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TOP STORIES
The head of the UN atomic watchdog chided Iran on
Thursday after a second minor breach this year by Tehran of the 2015
nuclear deal with major powers. A report by the International Atomic
Energy Agency last week showed that Iran's stock of so-called heavy
water had inched above the level agreed under the landmark accord.
Heavy water, a modified form of normal water, is used in certain
types of nuclear reactors. "Iran has since made preparations to
transfer a quantity of heavy water out of the country," which
will bring it below the ceiling, IAEA chief Yukiya Amano told the
agency's board. "It is important that such situations should be
avoided in future in order to maintain international confidence in
the implementation" of the deal, he said in Vienna.
The U.S. Senate will vote to renew sanctions on Iran
for 10 years before adjourning next month, the chamber's Republican
leader said on Wednesday, sending the bill to the White House, where
President Barack Obama is expected to sign it into law. The House of
Representatives voted overwhelmingly on Tuesday for the decade-long
extension of the Iran Sanctions Act, or ISA, first adopted in 1996 to
punish investments in Iran's energy industry and deter the country's
pursuit of nuclear weapons. The act will expire at the end of 2016 if
it is not renewed. "We're going to take up the House bill,"
Senate Majority Leader Mitch McConnell told reporters at the Senate's
weekly Republican leadership news conference. "... And we're
going to pass it."
President-elect Donald Trump spent much of his
campaign railing against the Iran nuclear deal, even raising the
possibility of scrapping the agreement immediately upon taking
office. But many of the deal's most ardent critics are now saying:
"Slow down." As the reality of Donald Trump's White House
win sinks in among nuclear deal opponents, some are insisting that
pulling out of the agreement is unwise. Instead, they say, Trump
should step up enforcement of the deal, look for ways to renegotiate
it, and pursue measures to punish Iran for its non-nuclear
misbehavior. Such a multi-pronged, get-tough approach may even give
Trump cover to fend off any criticism he may get for keeping the
deal... "You don't want all the blame for the deal falling apart
to land on the U.S.," argued David Ibsen, president of United
Against Nuclear Iran, a group that has spent months trying to
persuade companies around the world not to invest in Iran despite the
lifting of sanctions. Ibsen and others said Trump can still save face
on Iran by making it clear he is serious about enforcing the nuclear
deal while also cracking down on Tehran's nefarious activities. For
instance, since the nuclear agreement took effect almost a year ago,
Iran has twice exceeded the limits on its heavy water stockpile, but
the Obama administration has downplayed the incidents. Trump could be
much more publicly harsh about these and other such apparent
violations of the deal, the critics said. He could also use such
incidents to rally other countries to warn Iran that it must not
stray from the deal's fine print.
IRAN NUCLEAR DEAL
The U.S. House of Representatives approved an
extension for 10 years of Iran sanctions, including many currently
under waiver as part of the Iran nuclear deal, in a move that could
pave the way for President-elect Donald Trump to pull out of the
deal... Renewal of the sanctions could facilitate the United States
opting out of the Iran nuclear deal, which exchanged a nuclear rollback
for sanctions relief. To pull out, Trump as president would need only
to stop waiving existing sanctions. Without renewal, pulling out of
the deal could be more complicated, requiring proactive executive
actions by Trump.
U.S.-IRAN RELATIONS
In the hours after Donald Trump's election victory,
the Tehran Stock Exchange plummeted by 5 per cent. The sharp decline
was triggered by concerns that the president-elect could seek to
unravel Iran's historic nuclear accord with world powers and push the
Islamic republic back into international isolation. But within
minutes of Mr Trump's acceptance speech, during which he said
"we will deal fairly with everyone", and "we will seek
common ground, not hostility," the market rebounded. The
bourse's fluctuations reflect the sense among some in the Iranian
regime that a Trump presidency might not be as bad as they feared.
Even Ayatollah Ali Khamenei, the supreme leader who often lashes out
at the US, considered by many in the regime as Iran's arch enemy,
gave a measured response in his first public reaction on Wednesday.
He said his regime had "no concerns" about the election of
a man who has described the nuclear agreement as the "stupidest
deal of all time". Iran's ultimate decision maker added that his
nation was "ready for any possible incident."
Donald Trump had sharp words for Iran during his
presidential campaign, but Iranian leaders see reasons for hope in a
Trump presidency. For hard-liners, Trump's threats to revisit the
nuclear deal, which Iran struck with six world powers including the
United States, bolsters their constant refrain that Washington cannot
be trusted. Meanwhile, moderate President Hassan Rouhani and his
allies are playing down concerns over Trump's rhetoric. Some quietly
express optimism that the real estate tycoon would be open to
negotiations in other areas dividing Washington and Tehran.
CONGRESSIONAL ACTION
The Senate will move to pass a 10-year extension of
existing sanctions against Iran before disbanding for the year,
leaving the grittier fight over expanding the scope of punitive
measures against Tehran until next year. Senate Foreign Relations
Committee Chairman Bob Corker (R-Tenn.) told reporters Wednesday that
the Senate would tackle "just the straight extension" -
either as a stand-alone bill, or attached to a must-pass spending
measure - "and when we get back, we'll do something that is much
broader." ... Corker said the Senate would follow the House's
lead for now, explaining that he had attempted to push a broader
package of sanctions because the need to come down harder on Iran is
"something that so many people agree on." Corker faulted
the Obama administration for pressuring Democrats away from efforts
to adopt additional limits against Tehran, but predicted that many
would vote for expanded measures once President Obama is out of
office. "If you don't have a president that's pushing back on
Democrats, they're now free to express themselves," Corker said.
"They felt hamstrung, I think, before."
Putting U.S. financing off-limits for Iran to buy or
lease commercial Boeing aircraft was the first order of business for
the House Rules Committee, on its first day back after a long recess
and the presidential election of Donald Trump. The measure passed the
committee 7-2 late Monday, but President Barack Obama has promised to
veto the bill, saying it would undermine U.S. commitments to the
Joint Comprehensive Plan of Action, or the Iran nuclear deal.
"The bill would undermine the ability of the United States to
meet our JCPOA commitments by effectively prohibiting the United
States from licensing the sale of commercial passenger aircraft to
Iran for exclusively civil end uses, as we committed to do in the
JCPOA, and seeking to deter companies from pursuing permissible
business with Iran," an administration statement on the bill
says.
BUSINESS RISK
Iran's resurgent oil industry has confounded skeptics.
Production is up by almost a third since sanctions were eased in
January and foreign companies are lining up to help boost output
further. Yet Donald Trump's victory in the U.S. casts doubt on
whether the momentum can last. "The risk is heightened for future
projects," said Robin Mills, who founded Dubai-based consultants
Qamar Energy and worked for Royal Dutch Shell Plc in Iran. "It's
gotten more complicated." The U.S. president-elect has vowed to
tear apart the international nuclear deal with Iran that unlocked the
country's oil exports this year. Such a move could obstruct its plans
to pump a further 800,000 barrels a day with $100 billion of foreign
investment. The oil market has been counting on Iran as a key new
source of supply, and the current uncertainty may see investors step
back. "International oil companies are likely to adopt a
wait-and-see position on Iran until it becomes clear what Trump
does," said Jason Bordoff, director of the Center on Global
Energy Policy at Columbia University and a former official in the
Obama administration... Even before Trump's win, progress on Iran's
new oil-contract terms had been slow, and producers are still
awaiting full details of the tendering process for fields, the
officials said.
HUMAN RIGHTS
When Iran conducted a mass hanging in August of Sunni
prisoners accused of attacks in its restive western Kurdish region,
the executions were widely criticized as an egregious human rights
violation. But death-penalty opponents also were appalled at what
came next. Videos that showed apparently coerced confessions of the
prisoners - interwoven with ominous-sounding music and clips of
unrelated assaults by militants of the Islamic State - have been
shown on Iranian state television in the months since the executions.
Produced and disseminated by official media outlets, the videos
contain no apologies for the mass hangings. They apparently are meant
to exploit fears among the country's majority Shiite population about
the Islamic State, the Sunni extremist group ensconced in Syria and
Iraq that shares antipathy for both Iran and the West. Human rights
groups say the hangings in Iran on Aug. 2 put 20 to 25 prisoners to
death, one of the largest mass executions ever carried out in that
country. In a report about the videos issued Wednesday, titled
"Broadcasting Injustice, Boasting of Mass Killing," the
rights group Amnesty International accused Iran of having used
stage-managed confessions, falsehoods and sensationalist screen titles
like "In the Devil's Hands" and "In the Depth of
Darkness" to justify the mass hangings to a domestic audience.
OPINION & ANALYSIS
On November 9, 2016, the International Atomic Energy
Agency (IAEA) released its fourth report on Iran's compliance with
United Nations Security Council (UNSC) resolution 2231 (2015).
UNSCR 2231 codified into international law the Joint Comprehensive
Plan of Action (JCPOA), an agreement reached between the P5+1 and
Iran in July 2015 aimed at limiting Iran's nuclear program. The
JCPOA was implemented on January 16, 2016, a date known as
Implementation Day. The latest IAEA report again states:
"Since Implementation Day, the Agency has been verifying and
monitoring the implementation by Iran of its nuclear-related
commitments" under the Iran deal. Nowhere in the report
does the IAEA state that Iran is fully compliant with the JCPOA.
The report lists many areas where Iran has met the conditions of the
JCPOA's provisions. However, it states that Iran has exceeded
its cap on heavy water, and the IAEA is still unable to determine or
provides no information about its efforts to determine the absence of
undeclared nuclear material and activities in Iran. Moreover,
the IAEA reporting is so sparse as to confirm suspicions that
compliance controversies are being deliberately omitted from the
report... We are increasingly concerned that Iran is not fully complying
with the JCPOA. Based on discussions with senior United Nations
officials close to the IAEA, while Iran had appeared to be following
exactly what it is supposed to do with respect to the deal,
increasingly, Iran has stated to inspectors that it did not
understand the meaning of the requirements or acted surprised when
confronted. In earlier periods, when Iran was resisting IAEA
safeguards requirements, Iran used a similar strategy, professing not
to grasp what was required, as one official remembered. These
developments need to be closely followed.
The Joint Comprehensive Plan of Action (JCPOA) between
the five permanent members of the UN Security Council plus Germany
(P5+1) and Iran remains a controversial and potentially dangerous
deal. During the election campaign, president-elect Donald Trump
vowed to scrap it. Trump is no doubt correct that the JCPOA is deeply
flawed, and did not achieve what it originally set out to do; nor was
it signed nor ratified by any of the parties. Still, the deal
indicates strong commitment on the part of all sides to uphold its
terms and timetables, in order to get what they want from the deal.
Serious questions arise, however, with regard to what each side has
been gaining - and losing - from the deal, and make it imperative for
the next president to take steps to strengthen compliance, and
deliver new messages of determination to Iran... Since the deal was
announced last July, the major problem encountered has been Iran's
attempts to test the resolve of the P5+1, and the US in particular,
by pushing the envelope on a number of issues - from illegal
ballistic missile tests to military cooperation with Russia in Syria
to protect the Assad regime. Iran has also twice exceeded the
produced heavy-water storage limit in the deal, and attempted to
procure technologies and components with nuclear applications. Rather
than confronting Iran on these issues, the Obama administration has
tended to turn a blind eye, explaining everything away as minor and
insignificant. As such, the first order of business for the new
administration is to change this attitude, and take a more determined
stance towards Iran's activities, something president-elect Trump
seems poised to do... In conclusion, despite Trump's pre-election
rhetoric, it is reasonable to assume that he will not rip up the
deal. Instead, he should focus on the weaknesses of the JCPOA, and on
repairing the damage that has been done. To do so, the new
administration should fully utilize the provisions of the JCPOA, the
valid safeguards commitments of Iran to the International Atomic Energy
Agency (IAEA), and introduce some essential additions and
modifications. In addition to improvements regarding the JCPOA
itself, things need to change in terms of US-Iran interactions. Iran
has been exploiting the eagerness of the Obama administration to
ignore and/or attempt to explain away all moves Iran has made over
the past year to strengthen its position in the military realm, and
across the Middle East. This trend can still be reversed. Until Iran
indicates that it plans to be a willing international and regional
player, it cannot be treated as one, especially when it comes to the
nuclear realm.
On 2 August 2016, 25 Sunni men were executed in Iran
for the vaguely worded crime of "enmity against God" without
their families being notified. The authorities issued statements that
attributed to the men a range of criminal activities and aired
"confession" videos seemingly intended to dehumanize them.
Amnesty International's research shows that Iran's justice system
blatantly violated the men's right to a fair trial, including their
rights to access a lawyer, not to be subjected to torture and other
ill-treatment, to remain silent, to have their cases heard in public
hearings, and to have a meaningful review of their sentences.
The signing of a heads of agreement (HOA) between
Paris-based Total SA, China National Petroleum Corp. and Iran's
Petropars on the development of phase 11 of the South Pars gas field
is an important development in post-sanctions Iran. In fact, the
country had been deprived of Western technology in its petroleum
sector since the departure of major European companies in 2008-2009
due to an intensification of nuclear-related sanctions. Though an HOA
is not considered a full-fledged contract, it is a symbolic step
underlining that Western international oil companies (IOCs) are
returning to Iran. This specific HOA is symbolic for two more
reasons: It was signed on Nov. 8, Election Day in the United States,
indicating that the outcome of the election had no impact on Total's
decision to re-engage the Iranian market. Furthermore, the creation
of a consortium consisting of a Western IOC, an Eastern IOC and an
Iranian company is a reflection of what the Iranian stakeholders
expect: Western technology, potentially some Chinese financing as
well as capacity building for an Iranian company. The question is
whether this signing represents the starting point of a process in
which European IOCs will return to the Iranian market. Evidently,
being located in a low-cost, oil-producing region, oil and gas fields
in Iran offer an opportunity for IOCs in the current low oil price
era. Furthermore, Iranian projects do not present any major
geological risks. However, political and legal risks are certainly
the key factors influencing the investment decisions of IOCs with
regard to projects with Iran.
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