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TOP STORIES
The U.S. and its Western allies are pressing Iran to
take steps to sharply cut the amount of radioactive material it holds
in a bid to shore up last year's nuclear deal and discourage the
incoming Trump administration from abandoning it, Western officials
said. The discussions about reducing Iran's stockpile of enriched
uranium started months ago, officials said, and are among a number of
measures the Obama administration has been examining to fortify the
accord in its final months in office. But the initiative has taken on
new urgency since the election of President-elect Donald Trump
created fresh uncertainty around the deal. If agreed upon, the plan
could reduce the odds of a sudden flashpoint between the U.S. and
Iran over Tehran's implementation of the deal once Mr. Trump takes
office, Western officials say, by reducing its enriched-uranium
stockpile well below the cap agreed to in the 2015 accord.
Iran's chief of staff of the armed forces said
Saturday that Tehran may be interested in setting up naval bases in
both Syria and Yemen, the semi-official Tasnim reported. The report
by Tasnim, close to military, quoted Gen. Mohammad Hossein Bagheri as
saying, "Maybe, at some point we will need bases on the shores
of Yemen and Syria." He said "Having naval bases in remote
distances is not less than nuclear power. It is ten times more
important and creates deterrence." Gen. Bagheri added that
setting up naval platforms off the shores of those countries requires
"infrastructures there first." He said Iran is also able to
set up permanent platforms for military purposes in the Persian Gulf
and roving ones in other places.
Schlumberger Ltd., the world's largest oil driller by
market value, said Sunday it had signed a preliminary deal to study
an Iranian oil field, as Donald Trump's presidential victory has yet
to deter U.S.-connected companies from dealing with Tehran. The
contract is one of the most prominent signed since the Nov. 8
election. Mr. Trump has vowed to undo a nuclear pact with Tehran
signed last year by global powers. The pledge has led many
international companies to freeze their plans to enter the Islamic
Republic despite the country's huge potential as an energy and
consumer market. But a spokesman for Schlumberger, one of the world's
largest oil-services companies, told The Wall Street Journal it has
signed a memorandum of understanding with the state-run National
Iranian Oil Company "for the non-disclosure of data required for
a technical evaluation of a field development prospect." Though
it is incorporated in Curaçao in the Dutch Antilles, Schlumberger has
one of its headquarters in Houston, while some of its shares trade in
New York. If completed, the deal would be the first in Iran for
Schlumberger since European sanctions for the company to leave the
country in 2010.
IRAN NUCLEAR DEAL
Leader of the Islamic Revolution Ayatollah Seyyed Ali
Khamenei says the renewal of sanctions against the Islamic Republic
by the US is tantamount to the violation of commitments under the
landmark nuclear deal between Iran and the group of six countries
known as the P5+1. "During the [nuclear] negotiations there was
a lot of debate about the sanctions, but now they raise the issue of
extending the sanctions in the US Congress and claim that these are
not [new] sanctions but renewal [of old ones]," the Leader said
in a meeting with a group of Iranian Navy commanders and officials in
Tehran on Sunday on the occasion of National Navy Day.
"'Initiating sanctions' is no different from 'renewing them
after their expiration,' and the latter is also [an instance of
imposing] sanctions and violation of the previous commitments by the
opposite side," Ayatollah Khamenei said.
The international agency responsible for monitoring
last summer's nuclear deal with Iran is deliberately not reporting on
Iranian activities that may indicate Iran is violating the deal,
setting up a potential confrontation with the incoming Trump
administration, according to nuclear and nonproliferation experts.
The International Atomic Energy Agency (IAEA) published its regular
report on Iranian compliance earlier this month, its fourth since the
deal came into effect last January. The report said Iran breached the
limit for a material used in the production of weapons-grade
plutonium, but left out figures that had been included in IAEA
reports for years, including information about the country's
possession of certain forms of uranium. The agency omitted a number
of details in its first quarterly report on Iranian compliance in
February. IAEA chief Yukiya Amano defended the gaps by saying the
nuclear deal itself had narrowed what the agency was supposed to
report. Critics have suggested the underreporting is aimed at
covering up Iranian violations to placate the Obama administration,
and told THE WEEKLY STANDARD this week that the practice should be
reversed. David Albright, head of the Institute for Science and
International Security, told TWS that the underreporting was the
IAEA's decision, and that the Trump administration should seek to
restore the scope of the agency's reporting. "The Trump
administration should insist that the IAEA more fully report on the
situation with regard to Iranian compliance with the [nuclear
deal]," Albright said. "The IAEA has considerable latitude
on its reporting and could include much more than it is doing
today."
SANCTIONS RELIEF
Germany agreed to provide Iran with a 1.2 billion euro
($1.27 billion) credit line to help finance a rail project ,
according to an official at the Central Bank of Iran. The facility --
through state-run lender KfW IPEX -- will help fund the development
of the Tehran to Mashhad railway, the official said, asking not to be
identified. German banks have also agreed to help fund power stations
in the country, he said. Iran has struggled to raise foreign
financing for tens of billions of dollars worth of infrastructure
projects it hoped it could get started after sanctions were eased 10
months ago. Large European banks have mostly kept their distance,
worried that they could fall afoul of remaining U.S. sanctions,
Iranian officials have said... The funding has been agreed in
principle and is close to being finalized, Michael Tockuss, chairman
of the Germany-Iran Chamber of Commerce, said in an interview in
London, adding it would be the biggest credit line Iran has secured from
foreign sources since the easing of sanctions in January.
The U.S. Treasury has reassured Brazilian banks they
can finance trade with Iran without fear of sanctions, opening the
way to billions of dollars in potential exports of jet planes, buses
and equipment, a senior Brazilian official said on Wednesday.
Sanctions on non-U.S. entities doing business with Iranian companies
were lifted with implementation in January of the nuclear accord with
Iran, but Brazilian banks remained worried they could still face
repercussions, said Rodrigo Azeredo, Brazil's top diplomat for trade.
"They feared U.S. and European banks could react by cancelling
their credit lines," Azeredo said. That is expected to change
after Treasury officials explained to executives of Brazil's largest
banks in Sao Paulo last week that they can deal with Iranian banks as
long as the transactions - in dollars or any other currency - do not
go through the U.S. banking system and do not involve blacklisted
Iranian companies... The OFAC team's briefing coincided with a visit
to Brazil by an Iranian mission headed by Finance Minister Ali
Tayebnia seeking to advance trade deals. Brazil's Embraer, the
world's third largest maker of commercial planes, is in talks to sell
Iran at least 20 of its E-195 jets worth over $1 billion as the Middle
Eastern country moves to renew its aging airline fleets. Embraer
still requires a U.S. license for the sale to Iran of sensitive jet
engine technology in its planes... Brazilian bus maker Marcopolo SA
is also looking to sell hundreds of vehicles to Iran. The company
declined to comment.
Italian oil major Eni will start working again in Iran
when it has been repaid investments previously made and when it
understands the type of contracts Teheran will be offering, CEO
Claudio Descalzi said on Thursday. "We are still in Iran... we
never left... because they owe us a load of money and we are trying
to recoup it ... We'll come back when we will have recouped all our
money and we know the contracts," Descalzi said in a meeting
with students. Iran for years has been using oil to pay back Eni for
decade-old deals. "We're not in a hurry to go back but ... we
will restart work in Iran," Descalzi added.
An Indian Oil Corp unit plans to invest $5.5 billion
to gradually raise the capacity of its smallest refinery co-owned by
Iran to 300,000 barrels per day (bpd), its chairman said, to help
meet a surge in demand for refined products in the world's fastest
growing major economy. The Nagapattinam plant operated by IOC's
subsidiary Chennai Petroleum Corp requires a complete overhaul to
produce the cleaner, higher grade fuels needed to meet rising demand
in southern India, said B. Ashok, chairman of the two firms... CPCL's
two plants, in which Iran's Naftiran Intertrade Co Ltd has a 15.4
percent stake, are located in the southern state of Tamil Nadu.
Iran's Persian Gulf Petrochemical Industries Co. is in
talks with Asian companies to raise as much as 1 billion euros ($1.1
billion) for an expansion including a methanol project intended to
serve China and other Asian customers. An Italian company is "in
the forefront" as a potential investor in the company, according
to Touraj Seyed Arvanaghi, managing director of Persian Gulf
Petrochemical's Veniran Apadana methanol project in Asaluyeh in
western Iran on the Persian Gulf coast. He declined to identify the
companies until negotiations are concluded.
MILITARY MATTERS
Iran's Defense Ministry said it plans to modernize the
air force fleet but denied reports earlier on Saturday that it wanted
to buy Russian Sukhoi Su-30 fighter planes, news agencies reported.
Several agencies quoted Defense Minister Hossein Dehghan as saying
"the purchase of this fighter is on the agenda of the Defense
Ministry" when asked about the Sukhoi aircraft, but some later
said the ministry had called the reports "incorrect." The
ministry's website quoted Dehghan as saying only that
"reinforcing and providing the needs of the air force are among
the priorities of the Defense Ministry," without referring to
any specific purchase plans. Earlier this year, Dehghan said Tehran
and Moscow had started talks on the supply of the Sukhoi fighters to
Iran. A deal would need the approval of the United Nations Security
Council and could further strain Moscow's relations with Israel,
Saudi Arabia and the United States.
FOREIGN AFFAIRS
Turkish Foreign Minister Mevlut Cavusoglu visited Iran
on Saturday and met President Hassan Rouhani, Iranian state media
reported, in rare previously announced talks between the regional
rivals. Cavusoglu was also due to meet his Iranian counterpart
Mohammad Javad Zarif during the visit, the official news agency IRNA
reported. "Despite (their differences), the two countries'
officials are looking for solutions and seeking to draw closer their
points of views, especially on Iraq and Syria," IRNA reported,
without giving details of the talks.
TERRORISM
The Obama administration has given clearance to
Western airline manufacturers to sell planes to Iran at the same time
the Islamic Republic is using commercial airliners to smuggle weapons
and other illicit arms to Hezbollah terrorists in Lebanon, according
to new intelligence and congressional communications obtained by the
Washington Free Beacon. The disclosure of this new intelligence,
which shows that Iran has been using its commercial airline company
to smuggle advanced weaponry to Hezbollah and terrorists operating in
Syria, has placed renewed focus on a congressional inquiry that has
been stymied by Obama administration officials since early October.
Senators, led by Sen. David Perdue (R., Ga.), have been pushing Obama
administration officials to explain why they are helping airline
manufacturers Boeing and AirBus sell planes to Iran, despite clear
evidence that Tehran is using its commercial airline as cover for its
continued terrorist operations across the region.
SYRIA CONFLICT
While Russian war planes and bombs have dominated
headlines about outside intervention in Syria's five-year conflict,
thousands of those fighting on the ground in support of President
Bashar al-Assad are just as foreign. They are part of a large and
growing force of Shia militias hailing from Lebanon, Iraq, Iran and
beyond that see the war as both an ideological and regional struggle
against Sunni rivals. The foreign Shia militants have typically tried
to keep their activities in the shadows, but they have become
increasingly bold in showcasing their role in the conflict. Iran, Mr
Assad's staunchest backer in the war, this week said 1,000 of its men
have died in Syria in a highly unusual announcement that put
attention on a military role it has shrouded in secrecy. A week
earlier, Hezbollah, a Lebanese militant group backed by Iran, shared
photographs of a massive "military parade" not at home, but
across the border on Syrian soil... Basra residents say recruiters
frequent their areas, and say some offers now extend to Yemen, where
Houthi rebels with loose ties to Iran are fighting forces loyal to a
government in exile, which is backed by Saudi Arabia. For Ali's
cousin, a taxi driver, one trip fighting in Syria was enough to meet
his financial needs. But the concept still appals him. "It is a
choice for these guys ... but it also seems like human
trafficking," he says.
IRAQ CRISIS
Iraq's parliament approved a law on Saturday that will
transform Popular Mobilisation forces, a mostly Iranian-backed
coalition of Shi'ite militias that played a role in fighting Islamic
State, into a legal and separate military corps... All the Shi'ite
blocks in parliament voted for the bill in a session boycotted by
lawmakers from the Sunni minority who object to the existence of
armed forces outside the army and police. Popular Mobilisation, or
Hashid Shaabi in Arabic, was accused of abuses against Sunni
civilians in towns and villages retaken from Islamic State, according
to international human rights groups and the U.N. Human Rights
Commissioner. "I don't understand why we need to have an
alternative force to the army and the police," said Sunni member
of parliament (MP) Raad al-Dahlaki. "As it stands now, it would
constitute something that looks like Iran's Revolutionary
Guard," he added.
HUMAN RIGHTS
The son of one of Iran's founding revolutionaries was
sentenced to several years in jail Sunday after releasing a
decades-old tape in which his father denounced the mass execution of
prisoners, local media reported. Ahmad Montazeri, 60, was convicted
by a clerical court in the holy city of Qom on charges of
"acting against the national security" and "releasing
a classified audio file," the ISNA news agency reported. He
received a further year for "propaganda against the
system," ISNA said. The court said he would only serve six years
in view of his lack of previous convictions, his age, and
"reverence" for a brother he lost in an insurgent attack.
Montazeri is the son of Ayatollah Hossein Ali Montazeri, who for
decades was right-hand man to Ayatollah Ruhollah Khomeini, the father
of Iran's Islamic revolution. The elder Montazeri was one of the few
Iranian leaders to voice opposition in 1988 when Khomeini ordered the
execution of thousands of political dissidents held in the country's
jails.
Iranian filmmaker Keywan Karimi has begun serving a
year-long prison sentence handed down over footage authorities deemed
insulting, his production company confirmed on Thursday. The charges
against the 30-year-old stemmed from a film he directed called
"Writing on the City" that focuses on political graffiti in
Iran from the country's 1979 Islamic Revolution to the contested 2009
election. He was initially sentenced to six years behind bars after
being found guilty of "insulting sanctities" in October
2015. In February, an appeals court reduced the sentence to one year
but kept the requirement that Karimi endure 223 lashes as stipulated
in his original sentence. Speaking to The Associated Press earlier
this week, Karimi said he hopes to use the time behind bars to
complete the script for his next film. "Be sure, I'm strong.
Inside, and mentally, I'm ready," he said.
DOMESTIC POLITICS
Iran's official IRNA news agency is reporting that
head of the country's railways has resigned over the deadly collision
of two trains in the north of the country which killed 45 passengers.
The Sunday report says Mohsen Pour Seyyed Aghaie summited his letter
of resignation on Sunday and it was accepted by Minister of Transportation
Abbas Akhoundi. IRNA quotes Aghaie as saying the accident was caused
by "wrong decisions." On Saturday, Iranian authorities
detained three employees of the state railroad company over the
incident.
OPINION & ANALYSIS
When it comes to implementation of the Joint
Comprehensive Plan of Action (JCPOA), Donald Trump's election may
give new meaning to the phrase "overtaken by events." But
even if Trump is able to make good on his promise to
"renegotiate" the JCPOA, it's worth remembering that
implementation of the deal has not exactly been smooth sailing. One
hiccup that both sides seem to be especially vocal about-and which
could be relevant in efforts to unwind other unrelated sanctions
regimes-is the reported hesitance on the part of financial
institutions to service Iran. Ask the State Department about this and
you'll probably hear about Secretary of State John Kerry's persistent
efforts to get banks to do business with Iran and how overly-cautious
banks are stymying his efforts. This past May, for example, Kerry
explicitly told the European private sector to "not use the
United States as an excuse" if they don't want to do business in
Iran. Ask Iran and you might hear a slightly different version of the
same story. According to Iranian President Rouhani, for example, the
U.S. is welching on its side of the deal by not actually getting
banks to do business with Iran. But these explanations don't appear
to appreciate how banks actually think about illicit finance risk,
which is likely driving their hesitance to set up shop in Iran. And
much to disappointment of Tehran (and perhaps Kerry), sanctions
relief isn't a magic wand that can make all illicit finance risk or
international anti-money laundering norms disappear. Part of the
problem may be that Iran is no longer running up against purely
political decisions. Rather, Iran looks to be running up against new,
but established, norms of international financial conduct. And even
if the Iran deal disappears, understanding these norms will be
critical for future efforts to wind up or down unrelated sanctions
regimes. I briefly discuss some of these norms below.
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