Monday, November 28, 2016

Eye on Iran: U.S., Western Allies Push Iran on New Measures to Bolster Nuclear Deal


   EYE ON IRAN
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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 CuraƧao 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.






Eye on Iran is a periodic news summary from United Against Nuclear Iran (UANI) a program of the American Coalition Against Nuclear Iran, Inc., a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. Eye on Iran is not intended as a comprehensive media clips summary but rather a selection of media elements with discreet analysis in a PDA friendly format. For more information please email press@uani.com.

United Against Nuclear Iran (UANI) is a non-partisan, broad-based coalition that is united in a commitment to prevent Iran from fulfilling its ambition to become a regional super-power possessing nuclear weapons.  UANI is an issue-based coalition in which each coalition member will have its own interests as well as the collective goal of advancing an Iran free of nuclear weapons.

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