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TOP STORIES
The United Nations agency monitoring the nuclear pact
between Iran and six world powers reported Thursday that it has found
no violations of the deal meant to crimp Tehran's ability to make
atomic arms. But touching on one potentially sensitive area, the International
Atomic Energy Agency said in a review issued Thursday that Iran had
begun manufacturing rotor tubes for centrifuges, the spinning
machines used to enrich uranium. Iran is allowed to make the parts,
but only under certain conditions... In its confidential report
obtained by The Associated Press, the atomic energy agency said
"related technical discussions" with Iran on rotor tube
manufacturing are ongoing. The agency needs to keep a close eye on
how many rotor tubes are being made and for what models of
centrifuges to make sure they are being produced only in quantities
and for machines allowed under the 2015 nuclear agreement that sets a
schedule for when and how many advanced centrifuges can be tested.
German intelligence authorities met with Iran's
Minister of Intelligence Mahmoud Alavi in Berlin on Tuesday,
according to the Tasnim News Agency in Tehran, a paper with close
links to the Revolutionary Guards Corps. Dr. Kazem Moussavi, an
Iranian exile in Germany, said on Wednesday Alavi is in the Federal
Republic is to lay the groundwork for a visit by President Hassan
Rouhani later this month. "The Iranian regime is planning to
intensify the monitoring and cracking down on members of the
opposition in Germany in order to prevent protests against the visit
of Hassan Rouhani, Iran's president of executions. It would be a huge
scandal if German security authorities collaborated in these efforts.
Alavi should be brought to justice rather than enjoying an official
reception," Moussavi said.
Obama administration officials told Congress on
Thursday that Iran wanted "immediate access" to $1.7
billion paid by the United States in cash to settle a decades-old
arbitration claim between the two countries. At a hearing called by
House Republicans, officials from the departments of Treasury, State
and Justice defended the payment and its cash delivery. An initial
$400 million was delivered Jan. 17, the same day Tehran agreed to
release four American prisoners, and the Republicans are calling it a
ransom. Christopher Backemeyer, a deputy assistant secretary of state
for Iranian affairs, said Iran wanted immediate access to the money,
but he said he wasn't aware whether Iran had asked for cash. He said
it was his understanding that the money is going to "critical
economic needs" in Iran. GOP Rep. Sean Duffy of Wisconsin,
chairman of the House Financial Services subcommittee on oversight
and investigation, said the evidence presented made it difficult to
believe the payment wasn't a ransom. He asked the witnesses if they
could guarantee that the money will not fund terrorism. "I can't
speak for every dollar that goes in and out of Iran, as you
know," Backemeyer said.
U.S.-IRAN RELATIONS
An Iranian Kurdish rebel group received military
training in weapons and explosives from U.S. and European advisers as
part of the international program backing Kurds in the war against
the Islamic State group in Iraq, the group's commander told The
Associated Press. The group, called the Kurdistan Freedom Party, is
one of several Iranian Kurdish factions that have carried out attacks
this year inside Iran, sparking a crackdown by security forces. At
the same time, the group has been fighting alongside Iraqi Kurds
against Islamic State group militants in northern Iraq... It appeared
that the Iranian faction made its way into the training because it is
officially under the umbrella of the Iraqi Kurdish forces. But any
training of Iranian insurgents, even indirectly through the anti-IS
campaign, could alarm Tehran, which remains a top rival of Washington
and U.S. allies in the region despite their common cause in fighting
the militants in Iraq and despite last year's nuclear deal.
The Obama administration may have facilitated several
cash payments to Iran even before its controversial $1.7 billion
transfer to the country, potentially putting even more liquid money
in the hands of nefarious actors backed by the Islamic Republic,
according to testimony presented Thursday at a congressional
hearing... "If there was no mechanism through the formal
financial system to send Iran the $1.7 billion in settlement money,
the $11.9 billion in [Joint Plan of Action] sanctions relief funds
from its oil escrow accounts, and the $20 billion from Iran's total
liquid, unencumbered assets following the implementation of the [Iran
nuclear deal], Iran received as much as $33.6 billion in cash,"
said Mark Dubowitz, executive director for the Washington-based
Foundation for Defense of Democracies, in written testimony to the
House Financial Services Committee. Dubowitz called the $33.6-billion
figure "the worst-case scenario," adding that it also could
have been denominated "in gold and other precious metals."
Experts at the hearing noted the ease with which Iran could use $1.7
billion of untraceable, liquid funds toward illicit activities,
including terror financing.
CONGRESSIONAL ACTION
The House Foreign Affairs Committee will vote next
week on a bill to bar payments to Iran, the latest salvo in a war of
words between Republicans and the White House over whether a $400
million payment to the country was ransom for the release of American
prisoners earlier this year. The committee will mark up the bill on
Wednesday. That would give GOP leaders plenty of time to bring the
proposal to the House floor for a vote - and force Democrats to take
a stand on the issue - before Congress leaves again for recess.
Republican leaders said last week they were planning a legislative
response aimed at what they say was clearly a ransom payment, a
characterization the White House adamantly denies.
SANCTIONS RELIEF
Iran's steep oil output growth has stalled in the past
three months, new data showed, suggesting Tehran might be struggling
to fulfill its plans to raise production to new highs while demanding
to be excluded from any OPEC deals on supply curbs. Iran's oil output
soared to 3.64 million barrels per day in June from an average of
2.84 million bpd in 2015 following the easing of Western sanctions on
Tehran in January, adding to a global crude glut which has slashed
oil prices. But since June, output has stagnated and reached just
3.63 million bpd in August, according to fresh OPEC data based on
secondary sources, which include consultants and industry media, and
seen by Reuters. Iran also told OPEC it produced 3.63 million bpd in
August, according to an OPEC source.
Iran's ports are showing clear signs of benefiting
from the relaxation of sanctions as government figures indicate
year-over-year (y/y) throughput growth of more than 16% for the first
eight months of 2016. Throughput at the 28 ports included in
statistics from Iran's Ports and Maritime Organization stood at
191.86 million tonnes at the end of August, a rise of 26.9 million
tonnes and 16.3% higher than volumes handled in the first eight
months of 2015... YTD container volumes are disappointing, falling
0.4% to 1.67 million teu. However, the data show container traffic
surged in recent months, rising by nearly 16% in August, 19.5% in
July and 14% in June.
SAUDI-IRAN TENSIONS
Thousands of Iranians marched through the streets
Friday to protest Saudi Arabia ahead of the hajj, a sign of soured
relations between the two countries following last year's crush and
stampede during the annual pilgrimage. Iranians won't be taking part
in this year's hajj, required of all able-bodied Muslims once in
their life, over tensions between Sunni Saudi Arabia and Shiite Iran,
regional rivals divided over a host of issues. Demonstrators waved
signs after Friday prayers depicting Saudi King Salman holding a
bloody sword, his head wrapped in an American flag and his shirt
bearing a blue Star of David similar to that on the Israeli flag.
"Death to Al Saud and the traitors!" protesters in Tehran
shouted. State media reported similar protests across the country.
OPINION & ANALYSIS
As Secretary of State John Kerry and Russian foreign
minister Sergei Lavrov continue seeking a deal on military
cooperation and a nationwide cessation of hostilities in Syria, the
Assad regime -- with Iran's military aid -- has been accelerating its
evacuation of the besieged Sunni suburbs surrounding Damascus. On August
27, Bashar al-Assad's forces moved into Daraya, less than two miles
from the capital's center, after convincing the approximately 8,000
local residents who remained there to leave. The Daraya incident is
not isolated -- the regime has begun negotiating similar agreements
with other besieged Sunni areas around Damascus in order to protect
the capital and the presidential palace from rebels, who could use
these towns as points of access. Yet the fact that Iranian-sponsored
militias are heavily involved in the sieges also says a lot about
Tehran's interest in establishing control over these towns, which
fall within the "useful Syria" (i.e., Assad-controlled
Syria) and the wider Shiite crescent that the Islamic Republic has
long prioritized in the region.
Iran is actively supporting proxies in major conflicts
in the following areas: Syria, Iraq, Yemen, Lebanon, and the
Palestinian territories. In addition, there is evidence that Iranian
agencies are active among Shi'i populations - as yet without major
effect - in Kuwait, Saudi Arabia and Bahrain. The Joint
Comprehensive Plan of Action adopted in October of 2015 has produced
no major impact on the pattern of Iranian regional commitments.
However, the release of tens of billions of dollars in sanctions
relief has enabled the Iranians, who were in some danger of
overstretch, to now freely commit to supporting more strongly their
various allies and proxies in the Middle East. This paper will look
at Iranian aims and strategy and will then focus on Iran's
involvement in a number of Arab settings.
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