The View From Iran: What the Raisi Administration Wants in the Nuclear Talks

[Sineva]

The View From Iran: What the Raisi Administration Wants in the Nuclear Talks
https://foreignpolicy.com/2021/10/07/iran-deal-talks-jcpoa-vienna-nuclear-negotiations-raisi/
President Ebrahim Raisi doesn’t consider reviving the nuclear deal a top priority.

“The Ministry of Foreign Affairs will not be the Ministry of JCPOA during my term in office,” Iranian Foreign Minister Hossein Amir-Abdollahian told lawmakers in the Iranian parliament on Aug. 22. He went on to mock his predecessor, Mohammad Javad Zarif, for having spent the bulk of his diplomatic efforts trying to resolve the nuclear crisis and negotiating the since-collapsed nuclear deal between Iran and major world powers known as the Joint Comprehensive Plan of Action (JCPOA).


Amir-Abdollahian’s snarky comments reflect a fundamental change in the foreign policy of the new Iranian government. Unlike former President Hassan Rouhani, President Ebrahim Raisi does not consider resolving the nuclear crisis and reviving the JCPOA, from which then-U.S. President Donald Trump withdrew in May 2018, as one of his top priorities. Indeed, he announced in his first press conference as president-elect that his government’s foreign policy would not begin with JCPOA and would not end with it and that he would not link the fate of the country’s economy to the negotiations.


In April 2021, just a few months after U.S. President Joe Biden took office, Iran and the remaining participants in the JCPOA (the United Kingdom, France, Germany, China, and Russia) began talks in Vienna on reviving the deal. But after six rounds of talks, in which the United States was also indirectly involved, negotiations came to a halt amid the June presidential elections in Iran. The new Iranian government has announced it is reviewing previous rounds of talks and forming a new negotiating team and will return to the talks soon.


However, Raisi’s administration has focused on a strategy that prioritizes “neutralizing the impact of sanctions” by strengthening economic ties with neighbors and countries such as Russia and China, among other measures, over resuming talks to revive the JCPOA—a strategy that Iran’s supreme leader, Ayatollah Ali Khamenei, has also repeatedly emphasized. Khamenei said in his final meeting with the outgoing Rouhani administration that its efforts had proved the folly of trusting the West.


The policy shift reflects the current Iranian government’s deep disappointment and skepticism when it comes to the United States’ failure to lift economic sanctions on the country. No one in Tehran’s new cabinet believes the United States intends to actually lift the sanctions; on the contrary, they think the United States uses the nuclear talks as leverage to contain Iran’s power. Iran’s new first vice president, Mohammad Mokhber, has said that “it is unlikely we will reach an agreement with the West to lift the sanctions. We cannot link our planning to run the country to reliance on the lifting of sanctions. We must plan in such a way as with presumption that the sanctions will not be lifted.”



The policymakers in Raisi’s administration see the experience of signing the JCPOA in 2015 as a clear example of the U.S. government’s approach and lack of seriousness in lifting the sanctions. They argue that although Iran lost the bulk of its nuclear capabilities under the agreement, Washington did not effectively lift sanctions during the more than two years between the implementation of the agreement and the Trump administration’s withdrawal from the deal in May 2018.


They say Obama-era sanctions such as the 2015 visa waiver restrictions and the U.S. Office of Foreign Assets Control’s “sabotage” of issuing licenses for companies to trade with Iran hindered normalization of Iran’s trade with the world and cite remarks by the former governor of Central Bank of Iran as evidence that Iran’s economic benefits from the JCPOA were “almost nothing.” Trump-era measures such as the 2017 Countering America’s Adversaries Through Sanctions Act and the 2018 withdrawal from the JCPOA further contributed to the Iranian government’s frustration with the lifting of sanctions.


Iranian policymakers are now of the opinion that even if the agreement is revived, it will have far fewer economic benefits for Iran than even the pre-U.S. exit era because banks and corporations will have less confidence in the next U.S. president’s commitment to abide by the deal.


Nevertheless, the specific failures of the JCPOA are not the sole reason for the Iranian government’s current skepticism. Their distrust of Washington has much deeper roots.


Iranian officials assume that the overall U.S. policy is to contain Iran and therefore that the Americans will keep the sanctions in place somehow. Even if the JCPOA is revived, the thinking goes, the United States would lift only a small portion of the sanctions and maintain the bulk of them under the new pretext of human rights, Iran’s missile program, or Tehran’s activities in the Middle East. The Biden administration’s continued refusal to lift all sanctions imposed on Iran during the Trump era, many of which were imposed on the pretext of human rights and terrorism, has deepened this distrust.


Given all of this, the prevailing view among policymakers in the Raisi administration is that reviving the JCPOA at any cost should not be on Iran’s agenda and that the country should adopt a tougher stance in future negotiations to secure its anticipated economic benefits.


Specifically, they want any agreement on reviving the JCPOA to include three elements: 1) the removal of all sanctions that were lifted under the original agreement as well as any that have been imposed since the execution of the JCPOA in January 2016; 2) a U.S. guarantee not to withdraw from the deal again; and 3) the stipulation of a comprehensive interpretation of Paragraph 29 of the JCPOA that emphasizes the removal of barriers to the normalization of Iran’s trade. In addition, the negotiations must involve only the JCPOA; other issues such as Tehran’s regional influence and missile program should be off the agenda completely.


The Raisi government considers the passage of time to be to its advantage, enabling it to further develop its nuclear program and thereby increase its leverage in future negotiations. Iran’s economy has also shown more resilience to the sanctions than initially expected and is starting to emerge from the severe downturn it experienced in 2019 and 2020 immediately after Trump’s JCPOA exit. Although Iran’s economy is currently experiencing its highest inflation rate in over two decades (45.2 percent as of August) and living standards have fallen to unprecedentedly low levels, statistics from the Central Bank of Iran suggest an economic recovery is underway.



According to TankerTrackers.com, Iran’s oil exports in 2020 increased compared with 2018 and 2019 and in some months even exceeded 1.5 million barrels. Iran also reported that its revenues from oil and condensate sales in the six months from March to September 2021 were equal to the total oil revenues from March 2020 to March 2021. This increase also comes at a time when oil prices have more than doubled compared with last year, and some forecasts suggest the price could hit $100 per barrel or even higher in the near future.


Iran has announced that Ali Bagheri Kani, the new deputy foreign minister for political affairs—who replaced Abbas Araghchi, Iran’s former chief negotiator during Rouhani’s government—will lead the Iranian negotiating team from now on. Bagheri was a senior member of the Iranian negotiating team under former President Mahmoud Ahmadinejad but was ousted when the Rouhani government took office. He is a staunch opponent of the JCPOA, believing the agreement violates Iran’s national rights and undermines the country’s independence.


Although Tehran has said it will not enter brand-new negotiations and that the Vienna talks will resume from where the previous six rounds were halted, the appointment of a new negotiating team led by Bagheri suggests the Raisi administration intends to pursue a very different stance on resolving existing differences between Iran and the remaining JCPOA parties.


The new approach will likely see the Iranian negotiating team evaluating the results of the negotiations not on paper but in practice and with objective and measurable criteria. Under such circumstances, one can predict lengthy and tense negotiations in the coming months.

 

[Sineva]

The View From Iran: What the Raisi Administration Wants in the Nuclear Talks
https://foreignpolicy.com/2021/10/07/iran-deal-talks-jcpoa-vienna-nuclear-negotiations-raisi/
President Ebrahim Raisi doesn’t consider reviving the nuclear deal a top priority.

“The Ministry of Foreign Affairs will not be the Ministry of JCPOA during my term in office,” Iranian Foreign Minister Hossein Amir-Abdollahian told lawmakers in the Iranian parliament on Aug. 22. He went on to mock his predecessor, Mohammad Javad Zarif, for having spent the bulk of his diplomatic efforts trying to resolve the nuclear crisis and negotiating the since-collapsed nuclear deal between Iran and major world powers known as the Joint Comprehensive Plan of Action (JCPOA).


Amir-Abdollahian’s snarky comments reflect a fundamental change in the foreign policy of the new Iranian government. Unlike former President Hassan Rouhani, President Ebrahim Raisi does not consider resolving the nuclear crisis and reviving the JCPOA, from which then-U.S. President Donald Trump withdrew in May 2018, as one of his top priorities. Indeed, he announced in his first press conference as president-elect that his government’s foreign policy would not begin with JCPOA and would not end with it and that he would not link the fate of the country’s economy to the negotiations.


In April 2021, just a few months after U.S. President Joe Biden took office, Iran and the remaining participants in the JCPOA (the United Kingdom, France, Germany, China, and Russia) began talks in Vienna on reviving the deal. But after six rounds of talks, in which the United States was also indirectly involved, negotiations came to a halt amid the June presidential elections in Iran. The new Iranian government has announced it is reviewing previous rounds of talks and forming a new negotiating team and will return to the talks soon.


However, Raisi’s administration has focused on a strategy that prioritizes “neutralizing the impact of sanctions” by strengthening economic ties with neighbors and countries such as Russia and China, among other measures, over resuming talks to revive the JCPOA—a strategy that Iran’s supreme leader, Ayatollah Ali Khamenei, has also repeatedly emphasized. Khamenei said in his final meeting with the outgoing Rouhani administration that its efforts had proved the folly of trusting the West.


The policy shift reflects the current Iranian government’s deep disappointment and skepticism when it comes to the United States’ failure to lift economic sanctions on the country. No one in Tehran’s new cabinet believes the United States intends to actually lift the sanctions; on the contrary, they think the United States uses the nuclear talks as leverage to contain Iran’s power. Iran’s new first vice president, Mohammad Mokhber, has said that “it is unlikely we will reach an agreement with the West to lift the sanctions. We cannot link our planning to run the country to reliance on the lifting of sanctions. We must plan in such a way as with presumption that the sanctions will not be lifted.”



The policymakers in Raisi’s administration see the experience of signing the JCPOA in 2015 as a clear example of the U.S. government’s approach and lack of seriousness in lifting the sanctions. They argue that although Iran lost the bulk of its nuclear capabilities under the agreement, Washington did not effectively lift sanctions during the more than two years between the implementation of the agreement and the Trump administration’s withdrawal from the deal in May 2018.


They say Obama-era sanctions such as the 2015 visa waiver restrictions and the U.S. Office of Foreign Assets Control’s “sabotage” of issuing licenses for companies to trade with Iran hindered normalization of Iran’s trade with the world and cite remarks by the former governor of Central Bank of Iran as evidence that Iran’s economic benefits from the JCPOA were “almost nothing.” Trump-era measures such as the 2017 Countering America’s Adversaries Through Sanctions Act and the 2018 withdrawal from the JCPOA further contributed to the Iranian government’s frustration with the lifting of sanctions.


Iranian policymakers are now of the opinion that even if the agreement is revived, it will have far fewer economic benefits for Iran than even the pre-U.S. exit era because banks and corporations will have less confidence in the next U.S. president’s commitment to abide by the deal.


Nevertheless, the specific failures of the JCPOA are not the sole reason for the Iranian government’s current skepticism. Their distrust of Washington has much deeper roots.


Iranian officials assume that the overall U.S. policy is to contain Iran and therefore that the Americans will keep the sanctions in place somehow. Even if the JCPOA is revived, the thinking goes, the United States would lift only a small portion of the sanctions and maintain the bulk of them under the new pretext of human rights, Iran’s missile program, or Tehran’s activities in the Middle East. The Biden administration’s continued refusal to lift all sanctions imposed on Iran during the Trump era, many of which were imposed on the pretext of human rights and terrorism, has deepened this distrust.


Given all of this, the prevailing view among policymakers in the Raisi administration is that reviving the JCPOA at any cost should not be on Iran’s agenda and that the country should adopt a tougher stance in future negotiations to secure its anticipated economic benefits.


Specifically, they want any agreement on reviving the JCPOA to include three elements: 1) the removal of all sanctions that were lifted under the original agreement as well as any that have been imposed since the execution of the JCPOA in January 2016; 2) a U.S. guarantee not to withdraw from the deal again; and 3) the stipulation of a comprehensive interpretation of Paragraph 29 of the JCPOA that emphasizes the removal of barriers to the normalization of Iran’s trade. In addition, the negotiations must involve only the JCPOA; other issues such as Tehran’s regional influence and missile program should be off the agenda completely.


The Raisi government considers the passage of time to be to its advantage, enabling it to further develop its nuclear program and thereby increase its leverage in future negotiations. Iran’s economy has also shown more resilience to the sanctions than initially expected and is starting to emerge from the severe downturn it experienced in 2019 and 2020 immediately after Trump’s JCPOA exit. Although Iran’s economy is currently experiencing its highest inflation rate in over two decades (45.2 percent as of August) and living standards have fallen to unprecedentedly low levels, statistics from the Central Bank of Iran suggest an economic recovery is underway.



According to TankerTrackers.com, Iran’s oil exports in 2020 increased compared with 2018 and 2019 and in some months even exceeded 1.5 million barrels. Iran also reported that its revenues from oil and condensate sales in the six months from March to September 2021 were equal to the total oil revenues from March 2020 to March 2021. This increase also comes at a time when oil prices have more than doubled compared with last year, and some forecasts suggest the price could hit $100 per barrel or even higher in the near future.


Iran has announced that Ali Bagheri Kani, the new deputy foreign minister for political affairs—who replaced Abbas Araghchi, Iran’s former chief negotiator during Rouhani’s government—will lead the Iranian negotiating team from now on. Bagheri was a senior member of the Iranian negotiating team under former President Mahmoud Ahmadinejad but was ousted when the Rouhani government took office. He is a staunch opponent of the JCPOA, believing the agreement violates Iran’s national rights and undermines the country’s independence.


Although Tehran has said it will not enter brand-new negotiations and that the Vienna talks will resume from where the previous six rounds were halted, the appointment of a new negotiating team led by Bagheri suggests the Raisi administration intends to pursue a very different stance on resolving existing differences between Iran and the remaining JCPOA parties.


The new approach will likely see the Iranian negotiating team evaluating the results of the negotiations not on paper but in practice and with objective and measurable criteria. Under such circumstances, one can predict lengthy and tense negotiations in the coming months.

I`m reposting this here,as I think its relevant,and because sadly the original thread wound up being sidetracked into near total irrelevance by a poster with an axe to grind.

Here is a link to a pdf of the original report by the majils research center [in farsi]
https://www.bourseandbazaar.com/s/BBF_Majlis_Sanctions_Verification_Report

Here's What Iran Wants From Sanctions Relief
https://www.bourseandbazaar.com/articles/2021/10/1/heres-what-iran-wants-from-sanctions-relief

Back in February, Iran’s Supreme Leader, Ali Khamenei, set out an early condition for new negotiations over the fate of the JCPOA. In a major speech outlining Iran’s “final” stance on U.S. reentry into the nuclear deal, Khamenei declared that sanctions relief must be implemented “in practice” and not just “on paper.” Iran would also “verify” that sanctions relief commitments had been met before fulfilling its own commitments under the restored agreement.

Khamenei’s demands were shaped by the bitter experience of the Trump administration’s withdrawal from the JCPOA and unilateral reimposition of sanctions. The issues surrounding sanctions relief and Khamenei’s demands hung over six rounds of negotiations in Vienna. They are again being cited as a possible reason for the Raisi administration’s slow return to the nuclear talks. But what exactly Iranian leaders envision for verifiable sanctions relief has been unclear.

A new report, published by the Office of the Deputy for Economic Research of the Majlis Research Center, the influential research body of the Iranian parliament, offers the first detailed assessment of what verified sanctions relief might look like. The report, entitled “Verifying Sanctions Relief,” does not represent the official position of the Raisi administration, but given the timing of its publication and the affiliation with parliament, it likely represents an emerging consensus about how best to meet Khamenei’s demands while also assuaging the concerns of Iranian parliamentarians who feel the JCPOA is inherently unfair. Many of the details in this new report are drawn from an April 2021 report published by the same research centre that also looked at issues around the verification of sanctions relief. But the new report is more detailed in its diagnosis of the problem sanctions verification seeks to address and the mechanisms that should be used.

In particular, the report aims to address the perceived imbalance between paragraphs 26 and 36 of the JCPOA. Iran interprets paragraph 26 to allow it to lessen its commitments under the deal if sanctions relief is not fully implemented—an interpretation that is disputed by the P5+1. Paragraph 36, meanwhile, allows any party to trigger the dispute resolution mechanism and begin the process of “snapback” of sanctions—a provision that Iran considers a tool for the West to renege on the deal. Additionally, the report outlines an asymmetry in the ways in which Iran’s nuclear commitments under the JCPOA and the sanctions commitments of the P5+1 are overseen and implemented. Unlike nuclear commitments, sanctions relief commitments lack a verification and monitoring mechanism, can be obstructed, are slow to implemented, and can be undone unilaterally through snapback. The report summarises this asymmetry in the following table (translated here):


Asymmetry in JCPOA Implementation

	Iranian commitments	P5+1 commitments
Body responsible for verification and monitoring	IAEA	None
Verification mechanism	Technical	Non-technical
Means to disrupt	None	Increasing the perceived risk of engaging Iran
Timeframe for implementation	Immediate	Not immediate (Delay between sanctions relief and economic benefits)
Means to punish	“Snapback” mechanism	None

To address this asymmetry, the report calls for measures to be taken in three broad areas. What is striking about these measures is their practicality. The report basically calls for a more institutional and technical approach to sanctions relief in which a checklist provides Iranian policymakers an ability to assess the implementation of sanctions relief on an ongoing basis. As part of this approach, the report also sets out targets for oil exports and bilateral trade with Europe.

New Verification Body

The report calls for the designation of an Iranian body or institution to oversee verification of sanctions relief. This could be the Supreme National Security Council or it could be a new body established with its own staff and active secretariat. The body would have three tasks:

1. Observe and assess the actual impact of sanctions removal.
2. Establish a mechanism so that any Iranian person or entity can submit a complaint about issues related to sanctions relief.
3. Prepare an action plan for decreasing nuclear commitments in the event that other parties to the JCPOA renege on their commitments. Actions might include ceasing the voluntary application of the Additional Protocol, producing uranium metal, increasing enrichment above 20 percent, or expanding the number of operational IR6 centrifuges.

Verification Checklist

The new verification body would perform its mission in accordance with a defined “checklist.” The checklist would have two sections. The first section relates to specific actions and targets related to American and European sanctions relief commitments. The stipulations include:

1. Iran should be able to export oil and gas condensate according to its rightful market share of 2.5 million barrels per day (bdp) with an initial target of 2 million bdp.
   This target is feasible—during the sanctions relief afforded Iran under the JCPOA in 2016-2018, Iran exports hovered between 2 and 2.5 million bpd.
2. Iran should be able to increase bilateral trade with key European partners and conduct normal banking transactions to facilitate that trade. The report stipulates an initial monthly target of $3 billion in transactions with EIH Bank in Germany, rising to $4.2 billion. Monthly transactions with the French branch of Tejarat Bank are targeted at $1 billion, rising to $1.5 billion.
   Here, the report has highlighted Iranian-controlled financial institutions in Europe as the key conduits, perhaps reflecting how in recent years Europe-Iran trade has been increasingly run through smaller European banks without Iranian ownership or management. While the report stipulates “transactions,” the targets here are high when likely trade totals are considered. Even if we interpret that key Germany and France-based banks may process most EU-Iran trade, the total initial transaction volume envisioned of $48 billion is significantly higher than the total value of EU-Iran trade in 2016 following the lifting of sanctions. That year, bilateral trade reached just over EUR 20 billion. While the transaction targets could include foreign investment in Iran, it is unlikely that either EIH or Tejarat Bank can scale-up to handle the envisioned volumes.
3. Iran will also seek to verify a range of sanctions lifting measures taken by the Biden administration. This includes the removal of executive orders issued by “two American presidents,” a likely reference to Trump and Biden that suggests a desire for non-nuclear sanctions designations, such as the Foreign Terrorist Organization designation of the Islamic Revolutionary Guard Corps, to be lifted. In addition, the report calls for the update of the website of the Office of Foreign Assets Control (OFAC), the sanctions enforcement body of the U.S. Department of Treasury. OFAC is to cease publishing notices, advisories, and fact sheets that dissuade trade with Iran and should increase the issuance of licenses and exemptions to ease trade
   This stipulation that means the report authors understand U.S. primary sanctions will continue to pose a challenge for Iran’s engagement with the global economy.

The second section of the checklist focuses on ongoing efforts to decrease the risks of doing business with Iran once sanctions have been lifted. These stipulations reflect the perception in Iran that following the lifting of sanctions “on paper” in January 2016, the Obama administration took a lackadaisical approach to supporting the normalisation of global trade and investment in Iran. The continued characterisation of Iran as a high-risk jurisdiction is seen to have hampered economic engagement. Therefore, the checklist would require:

1. The removal of all measures that have presented Iran as a jurisdiction with high risk of money laundering and adoption of measures to normalise economic relations with Iran.
2. Changing the basis of guidance to banks issued by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) from risk-based to rule-based.
3. Maximal removal of sanctioned individuals and entities from the SDN list and a substantive review of SDN and non-SDN sanctions lists.
4. Removal of statements by OFAC and other institutions that dissuade humanitarian trade and maritime trade with Iran. In addition, there should be new licenses issued to all banks that hold Iranian oil revenues in order to ensure the timely release of frozen assets.
5. A written commitment from neighbouring countries not to take action against foreign entities willing to engage Iran economically.
6. Official statements proclaiming that medium and long-term economic engagement with Iran is permissible and refraining from any action that would damage engagement with Iran.

Notably, the report does not indicate that Iran would make progress on key measures such as implementation of the Financial Action Task Force (FATF) action plan that would substantially change the perceived risk associated with engaging with the Iranian financial system. While the demand that FinCEN changes its guidance from risk-based to rule-based is unrealistic, it does point to a desire for a more prescriptive approach from the U.S. government that may create a basis for reciprocal regulatory reforms in Iran. Here, the report is pointing to the issue of over-compliance by international banks, which deem the risks and costs of transacting with Iran, even in support of clearly permissible trade, to be too high. FinCEN’s risk-based guidance essentially places the burden on financial institutions to determine the appropriate level of due diligence, putting bank managers in an uncomfortable position where minimising risk means maximising administrative burdens. A more prescriptive approach, like the rule-based approaches taken by some European regulators, may reduce the incidence of over-compliance by eliminating the uncertainty around just how much due diligence is required to mitigate anti-money laundering or counter-terrorist financing risks.

Ongoing Monitoring

Finally, the report envisions that the verification of JCPOA-related sanctions relief will be take place on an ongoing basis. The verification body would produce a quarterly report that would certify that Iran is benefiting from sanctions relief in accordance with the checklist. This monitoring function would track developments in five key sectors: baking and finance, transportation and logistics, oil, gas, and petrochemicals, aviation, and industry and mining. The body would also consult across government and with the private sector. As part of its report, the body would offer its recommendation as to whether Iran should remain in the JCPOA, decrease its commitments, or cease participation. The quarterly reports would be used by Iran to inform its engagement with the JCPOA Joint Commission. Interestingly, the report envisions an Iranian body tasked with verification and does not outline the creation of an international third-party body that would be the true analogue for the IAEA. This may reflect a lack of trust that the third-party body would be impartial.

Outlook for Negotiations

As the Raisi administration has delayed its return to the Vienna negotiations, fears have grown that Iran will not continue the talks where they left off in the sixth round, instead returning to the table with new and unreasonable demands. But there is little to indicate that Khamenei’s “final” stance on the talks have changed since February, meaning that the key unknown is how reasonable Iranian negotiators will be in seeking to secure his core demand for verified sanctions relief. To this end, the new report from the Majlis Research Center should be reassuring. While some of the demands are unreasonable, for example the high targets for Europe-Iran trade and the insistence on changes to how FinCEN provides guidance, they are undeniably technical. Should this report reflect an emerging consensus about how to “improve” the JCPOA not by changing its terms, but by improving its implementation, then the outlook for negotiations may be less dire that many predict. A focus on technical shortcomings rather than political or strategic flaws indicates that Iran sees the value of a restored JCPOA but wishes the benefits to be assured and durable. Should the Biden administration be prepared to acknowledge the shortcomings in the sanctions relief provided to Iran between 2016-2018, there are ways in which verification can be addressed within the context of the deal.