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«Implications of a Nuclear Agreement with Iran Mark Dubowitz Executive Director Foundation for Defense of Democracies Center on Sanctions and Illicit ...»

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(https://www.iaea.org/newscenter/pressreleases/iaea-director-generals-statement-and-road-map-clarification-pastpresent-outstanding-issues-regarding-irans-nuclear-program) Foundation for Defense of Democracies www.defenddemocracy.org Mark Dubowitz July 23, 2015 assessed that Iran’s economic growth would likely stabilize around 2.6% in FY2015/16, and then accelerate to about 4% in FY 2016/17. In the second half of the decade, Iran’s economic growth would likely average 3.5-4%.17 Depending on Iran’s economic policy choices, in FY 2017/18, growth might reach 5-6%.

The IRGC will be a significant beneficiary of the sanctions relief. Combined with the de-listing of IRGC officials and IRGC-linked entities, the relaxed banking standards will grant the Iranian regime the ability to move its money anywhere in the world. With EU sanctions also set to be lifted on major Iranian banks, Europe will become an economic free zone for Iran’s most dangerous people and entities.

3. Begin purchasing arms after the United Nations arms embargo terminates.

According to the U.N. Security Council resolution, the arms embargo will end in five years. 18 After five years, Iran can begin purchasing “battle tanks, armoured combat vehicles, large caliber artillery systems, combat aircraft, attack helicopters, warships, [and] missiles.” Iran can purchase these goods with the cash it has received through sanctions relief to build its own military capacities. Tehran may also illicitly provide these heavy arms to its allies and proxies.

4. Develop a long-range ballistic missile system after the termination of the ballistic missile sanctions.

U.N., U.S., and EU ballistic missile sanctions will be terminated. 19 Notably, the JCPOA permits this to happen after eight years or after the IAEA reaches a so-called “broader conclusion” that Iran’s program is entirely peaceful and contains no undeclared activities, “whichever is earlier.” (emphasis added). In short, whether or not the IAEA has determined that Iran’s program is peaceful, Tehran will be permitted to engage in an expansion of its ballistic missile program after a maximum of eight years. Iran may also be able to expand its intercontinental ballistic missile program under the guise of satellite testing. The U.S. Defense Department notes, “Iran has publicly stated it may launch a space launch vehicle by 2015 that could be capable of intercontinental ballistic missile ranges if configured as a ballistic missile.” 20 Even with the current sanctions in place, Iran reportedly has the “largest and most diverse” ballistic missile program in the Middle East. 21 The U.S. Defense Department has repeatedly Mark Dubowitz, Annie Fixler, & Rachel Ziemba, “Iran’s Economic Resilience Against Snapback Sanctions Will Grow Over Time,” Foundation for Defense of Democracies & Roubini Global Economics, June 2015.

(http://www.defenddemocracy.org/content/uploads/publications/Iran_economy_resilience_against_snapback_sancti ons.pdf) United Nations Security Council, “Resolution 2231 (2015),” July 20, 2015, Annex B, paragraph 5, page 100.

(http://www.un.org/en/sc/inc/pages/pdf/pow/RES2231E.pdf) “Joint Comprehensive Plan of Action,” Vienna, July 14, 2015, Annex V, paragraphs 19 and 20.1.

(http://eeas.europa.eu/statements-eeas/docs/iran_agreement/annex_5_implementation_plan_en.pdf) United Nations Security Council, “Resolution 2231 (2015),” July 20, 2015, Annex B, paragraph 3, page 99.

(http://www.un.org/en/sc/inc/pages/pdf/pow/RES2231E.pdf) U.S. Department of Defense, “Unclassified Report on Military Power of Iran,” January 2014, page 1.

(http://freebeacon.com/wp-content/uploads/2014/07/Iranmilitary.pdf) Michael Elleman, “Iran’s Ballistic Missile Program,” The Iran Primer, accessed August 25, 2014.

(http://iranprimer.usip.org/resource/irans-ballistic-missile-program) Foundation for Defense of Democracies www.defenddemocracy.org Mark Dubowitz July 23, 2015 assessed that Iran’s ballistic missile could be “adapted to deliver nuclear weapons.”22 Last year, Director of National Intelligence James Clapper testified before Congress that if Iran chooses to make a bomb, Iran would choose “a ballistic missile as its preferred method of delivering nuclear weapons.”23 According to Clapper, these missiles are “inherently capable of delivering WMD.”24 Why is Iran permitted to engage in ballistic missile development—the development of the likely delivery vehicle if Iran builds a nuclear warhead—before the international community is certain that Iran’s existing nuclear program is peaceful?

5. Reap additional economic and military benefits when additional sanctions terminate and more entities are de-listed by the United States and EU.

Of the nearly 650 entities that have been designated by the U.S. Treasury Department for their role in Iran’s nuclear and missile programs or for being owned or controlled by the government of Iran, more than 67 percent will be de-listed from Treasury’s blacklists within 6 to 12 months.

After eight years, only 25 percent of the entities that have been designated over the past decade will remain sanctioned.

After eight years—whether or not the IAEA has determined that Iran’s nuclear program is entirely peaceful—additional significant EU sanctions will be lifted. These include sanctions on the IRGC, Quds Force, IRGC Air Force, and the Ministry of Defense. Additionally, the United States will lift sanctions on two central figures in Iran’s nuclear development: Fereidoun AbbasiDavani and Mohsen Fakhrizadeh. Abbasi-Davani is the former head of the Atomic Energy Organization of Iran. Fakhrizadeh is the AQ Khan of Iran’s nuclear weapons development. The United States will also de-list—among other entities involved in Iran’s nuclear program—the Organization of Defensive Innovation and Research (SPND), an entity “primarily responsible for research in the field of nuclear weapons development.”25 Additionally, Iran could argue that other “non-nuclear” sanctions should also be lifted under the





JCPOA according to paragraph 26:

“The U.S. Administration, acting consistent with the respective roles of the President and the Congress, will refrain from imposing new nuclear-related sanctions. Iran has stated that it will treat such a re-introduction or re-imposition of the sanctions specified in Annex II, or such an imposition of new nuclear-related sanctions, as grounds to cease performing its commitments under this JCPOA in whole or in part.” 26 U.S. Department of Defense, “Unclassified Report on Military Power of Iran,” April 2010, page 10.

(http://www.iranwatch.org/sites/default/files/us-dod-reportmiliarypoweriran-0410.pdf); U.S. Department of Defense, “Unclassified Report on Military Power of Iran,” April, 2012, page 1. (http://fas.org/man/eprint/dodiran.pdf) James R. Clapper, “Statement for the Record: Worldwide Threat Assessment of the US Intelligence Community” Testimony before the Senate Select Committee on Intelligence, January 29, 2014, page 6.

(http://online.wsj.com/public/resources/documents/DNIthreats2014.pdf) Ibid.

Department of State, Media Note, “Additional Sanctions Imposed by the Department of State Targeting Iranian Proliferators,” August 29, 2014. (http://www.state.gov/r/pa/prs/ps/2014/231159.htm) “Joint Comprehensive Plan of Action,” Vienna, July 14, 2015, paragraph 26. (http://eeas.europa.eu/statementseeas/docs/iran_agreement/iran_joint-comprehensive-plan-of-action_en.pdf)

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Paragraph 29 of the preface states:

“The EU and its Member States and the United States, consistent with their respective laws, will refrain from any policy specifically intended to directly and adversely affect the normalization of trade and economic relations with Iran inconsistent with their commitments no to undermine the successful implementation of this JCPOA.” (emphasis added)27 While paragraph 26 only refers to the imposition of new nuclear-related sanctions, Iran may be able to argue that U.S. terrorism-related sanctions to the extent they have any economic impact on Iran are in violation of the JCPOA because they block the normalization of trade and economic relations. For example, Iran could claim that the imposition of sanctions on Iranian banks for terrorist financing would impede normal trade and economic relations. Tehran also can threaten to use its “nuclear snapback” (described below) to persuade the EU and other countries not to comply with any new U.S. non-nuclear sanctions, complicating Washington’s ability to constrain and deter the full range of Iran’s illicit conduct.

6. Transform from a nuclear pariah to a nuclear partner.

After ten years, the United Nations will remove the Iranian nuclear file from its agenda and will “no longer be seized of the Iran nuclear issue.” At that time, Iran will no longer be under any Chapter 7 resolutions and will have a legitimate and legal nuclear program. Iran can also build additional scientific knowledge because research and development restrictions will be lifted.

Even prior to the lifting of restrictions on R&D, Iranian scientists can acquire knowledge and skills which can be used to move quickly to nuclear breakout at the time of Iran’s choosing.

Under the JCPOA, all parties also commit to cooperate on enhancing Iran’s ability to respond to nuclear security threats “including sabotage,”28 which may limit the use of cyber and other tools to counter Iran’s nuclear expansion or to respond to Iranian noncompliance.

7. Use the threat of a “nuclear snapback” to ward off any attempt to use the sanctions snapback.

The JCPOA explicitly states, “Iran has stated that if sanctions are reinstated in whole or in part, Iran will treat that as grounds to cease performing its commitments under this JCPOA in whole or in part.”29 Using snapback sanctions cancels the JCPOA. In short, if the United States or its partners attempt to re-impose sanctions, Iran may simply walk away from the deal. If Iran cheats and gets caught, and the international community attempts to punish Iran, Iran can threaten to back out of the deal and expand its nuclear program. This may create reluctance to punish Iran for any violations short of the most flagrant and egregious violations and create a permissive environment for Iranian cheating and stonewalling of the IAEA.

Ibid., paragraph 29.

“Joint Comprehensive Plan of Action,” Vienna, July 14, 2015, Annex III, paragraph 10.2.

(http://eeas.europa.eu/statements-eeas/docs/iran_agreement/annex_3_civil_nuclear_cooperation_en.pdf) “Joint Comprehensive Plan of Action,” Vienna, July 14, 2015, paragraph 37. (http://eeas.europa.eu/statementseeas/docs/iran_agreement/iran_joint-comprehensive-plan-of-action_en.pdf)

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8. Build an advanced centrifuge-powered, industrial-size nuclear program.

After fifteen years, the significant restrictions on Iran’s nuclear program will have lapsed. Iran

will in effect be permitted to have:

 Multiple enrichment facilities;

 A near-zero breakout time with faster advanced centrifuges;

 An easier clandestine sneak-out with fewer machines deployed in smaller facilities;

 Plutonium reprocessing;

 A stockpile of enriched uranium to 20 or 60% levels; and,  An expanded ballistic missile program.

9. Stymie IAEA inspections.

Throughout the duration of the JCPOA, Iran can delay IAEA inspections of suspected sites without facing consequences. The JCPOA creates a 24-day delay between the IAEA request to access a suspicious site and the date on which Iran must allow access. As former Deputy Administrator for Defense Nuclear Nonproliferation at the National Nuclear Security Administration William Tobey explains, “24 days … [is] ample time for Iran to hide or destroy evidence.”30 Former Deputy Director General for Safeguards at the IAEA Dr. Olli Heinonen explains that for small facilities, 24 days is enough time for Iran to “sanitize” suspected sites, including, for example, where Iran may be engaged in weaponization activities.31 Iran is also likely to have developed contingency plans to respond to IAEA demands to visit these sites. According to Dr.

Heinonen, Tehran may only need two days to remove nuclear equipment from a small facility 32 and remove any traces of uranium, which even environmental sampling may be unable to detect.

As Dr. Heinonen notes:

“Time for ‘scrubbing’ takes on special salience in nuclear-related developments without nuclear material present. Some of the past concealment events carried out by Iran in 2003 left no traces to be detected through environmental sampling.”33 William Tobey, “The Iranian Nuclear-Inspection Charade,” The Wall Street Journal, July 15, 2015.

(http://www.wsj.com/articles/the-iranian-nuclear-inspection-charade-1437001048) Bill Gertz, “Ex-IAEA Leader: 24-Day Inspection Delay Will Boost Iranian Nuclear Cheating,” The Washington Free Beacon, July 21, 2015. (http://freebeacon.com/national-security/ex-iaea-leader-24-day-inspection-delay-willboost-iranian-nuclear-cheating/) Michael R. Gordon, “Provision in Iran Accord Is Challenged by Some Nuclear Experts,” The New York Times, July 22, 2015. (http://www.nytimes.com/2015/07/23/world/middleeast/provision-in-iran-accord-is-challenged-bysome-nuclear-experts.html?referrer=&_r=1&gwh=F74FAB44A324C6E6F96BB6460E6FBCDA&gwt=pay) Olli Heinonen, “The Iran Nuclear Deal and its Impact on Terrorism Financing,” Testimony Before the House Financial Services Committee, Task Force to Investigate Terrorism Financing, July 22, 2015.

(http://financialservices.house.gov/calendar/eventsingle.aspx?EventID=399373)

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10. Become a threshold nuclear weapons state.

While adhering to the letter of its commitments under the JCPOA, Iran will emerge in 15 years with multiple pathways to a nuclear weapon. Iran will have a powerful economy, immunized against sanctions pressure and increased military and regional power. Iran will likely be the dominant power in the region and a threshold nuclear weapons state. Iran will have achieved its goals through strategic patience by following the terms of the deal.

The JCPOA does not prevent a nuclear-armed Iran; rather it provides multiple patient pathways for Iran.

JCPOA & CHALLENGE TO CONDUCT-BASED FINANCIAL SANCTIONS

The JCPOA also dismantles the international economic sanctions architecture which was designed to respond to the full range of Iran’s illicit activities, not only the development of Iran’s illicit nuclear program. The United States has spent the last decade building a powerful yet delicate sanctions architecture to punish Iran for its nuclear mendacity, illicit ballistic missile development, vast financial support for terrorist groups, backing of other rogue states like Bashar Assad’s Syria, human rights abuses, and the financial crimes that sustain these illicit activities.

More broadly, a primary goal of the sanctions on Iran, as explained by senior Treasury Department officials over the past decade, was to “protect the integrity of the U.S. and international financial systems” from Iranian illicit financial activities and the bad actors that facilitated these. 34 The goal of sanctions was to provide the president with the tools to stop the development of an Iranian nuclear threshold capacity and also to protect the integrity of the U.S.-led global financial sector from the vast network of Iranian financial criminals and the recipients of their illicit transactions. This included brutal authoritarians, terrorist funders, weapons and missile proliferators, narco-traffickers, and human rights abusers.

Tranche after tranche of designations issued by the Treasury, backed by intelligence that often took months, if not years, to compile, isolated Iran’s worst financial criminals. And designations were only the tip of the iceberg. Treasury officials traveled the globe to meet with financial leaders and business executives to warn them against transacting with known and suspected terrorists and weapons proliferators.35 This campaign was crucial to isolating Iran in order to deter its nuclear ambitions and also to address the full range of its illicit conduct.



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