Cfr - Iran Diplomacy Samore

www.iiss.org/stratcom Editor: Alexander Nicoll; Assistant Editor: Jessica Delaney

IISS Strategic Comments

Iran’s nuclear programme Can diplomacy succeed? President Mahmoud Ahmadinejad announcing on Monday 9 April that Iran had achieved a ‘commercial-scale’ enrichment capacity at Natanz.   Photo © AP

What are the prospects for a diplomatic resolution of the Iranian nuclear issue? The answer is shaping up as a contest of wills. On the one hand, the five permanent members of the United Nations Security Council (UNSC – China, France, Russia, the United Kingdom and the United States) have agreed gradually to increase mandatory economic and political sanctions against Iran until it agrees to suspend its uranium-enrichment programme. Suspension is a condition for beginning multilateral talks with the P-5 plus Germany (so-called ‘Seven Party Talks’), aimed at negotiating a permanent diplomatic solution. On the other hand, Iran appears determined to press ahead with the enrichment programme, while expressing its willingness to begin nuclear negotiations without conditions, which the P-5 have rejected. Efforts to engineer a compromise to get to the bargaining table have failed and neither side is showing signs of backing down. Further escalation of the dispute seems certain. Recognising that military options have serious drawbacks and risks, Washington is prepared to follow the diplomatic route for now, hoping that Iran will eventually succumb to international pressure. Ultimately, however, if diplomacy fails – and Iran overcomes the technical problems hampering its enrichment programme – the US will consider the military options more seriously.

A key condition of talks

The dispute between the UNSC and Iran over the suspension of uraniumenrichment activities as a condition for negotiation is based on the precedent set during the negotiations between the EU3 (the UK, France and Germany) and Iran in 2003–05. As a condition for holding negotiations, the Europeans insisted that Iran suspend its enrichment programme during talks to achieve a diplomatic solution. Tehran eventually accepted this condition despite its initial resistance. In return, the Europeans agreed not to refer Iran to the UNSC for numerous safeguards violations uncovered by the International Atomic Energy Agency (IAEA) in connection with Iran’s secret enrichment programme dating back nearly 20 years. The EU-3 talks with Iran made little progress, however, towards

ISSN: 1356-7888

resolving the central issue of whether Iran would be allowed to develop a full-blown enrichment programme. The Europeans demanded that Iran accept a permanent suspension of its enrichment programme (or at least a ten-year moratorium), but Iran insisted on its right to develop an industrial enrichment capability, while offering to accept various technical constraints and provide political assurances intended to build confidence that the enrichment plant would not be used for military purposes. The Europeans rejected these proposals as insufficient. As the talks dragged on, Tehran complained that the Europeans were stalling simply to keep its enrichment activities frozen. By the summer of 2005, as President Mahmoud Ahmadinejad took office, Iran decided to end the suspension and its negotiations with the EU-3. With the US bogged down in Iraq and the big powers divided over the threat of sanctions, Tehran calculated that it could resume its enrichment activities with a low risk of serious international retaliation. Indeed, international pressure was slow to mount. After months of procedural delays and negotiations, the IAEA Board of Governors finally referred Iran to the UNSC in February 2006, after Tehran rejected a Russian proposal for Iran to participate in a multilateral enrichment programme located in Russia. The UNSC issued a toothless presidential statement in March 2006 calling on Iran to suspend enrichment within 30 days. When Iran ignored this request, the UNSC unanimously approved Resolution 1696 on 31 July 2006, demanding that Iran ‘suspend all enrichment-related and reprocessing activities’ by 31 August 2006 and threatening economic sanctions under Article 41 of Chapter VII of the UN Charter if Iran did not comply. The key to P-5 consensus on this resolution was Washington’s willingness to omit reference to Article 42, which authorises military action, and its offer to join multilateral negotiations with Iran if it agreed to suspend enrichment. In addition, Washington hoped that the

Israeli offensive against Hizbullah in south Lebanon, launched in mid-July 2006, would weaken Iran’s resolve by damaging one of its most important allies in the region. Instead, the Lebanon war backfired. Iran emerged as the champion of Arab resistance to Israeli occupation, embarrassing and alarming the Sunni Arab powers. In the aftermath of the war, Iran felt even more confident that it could resist UNSC demands for the suspension of its enrichment programme. Efforts by EU foreign policy chief Javier Solana and Iranian National Security Adviser Ali Larijani to craft a compromise that would allow suspension and negotiations to begin simultaneously were essentially subverted by Ahmadinejad. In New York, there was a six-month period of painful negotiations among the ­P­-­5, with Russia (quietly supported by China) opposing most of the proposals put forward by the US and Europeans to place sanctions on Iran. Gradually, in the interests of maintaining P-5 consensus, the resolution was whittled down to a bare minimum. Finally, on 23 December 2006, Resolution 1737 was unanimously adopted, setting a 60-day deadline for Iran to suspend all enrichment and reprocessing activities as a basis for beginning negotiations with the P-5 plus Germany, and imposing largely symbolic financial sanctions against a small number of Iranian individuals and entities directly involved in ‘sensitive nuclear activities’.

Hopes of a breakthrough

By early 2007, however, officials in Washington and Europe began to grow confident that their diplomatic strategy was beginning to wear down Iran’s resistance. Weakened by Iranian municipal elections in midDecember, Ahmadinejad was criticised by his ‘pragmatic conservative’ rivals for mishandling the nuclear portfolio and allowing a UNSC consensus to emerge against Tehran. Although the official sanctions were puny, there was a significant indirect economic impact as private firms began to reduce their

Volume 13 Issue 03 April 2007 Iran's nuclear programme

exposure in Iran in anticipation of additional UN-mandated sanctions. Supreme Leader Ayatollah Sayyid Ali Khamenei reportedly empowered Larijani to resume his desultory talks with Solana in February and April 2007. The latest compromise under discussion would involve a two-step process, the first being a 30-day moratorium in which Iran would not install additional centrifuge machines and the UNSC would not impose additional sanctions. During this period the two sides would negotiate terms for a 'double suspension', in which, as a basis for beginning multilateral negotiations, Iran would suspend enrichment activities and the UNSC would suspend sanctions. A key issue is whether Iran would agree to halt all enrichment activities or insist on continuing some research and development activities during multilateral negotiations. On the ground, Saudi Arabia embarked on diplomatic efforts to limit Iran’s influence in the region and maintained high oil production, which reduced Iranian oil revenues, while the US pursued a more aggressive strategy against Iranian agents in Iraq and sent additional naval assets into the Persian Gulf. Despite this increased economic, political and military pressure, Iran once again defied the UNSC deadline in late February. This time the P5 responded very quickly with a new resolution, in part because Moscow and Washington reached agreement bilaterally on its main elements before presenting it to the other permanent members. Adopted unanimously on 24 March 2007, Resolution 1747 set a new 60-day deadline for Iran to suspend its enrichment programme, expanded the existing financial sanctions by targeting the state-owned Bank Sepah and additional Revolutionary Guard commanders, and hinted at additional mandatory sanctions such as an arms embargo and a ban on export credits. It also endorsed the previous proposal to begin Seven Party negotiations with Iran and implicitly offered to suspend sanctions during the talks if Iran agreed to halt its enrichment programme during the same period. With Russia’s apparent shift in position, Resolution 1747 represented a much more cohesive P-5 stand aimed at further increasing international pressure on Iran. In addition to immediately rejecting the resolution, however, Iran responded by demonstrating that it could also up the ante, seizing 15 British military personnel operating in the Persian Gulf. The outcome of the

episode also seemed to mark a comeback for Ahmadinejad, who announced the return of the prisoners after 13 days as an ‘Easter gift’ to the British people. A few days later, he declared that Iran had achieved a ‘commercial-scale’ enrichment capacity at Natanz. In reality, Iran is still experiencing technical difficulties with its centrifuge machines and is at least several years away from achieving a truly commercial-scale enrichment capability.

A dangerous stalemate

Nonetheless, with the new UNSC deadline looming in late May, neither side appears willing to relent. While some outside experts have advocated unconditional nuclear talks with Iran, the P-5 see little value in negotiating the nuclear issue while Iran continues to develop its enrichment capacity. Under these circumstances, Iran would have every incentive to drag out the talks while working to achieve its nuclear objectives. For its part, Iran fears that if it does agree to halt its activities, the P-5 would have their own reason to drag out the talks, keeping Iran’s enrichment programme on ice indefinitely while threatening to re-impose sanctions if Iran were to re-start it. Various attempts to break this stalemate have failed. Iranian diplomats have suggested that if the P-5 would accept in principle that Iran could develop an industrial-scale enrichment plant, then Iran could accept a temporary suspension to work out details, such as inspection arrangements and possible joint ownership and operation. This idea has been rejected by the P-5 because it would concede the main issue before the negotiations had begun. Similarly, Iran has rejected various face-saving proposals put forward by the Europeans to hold a series of preliminary multilateral meetings, culminating in a ministeriallevel Seven Party meeting at which suspension of enrichment and sanctions would be simultaneously announced. Larijani apparently expressed interest in this formula, only to be overruled by Ahmadinejad. With no diplomatic end in sight, the pressure on both sides is likely to mount. Assuming that Tehran ignores Resolution 1747, the P-5 will have to consider more serious sanctions in future resolutions, including a suspension of civil nuclear cooperation with Iran, imposition of an arms embargo, suspension of export credits for companies trading with Iran, and limits on foreign investment in Iran’s oil and gas sector. A key issue is whether the P-5 will be able to maintain consensus on tougher sanctions. On the one hand, the P-5 share an interest

Volume 13 Issue 03 April 2007 Iran's nuclear programme

in preventing Iran from acquiring a nuclear-weapons capability and hope that muscular multilateral diplomacy will avert the risk of war. On the other hand, there are differences among the P-5 over the perceived utility of sanctions, the extent to which sanctions would damage bilateral relations with Iran, the extent to which they would heighten tensions, and the prospects of managing threats from a nuclear-armed Iran. On the Iranian side, the key issue is whether escalating sanctions will empower the opponents of Ahmadinejad, the so-called ‘pragmatic conservatives’, to convince the Supreme Leader to support a temporary suspension, if only for tactical reasons to relieve international pressure and to create new opportunities to divide the opposition. But, as the episode of the British captives demonstrates, Ahmadinejad and the Revolutionary Guard are also able to turn up the heat in response to UNSC sanctions in ways that mobilise nationalist sentiment and make it more difficult for Tehran to compromise over its self-proclaimed nuclear rights. As long as the P-5 believe that their diplomatic strategy of incremental sanctions has a good chance of working, unity is likely to hold, but if it becomes clear that Iran is determined to proceed with enrichment no matter what sanctions are imposed, then underlying P-5 differences are likely to emerge. In particular, only the US is prepared to consider the use of force against Iranian nuclear facilities if that becomes the only way to prevent (or delay) Iran from achieving a nuclear-weapons capability. At the same time, Washington recognises that military options are very unattractive. It is unclear how much damage air strikes could inflict on Iran’s nuclear capabilities, and such attacks would run the risk of developing into a general conflict and are likely to disrupt seriously US efforts in the region to form an Arab alliance to contain Iran. For now, Washington is prepared to let diplomacy ‘play out’ because Iran is not making rapid technical progress towards acquiring a nuclear-weapons capability and because Washington believes that its diplomatic strategy is having some effect. Ultimately, however, if Iran begins to reach critical technical thresholds, and diplomatic means fail to persuade Iran to suspend its uranium-enrichment programme, then consideration of military options will come into play, despite all the risks IISS and drawbacks.

© The International Institute for Strategic Studies

For information on sales and reprints of Strategic Comments, as well as subscriptions subscriptions, ,contact: contact: T&F T&FOrder OrderProcessing, Processing,T&F T&FInforma InformaUK UKLtd, Ltd,Sheepen SheepenPlace, Place,Colchester ColchesterEssex EssexCO3 CO33LP 3LPTel: Tel:+44 +44(0) (0)20 207017 70175544, 5544,Fax: Fax:+44 +44(0) (0)20 207017 70174760, 4760,email: email:[email protected] [email protected]

Iran's nuclear programme page 2