One year after major world powers reached a historic nuclear deal with Iran, that country has largely kept up its end of the bargain but Tehran has complained it has not experienced the financial boost it hoped to receive.
After years of negotiations, Iran accepted restrictions on and monitoring of its nuclear program – which the world feared was an attempt to make a bomb, despite Iranian assertions to the contrary – in exchange for the lifting of crippling sanctions.
Iran moved swiftly to dismantle its nuclear program after the deal was signed July 14, 2015, to speed sanctions relief, which would not come until the International Atomic Energy Agency certified Tehran had fully complied with the requirements.
Those also included reducing its stockpile of enriched uranium from 12,000 kilograms to 300 kilograms, filling the core of its Arak heavy-water reactor with cement, removing nuclear material from its Fordow facility and dismantling two-thirds of its 19,000 centrifuges from Natanz.
The most significant element of the Iran deal to date, in my opinion, is how smoothly the agreement has been implemented.
Kelsey Davenport, Arms Control Association
Opponents of the landmark deal, reached between Tehran and the U.S., China, France, Germany, Russia and the U.K, asserted that Iran was sure to cheat given its past illicit nuclear activity. But IAEA monitors have found the country so far has complied, including shipping the bulk of its enriched uranium to Russia.
Kelsey Davenport, director for nonproliferation policy at the Arms Control Association, which supported the deal, said that given the technical complexity of what was required, it is a major accomplishment that Iran has stuck to its obligations.
“The most significant element of the Iran deal to date, in my opinion, is how smoothly the agreement has been implemented,” Davenport said. “Since implementation day in January, Iran has adhered to all of the restrictions under the agreement, sanctions have been lifted and while Iran isn’t seeing economic windfall it originally anticipated, businesses are demonstrating interest in going back into Iran.”
That windfall, estimated in the tens of billions of dollars, has been slow to come because although nuclear-related sanctions have been lifted under the deal, the majority of the U.S. financial punishments remain in place. Washington also sanctions Tehran for human rights violations, ballistic missile activity and continued support for terrorism.
The airline sector is one of the few U.S. industries that opened to Iran following the agreement, with Boeing announcing in June a $17.6-billion deal to sell 80 passenger jets to Iran Air.
Congress moved to block the sale last week on the grounds the aircraft could be used by Iranian armed forces, and lawmakers have threatened to stop a deal by the French company Airbus to sell Iran planes because they contain American parts. But President Barack Obama threatened to veto the bill to block the Boeing sale.
Sanctions prohibit Iran from using U.S. dollars, and many international banks remain wary of doing business there for fear of running afoul of other sanctions that could restrict their access to the more lucrative American market. There is also a risk that the country could still violate the deal, triggering a snapback of economic sanctions that would force businesses out of the country.
Secretary of State John Kerry has worked to address such concerns among the deal’s European signatories. Those countries are eager to see their businesses have access the Iranian market.
Iranian Ayatollah Ali Khamenei accused the U.S. of creating “Iranophobia” to scare off international businesses.
The deal could face new challenges next year. If he wins the White House, Donald Trump has said he would renegotiate its terms, and Iranian President Hassan Rouhani must stand for reelection next year.
But Mark Dubowitz, who opposed the deal and is executive director of the Foundation for Defense of Democracies, said that Iranian dissatisfaction with the pace of economic recovery doesn’t violate the agreement. He said that when the deal was being negotiated, Iranians asked for tangible guarantees that foreign financial institutions would reenter the Iranian market and gross domestic product would increase.
“The administration said ‘absolutely not. We’re not guaranteeing you economic outcomes. What we are guaranteeing you is that we will lift or suspend hundreds of U.S. sanctions and European sanctions,’ ” Dubowitz said. “So now for Iran to come back and effectively say to the administration, ‘We’re just not happy with the economic relief that we got. We want you to guarantee economic outcomes,’ is for Iran to return back to the position of continuing to negotiate points that were supposedly well settled.”
The deal has also provided more subtle diplomatic benefits for the U.S. in a volatile Middle East, analysts note.
While the U.S. and Iran still do not have formal diplomatic relations, Kerry and Iranian Foreign Minister Javad Zarif developed a close working relationship during the negotiations and remain in regular contact. In January, when a Navy vessel carrying U.S. sailors errantly wandered into Iranian waters and the crew was taken into custody, Kerry’s personal call to Zarif secured the sailors’ release, defusing an encounter that previously could have become an international incident.
Some also credit the personal rapport with securing the release of several Americans held in Iran, including Christian pastor Saeed Abedini of Idaho and Washington Post reporter Jason Rezaian.
Despite this unofficial diplomatic thaw, opponents of the nuclear deal say Iran’s continued ballistic missile activity and support for Hezbollah and Syrian President Bashar al Assad are evidence Tehran does not intend to become more moderate in the wake of the international agreement, even if it does stick to the nuclear provisions.
And with only six months left of the Obama administration, the deal’s continued success largely depends upon the attention it receives from the next president, Davenport said.
Republican presidential candidate Donald Trump has said he would renegotiate the deal, while Democratic candidate Hillary Clinton, who was involved with the initial nuclear diplomacy with Iran while secretary of state, would keep it in place.
Iran may also change leadership, with moderate President Hassan Rouhani up for reelection next year.
“The next (U.S.) president will need to ensure that the Iran deal remains a priority,” Davenport said. “We certainly wouldn’t want to end up in position where over time Iran moves into a grey zone, violating elements of the deal slightly here and there, and then has moved in position where it could be moved to pursue nuclear weapons in the future.”
Teresa Welsh, 202-383-6035, @tmawelsh