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Iran ignores a lucrative deal over its nuclear activities

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By Reuel Marc Gerecht and Mark Dubowitz August 10 at 9:29 AM

Reuel Marc Gerecht is a senior fellow at the Foundation for Defense of Democracies. He served in the CIA’s Clandestine Service from 1985 to 1994, specializing in the Middle East. Mark Dubowitz is the foundation’s executive director.

Why hasn’t Iran’s supreme leader, Ayatollah Ali Khamenei, agreed to the offer the West put on the table in Vienna last month in negotiations over the country’s nuclear activities? If he were simply motivated by economics, he certainly should have.

Iran’s fully accessible hard-currency reserves are low, perhaps below $20 billion. Even within the limitations of the Joint Plan of Action concluded in November, Tehran has received around $4.2 billion in cash relief from unfrozen hard-currency accounts. Another $2.8 billion is forthcoming with the plan’s four-month extension. Billions more have been gained indirectly since the United States and Europe ceased escalating sanctions; one can see the effects through the halving of Iran’s inflation rate, the stabilization of its exchange rate and an increase in gross national product. If the Iranians moved toward the West, tens of billions of dollars would likely start flowing into Iranian banks.

Furthermore, the Iranian regime is well aware that the European Union oil embargo was a rare act of consensus, brought on in part by the combative style of former president Mahmoud Ahmadinejad. Many European states feel they have little at stake in the Middle East, and others, such as Germany, Italy and Great Britain, have had substantial trade with the Islamic Republic. Nuclear concessions by Iran could easily lead rapidly to the lifting of the embargo.

Although Tehran might still have to navigate Washington’s financial sanctions, an end to the embargo would probably mean that Europe would never again be a major player in sanctions — even if the mullahs were later caught cheating on a nuclear deal. President Hassan Rouhani has often stressed the need to use Europe against the United States; it’s a good bet that a primary political objective for Tehran is to shatter Western unity on the nuclear issue. Khamenei’s obstinacy puts that at risk.

Nor is the West even trying arduously to deny Tehran the capacity to build nuclear weapons. Negotiators have recognized the regime’s “right” to uranium enrichment; they appear ready to accept several thousand operational centrifuges and Iran’s “right” to advanced centrifuge research and development at the buried-in-the-mountain Fordow site. President Obama has also accepted the idea of a “sunset clause” on any agreement (Tehran has suggested three to seven years; Washington wants more than 10), which means that eventually the regime could legally develop an industrial-size enrichment program, reducing its bomb breakout time to days and increasing the risk of uranium diversion to covert sites. The White House has also largely ignored concerns of the International Atomic Energy Agency about weaponization research, leaving those troublesome questions to separate talks between the IAEA and Tehran.

Questions about Iran’s intercontinental ballistic missile program are being redefined. The administration no longer seeks to stop the development of long-range missiles, just nuclear warheads, even though warhead production is nearly impossible to detect, especially without an intrusive inspections regime. And Obama appears content to keep inspections limited to known nuclear sites; Iran won’t have to agree to give IAEA inspectors unchallenged access to any suspicious location. The White House also seems to have dropped the demand that the heavy-water facility at the Arak plant be converted to a light-water reactor, which produces hard-to-extract plutonium. The emphasis at Arak is now on frequent inspections and a reduction in reactor fuel.

All in all, the United States has offered a very good deal, yet Khamenei hasn’t bitten. It’s quite possible that the cleric just expects to win more concessions from a U.S. president allergic to conflict in the Middle East. Much has been made of the salutary effect of sanctions on the regime’s embrace of diplomacy; too little has been made of Tehran’s longtime strategy to get the West to accept its continuing nuclear progress. Diplomacy for the regime has always been a path to the bomb, and this is especially true for Rouhani, who believes he used diplomacy between 2003 and 2005 to protect his country’s atomic quest from a war-mongering George W. Bush. Rouhani has surely told Khamenei that the more the West extends diplomacy, the more concessions it makes and, thus, the smoother Iran’s transition to a nuclear-armed state.

But such diplomatic maneuvering is difficult for Khamenei. He loathes America and doesn’t appear to share Rouhani’s fondness for using Europe against the United States. In his view, bowing to Westerners is a sin. The same is true for the Islamic Revolutionary Guards, who aren’t clever but are powerful. Rouhani has a long-standing, friendly relationship with Khamenei, but he may not be able to persuade his boss to let Obama surrender with some face.

No one should be surprised if the supreme leader doesn’t allow negotiations to drag on beyond November, the new deadline, even if the West offers more economic relief. If talks end, the White House could try to bolster its diplomacy with more sanctions and a congressional authorization to use military force. The odds of such an approach working, however, aren’t good. The White House’s palpable fear of conventional conflict, which Khamenei regularly mocks, and the West’s track record of giving ground in talks, probably proves in Khamenei’s eyes the strategic wisdom of his nuclear aspirations.

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