Iran Gets
Sanctions Relief Jan. 20 as Nuclear Deal Begins
President Barack Obama urged Congress to hold off
on imposing new sanctions on Iran after the Islamic Republic agreed to curtail
its nuclear activities starting Jan. 20 under a deal with world powers.
The agreement restricts Iran’s nuclear activities
and imposes more intrusive inspections while starting a six- to 12-month
timetable to reach a permanent accord. In return, Iran will benefit from
sanctions relief, which the U.S. values at $6 billion to $7 billion over six
months.
The accord was reached after Iran and the so-called
P5+1 countries -- China, France, Russia, the U.K. and the U.S., plus Germany --
arrived at an understanding over the weekend on how to implement a deal
negotiated in November. There were no immediate signs that it would quell
efforts in Congress to escalate pressure on Iran with further sanctions.
Iran has threatened to abandon talks if Congress
votes to tighten economic restrictions, and Obama has vowed to veto additional
sanctions while negotiations continue.
“Now is not the time for new sanctions,” Obama
said.
Iran's Uranium Enrichment
House Majority Leader Eric Cantor, a Virginia
Republican, said in a statement that the implementation deal “only furthers a
deeply flawed agreement.” As many as 59 senators, most of them Republicans,
have signed on in support of sanctions legislation by New Jersey Democrat
Robert Menendez and Illinois Republican Mark Kirk.
At the same time, Senate Majority Leader Harry
Reid, a Nevada Democrat, hasn’t indicated he intends to bring the sanctions
measure to the floor for action, and the bill has been opposed by a number of
Democratic committee chairmen -- including Carl Levin of Michigan, who heads
the armed services panel and Dianne Feinstein of California, who leads the
intelligence committee.
Sanctions constraining sales of Iranian oil remain
in effect, and the U.S. hasn’t seen indications that major oil companies are
violating them, an Obama administration official told reporters in Washington
on 13 January on condition that he not be identified
discussing details of the sanctions regime.
Major companies including the U.K.’s Royal Dutch
Shell Plc and BP Plc and
France’s Total SA, have had partnerships with Iran.
West Texas Intermediate crude fell as much as 1.2 percent on 13 January. WTI for February delivery fell 85
cents, or 0.9 percent, to $91.87 a barrel on the New
York Mercantile Exchange. The volume of all futures traded was 12 percent below the 100-day average. Oil is down 6.7 percent so far this year.
Under the accord, Iran is to immediately begin
actions to eliminate within six months its entire stockpile of 20 percent enriched uranium, which could be most quickly
processed to fuel nuclear weapons, according to one of three U.S.
administration officials who briefed reporters on the condition that they not be identified.
Iranian officials also agreed not to install or
operate more advanced uranium centrifuges and to take steps to prevent use of
current equipment for 20 percent enrichment, which
will be verified as part of a tougher inspection regime by the International
Atomic Energy Agency, one U.S. official said.
Negotiations on a permanent agreement will begin
within a few weeks, Lebanese al-Mayadeen television
reported, citing Iranian Deputy Foreign Minister Abbas Araghchi.
Obama has said he sees no more than a 50-50 chance
those negotiations will succeed, while emphasizing it’s important to seek such
a diplomatic solution before the possibility of military action. One of the
officials said that, while Iran’s behavior was
encouraging, the odds are unchanged.
U.S. Secretary of State John Kerry told reporters
in Paris on 12 January that the next phase in the talks will be “very
difficult.” In comments posted on his Facebook page on Jan. 8, Iranian Foreign
Minister Mohammad Javad Zarif
said “access to a comprehensive solution is fully possible” provided that all
parties involved in the negotiations remain committed to the preliminary
agreement.
Israeli Prime Minister Benjamin Netanyahu, who
opposed the agreement, declared on 13 January at the funeral for former Prime
Minister Ariel Sharon that his country wouldn’t let Iran acquire nuclear
weapons capability. Iran has asserted its program is for peaceful purposes,
though the U.S., Israel and other nations say the Islamic Republic is seeking a
weapons capability.
Centrifuge development was one of the last issues
resolved. While Iran is able to continue work it has under way based on
previous IAEA reports, it can’t develop or install newer technology, one U.S.
official said.
The P5+1 countries agreed to a series of steps to
ease some sanctions while leaving in place the core energy and banking
sanctions as well as those on Iran’s energy shipping and ports, according to a
third administration official.
They will suspend sanctions on Iran’s petrochemical
exports and imports of goods and services for its auto sector. The U.S. will
also put on hold efforts to further reduce Iran’s exports of oil to the six
nations still purchasing its crude, the official said. Under sanctions law that
took effect in July 2012, the U.S. would otherwise have demanded more
“significant reductions” in imports from Iran.
Also, the nations will suspend sanctions on Iran’s
imports and exports of gold and other precious metals, with some restrictions,
and will expedite license applications for parts and services for its civil
aviation industry. They will also take steps to facilitate financing of
humanitarian trade through non-U.S. financial institutions, the official said.
Iran will get access to $4.2 billion in oil revenue
held in foreign banks, to be released in monthly increments tied to its
compliance with the commitment to eliminate the 20 percent
enriched uranium stockpile, the official said.
Iran’s compliance will be monitored by the IAEA and
the sanctions relief will be stopped and reversed if the country fails to meet
its obligations, the first administration official said. At that point, he
said, the administration would support moves by Congress to impose further
sanctions.
The implementation agreement substantially expands
the IAEA’s powers. It will inspect Iran’s Fordo and Natanz
enrichment facilities daily, rather than weekly, and for the first time get
access to centrifuge production facilities. Iran is also obligated to resolve
outstanding questions about suspected past nuclear militarization tests,
including activities at its Parchin military
facility, a U.S. official said.
The accord starts a six-month timetable to reach a
final agreement. That period could be extended a further six months by mutual
consent.
Iran’s oil exports, the country’s largest
foreign-currency earner, plunged last year as U.S. and European Union sanctions
meant that banks and insurers couldn’t handle Iranian sales of the fuel.