Iran Moves Towards Compliance on Nuclear as Sanctions Lifting Begins

World powers and Iran set the clock ticking Sunday on a landmark accord placing limits on the Islamic Republic’s nuclear work in return for access to oil and financial markets.

The formal adoption of the deal means that all sides will have to begin delivering on the pledges they made three months ago. For Iran, that requires mothballing thousands of centrifuges, eliminating 95 percent of its enriched-uranium stockpile and retrofitting a reactor. The U.S. and Europe will make preparations to lift sanctions, which will occur on “implementation day,” once the Iranian measures are in place.

No Plutonium

One of the first steps will be a statement of intention by China, Iran and the U.S. to work together modernizing Iran’s heavy-water reactor at Arak so it can’t produce plutonium that could be used in a nuclear weapon, according to U.S. officials who briefed reporters on condition of anonymity to discuss details of the deal’s implementation.

More than two years of negotiations culminated in an agreement of more than 100 pages that was signed on July 14 in Vienna. The accord survived fierce opposition in the U.S. Congress, where a Republican bid to scuttle the deal failed, and among hard-line members of Iran’s parliament.

Twelve years after Iran was found concealing some nuclear activities, prompting concern it had weapons ambitions, the deal has been described as a victory of diplomacy over the potential use of force.

Sanctions against Iran probably will be lifted within the first three months of 2016, after the International Atomic Energy Agency has confirmed the nation has curtailed its nuclear work. Once the restrictions are removed, relief is expected to fuel economic growth by lowering barriers to Iran’s oil exports and ending the isolation of its banks.

Iran has said it will offer about 50 energy projects to investors and plans to boost output by about 2 million barrels a day once the deal is in place. The Persian Gulf nation, with the world’s fourth-largest oil reserves, pumped 2.8 million barrels a day last month.

Japan to Buy Iran Oil

One nation, Japan, plans to triple its imports of Iranian crude once sanctions are lifted, the Iranian Oil Ministry’s Shana news agency said on Saturday, citing Seyed Mohsen Ghamsari, director of international affairs at National Iranian Oil Co. Japan will increase purchases to 350,000 barrels a day from 110,000 barrels, the agency said.

But for U.S. companies, sanctions will be eased only for certain narrow categories, the officials said. They said these include the export of civilian passenger aircraft, the import of spare aircraft parts and handicrafts from Iran, and some activities that subsidiaries of U.S. companies can conduct overseas.

In addition, Obama told reporters that sanctions “related to ballistic missiles, human-rights violations, terrorism – those, we will continue to enforce.”

Intrusive Inspections

In another sign of progress, Iran told the IAEA on Sunday that it was ready to let monitors implement their most intrusive inspections regime once the agreement was implemented. Moreover, the government will begin providing more detailed design information about nuclear projects, the IAEA said in a statement on its website.

Iran’s nuclear work has been the focus of international scrutiny since February 2003, when Iranian officials told inspectors visiting Tehran of their plans to begin enriching uranium on an industrial scale. Subsequent discoveries that Iran had secretly procured nuclear materials and technologies led to years of mistrust. In May 2008 and again in November 2011, the IAEA publicly disclosed its suspicions about Iran’s activities.

Important Dates

Late 2015-early 2016 — Oil sanctions to be lifted on “Implementation Day.” U.S. officials have suggested it will take at least two months from “Adoption Day” to reach this point.