Iran Digest: Week of October 30 - November 6, 2015

Iran Digest

AIC’s Iran digest project covers the latest developments and news stories published in Iranian and international media outlets. This weekly digest is compiled by Communications Associates Alexander Benthem de Grave and Bradford Van Arnum.

Nuclear Accord

Iran starts taking nuclear centrifuges offline

Iran has begun shutting down uranium enrichment centrifuges under the terms of a deal struck with six world powers in July on limiting its nuclear program, Tehran's atomic energy chief said on Monday during a visit to Tokyo.

"We have already started to take our measures vis-a-vis the removal of the centrifuge machines - the extra centrifuge machines. We hope in two months time we are able to exhaust our commitment," Ali Akbar Salehi told public broadcaster NHK.

NHK's website also quoted Salehi as saying it was important that there be "balance" in implementing the deal, signaling Tehran's stance that all sanctions against Iran should be lifted promptly in step with its dismantling of nuclear infrastructure. (Reuters)

What Iran will really do with its sanctions relief windfall

Critics of the Joint Comprehensive Plan of Action (JCPOA) deal continue to assert that sanctions relief will primarily be used for nefarious purposes by the Iranian government. They claim the windfall will be used to improve Iran’s military capabilities and increase support for proxies, fomenting instability in the region and raising the prospects for conflict between the United States and Iran.

However, past and recent statements and policies by the Iranian government indicate it will apply sanctions relief more to the economy than the military or proxies.

Sanctions relief will allow Iran to reconnect to international financial markets, import previously restricted goods, expand export markets and receive greater foreign direct investment (FDI). Estimates of the sum of unfrozen assets range from $30 billion to $180 billion in an economy valued at approximately $400 billion. Analysts have not only tried to project the deal’s exact windfalls but also to what ends they will be used and to what extent they will alter Iran’s regional conduct. (The Washington Post)

Regional Politics

Khamenei calls for Syrian elections to solve crisis

Iran's clerical supreme leader said elections should be held in Syria to end the civil war there and criticized foreign powers that arm and fund Syrian opposition fighters, state television reported on Sunday.

In an annual address to the Islamic Republic's top diplomats, Ayatollah Ali Khamenei also said that U.S. objectives in the Middle East were the opposite of Iran's and that negotiating with Washington on regional issues was meaningless.

Foreign Minister Mohammad Javad Zarif attended the meeting after returning from inconclusive talks with world powers in Vienna on Friday aimed at finding a solution to the war, the first time Iran had participated in such talks.

"The solution to the Syrian question is elections, and for this it is necessary to stop military and financial aid to the opposition," several state media outlets quoted Khamenei as saying. (Reuters)

Iran threatens to leave Syria talks, issues warning to Saudis

Iran said on Monday it would quit Syria peace talks if it found them unconstructive, citing the "negative role" of Saudi Arabia, in the latest twist in a spat between the regional rivals that bodes ill for efforts to ease turmoil across the Middle East.

Increasingly bad-tempered exchanges between the conservative Sunni-ruled kingdom and the revolutionary Shi'ite theocracy have dampened hopes of improved ties after the adversaries sat down for their first meeting to discuss the Syria war last week.

"In the first round of talks, some countries, especially Saudi Arabia, played a negative and unconstructive role … Iran will not participate if the talks are not fruitful," ISNA cited deputy Foreign Minister Hossein Amir Abdollahian as saying.

Delivering unusually personal criticism, Iranian President Hassan Rouhani appeared to reprimand Saudi Foreign Minister Adel al-Jubeir, who, on Saturday, lashed out at Tehran for what he termed its interference in regional countries. (The Huffington Post

International Trade

Amid Iran sanctions being lifted, Germany-Iranian trade explored, could quadruple Bavarian economic ties

The southern German region of Bavaria aims to increase economic ties with Iran and sent a delegation of businessmen and diplomats to the Middle Eastern nation Saturday to begin building that relationship, the Tehran Times reported Monday. Bavaria has looked to increase trade up to four-fold, one economic minister said.

Iran is a “a very attractive and profitable market” that businesses in Bavaria would like to trade with, Bavarian Minister for Economic Affairs Ilse Aigner said, reports the Tehran Times. Aigner led the 130-person delegation to Tehran that aimed to strengthen ties between the two regions.

Trade relations between Iran and most European countries, including Germany, have been sparse in the past decade because of strict sanctions on Iran over its nuclear activity. Following passage of the historic Iran nuclear agreement in July, where Iran exchanged tough limits on its nuclear capacity for the easing of sanctions, trade is becoming increasingly possible between Iran and Europe. (International Business Times)

Iran, Turkmenistan determined to meet $60 billion mutual trade goal

Tehran and Ashgabat are determined to meet the targeted US$60 billion in bilateral trade volume within a ten-year period, the Islamic republic’s oil minister, Bijan Namdar Zanganeh, said.

He made the remarks at a meeting with Ahmed Gorbanov, Turkmenistan’s ambassador to Tehran, the oil ministry’s official SHANA news agency reported on Nov. 5. The mutual trade value has increased from $90 million in 1991 to $4 billion in 2014, which is appreciable, Zanganeh stated.

Gorbanov, for his part, stressed that all regional countries would benefit from the implementation of the Tehran-Ashgabat agreements. He referred to the launch of the Kazakhstan-Turkmenistan-Iran railway project as an outstanding example of cooperation between Tehran and Ashgabat. (Trend News Agency)

Inside Iran

Iran president pushes back over anti-US crackdown

President Hassan Rouhani of Iran on Wednesday criticized the recent arrests of journalists and others by the Revolutionary Guard Corps, which has accused detainees of being part of seditious plots hatched by the United States.

In remarks at a cabinet meeting posted on his Instagram account, Mr. Rouhani suggested that at least some of those arrests had been groundless.

“Let us not go and arrest one person here, another there, based on an excuse and without any reason, and then make up a case and aggrandize it, and finally say this is an infiltration movement,” Mr. Rouhani said.

His reaction signaled a deepening divide between his administration and hard-line adversaries over Iran’s future relationship with the United States and other Western powers. The hard-liners have vowed to severely limit dealings with the Americans despite the signing of an international agreement limiting Iran’s nuclear activities in exchange for ending onerous American and European economic sanctions. Mr. Rouhani’s administration was the main advocate in Iran for that accord. (The New York Times)

Iran's Ayatollah clarifies that 'death to America' slogan refers to policies

From school assemblies to Friday prayers and city billboards, it is a slogan still ubiquitous in Iran: “Death to America!” And Iran’s supreme leader, Ayatollah Ali Khamenei, has made it clear that the refrain will not leave the Islamic republic’s political lexicon any time soon.

“The slogan ‘death to America’ is backed by reason and wisdom,” the 76-year-old ayatollah said in remarks published on his website on Tuesday.

But Khamenei, who has faced criticism from hardliners at home over the landmark nuclear agreement with the US, also attempted to draw a line between the American people and their administration.

“It goes without saying that the slogan does not mean death to the American nation; this slogan means death to the US’s policies, death to arrogance,” he said. (The Guardian)


Adopting the Iran deal

By Richard Nephew

Contrary to most expectations – particularly outside of the United States, where suspicions about U.S. motives abound – the nuclear agreement reached between Iran and members of the P5+1 (China, France, Germany, Russia, the United Kingdom, and the United States, with the coordination of the European Union) will not offer many benefits to U.S. companies.

Even when the Joint Comprehensive Plan of Action (JCPOA) nuclear agreement is formally implemented (expected in early Spring 2016 though the Iranians maintain that they can fulfill their commitments before the end of 2015), the U.S. national embargo against Iran will remain intact. This severely limits the business U.S. companies can do with Iran and Iranian companies. Non-U.S. companies are not bound by these sanctions.

The core focus of sanctions relief in the JCPOA deal is the set of sanctions normally referred to by U.S. officials as “secondary sanctions,” so named because they seek to expand the impact of the U.S. embargo to have secondary effects on foreign trade and business with Iran.  As a result, the deal will remove impediments to global trade with Iran, so long as U.S. persons are not involved.  Foreign companies will be able to invest in Iran’s oil and gas sector, trade in oil and gas products, conduct transportation and financial services on Iran’s behalf, and generally speaking, conduct business with Iran as a normal matter. U.S. officials have explained that the rationale for this division lies in the rationale for the specific sanctions.

Read the full article.