The Final Deal: Promises and Pitfalls

The debate surrounding the historic nuclear deal between Iran and the world’s six major powers played out among two nuclear experts, a sanctions specialist and an Iran scholar during an event co-hosted by USIP at the Woodrow Wilson Center on July 23. The discussion outlined key issues that will top agendas in Washington and Tehran as lawmakers in both countries consider the agreement in the coming months.

• After 10 years, Iran will be able to increase the number of centrifuges without limit. Its uranium stockpile will still be restricted, but the limits will be less important because by then Iran will be using more-advanced centrifuges.
• After 15 years, limits on the stockpile of enriched uranium will expire. Iran’s breakout time for a bomb could decrease to as little as a few weeks.
• So-called “snap back” sanctions, penalties that could be restored in the case of violations by Iran, could take months or even years to fully implement. There may need to be a faster mechanism to address Iranian violations.
• Iran has agreed to ratify the IAEA’s Additional Protocol after the UN agency determines Iran’s nuclear program is peaceful. The IAEA would normally require ratification before making that determination.
• The IAEA system for monitoring declared facilities – like Natanz and Fordow – is robust. If Iran carries out violations at these sites, they would be detected fairly quickly.
• The IAEA is still missing information about Iran’s nuclear activities since 2005, which will make it hard to begin verification with a clean slate.
• The 24-day timeframe for inspectors to access suspicious sites could be problematic. There are scenarios in which evidence of nuclear activity can be removed or erased in much less time.
• The alternative to a deal is not necessarily war. Iran is unlikely to dash towards a bomb given its current nuclear infrastructure, but would instead escalate its activities strategically.

• Most – but not all – sanctions targeting Iran’s energy industry, financial services, shipping and other sectors will be lifted on implementation day, the day Iran is deemed to have met its nuclear commitments. That could occur six- to nine months from now..
• U.S. and E.U. sanctions relating to Iran’s support of terrorism will remain in place.
• Sanctions that restrict Iran’s participation in the SWIFT international financial payment system are particularly significant, perhaps even more than U.S. sanctions. If they are lifted, Iran will be able to resume international transactions.
• Lifting U.S. sanctions will impact foreign companies, but many American companies will still face restrictions. There are some exceptions, including trade in commercial aircraft, pistachios and rugs.
• In reality, sanctions relief won’t have a significant impact in the first few months or even years. Companies may be concerned about the risk of a deal collapsing or getting wrapped up in sanctions violations, which can cost them billions of dollars and reputational damage. And issues like corruption make Iran a difficult place to do business.
• Still, Iran is an attractive market for emerging investment. It has a large, well-educated population.
• If the United States and the European Union are involved with Iran’s reintegration into the international financial system, they will have more leverage later on to re-impose sanctions if necessary. So it is also important to increase trade with Iran enough that it will feel the impact if sanctions are reimposed.
• Multilateral sanctions are far more effective than unilateral penalties. The United States cannot produce the same effect alone. And if it tries and fails, it makes sanctions look weak as an option.

• From the beginning, Iran wanted more than sanctions relief in the negotiations. It wanted recognition of the Islamic Republic, and a shift away from talk of regime change.
• Iran also chose to engage because it opened up economic avenues. Iran needs $1 trillion of investment to revive its economy.
• The Islamic Republic also feels vulnerable, with ISIS as close as 25 miles from its borders. Iranians fear rising sectarianism in the region, as Iran is in the minority as a Shiite state surrounded by Sunnis.
• There is potential for profound change within Iran. More than half the electorate is under 35 – born after the revolution – and they have enormous influence. The government understands that this is a moment to engage. And the supreme leader cannot ignore the changes happening in society.
• Hardliners are less concerned about the deal itself than they are about how it will affect domestic politics. They might oppose the deal because their own political future is at stake. They may fear that opening up to the world will undermine the revolution.
• A key issue is what Iran will do with the billions of dollars it will receive with sanctions relief. The question will be whether the Revolutionary Guards will get a payoff in terms of funds for their activities in the region, or for their spinoff construction companies in Iran.
• If Congress rejects the deal, hardliners in Iran’s parliament might reject it as well. But they also might approve it, as a way to undermine the United States. Khamenei would argue that he was right to assume the United States could not be trusted as a negotiating partner. It might make future engagement impossible.

• The deal is a major diplomatic triumph. It is the most important nonproliferation agreement of the last 20 years. 
• It stops Iran from acquiring a nuclear weapon and prevents a new war in the Middle East. It also makes the region more secure.
• The United States achieved all its major goals in this deal: stopping all pathways to a bomb, putting a verification system in place, and deterring Iran from cheating by maintaining the international coalition that imposed sanctions.
• The deal strips down Iran’s nuclear program and wraps it in an extensive verification system. It would be almost impossible for Iran to evade inspections.
• There are some concerns and issues, but overall it is much better than any deal previously negotiated.
• In 10 years, Iran will be allowed to install more centrifuges, but they will still have a small stockpile. And even when they are allowed to increase it, after 15 years, Iran will still be limited in its procurement channels and bound by international inspections.
• Even when other restrictions expire, the international community will have so much more information on Iran’s nuclear sites and activities that a potential military option would be more effective than it is now.
• The deal is not perfect. But it buys time, which is the main goal when it comes to national security concerns.

To assess the period of pivotal diplomacy leading up to the deal, the coalition of eight Washington policy organizations has previously hosted four other discussions.

• The Volatile Factors Underlying a Potential Iran Nuclear Deal
• Nuclear Flashpoints: US-Iran Tensions Over Timetables and Terms
• Iran Sanctions and the Possible Trade-Offs for a Nuclear Deal
• Politics of a Nuclear Deal: U.S. and Iranian Officials Debate

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