Iranís Nuclear Program and the IAEA Compromise:
A Bridge to a Better Bargain?

John Calabrese
The Middle East Institute
December 15, 2003

On November 26, 2003 the Governing Board of the 35-member International Atomic Energy Agency (IAEA) voted unanimously on a compromise version of a draft resolution, censuring Iran for “failures and breaches” of its nuclear safeguards while welcoming Iran’s “offer of active cooperation and openness.” According to IAEA Director General Mohammed El Baradei, the resolution conveys an “ominous message that failures in the future will not be tolerated.” Exclaiming that “[this] is a good day for peace ... and non-proliferation,” El Baradei added that the resolution “strengthens my hand in ensuring that Iran’s program is for peaceful purposes.”Though in reality, the resolution does not in itself constitute a breakthrough, it might eventually prove to have been the crucial first step in resolving the problem of Iran’s nuclear program and thus to have served as a bridge to a better bargain.

Iran’s Nuclear Profile: Unambiguous but Incomplete
Until recently, the story of Iran’s nuclear ambitions had been longer on rumors than on facts. Among the few well-established facts were these: First, that as a signatory of the Nuclear Proliferation Treaty (NPT), Iran is duty-bound to observe its strictures. Second, that the NPT creates a distinction between civilian (permissible) and military (proscribed) nuclear activities that is maintained by a system of voluntary disclosure bolstered by monitoring and verification mechanisms. Third, that Iran’s nuclear program was launched by Shah Mohammed Reza Pahlavi with the purchase from the United States of a small research reactor for Amirabad Technical College in 1967, the establishment of the Atomic Energy Organization of Iran (AEOI) in 1974, and the subsequent announcement of an ambitious plan to build 23 nuclear power plants by 1994. Fourth, that in 1979 the revolutionary government of Iran suspended construction of the Bushehr power plant (the centerpiece of the Shah’s nuclear program), and later tried unsuccessfully to get Germany to resume its involvement in the project. Finally, that Iran announced in March 1983, at the same time of the unveiling of the first Five-Year Development Plan, its intention to restart the nuclear program.
Iran spent much of the 1980s waging war with Iraq and battling international isolation. And much of theUS concern about Iran during that time focused on the course and outcome of the Gulf conflict, on Iranian-supported terrorism, and on Iran’s determined effort to procure and develop ballistic missiles. In the early 1990s, however, a series of disclosures heightened Washington’s concern about Iran’s nuclear activities: the official announcement of a nuclear technology cooperation agreement between Iran and the Soviet Union (1989), press accounts that Iran had purchased a calutron from China (1991), the signing by Iran of two nuclear agreements with the Russian Federation (1992), and media reports that in 1992 Iranian officials had visited the Ulba Metallurgical Plant in Kazakhstan (a plant which, perhaps not coincidentally, had a surplus inventory of more than 600 kilograms of highly enriched uranium).
Nevertheless, the 1991 US National Intelligence Estimate (NIE) described the Iranian nuclear program as “disorganized” and “in an initial stage of development.” Following unofficial visits to Iran in February 1992 and November 1993, IAEA officials declared that Iran’s nuclear activities were “consistent with peaceful uses.” Still, many US officials and policy analysts remained skeptical. Fueling their skepticism were fresh clues about the nature and extent of Iran’s nuclear program: a mining contract with China to develop indigenous uranium resources, a contract with Russia to complete the Bushehr plant, and intermittent reports of Iranian officials abroad shopping for heavy water reactors of the type that had been used by India and Israel to produce their first fission bombs.
Yet, throughout the 1990s Tehran held fast to the official position that its nuclear program was intended exclusively for civilian purposes and was therefore in compliance with NPT obligations; and that it was firmly committed to the principle of transparency embodied in the treaty and thus to cooperating fully with the IAEA. However, even then many nuclear experts considered the civilian purposes rationale — electricity generation — to be highly dubious. They cited the exorbitant cost ($800 million merely for the completion of the Bushehr plant), given the amount of electricity this facility could conceivably produce. They also cited the steadily advancing state of the Iranian missile program as casting further doubt on the veracity of Tehran’s civilian purposes argument. Thus, by the time the Bush Administration entered office in 2001, the conventional wisdom among a growing number of experts was that Iran was following a dual-track approach: buying civilian reactors while seeking clandestinely the means to acquire nuclear capability for military purposes.
Beginning in mid-2002, increasingly disturbing details of Iran’s activities came to light. Much of the accumulating evidence against Iran was gathered by IAEA investigations, with key tips provided by the National Council for Iranian Resistance (NCIR). With rather remarkable rapidity, a much clearer, though incomplete picture of Iran’s nuclear program began to take shape: In August 2002, the NCIR disclosed the location of a pilot uranium enrichment plant, which Iranian officials had previously passed off as a de-desertification facility. A month later, the Iranian government informed the IAEA Secretariat of the existence of the enrichment facility. In December 2002, CNN reported that satellite images had revealed construction of two secret nuclear fuel-cycle facilities, one in Arak and the other in Natanz. In February 2003, IAEA Director General El Baradei met with officials in Tehran, armed with results from environmental sampling of various locations in Iran that showed trace elements of enriched uranium. In short, by the time Operation Iraqi Freedom had commenced (March 2003), it was possible to sketch a rough outline of Iran’s nuclear program. That program appeared to be more extensive and to have progressed faster than most analysts had suspected, or had even thought possible.
In a June 2003 report, the IAEA declared that Iran had violated its safeguards agreement. In another report three months later, the IAEA highlighted inconsistencies in previous Iranian statements and delays in granting access to inspectors. The reports detailed suspicious and disturbing gaps: undeclared uranium imports, undeclared uranium metal production, missing uranium hexafluoride. As a result, all of Iran’s previous claims about its nuclear activities were called into question. All the signs now point to a multifaceted effort by Iran, at an advanced stage of development, to attain the ability to produce significant quantities of fissile material on its own by both uranium enrichment and plutonium reprocessing.
Those who have long been convinced that Iran does have, and those who are now at least willing to concede that Iran might have, a nuclear weapons program remain divided in their thinking about what motivates these activities. One school of thought essentially regards Iran as a status quo state whose principal aim in pursuing a nuclear option is deterrence. The other school, which views Iran as a revanchist state bent on dominating the region and implacably hostile to the United States, holds that once Iran possesses nuclear weapons it will brandish them in an effort to neutralize the American military presence in the area and to intimidate its neighbors.
Though opinion on Iranian intentions with respect to nuclear weapons is thus divided, there now appears to be broad agreement in the policy communities in Washington and in Europe (including Russia) that adding yet another nuclear state to the already combustible strategic equation in the Middle East and South Asia is destabilizing; and that, given the mature stage of development of the Iranian nuclear program, the window of potentially effective preventive action is exceedingly narrow.

US Iran Policy in Limbo – Nonproliferation Policy in Crisis?
Upon taking the oath of office in January 2001, President George W. Bush inherited from his predecessor a policy of isolating Iran that consisted mainly of economic sanctions which had for the most part been mandated by the US Congress. For well over a decade, many US officials had viewed Iran’s quest for nuclear energy as a threat both to American interests in the Middle East and to the effectiveness of the existing nonproliferation regime. Thus, when President Bush assumed office, there were already in place a number of proliferation sanctions in place, two of which are unique to Iran (i.e., The Iran-Iraq Arms Nonproliferation Act and The Iran Nonproliferation Act (P.L. 106-178). The Bush Administration also inherited the traditional international nonproliferation framework, that is, the NPT and the associated IAEA monitoring/reporting system — a nonproliferation regime with demonstrable weaknesses, a regime in which at least some senior US officials had long before lost confidence.
Though during the first year of the Bush Administration — including after the September 11th terrorist attacks — there seemed to be some interest in engaging Iran, voices in favor of a rapprochement began to give way those advocating a more confrontational approach. The first salvo was fired by President Bush himself during the January 29, 2002 State of the Union speech. In that address, the President classified Iran, along with Iraq and North Korea, as part of an “axis of evil.” It was partly because of Iran’s alleged efforts to acquire nuclear weapons capability that it was assigned this dubious distinction. Bush Administration concern specifically about the Iranian nuclear program was registered by DCI George Tenet, who just several days after the President’s State of the Union Address, in testimony before the US Congress warned that Iran might be able to produce enough fissile material for a nuclear weapon by late this decade, and sooner if it gets such material from outside.
Accompanying the new label, “axis of evil,” was a new round of bellicose rhetoric from Washington. And adding substance to the language of vague threats was new strategic thinking, anchored in the belief that the nexus between terrorism and weapons of mass destruction constitute the gravest security threat of our time, and subsequently elaborated in the November 2002 National Security Doctrine (NSD). Revelations about Iran’s nuclear activities undoubtedly strengthened the hand of proponents of a tougher US policy towards Iran. Yet, apart from expressing in the most general terms its solidarity with democratic forces in Iraq, the Bush Administration has yet to articulate a coherent policy toward Iran.
Preoccupied with building support for, preparing and launching the war in Iraq, the Bush foreign policy team focused its nonproliferation efforts with respect to Iran on the supply side, for example applying pressure to Russia. After the war ended, US officials again began to ratchet up the pressure on Iran. The case for challenging Iran on the nuclear issue was enhanced by Tehran’s own loss of credibility with the major powers — European countries, Japan, and Russia — that had previously been reluctant to hold Iran’s feet to the fire. The case for action with respect to Iran was also enhanced by the military action against Iraq, the results of which made both US officials and their European counterparts, though for different reasons, inclined to pursue a multilateral diplomatic approach.
The diplomatic intervention spearheaded by Britain, France, and Germany was designed to engender cooperation from the Iranian side. Meanwhile, on the IAEA front, the Agency issued a demand for Iran to take steps to open its program to full inspections by signing the Additional Protocol, and explain past infractions. The September 12th resolution had “teeth” in the sense that it set October 31 as a deadline for Iran to cooperate fully to resolve concerns about its nuclear activities. Following several weeks of mixed signals from Tehran, and ten days before the appointed deadline, these initiatives yielded fruit in the form of a Foreign Ministers Joint Statement, in which Iran agreed to IAEA demands that it cooperate with the agency’s efforts to allay fears that Tehran is pursuing a nuclear weapons program.

An Historic Breakthrough or Simply Muddling Through?
As stated at the outset, in their November 26 resolution, the 35 members of the IAEA Governing Board balance the statement that they “strongly deplore” Iran’s past breaches and infractions, with the statement that they welcome Iran’s cooperation. The resolution also contains a trigger mechanism in the form of a warning that Iran’s failure to cooperate fully will engender “serious consequences.” Though not spelled out in detail, such consequences are generally understood to mean referral to the UN Security Council with the possibility of the subsequent imposition of sanctions.
The diplomatic process that culminated in the November 26th resolution was one in which each and every party had its particular interest: For Prime Minister Tony Blair, it was a vehicle for rebuilding bridges with France and Germany, repositioning Britain so as to strike a better balance between the “European” and “Atlanticist” aspects of its foreign policy, and regaining some political support both for the Labor Party and for himself within that party. his own party. For the three European powers which launched the diplomatic intervention, it was an occasion to demonstrate collective leadership and policy coordination withinn the European context, to breathe new life into a moribund, largely discredited policy of “constructive engagement” with Iran, and to avoid an even deeper rift in the Transatlantic relationship. With respect to the Iranian clerical establishment, it created an opening for a tactical alliance between elements within the “conservative” faction and the “reformists” — each of which could, and did, claim credit for the most appealing aspects of the final IAEA resolution. For Mohammed El Baradei and the IAEA, it was an opportunity to advance the argument in favor of continued commitment to, and patience with, the technical and operational aspects of NPT adherence/compliance. For the United States, it was a way to reengage multilaterally while retaining the prerogative to insist on, define, and mete out (unilaterally, in the last resort) “serious consequences” in the event of future breaches by Iran of its nuclear obligations.
All of the parties, then, could draw some satisfaction from, claim credit for, and trumpet the November 26th resolution as a “success.” But much uncertainty remains. Iran pledged to sign the Additional Protocol of the NPT. When exactly will Iran sign and ratify the Protocol? Iran agreed to full disclosure and full access to its nuclear facilities. But what precisely will the IAEA demand? More to the point, what will Tehran choose to, and be able to, withhold or conceal from IAEA authorities? Iran has agreed to suspend its uranium enrichment and plutonium reprocessing activities, but for how long? On this last question, Hassan Rowhani, Secretary of the Supreme National Security Council, offered this answer, though it might not be the definitive one: “The suspension of enrichment is provisional and voluntary, to build confidence. There is no question of halting our enrichment activities.”
In agreeing to the compromise language of the November 26th IAEA reslution, the United States and the Europeans merely papered over their differences; they did not resolve them. The American side remains fixated on the past — on mounting evidence of systematic Iranian concealment and deception and low confidence in inspections processes, both of which tend to be viewed through the prism of the UN-Iraq experience. The European side is focused on the future, on the possibility that the process itself — through rewards for cooperation — might engender sufficient confidence by Iran that Tehran will dedicate its nuclear program exclusively to civilian purposes and sufficient confidence in Iran that Tehran is indeed doing so.
In spite of these differences, the US and European sides match up well in terms of their leverage over Iran in working the nuclear issue. With the European Union having become Iran’s leading trade partner — two-way trade in 2002 having surpassed 13 billion euros and the fate of the EU-Iran trade and economic cooperation agreement hanging in the balance — European opinions and policies matter a great deal to Tehran. This is equally the case with the United States, where the Bush Administration has already demonstrated that it is willing to use military force preemptively, has knowledge certain of the location of at least some of Iran’s nuclear installations, and has until now not ruled out the military option.
Today, as prior to the November 26th resolution, Iran has before it three options: continue to develop its nuclear infrastructure, seek to develop clandestinely a small number of nuclear weapons, or strive for a nuclear “breakout.” Though it is clear which of these options the United States and much of the rest of the international community prefers, it is far from clear which one Iran will ultimately choose to exercise, even in the face of the current unprecedented degree of international scrutiny and pressure. For the time being, Iran is likely to honor its agreement to cooperate with the IAEA and its moratorium on uranium enrichment and plutonium reprocessing. So, too, for the time being, the 35 members of the IAEA are likely to hold firm in solidarity.
The next test comes with the IAEA report due in February 2004, followed by the next IAEA governing board meeting scheduled for March. Between now and then, the United States and its allies can ill afford to stand idle. For the November 26th resolution to serve as a bridge to a better bargain, and not the prelude to another full-blown international crisis, American, European, and Japanese officials will have to work energetically together to fashion a set of common objectives with respect to Iran policy in general and a package of incentives that are linked specifically to clear evidence of Iranian cooperation with IAEA authorities. For, realistically, achieving a high level of confidence that Iran has abandoned its quest for nuclear weapons depends not only on maintaining strong pressure to ensure that Iran does not bend the rules but on building confidence that Iran’s legitimate security concerns are being addressed and that its prospects for economic and political reintegration into the world community are improving.

The views expressed in this document do not necessarily reflect those of the Middle East Institute, which does not take a position on Middle East Issues.

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