The Nuclear Agreement with Iran, One Year On: An Assessment and a Strategy
for the Future
INSS Insight No. 835, July 17, 2016
Amos Yadlin, Avner Golov
http://www.inss.org.il/index.aspx?id=4538&articleid=12058


SUMMARY: It is over one year since the nuclear agreement between the world
powers and Iran was signed, and an analysis of Iran’s behavior over the past
year strengthens the INSS assessments that in the short term the agreement
poses only moderate risks. it is important to note what did not happen over
the past year, particularly the extreme scenarios that did not materialize,
despite the dire forecasts sounded during the political debate regarding the
agreement. During the second decade of the JCPOA, however, Iran will be
presented with an opportunity to advance its nuclear program within a less
restrictive framework, and can then be expected to take action to bring
itself within immediate range of a nuclear weapon, after it has realized its
conventional buildup and advanced other issues that were not explicitly
prohibited by the agreement. In the face of this strategy, the United States
and Israel would do well to formulate a joint means of addressing the
situation, grounded in a parallel agreement, based on the demarcation of a
clear public red line: that as long as the current Iranian regime does not
change its subversive policy in the region, its support of terrorism, and
its rhetoric regarding Israel’s erasure from the map, both countries will be
committed to decisive action to prevent it from gaining close proximity to
the nuclear threshold. To this end, the Israeli government must conduct a
secret dialogue with the next US administration, which in addition to
clarifying the points of disagreement between the two countries, will map
out areas of agreement vis-à-vis possible scenarios and coordinate joint
responses.

It is over one year since the nuclear agreement between the world powers and
Iran was signed, and an analysis of Iran’s behavior over the past year
strengthens the INSS assessments that in the short term the agreement poses
only moderate risks. This analysis also points to several principles
regarding an updated strategy that should be formulated for the long term,
and estimates that the agreement will pose new, significant challenges for
Israel.

First, it is important to note what did not happen over the past year,
particularly the extreme scenarios that did not materialize, despite the
dire forecasts sounded during the political debate regarding the agreement.
Supporters of the JCPOA maintained that in addition to a complete arrest of
Iran’s progress toward a nuclear weapon, approval of the agreement could
serve to strengthen the pragmatic Iranian political camp led by Hassan
Rouhani, and even to moderate Iran’s hard-nosed stance against the West and
Israel. In contrast, opponents of the JCPOA estimated that Iran would not
live up to its commitments to disassemble its nuclear program. They also
emphasized the immediate threat of Iran’s construction of a conventional
military force and increased Iranian support of terrorism, based on the
billions of dollars that would be immediately injected into the Iranian
economy as a result of the agreement and the lifting of sanctions. One year
after the signing of the agreement, it is clear that these scenarios were
not realized.

The optimistic forecasts regarding positive changes in Iranian policy were
based on an overestimation of President Rouhani’s power and influence within
the Iranian political system. Without question, the strongest figure within
the Iranian system is the Supreme Leader, Ali Khamenei, who possesses the
power to disqualify candidates who vie for political posts and, by doing so,
to shape the country’s senior echelons. He is also the sole decision maker
in the realm of foreign relations and security, including the nuclear realm.
The results of the Iranian elections that were held in February 2016, which
initially appeared to herald a positive change, actually led specifically to
the appointment of figures from the conservative camp supported by the
Revolutionary Guard. The most salient example is the choice of Ahmed
Jannati, who was elected chairman of the Assembly of Experts, which is
likely to choose the next leader of Iran. Although the Iranian political
system is complex and allows the President a degree of independence,
particularly with regard to domestic matters, his ability to lead a process
of genuine political change or bring about change in Iranian foreign affairs
and security policy, against the will of the Supreme Leader, is minimal at
best.

The chilling predictions of hundreds of billions of dollars flowing into
Iran and of clandestine and open Iranian violations of the nuclear agreement
presented extreme scenarios that in theory might have been realized but that
in fact contravened the prevailing reality. For Iran to receive hundreds of
billions of dollars into its economy, it would need to persuade large
numbers of investors that the agreement transformed the Islamic Republic
into a secure site for investment. However, changing the attitudes of
investors is a slow and difficult process. As long as the stability of the
Iranian economy remains in question in light of regional instability and the
internal state of affairs in Iran itself, Iran will find it difficult to
significantly increase foreign investment within the country. In addition,
Iran must also work toward the lifting of the international sanctions that
are not related to the nuclear program, which were imposed due to Iranian
support of terrorism, its missile program, and its regime’s violation of
human rights. As long as these sanctions stay in place and some of the
limitations on the Iranian economy remain intact, many investors will
continue to regard it as unstable.

The more pessimistic scenarios, of an Iranian failure to honor the agreement
or a secret effort on the part of Iran to advance its nuclear program, were
based on a flawed reading of Iranian strategy. Tehran’s policy in the
nuclear realm is extremely cautious and risk-averse. In the nuclear
agreement, Iran succeeded in establishing its status as a legitimate nuclear
threshold state and is unlikely to endanger this status unless it feels
confident in its ability to cross the nuclear threshold without the
international community able to stop it. In the absence of such an
opportunity in the coming decade, Iran can be expected to take advantage of
the nuclear agreement to advance its research and development apparatus in
the nuclear realm and its missile program (including the capacity to carry
nuclear weapons in the future) and to strengthen its conventional military
power and regional influence. During the second decade of the agreement,
Iran will be presented with an opportunity to advance its nuclear program
within a less restrictive framework, and can then be expected to take action
to bring itself within immediate range of a nuclear weapon, after it has
realized its conventional buildup and advanced other issues that were not
explicitly prohibited by the agreement.

At the same time, it is important to highlight what has occurred over the
past year, highlighting the gap between statements by the US administration
prior to the approval of the agreement and the reality that was created
after its implementation. In contrast to the White House’s declarations that
the agreement would strengthen the supervision of Iran, the two reports
published by the International Atomic Energy Agency (IAEA) in the past year
included less information on the Iranian nuclear program than previous
reports. Reports of dissatisfaction among some of the world powers as to the
supervision of Iran are evidence of significant failures in this regard.
These lapses must be considered in conjunction with the criticism of IAEA
Chairman Yukiya Amano regarding UN Security Council Resolution 2231,
approved after the agreement, which lifted the restrictions imposed on the
Iranian nuclear program, and replaced them with those stipulated in the
JCPOA for the coming decade. Amano emphasized that this decision fails to
lay a broad legal foundation, as created by the Security Council decisions
that preceded it.

Another gap pertains to the US administration’s commitment that the
agreement would facilitate the address of past Iranian military activity in
the nuclear realm. However, the concluding IAEA report states that Iran
failed to cooperate with the international agency and provided no new
significant material. Hence, the agreement has not served to enhance the
existing knowledge regarding the military dimension of the Iranian nuclear
program. Last month, a German intelligence report drew attention to the fact
that Iran continues to acquire technology that can also serve in the
development of its military nuclear capabilities. This report primarily
illustrates the difficulty of supervising Iranian conduct, which again, is
cautious and refrains from blatant violations of the agreement, and instead
takes advantage of the "grey areas." This strategy is implemented more
intensively and publically in the Iranian missile program: although the
continuation of the missile program does not constitute a violation of the
nuclear agreement, it runs counter to the spirit of the Security Council
resolution that was passed in the wake of the agreement. This Iranian
conduct has been criticized by the leaders of the world powers, and although
the missile program is not covered by the JCPOA, if Iran decided to break
out toward a nuclear weapon, its missile capabilities will be a central
component of its ability to translate its nuclear accomplishment into a
military threat.

In the face of this strategy, the United States and Israel would do well to
formulate a joint means of addressing the situation, grounded in a parallel
agreement, based on the demarcation of a clear public red line: that as long
as the current Iranian regime does not change its subversive policy in the
region, its support of terrorism, and its rhetoric regarding Israel’s
erasure from the map, both countries will be committed to decisive action to
prevent it from gaining close proximity to the nuclear threshold. To this
end, the Israeli government must conduct an intimate, secret dialogue with
the next US administration, which in addition to clarifying the points of
disagreement between the two countries, will map out areas of agreement
vis-à-vis possible scenarios and coordinate joint responses.

In the short term, the United States and Israel must continue to develop
intelligence mechanisms to monitor Iran’s implementation of the agreement
that facilitate quick detection of violations, alongside, and in
coordination with, the international bodies that are responsible for
supervision. It is also important to reinstate the two levers that brought
Iran to the negotiating table in the first place: the threat of sanctions,
primarily on the Iranian financial and energy sectors, and the military
option. Just as the agreement allows Iran to exit it by expressing its
intention to do so ahead of time, the United States can also exit the
agreement and reinstate the previous punitive measures against Iran. Israel
is not party to the nuclear agreement, and for this reason its coordination
with Washington, one of the agreement’s signatories, will be critical in the
event of Iranian violations. The understandings between Jerusalem and
Washington must include an agreement regarding American aid that will enable
Israel to improve its abilities in the face of the threats stemming from the
nuclear agreement.

In the long term, the United States and Israel must formulate a plan of
action for the second decade of the nuclear agreement, when a large and
significant portion of the restrictions on the Iranian nuclear
infrastructure will be lifted. This joint plan must preserve the
achievements of the nuclear agreement and deny Iran the opportunity to
develop the capability to produce nuclear weapons. This can be achieved by
means of an outline for a follow-up agreement to be promoted by the United
States, which will make use of effective levers and prevent Iran from
shortening its breakout period – that is, the amount of time it takes to
produce enough fissile material for a bomb – to a few months or a even
number of weeks. The future agreement will need to ensure the ability to
engage in close supervision of all uranium enrichment processes and make
certain that the plutonium track to a nuclear weapon is not revived. The
agreement will also be required to contend with the challenge of effective
detection of Iranian military activity in the nuclear realm.

However, it will likewise be necessary to prepare for the scenario in which
there is no follow-up agreement. According to this scenario, the United
States and Israel will need to enhance their intelligence capabilities in
order to uncover Iranian military activity in the nuclear realm, in the
absence of international supervision, as well as their ability to effect a
quick response capable of thwarting an Iranian attempt to cross the nuclear
threshold. Such deterrence capabilities could assist the diplomatic effort
to persuade the Iranian regime to sign a follow-up agreement and, if this
effort fails, to deter Tehran from actually producing a nuclear weapon.

Finally, the United States and Israel must formulate a means to address the
threat of the proliferation of sensitive nuclear technology and the
development of secret military nuclear programs by other countries in the
Middle East that feel threatened by the status granted Iran by the nuclear
agreement. These countries may view the nuclear agreement as a precedent
legitimizing their right to an advanced nuclear program and emulate the
Iranian strategy of developing the capabilities of a nuclear threshold
state. They may also attempt to cross the nuclear threshold before Iran
does. Thwarting such a scenario will require close US-Israeli intelligence
coordination that facilitates broad and effective coverage in the region.

The signing of the JCPOA in July 2105 created new and complex short term and
long term challenges. These challenges will require cooperation between the
Israeli government and the next American administration in order to advance
joint American and Israeli interests in the Middle East and to achieve the
main goal of the nuclear agreement: preventing Iran from acquiring nuclear
weapons.