Belfer Iran Brief – “Our ideals are not bound to centrifuges,” assessing the Congressional debate and other news

Highlights:

• Rouhani was branded as a “fake revolutionary” after announcing in major speech that “our ideals are not bound to centrifuges. Our ideals are bound to our hearts, brains and determination.”

• Supreme Leader Ayatollah Ali Khamenei said debate over relieving U.S. sanctions show that “this enemy cannot be trusted.”

• Congressional Republicans are revisiting two pieces of Iran legislation for consideration over the next several weeks.

 Diplomacy and nuclear issue

• US Secretary of State John Kerry said he hoped to “accelerate the process to make greater progress” in nuclear talks, while Iranian Foreign Minister Mohammed Javad Zarif urged “a more active Russian role” to speed up talks. (Al-Arabiya, 1/12; Reuters, 1/12)
  • Negotiations resume in Geneva January 15-17. U.S. negotiators will meet bilaterally with the Iranians, after which full P5+1 and Iran will meet. (State, 1/8)
     
• Ali Akbar Salehi, chief of the Atomic Energy Organization of Iran, said Iran will need to increase its annual production of enriched uranium from 2.5 tons to 30 tons within eight years, in order to power the Bushehr reactor without Russian supply. He also reiterated Supreme Leader Ayatollah Ali Khamenei’s summer statement that Iran requires 190,000 separative work units of enrichment capability. (Tehran Times, 1/11; IRNA, 1/11 (Fa); AFP, 1/11)
  • Unnamed diplomats said Iran tentatively agreed to ship some of its stockpile of enriched uranium to Russia for fuel fabrication. Iran denied the report. (AP, 1/3; Reuters, 1/3)
    • Following additional American sanctions, Russia threatened to cease cooperation on nuclear negotiations. (Los Angeles Times, 12/30)

• In landmark speech, Iranian President Hassan Rouhani said that “important issues” could be put to a public vote, apparently to bypass hardliners in government. While he was not specific, Rouhani’s speech introduces the possibility of a referendum on a nuclear deal. (Financial Times, 1/4; Los Angeles Times, 1/4; AP, 1/4; New York Times, 1/4)
  • Rouhani also aimed to wean the Iranian public away from using the number of centrifuges as a metric for the success of a deal: “Our ideals are not bound to centrifuges. Our ideals are bound to our hearts, brains and determination.” Note: Comment mirrors White House’s effort to de-emphasize centrifuge figures.
  • He also hinted at future concessions in talks: “[If] we are ready to stop some types of enrichment, which we do not need at this time, does it mean we have compromised our principles and causes?”
  • Rouhani indirectly criticized Iran’s “resistance economy” spirit, which emphasizes Iran’s ability to withstand international economic pressure: “Our political experience shows that the country cannot have sustainable growth when it is isolated.”
  • General Mohammed Reza Naqdi, commander of Basij militia, called Rouhani a “fake revolutionary” following the speech. (Guardian, 1/5)
     
• Khamenei directly addressed the Obama administration’s inability to unilaterally and permanently remove all sanctions, saying: “The Americans are impudently saying that even if Iran backs down on the nuclear issue, all the sanctions will not be lifted at once. They are saying that clearly. It shows that this enemy cannot be trusted.” (Washington Post, 1/7; Bloomberg, 1/7; New York Times, 1/7)
  • He added that “efforts must be made to immunize Iran against the sanctions” by focusing on Iran’s “resistance economy.”
  • Khamenei: “If world powers set as a condition for lifting sanctions something that your honor won’t permit, what would you do?...For sure, no official in the country would agree to it.”
     
• Zarif faced a hostile Majles session but received a snap vote of support for his handling of nuclear negotiations. Critics argued that Zarif made too many concessions to West. He received 125 votes in support and 86 against. (AFP, 1/6)
  • Zarif dismissed “enrichment outside Iran” and said Iran’s “industrialized enrichment has been accepted as an inalienable reality.” (Fars News, 1/6)
  • He added: “Today, no one speaks of suspending enrichment. Today no one speaks of closing Fordow or Arak.”
     
• French President Francois Hollande said that “France will not yield” on the condition that “if there is no clear statement from Iran on giving up nuclear weapons, there will be no agreement.” (AFP, 1/5)

Sanctions and Iran’s economy

• Western sanctions have cost the Iranian economy more than $100 billion in revenue. (UPI, 1/12)

• Iran’s unemployment rate last quarter (September 22-December 22) rose one percent to 10.5% compared to previous quarter. That is 0.2% more than same period last year. (Trend, 1/3)
  • Rouhani, apparently responding to the unemployment rate news, argued that oil revenues are not linked to employment. Between 2006 and 2011 – prior to strongest US sanctions – economy did not create any jobs, he said. (Trend, 1/4)

• Inflation fell 1% to 17.2% over past year, and GDP grew 4% in first half of this year. (Tehran Times, 12/27; Tehran Times, 12/25)

• Iranian oil exports dropped 60% to 1 million barrels/day. (Bloomberg, 1/5)
  • Iran’s oil minister acknowledged that fall of oil prices is not exclusively due to Saudi Arabia’s actions, saying that American shale production is partly responsible. (Financial Times, 1/4)
    • Bijan Namdar Zanganeh: “I will not lose our market share under any conditions…and will increase production, regardless of prices, when sanctions are lifted.”

• Trade between Iran and China increased 36 percent in 2014. Iranian customs data show that bilateral trade rose to $47.5 billion between January and November 2014, compared to same time frame in 2013. (Tasnim, 1/3)

• U.S. Treasury Department identified nine individuals and entities for alleged violations of Iran sanctions. (AFP, 12/31) 

Iranian domestic politics

• A Majles debate was suspended after hardliners interrupted a speech by Ali Motahari, a moderate member of parliament who was decrying “unconstitutional” house arrest of two reformist politicians. (AP, 1/11)

• Rouhani continued his call for the reduction of government role in business, arguing that the “economy must be rid of monopoly and see competition.” (Reuters, 1/4)
  • Rouhani: “We are trying to tax everyone across the board, but as soon as we touch this or that institution, they make a stink about it.” Note: Rouhani is likely referencing Majles approval of taxation on Setad, the foundation controlled exclusively by Khamenei, or efforts to tax IRGC assets.

• The Guardian Council rejected as unconstitutional a draft law to give police greater power to enforce women’s wearing of hijab. (AFP, 1/3)

• Iran is expanding “smart filtering” of social networking sites, which involves censoring content on popular sites instead of blocking access completely. (Reuters, 12/26)

US-Iran relations

• US ambassador to the UN Samantha Power  said new Congressional sanctions against Iran would “almost certainly end” nuclear talks. (US Mission to UN, 1/12; Reuters, 1/12; AP, 1/12)
  • Power: “Iran would be able to blame the U.S. for sabotaging the negotiations and causing the collapse of the process, and we would lose the chance to peacefully resolve a major national security challenge.”

• Republicans plan to call votes on two revised pieces of legislation on nuclear negotiations. (Politico, 12/29) Note: Congressmen have been vague about specifics before drafts introduced. Below is basic breakdown.
  • Revised Kirk-Menendez
    • Basis: S.1881 “Nuclear Weapon Free Iran Act of 2013,” which Sen. Robert Menendez (D, N.J.) introduced in December 2013.
      • S.1881 set a deadline on the length of negotiations and essentially outlined acceptable terms for agreement – such as requiring Iran to “fully and verifiably terminate its illicit nuclear program”  to “preclude a nuclear breakout capability” – by limiting White House’s ability to suspend or terminate sanctions.
      • Revised Kirk-Menendez legislation is being “significantly softened,” removing requirement that Iran suspend all enrichment activity for sanctions removal. (AP, 1/12)
  • Prospects: Sen. Mark Kirk (R, Ill.): “I have 17 Democrats with me. … We have a shot at even getting to a veto-proof majority in the Senate. That's what we'll be working on, a good bipartisan vote.” (Fox News, 12/28)
    • “Congress will follow your lead,” Sen. Lindsey Graham (R, S.C.) told Prime Minister Benjamin Netanyahu in Israel, saying he “fear[s] above all else” allowing Iran “an enrichment capability” that would allow it to become next North Korea. (Prime Minister’s Office, 12/27)
    • Sen. Marco Rubio (R, Fl.): Republicans have “veto-proof majority” for both Kirk-Menendez and Corker-Graham bills (see below). (NPR, 1/1)
    • Will be taken up by Senate Banking Committee.
  • Revised Corker-Graham-McCain
    • Basis: S.2650 “Iran Nuclear Negotiations Act of 2014,” which Sen. Bob Corker (R, Tenn.) introduced in July 2014.
    • S.2650 requires White House to submit any nuclear deal to Senate and House Foreign Relations Committee and would subject deal to up-or-down vote by Congress. It would also reinstitute sanctions if Iran cheats on a deal. (McClatchy, 11/13)
    • Prospects: See Rubio comment above.
      • Corker: “The Iranian Parliament definitely is going to weigh in on [a nuclear agreement], so you would think that the U.S. Congress would weigh in on the issue.” (Huffington Post, 1/7)
      • Corker: “I don’t think there’s any question for those in Iran, or around the world, that if this deal falls apart, certainly there’s going to be additional sanctions. The question is, when do you do that? When do you signal that?” (Fox News Sunday, 1/4)
      • Sen John McCain (R, Az.): “Graham and I are hellbent on making sure [it passes] and I believe that Senator Menendez is on board.” (Huffington Post, 1/7)
      • Will be taken up by Senate Foreign Relations Committee.

• US President Barack Obama said nuclear deal would “serve as the basis for us trying to improve relations over time” but rejected parallels to administration’s Cuba policy. (NPR, 12/29)

 Geopolitics and Iran

• A veteran commander of Iran’s Basij militias was killed fighting ISIL forces in Samarra, Iraq. Mehdi Norouzi is the second Iranian commander killed in Samarra in recent weeks; ISIL sniper killed Revolutionary Guard brigadier general in December. (Reuters, 1/12;Press TV, 1/11; Tehran Times, 1/11) Note: Iranian state media downplayed Norouzi’s role, simply calling him a “volunteer combatant,” but Reuters reported his “long record of battles in Iraq and Syria.”
  • Quds Force officer advising Iraqi troops and Shia militias in Samarra was killed by ISIL sniper. He was killed near Shia shrine in the city and was highest-ranking IRGC officer killed in Iraq during current conflict. (Long War Journal, 12/28; NPR, 12/28;Reuters, 12/28)
    • At his funeral, Badr Organization chief Hadi Al-Ameri said: “If it were not for the cooperation of the Islamic Republic of Iran and General Suleimani, we would not today have a government headed by Haidar Al-Abadi in Baghdad.” (AFP, 1/6)

• Khamenei and Venezuelan President Nicholas Maduro pledged to cooperate to combat the drop in oil prices, which Khamenei dubbed “political ploy and unrelated to the market.” (Reuters, 1/10; AP, 1/10)

• Iran’s Foreign Ministry condemned killing of 12 people at Charlie Hebdo office as “alien to the doctrine and teachings of Islam” but said cartoons designed to offend “monotheistic religions and their values and symbols is unacceptable.” (AFP, 1/7)

• US Chairman of the Joint Chiefs Martin Dempsey said the US learns of Iran’s operations in Iraq via the Iraqi leadership. Iran’s role has not threatened US operations, he said, adding, “Iranian influence will be positive” so long as Iraq remains interested in creating inclusive government. (AP, 1/8)

• Iranian and Iraqi defense ministers signed a Memorandum of Understanding enshrining areas of defense assistance, including “mutual cooperation to form the Iraqi national army.” (Mehr, 12/31; AFP, 12/31)

Israel

• No significant developments.

“Red lines,” “points of no return,” and military strikes

• No significant developments.

Uncertain or dubious claims

• No significant claims.