Belfer Iran Brief—"Three or four complex issues" to be resolved and other news

Highlights

• Rouhani said complicated issues remain in nuclear talks with the West, but the negotiation team has support of the Iranian people and the Supreme Leader.

• Iran apparently missed an IAEA deadline for declaring specifics about its nuclear program, though Iran claims it has satisfied three out of five requirements.

• Iranian weapons and logistics played a role in breaking the siege of an Iraqi town, and Kurdistan confirmed that Iran was the first country to provide aid to Kurdish forces.

Diplomacy and nuclear issue

• In a wide-ranging press conference, Iranian President Hassan Rouhani leveled harsh criticism at U.S. sanctions against Iran and reiterated his support of Iran's nuclear negotiators. "Three or four complex issues" remain in talks, he said. (Farsi transcript; English summary, 8/30)
  • "The team of negotiators has the support of the Supreme Leader and the nation of Iran,” he said.
  • Sanctions against the Iranian people are "cruel, false, illegal."
  • Regarding his administration's success in combating inflation: "God willing, in year 95 [1395, beginning March 2016] we will have single digit inflation." Note: According to the Central Bank of Iran, the inflation rate for July 2014 was 14.6%.

• Iranian Foreign Minister Mohammed Javad Zarif visited Moscow to discuss progress in negotiations, among other issues, with Russian Foreign Minister Sergei Lavrov. (Reuters, 8/29)
  • The next full round of talks is slated before 9/16 UN General Assembly in New York. (AFP, 8/24)

• Core disagreement between Iran and P5+1 continues to be the number of centrifuges Iran would retain, with Iran seeking a “figure that allows them to have an industrial capacity,” Western official said. (Reuters, 8/28)
  • Iran opened a new uranium conversion facility in Isfahan designed to convert uranium hexafluoride into uranium dioxide, as part of obligations under the Joint Plan of Action, Iran’s nuclear chief said. (AP, 8/23)
  • Modifications are underway at Arak facility to limit plutonium output. (AP, 8/27)

• Deadline for Iran to answer IAEA queries passed last week with no official indication Iran had fulfilled request to detail specifics about nuclear program. Diplomats believe Iran may try to release information before the next IAEA report, slated for this week. (Reuters, 8/27)
  • Iran said it has held “serious” talks with IAEA representatives and completed three of five transparency measures. (Reuters, 9/2; Tehran Times, 9/2)

• Iran’s next generation centrifuges, IR-8, have “undergone mechanical tests” but have not yet been injected with uranium hexafluoride gas. Iran said this development is within its right under JPOA and that IAEA has been notified. (Fars News, 8/27)
  • Iran claimed IR-8 has Separative Work Unit (SWU) output of 24. Note: Separative output of IR-1 around 0.9 SWU/year and 3-5 SWU/year for IR-2m.
  • IAEA previously stated that Iran intended to install a “single” IR-8 centrifuge at Natanz facility. (IAEA, Feb 2014)

• Iranian Defense Minister Hossein Dehghan said there is “no reason” to allow IAEA inspectors access to Parchin nuclear facility, last inspected in 2005. (AFP, 8/23)

Sanctions and Iran’s economy

• U.S. imposed additional sanctions on 25 entities and people it said were involved in Iran’s nuclear program, missile program or support for terrorism. (U.S. Department of Treasury, 8/29; U.S. Department of State, 8/29)
  • Targeted groups include Organization of Defensive Innovation and Research, established by Mohsen Fakhrizadeh, considered Iranian equivalent of Robert Oppenheimer.
  • Banks, airlines and shipping companies also targeted.
  • Rouhani said the sanctions deepened “mistrust” between the nations.

• Rouhani said “positive economic growth has started,” noting that oil, gas, agriculture, industry and mining sectors have seen growth. Foreign tourism has also increased. (Fars, 8/28)
  • Automobile production in Iran jumped 73 percent since the start of Persian year in March, and its industrial growth rate rose to 2 percent. Non-oil exports rose 20.8 percent. (Press TV, 8/31; Tehran Times, 8/31)

• Despite the lifting of sanctions on Iran’s petrochemical products, problems with payment transfers and insurance continue to hinder exports. (Bloomberg, 8/27)

• An Indian oil company in July dramatically increased level of Iranian oil it imports. (Reuters, 8/28)
  • Iran again postponed “oil contracts roadshow” in London, after nuclear negotiations failed to yield agreement last month. (WSJ, 8/25)

• U.S. renewed waiver allowing two European satellite companies to continue competing for business in Iran. (WSJ, 8/28)

Iranian domestic politics

• Rouhani and Dehghan unveiled new domestically constructed missile systems and drones, and Rouhani reiterated that Iran’s military doctrine is defensive. (AFP, 8/24)
  • Iran test-fired an “indigenously designed and manufactured” missile defense system, Talaash-3 (“Endeavor”). (Press TV, 8/28)
  • It also finished manufacturing long-range Bavar-373 (“Belief”), created in response to Russia’s decision not to deliver its S-300 defense system. (Press TV, 8/29)
  • Air Force announced two new radar systems designed to identify drones and cruise missiles. (AP, 9/2)

• Supreme Leader Ayatollah Ali Khamenei said Rouhani’s government has taken “good” positions over past year, but urged it to adopt “explicit and firm stances on issues such as Palestine, the Zionist regime, Gaza, Syria, Iraq, the Takfiris (extremists) and the US interferences.” (Tasnim, 8/27)

• Ayatollah Ali Akbar Hashemi Rafsanjani, head of Expediency Council, expressed regret that parliamentarians impeached minister of science, research and technology last week, in latest fallout after dismissal of Rouhani ally. (Tehran Times, 8/26)

• Iranian anti-corruption official: Exchange rate abuses totaled $22 billion under regime of Mahmoud Ahmadinejad. In some cases, fictitious companies used government-subsidized exchange rates to purchase and resell items at market rates, or to purchase luxury cars. (Al-Monitor, 8/27)
  • An Iranian court convicted one of Ahmadinejad’s vice presidents, Mohammad Reza Rahimi, on unknown charges. Rahimi had previously been accused of embezzlement. (AP, 9/1)
  • Ahmadinejad announced he would not run in next parliament elections. (Tehran Times, 8/26)

• Iran permitted two major mobile phone companies to use 3G and 4G networks, with Rouhani telling clerics that "we cannot shut the gates of the world to our young generation." (New York Times, 9/2)

US-Iran relations

• A U.S. Coast Guard cutter patrolling the Persian Gulf fired a warning shot at an Iranian fishing dhow, after the occupants pointed machine gun at U.S. Coast Guardsmen. Coast Guardsmen had attempted to approach the dhow with an inflatable boat when incident occurred. (DoD, 8/26)

Geopolitics and Iran

• Iranian arms and logistics, combined with U.S. air support, allowed Kurdish peshmerga forces to break ISIS’ siege on town of Amerli, in northern Iraq. (Reuters, 9/1; New York Times, 9/1)

• Kurdistan’s president, standing alongside Zarif, confirmed Iran was the “first country” to provide weapons and ammunition to Kurdish forces. Zarif denied Iran has troops in Iraq, despite report Iran sent “hundreds” of troops to fight alongside the peshmerga. (Reuters, 8/26; Al Jazeera 8/23)
  • However, Iran’s interior minister said Iran sent military advisers to Kurdistan. (Al-Monitor, 8/26)
  • Reports in Arabic language sites surfaced that Quds Force Commander Qassem Suleimani’s responsibility for Iraq had been rescinded. Iranian sources vehemently denied that Suleimani, once called “single most powerful operative in Middle East,” had been replaced in Iraq. (Al-Monitor, 8/28)

• Iran’s Deputy Foreign Minister Hossein Amir-Abdollahian met Saudi Arabia’s Foreign Minister Prince Saud al-Faisal in Jeddah, the highest level talks since last year’s election of Rouhani. “Fruitful” discussions focused on Iraq, Israel and other issues in the region. (AFP, 8/26)

• Iran condemned the GCC for “blatant interference” in its affairs, after GCC representatives reiterated support for UAE’s claims to three strategic islands near the Strait of Hormuz. (Press TV, 8/31)

Israel

• Iran’s Revolutionary Guard said it shot down an Israeli surveillance drone, identified as a Hermes 450, near the Natanz nuclear facility. The drone was launched from a northern, former Soviet country, IRGC said. (AP, 8/25; AP 8/27; Elbit Systems) Note: Drone’s listed range is 300 km, but Natanz, south of Tehran, is more than 450 km from Turkmenistan and nearly 600 km from the border with Azerbaijan. The Hermes 450 is constructed by an Israeli company but also operated by Azerbaijan, U.S. and U.K.
  • Another Hermes 450, reportedly Israeli, crashed near Baghdad International Airport. (Times of Israel, 8/28)

• The Israeli military shot down an Iranian made Yasir drone as it crossed border with Syria. (Times of Israel, 9/2)

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

• No significant developments.

Uncertain or dubious claims

• No significant claims.