A Year In Review: New Year. Nuclear Iran?

On March 5, 1957, under the Atoms for Peace Program, Iran started its nuclear program with the United States’ assistance. Initiated during the Eisenhower administration and reign of Shah Mohammad Reza Pahlavi, the relationship aided Iran’s quest for peaceful atomic energy.  In 1968, Iran signed the Nuclear Non-Proliferation Treaty (NPT), an international agreement created to prevent the spread of nuclear weapons. Iran ratified the NPT two years later.

The country’s relationship with the United States (and other Western countries) deteriorated after the 1979 Islamic Revolution, thereby alienating the foreign support that started the country’s nuclear program. Despite changes in policy and financial supporters, Iran maintained its nuclear program. Now, more than fifty years later, Iran’s nuclear program is at the forefront of the international community’s conscience and policy agenda as Iran’s actions intensify preexisting fears about its desire for nuclear weapons.

2012 was eventful for both Iran’s nuclear program and international efforts to derail the Islamic Republic from crossing the nuclear threshold. Although not exhaustive, the following overview chronicles events involving the Islamic Republic of Iran’s nuclear program during 2012.

In his first Iranian initiative of 2012, United States President Barack Obama enacted sanctions on financial institutions dealing with Iran’s Central Bank, the primary establishment through which Iran conducts its worldwide oil deals. Although President Obama could, under the details of the sanctions, issue exemptions to financial institutions in countries if they scaled down their oil transactions with Iran, many countries, including China, Russia, and Turkey, that are regular Iranian oil customers, were unhappy with the President’s order.

While China stated that it did not intend to curb its Iranian oil imports, Turkey, who receives approximately 30% of its oil from Iran, issued a statement that it was not bound by sanctions made outside the United Nations. Although new United States’ sanctions were not well received, including opposition from two United Nations Security Council members, the economic effects of the sanctions would take their toll on Iran throughout the upcoming year.

Shortly after the United States issued its new sanctions, Iran furthered international concerns by announcing that it was on the verge of opening its second major uranium enrichment site. (In February, United Nations nuclear inspectors reported production of fuel in the new facility, the Fordo Plant, located near the Shia holy city Qom.)

Within days of Iran’s announcement, backlash mounted as the international community grappled with Iran’s seemingly revved up nuclear agenda. On Wednesday, January 11^th, Mostafa Ahmadi Roshan, an Iranian nuclear scientist died in a bomb explosion in Tehran. Reportedly, a magnetic bomb was attached to Roshan’s car. Its detonation resulted in Roshan’s death and the wounding of others. Mohammad Khazaee, the Iranian ambassador to the United Nations, responded, stating, “I would like to emphasize, once again, that the Islamic Republic of Iran would not compromise over its inalienable right to use nuclear energy for peaceful purposes and any kind of political and economic pressures or terrorist attacks targeting the Iranian nuclear scientists, could not prevent our nation in exercising this right.”

Although Iran claimed the Fordo Plant inactive in mid-January, international reactions seemed responsive to the plant’s perceived imminent opening. To diminish Iran’s nuclear funding, the European Union (EU) agreed to ban Iranian oil imports. The twenty-seven member countries would not sign new oil contracts and agreed to end existing contracts by July 1, 2012. President Obama followed on February 6^th with an Executive Order blocking the Iranian government’s property and Iranian financial institutions in the United States.

Section 1 (a) states: All property and interests in property of the Government of Iran, including the Central Bank of Iran, that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, including any foreign branch, are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.

Further attacking Iran’s economy, and consequently its financial ability to support its nuclear program, the United States Senate Banking Committee unanimously approved sanctions that would, in part, force the Society for Worldwide Interbank Financial Telecommunications (Swift) to expel blacklisted Iranian banks. Connecting more than 10,000 financial institutions in 210 countries, Swift is a widely used platform for financial transactions. According to Swift’s most recent annual review, 19 Iranian banks and 25 Iranian financial institutions used Swift more than 2 million times during 2010. Consequently, expulsion from Swift would deny Iran billions in dollars from abroad, which are regularly routed into the country’s banking system. Upsetting Iran’s banking system could be detrimental to the country’s economy, and through such economic strangulation, the measure aimed to pressure Iran to suspend its uranium enrichment activities and force the country into nuclear negotiations. Although Iran continued to insist its nuclear activities peaceful, one week before Swift’s March 15^th announcement that it would expel 30 Iranian financial institutions, Iran agreed to resume negotiations about its nuclear program.

With what appeared to be a shift away from a diplomatic stalemate, Iran and other world powers scheduled renewed talks for the following month in Istanbul.  Despite renewed optimism in Iran’s desire to cooperate with the international community, President Obama’s early March reassertion of America’s dedication to using whatever power necessary to prevent Iran from becoming nuclear raised issues of whether the United States, and other Western powers, would fully be open to negotiation and compromise with Iran. In a speech to the American Israel Public Affairs Committee (AIPAC) on March 4^th, President Obama said, “I have said that when it comes to preventing Iran from obtaining a nuclear weapon, I will take no options off the table, and I mean what I say. That includes all elements of American power: A political effort aimed at isolating Iran; a diplomatic effort to sustain our coalition and ensure that the Iranian program is monitored; an economic effort that imposes crippling sanctions; and, yes, a military effort to be prepared for any contingency.”

Although Iran seemed more flexible and open to negotiation, no resolution was reached during the April meetings in Istanbul. Talks continued the following month in Baghdad but again ended without resolution. Although willing to engage in negotiations, Iran was not eager to accept Western powers’ request for Iran to halt uranium enrichment. Iran’s delegation argued there was an insufficient easing of sanctions to warrant Iran’s compliance with Western demands. One day after the Baghdad talks concluded, United Nations nuclear inspectors found traces of uranium enriched at 27% at Iran’s Fordo Plant.

Despite unsuccessful headway in Istanbul and Baghdad, negotiators reconvened for a third round of talks in June. Two days into talks, held in Moscow, delegates found themselves at a standstill with their Iranian counterparts. High-level representatives left the meeting discouraged, only committing to a meeting of lower-level representatives to be held in July. Meeting again in Istanbul, representatives would discuss the details associated with suspending Iran’s uranium enrichment. The meeting was a failure before it began as Iran made it clear that it would not agree to suspend its uranium enrichment without a significant ease in sanctions, something the West was not ready to do.

In the midst of international negotiations, ill will festered as the United States and other powers continued to implement sanctions against Iran. The newest wave of American sanctions included blocking foreign banks that conduct oil-related business with the Central Bank of Iran, from accessing the American financial market. Addressing the goals of the United States’ increased measures against Iran, Secretary of State Hillary Clinton said, “By reducing Iran’s oil sales, we are sending a decisive message to Iran’s leaders: until they take concrete actions to satisfy the concerns of the international community, they will continue to face increasing isolation and pressure.” In exchange for the promise to scale back Iranian oil imports, the United States granted exemptions to seven of Iran’s major oil customers: India, South Korea, Malaysia, South Africa, Sri Lanka, Taiwan and Turkey.

The United States’ efforts to strangle Iran’s economy, and halt Iran’s nuclear development, were propelled by the European Union’s July 1^st enactment of its January 2012 agreement prohibiting the purchase of Iranian oil. While Ayatollah Khamenei continued to protest that Iran was not seeking nuclear weapons and was solely pursuing a peaceful nuclear energy program, the International Atomic Energy Agency’s (IAEA) August report concluded that Iran doubled its production capacity at the Fordo nuclear site, located near Qom, and continued to hinder inspection of the Parchin military site.

With several unsuccessful rounds of talks during the first half of 2012, resolution of the Iranian nuclear situation was bleak by fall. A sign of further deterioration in efforts to broker an end to hostilities between Western powers and Iran, Canada broke diplomatic relations with the Islamic Republic of Iran, closing the doors to its embassy on September 9^th. With a slew of new American and EU economic sanctions gnawing at Iran’s economy, President Obama repeated his administration’s commitment to prevent Iran from acquiring nuclear weapons in an address to the United Nations General Assembly. By mid-October, after a new round of EU sanctions prohibiting transactions with Iranian banks and financial institutions and banning the import, purchase, and transport of natural gas from Iran, the Iranian government felt the pressure as the country’s currency, the rial, declined in value, hitting new lows, against the dollar. Iranians took to the streets in protest of the currency plunge, arguably a sign of the impact of sanctions on Iran’s economy.

Seeking a way to assuage unrest and reverse economic downturn, the Iranian government proposed a “nine-step plan” whereby it would gradually suspend the production of uranium easiest to convert into a nuclear weapon in exchange for the West ending all sanctions blocking Iranian oil sales. American leadership dismissed the proposal. Still seeking a solution to its economic crisis, Iran agreed to one-on-one negotiations with the United States (the first time such talks would take place). Although agreeing, in principle, to sit down with American officials, Iran insisted the talks occur after the American presidential election. Understandably, the Iranian government did not want to agree to negotiations without knowing whom it would be negotiating. Despite its legitimacy, the request is potentially a stall tactic for a regime that is likely to re-encounter the negotiation issues from the Istanbul, Baghdad, and Moscow talks.

Despite easing tensions between the United States and Iran as 2012 came to a close, Iran’s lack of cooperation with the international community was still apparent. The International Atomic Energy Agency’s (IAEA) November report details inspectors’ inability to access the Parchin site. Included in its list of concerns are observed activities that the IAEA says could be used for “possible nuclear weapon development.” Such activities include, but are not limited to:

• Frequent presence of, and activities involving, equipment, trucks, and personnel
• Reconfiguration of electrical and water supply infrastructure

While the IAEA conducted talks with Iranian representatives in Tehran on December 13^th, inspectors were still not granted access to the Parchin site.

A tumultuous year for the international community in dealing with the Iranian nuclear situation, 2012 ended (not surprisingly) without resolution. Although idealism is often favorable in international relations theory, the past year’s events, including the effects of economic sanctions, may have proven to politicians that the strong arm of realism is most effective in bringing Iran to the negotiating table. With such knowledge, the challenge for the upcoming year will likely be identifying how to ensure success in such negotiations.