One Year Later: Seven Facts about the Iran Deal

By: Abigail Stowe-Thurston and Erin Connolly

 

  1. What is the Iran Nuclear Deal?

In July of 2015, the United States and the other permanent members of the United Nations Security Council (the United Kingdom, France, Russia, China), and Germany (together known as the P5+1), as well as the European Union, negotiated an agreement with Iran that traded restrictions on Iran’s nuclear program for relevant sanctions relief. This deal, known as the Joint Comprehensive Plan of Action (JCPOA) is considered to be a major achievement in the tense relationship between the international community and Iran, and a milestone in the nuclear non-proliferation verification regime.

 

  1. What does the deal address?

The JCPOA addresses Iran’s ability to develop a nuclear weapon. At the time the agreement was negotiated, it was estimated that Iran could enrich enough nuclear material for a bomb in 2-3 months. The JCPOA was designed to address this concern by constraining Iran’s ability to possess and enrich nuclear material.

While there are other international concerns about Iran’s behavior in areas such as ballistic missile development, human rights, and involvement in regional conflicts, this deal is designed solely to address Iran’s nuclear weapons program. Sanctions related to these other concerns remain in place and the U.S. maintains the ability to increase sanctions for these behaviors.

 

  1. How is the deal being implemented?

According to the International Atomic Energy Agency (IAEA), Iran is abiding by the terms set by the JCPOA. It has scaled down its nuclear program to limits established by the agreement, and has complied with IAEA inspections. In return, the United States and its negotiating partners have lifted sanctions related to Iran’s nuclear program.

 

  1. How is the deal being monitored?

The IAEA has unprecedented access to Iranian nuclear facilities as part of the most intrusive nuclear monitoring regime to date. The methods used are comprehensive and allow the IAEA to have 24/7 access to online monitors as well as short-notice access to declared nuclear facilities. The IAEA also has the ability to inspect undeclared facilities where it suspects illicit activity may be occurring.

Some experts have voiced concerns that the IAEA lacks the funding, personnel, and expertise to adequately monitor and verify the implementation of the JCPOA. These intricate verification structures require a massive investment of both time and financial resources. The IAEA must be properly funded to effectively complete all aspects of the JCPOA, costing about $10.4 million annually.

 

  1. How does Iran benefit from the deal?

As a result of targeted sanctions, much of Iran’s wealth has been frozen in international banks. Since the JCPOA entered into effect, Iran has been able to access the money that has accumulated (mainly through oil sales) in those banks and open the Iranian economy to the global market. Although some claim that $100 billion will flow directly into Iran as a result of sanctions relief, this figure is imprecise. Many estimates put the number closer to $55 billion, and as of April 2016 Tehran has seen only $3 billion. According to Adam Szubin of the U.S. Department of the Treasury, Iran requires at least $500 billion to satisfy its most fundamental investment needs to rebuild aspects of its government and economy. While Iran benefits from sanctions relief, the amount of money flowing back into the Iranian economy is rather modest.

 

  1. Is the United States complying with the deal?

The United States lifted nuclear-related sanctions on Iran in January of 2016 in compliance with the JCPOA. Iran had high expectations for the effects of sanctions relief and Iranian officials have complained that the United States has not done enough to promote Iran’s economic growth. However, analysts like Elizabeth Rosenberg at the Center for a New American Security say that it is not a surprise that Iran hasn’t experienced a windfall of economic relief under the JCPOA. Businesses are wary about investing in an economy that struggles with corruption and a lack of transparency. While the United States and other countries should clarify what potential investors are and are not allowed to do, Iran needs to further address domestic corruption and problems with its banking system to make doing business with Iran desirable for investors.

 

  1. How long does the deal last?

The deal is broken down into graduated time frames, so different provisions expire at different times. For example, after ten years Iran will be allowed to conduct some nuclear research. Even after most elements of the deal expire, Iran agrees to continued IAEA presence and monitoring.