Home' Trinidad and Tobago Guardian : April 9th 2015 Contents BG8 ENERGY
BUSINESS GUARDIAN www.guardian.co.tt APRIL 2015 • WEEK TWO
Beware diplomats bearing
fact sheets; they rarely
reveal the whole truth.
The nuclear negotiations in Lausanne have
already produced three separate fact sheets,
issued by the United States, Iran and France,
each highlighting different aspects of the
But under all three versions, Iran's oil exports
are likely to rise in 2016.
The battle of the fact sheets confirms the
first rule of analysis: never trust a summary
produced by someone else, always go back to
the original documents.
In this instance, there is no final document
setting out all the undertakings by the various
parties because there are still significant areas
By reading the fact sheets side by side, how-
ever, the outlines of an eventual deal between
Iran and the five permanent members of the
United Nations Security Council plus Germany
(P5+1) are now reasonably clear.
The basic bargain allows Iran to maintain
and gradually develop a complete fuel cycle
in exchange for tough restrictions and inspec-
tions to ensure its activities have exclusively
It aims to ensure it would take a year or
more for the country to produce enough fis-
sionable material for a bomb in the event that
the agreement breaks down at any point over
the next 10 years.
While there are still many technical details
to be negotiated, the outlines of the political-
level agreement are clear, with all sides making
significant concessions compared with past
Battle of the fact sheets
Within minutes of the announcement of a
preliminary framework between Iran and world
powers on Thursday, the White House had
issued a "fact sheet" presenting its interpretation
of the emerging agreement.
The fact sheet succeeded in controlling the
media and political narrative in the crucial 48
hours after the announcement but reflected
only some of the understandings tentatively
reached by diplomats.
The US version devoted 31 paragraphs to
new controls that would be established on
Iran's nuclear activities but only eight to the
issue of sanctions relief.
While the sections on nuclear controls were
highly specific, the parts on sanctions were
notably vague about the timing and extent of
relief ("Parameters for a Joint Comprehensive
Plan of Action", April 2).
Iran would have had no reason to agree to
the deal as presented by US press officers, so
it was immediately clear the fact sheet did not
reflect the whole package of understandings
that had been reached.
Iran's Foreign Minister Mohammad Javad
Zarif complained it was much too early to start
publishing fact sheets.
Zarif told a television interviewer that "the
Americans put what they wanted in the fact
sheet ... I even protested this issue with (US
Secretary of State John) Kerry."
So Iran has now issued its own fact sheet,
published by the Foreign Ministry in Farsi, and
translated by various outside organisations.
Predictably, Iran's version devotes more space
to the removal of sanctions and goes into much
greater detail about the extent and timing
("Translation of Iranian fact sheet on the nuclear
negotiations", April 3).
France, too, issued its own details, providing
additional information about the framework,
which has been summarised in the Wall Street
Journal ("Nuclear deal allows Iran significantly
to boost centrifuges after 10 years", April 4).
Parameters of a deal
Iran will be allowed to maintain a complete
nuclear fuel cycle and continue enriching ura-
nium to reactor grade, but be subject to strict
controls on the number of centrifuges it can
operate and inspections by the International
Atomic Energy Agency (IAEA) to account for
Iran will be prohibited from enriching ura-
nium beyond the 3.67 percent used in civilian
nuclear reactors for at least 15 years. Uranium
that has already been enriched beyond this
level will be blended down or exported.
Iran will sign and ratify the IAEA's Additional
Protocol on nuclear inspections, which almost
all IAEA members have already implemented,
and reach agreement with the agency on meas-
ures related to disclosure of previous activities
with a possible military dimension (PMD).
The domestic enrichment program will be
restricted to fairly inefficient first-generation
centrifuges for the initial 10 years of an agree-
ment, though it will be allowed to continue
research and development on more advanced
models, which could be implemented after
the end of the first 10-year period.
Enrichment activities will be concentrated
at the above-ground (therefore bomb-able)
Natanz facility, while the underground Fordow
facility (which has been hardened against air
strikes) will be converted to "an advanced
nuclear and physics research center".
Fordow will retain two operational centrifuge
cascades and produce "stable isotopes" for
civilian uses in industry, agriculture and med-
icine, according to Iran.
The heavy water research reactor under
development at Arak will be redesigned to
limit the production of plutonium, while its
reactor fuel will be reprocessed outside the
A new UN resolution
In exchange for these undertakings, Iran
will get broad-based sanctions relief through
a new UN Security Council resolution super-
seding previous resolutions concerning the
country's nuclear programme.
The resolution will lift all UN-imposed mul-
tilateral sanctions, as well as EU and US sanc-
tions relating to the nuclear program (but not
terrorism, human rights and missile prolifer-
ation, according to the United States).
By employing the mechanism of a Security
Council resolution, the United States will side-
step the need for a formal treaty with Iran
(which would require the advice and consent
of the US Senate).
The United States will not even need to
reach an executive agreement, which could
be modified by a future US president (a point
emphasised by a group of 47 US senators in
their recent letter to Iran).
Instead, the two sides will reach a binding
agreement within the framework of the United
Nations that cannot be modified except with
the consent of all five permanent members
of the Security Council.
Employing the United Nations is meant to
reassure Iran that any framework agreement
will not be undone by the US Congress and
ensures disagreements about implementation
will be managed by all five permanent members
of the Security Council, not the United States
At the same time, the United States has
promised to retain the "architecture" of its
unilateral sanctions "for much of the duration
of the deal" so they can "snap back" in the
case of significant non-compliance.
Because US sanctions have an extra-terri-
torial dimension, through their application to
foreign entities that deal with Iran, Washington
will retain considerable leverage outside the
More oil exports in 2016
The time frame for sanctions relief, crucial
to oil markets because it would allow Iran to
raise its exports by up to one million barrels
per day, has also emerged into clearer focus.
The negotiating teams have until July 1 to
finalise the Joint Comprehensive Plan of Action,
which will then be approved by the Security
There will then be a period of what Iran
calls "preparatory work" for implementation
and what the United States calls "the com-
pletion, by Iran, of nuclear-related actions
addressing all key concerns (enrichment, For-
dow, Arak, PMD, and transparency)". Then on
a single date, UN sanctions will be lifted.
It is possible to construct a rough timeline
for the lifting of sanctions on Iran's oil exports.
Nothing will happen for three months while
the Joint Comprehensive Plan is finalised.
Then it is likely to take an additional six to
18 months to finalize the "preparatory work",
depending on the intentions and goodwill
among the parties.
The earliest that additional oil could start
flowing would be the first quarter of 2016,
while the latest is probably the end of 2016.
In theory, it could take more than 18 months
to finish the preparatory work, pushing the
date into 2017, but such a long delay would
risk the entire deal unraveling.
The most likely outcome is that it takes
about six to 12 months to implement the first
phase of the framework agreement, which
would see nuclear-related sanctions on Iran's
oil exports lifted sometime between January
and June 2016. Reuters
up oil market
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