Why the West Needs to Open Its Eyes to Iran’s Intentions

Honorable members of this subcommittee, I am privileged to appear before you today to discuss the status of the Iran nuclear negotiations. I will discuss why it’s more urgent than ever for the West to open its eyes to Iranian intentions. American officials are optimistic about the possibility of reaching a final nuclear deal with Iran this summer. But Western leaders must be careful not to let their wish for a deal blind them to Tehran's tactics. Iran’s leaders want both a bomb and sanctions relief, and a flawed nuclear deal may give them both.

It should be clear by now that President Barack Obama does not like to back his diplomacy with military force. He believes there should be a clear sequence of engagement: diplomacy, sanctions, more diplomacy, perhaps more sanctions, and only after all peaceful alternatives are exhausted, the possibility of force. Even then, the administration is loath to entertain such hypotheticals.

This explains why economic sanctions are now the default instrument of American coercive statecraft for confronting challenges to the international order. When Russia invaded Crimea in February, Mr. Obama turned to his “favorite non-combatant command”[1] at the US Treasury Department to design targeted sanctions to increase the costs of Russian revanchism.

Financial warfare has become the weapon of choice against Iran's Supreme Leader Ali Khamenei and Syria's Bashar al-Assad, as Khamenei threatens to unwind the nuclear non-proliferation regime and Assad turns Syria into even more of a slaughterhouse.

Iran’s sanctions were particularly important to Mr. Obama. An American-imposed economic minefield, which both the US Congress and the Obama and Bush administrations deserve credit for developing, persuaded Tehran to engage in more serious nuclear negotiations, leading to an interim nuclear agreement which came into effect in January, and more nuclear talks in Vienna this week.

American officials are now brimming with optimism about the possibility of reaching a final nuclear deal by July 20, based on a complicated technical compromise that will likely permit Iran to retain some essential elements of its military-nuclear infrastructure.

Confident that a deal is nigh, Washington has gone from “disclose and dismantle” – insisting that Iran come clean on its military-nuclear activities, coupled with demands to dismantle key elements of its military-nuclear infrastructure – to “defer and deter.”

This new approach involves punting on some of the tougher issues, such as demands for full disclosure on past nuclear weaponisation activities before any nuclear deal is signed, and relying heavily on weapons inspectors to stop the regime from achieving its decades-long ambition to build a nuclear bomb.

Iranian President Hassan Rouhani is surely lying when he says the Islamic Republic has never had any intention of building an atomic weapon. Defecting Iranian nuclear engineers told US officials in the late 1980s that the mullahs’ program, then hidden, was designed exclusively for such arms. Everything Western intelligence services and the International Atomic Energy Agency have tracked since then matches those early revelations.

US participation in the upcoming negotiations isn’t premised on an expectation of Iranian veracity. If it were, Mr. Obama wouldn’t conclude any nuclear deal until Tehran had come clean fully about its past deceits. The clerical regime has already dropped the bar through its “facts on the ground” intransigence: more than 19,000 centrifuges built, an enrichment facility buried in a mountain on an Islamic Revolutionary Guard Corps (IRGC) military base, and a heavy-water plant, which has no other legitimate nuclear purpose than as a plutonium-bomb producing facility.

In response, the West has lowered its nuclear demands in the face of Iran’s insistence that key elements of its nuclear program are “non-negotiable.” The interim deal reached in Geneva concedes to Tehran an enrichment capability on Iranian soil (despite multiple UN Security Council resolutions requiring suspension of all enrichment), permits it to continue R&D on advanced centrifuges, drops the previous P5+1 demands that enriched uranium be shipped out of the country and that the Fordow enrichment facility and the Arak heavy-water reactor be shuttered, and doesn’t demand that Iran halt its ballistic missile activities that could deliver nuclear weapons (again in contravention of UNSC resolutions). Unless a final deal requires all of these conditions, amongst others, and doesn’t replace them with technical fixes that are too easily reversible, Tehran appears poised to retain a military-nuclear infrastructure.

Meanwhile, however, America’s nuclear negotiating partners are splintering. The French, who would undoubtedly like a deal, are quite familiar with Iranian nuclear mendacity from their earlier experience between 2003 and 2005 negotiating with Rouhani and his then deputy nuclear-negotiator, and now Iranian foreign minister, Mohammad Zarif. They are much less confident that a technical algorithm can solve what is a strategic problem, which is the essential nature and conduct of the regime. They rightly believe that, if Tehran refuses to come clean on its past nuclear weaponisation activities, there can be no confidence in any Iranian commitments in the future, and no way to design an effective verification and monitoring safeguards regime.

The Russians, smarting over US sanctions on scores of Putin’s cronies over Ukraine, are reportedly negotiating a massive sanctions busting-deal with Tehran involving the transfer of Iranian oil to Moscow (akin to sending coal to Newcastle) in exchange for Russian military equipment. While the Obama administration has implored Putin not to move forward on this deal, escalating tensions between Washington and Moscow could mean that massive Russian-Iranian sanctions busting occurs anyway. This may make it very difficult for Washington to hold together key elements of the sanctions regime as a way to use economic pressure to enforce any deal signed with Tehran, especially when Iran begins to cheat on any of its nuclear commitments.

The Chinese and Germans, for their part, want to look past the current nuclear standoff and get back to their Iranian business ventures. UK Prime Minister David Cameron, who continues to take an even softer position than the Obama administration on Iran issues, seems content to take a nuclear backseat after his embarrassing failure to rally parliament behind forceful action in Syria last September. Not that anyone blames Mr. Cameron after President Obama’s own walk-back from military strikes when Assad crossed the chemical redline.

What explains this splintering?

Among numerous reasons, it’s the Syria chemical redline debacle which undercut the credibility of Mr. Obama’s insistence that the use of military force is on the table against an Iranian nuclear weapons breakout. It is also the White House’s panic attack about a recent bipartisan Senate bill mandating more sanctions if the nuclear talks fail or Tehran engages in further terrorism. Iran threatened to walk away from negotiations if the bill moved forward, and Mr. Obama, anxious to keep Tehran at the table, turned his fire on Senators, including from his own party, accusing them of undermining diplomacy and risking war. This anxiety, however, tells everyone, including Iran’s Supreme Leader, that Mr. Obama is not serious about backing up his diplomacy with real teeth.

But it doesn’t end there. Mr. Obama also downplays the sanctions relief he’s offered to Tehran. Shouldn’t one always overvalue the concessions one offers when bargaining? By contrast, Iran's negotiators understand the wisdom of undervaluing their relief package, so that they can ask for more at the end of the first six-month period of the Geneva interim deal, which is set to expire in July.

According to a new IMF report, thanks to de-escalating sanctions, Iran is also experiencing a modest albeit fragile economic recovery, with a halving of Iran’s 40%+ inflation rate, the stabilization of Iran’s previously plummeting currency, and projected positive growth after Iran’s economy lost over 6% in GDP between 2012 and 2014. The Obama administration is loath to admit this modest Iranian recovery lest it provoke the ire of Congress after promising that sanctions relief was “limited, temporary, and reversible.”[2] Tehran’s reprieve from what could have been a more severe sanctions-induced economic crisis (thanks to the de-escalation of sanctions pressure since the first half of 2013) has given the Iranian regime some breathing room.

Despite Mr. Obama’s claim that he can turn sanctions pressure on and off like “dials,” even a modest recovery reduces US negotiating leverage. That leverage is eroding further as international companies test the bounds of Western sanctions relief. As Juan Zarate, a former Treasury official, warned, “single-mindedly fixated on getting a deal at all costs,” can too quickly reduce critical financial leverage without understanding that it can be “impossible to put the genie fully back into the bottle,” once sanctions-induced pressure is relieved.[3]

Tehran senses a desire in Washington for a deal at all costs and is pushing its advantage through negotiations to retain enough of its nuclear achievements for an atomic weapon at a time of its choosing. The United States, on the other hand, seems increasingly fooled by false divisions within the regime between the so-called moderates and hardliners about Iran’s nuclear program. Abandoning the long quest for atomic weapons would be an extraordinary humiliation for all of Iran’s ruling class. That isn’t going to happen unless Iran’s supreme leader and his Revolutionary Guards know with certainty that their regime is finished if they don’t abandon the bomb.

A good nuclear deal with Tehran is still possible. But if President Obama believes that no deal is better than a bad deal, he needs to give his diplomacy more teeth. Otherwise, he may discover that what might appear to be a split-the-difference technical compromise with the Islamic Republic could turn into a fatally flawed deal with disastrous consequences for international security.

Policy Recommendations for the Government of Canada

Given the ongoing risks of Iran’s military-nuclear program, the Government of Canada can continue to play an important role in preventing Tehran from developing a nuclear weapon. I would recommend the following:

1. Iran’s military-nuclear program is still dependent on illicit procurement networks. In the event of a nuclear deal, Tehran may continue its long-standing track record of building clandestine nuclear facilities and may continue to source dual-use materials from countries like Canada. The Government of Canada needs to improve gaps in Canadian enforcement with respect to Iran’s ability to procure parts and components for its nuclear and ballistic missile programs. As nuclear expert David Albright from the Institute for Science and International Security noted recently in an April 24, 2014 report, Ottawa is not doing enough to stop Iranian exploitation of Canada as “a source of sanctioned goods and as a transshipment country for goods originating in the United States.”[4]

2. The Government of Canada should build on its global leadership on Iranian human rights issues by establishing the importance of linkage between any nuclear agreement with Iran and an improvement in Tehran’s atrocious human rights record. During the Cold War, Western negotiators linked certain arms control agreements with the Soviet Union to demands for Moscow’s adherence to human rights under the civil rights portion of the 1975 Helsinki Accords. The Iranian regime’s continued human rights abuses, which have only accelerated under Rouhani, make it less likely that Tehran will adhere to its international obligations under any nuclear agreement. The current P5+1 nuclear negotiations with Iran, however, do not require Tehran to make any improvements in its human rights record. This is a mistake: It will be much easier to monitor Iran’s nuclear program in a relatively freer and more transparent Iran.

3. In December 2012, the Government of Canada added Iran’s Quds Force, the overseas terrorist arm of the Islamic Revolutionary Guard Corps, to the list of terrorist groups under Canada’s Criminal Code. This was an important step in recognizing the IRGC’s threat to international peace and security. As I urged in prior testimony to this subcommittee,[5] the Government of Canada should take the next logical step and designate the IRGC in its entirety both under Canada’s Criminal Code for its terrorist operations and under the Special Economic Measures Act (SEMA) for its role in violating the human rights of the Iranian population. Human rights abuses by the Iranian regime fulfill the basic criteria under section 4(1) of SEMA, which has already been used to sanction human rights abuses by Syria’s Assad regime and its supporters (November 28, 2012), by the government of Zimbabwe (September 4, 2008), by the government of Burma (December 13, 2007), and by the government of Sudan (July 30, 2004), amongst others.

On behalf of the Foundation for Defense of Democracies, I thank you again for inviting me to testify before this distinguished subcommittee.