P5+1 and Iran Claim Progress in Talks

Kelsey Davenport

Following two days of discussions last month in Baghdad, Iran agreed to meet again in June with six world powers to “expand” on the “common ground” that the two sides identified during negotiations on Iran’s nuclear program, Catherine Ashton, who represented the six countries, said May 24.

Although the two sides did not reach an agreement, they said they had made progress during the May 23-24 discussions. Talks are scheduled to reconvene June 18-19 in Moscow.

The Baghdad talks originally were to last for one day, but were extended to two. Ashton, the European Union’s foreign policy chief, said it was “clear that both sides want to make progress” but that “significant differences” remain to be worked out. She also said that the six countries—China, France, Germany, Russia, the United Kingdom, and the United States—known as the P5+1, remain “united in seeking a swift diplomatic resolution” to international concerns about Iran’s nuclear program and expect Tehran to take “concrete and practical steps… to meet its international obligations.”

Lead Iranian negotiator Saeed Jalili described the atmosphere of the talks as “positive for the two sides to talk about their issues,” but said that getting the six powers to accept Iran’s “clearly irrefutable” right to uranium enrichment was an obstacle during the negotiations.

The Baghdad meetings were the second round of talks between the P5+1 and Tehran this year after negotiations broke down in January 2011. During the first round of talks, on April 14 in Istanbul, the two sides agreed on a process for moving forward in future negotiations. Ashton described it as an incremental approach with reciprocal actions. (See ACT, May 2012.) Both sides described the Istanbul meetings as positive.

Before the Baghdad meeting, Michael Mann, Ashton’s spokesman, said the P5+1 expected gradual progress rather than a final deal. After the talks concluded, White House spokesman Jay Carney said the Obama administration did not expect “breakthrough moments” during the talks and that the “expectations” for the talks, namely progress and “seriousness on the part of the Iranians,” had been met.

Baghdad Proposals

Two proposals, one from each side, were discussed at the meetings.

Iran’s enrichment of uranium to 20 percent was the focus of the P5+1 proposal and was characterized by Mann as one of delegation’s “main concerns,” according to media accounts. The proposal called for Iran to end its enrichment of uranium to 20 percent and ship its stockpile of the material out of the country. In return, Tehran would receive highly enriched uranium fabricated into fuel rods for the Tehran Research Reactor, nuclear security assistance, and some material incentives, including spare parts for civilian aircraft, which are scarce in Iran.

According to a report last month by the International Atomic Energy Agency (IAEA), Iran has produced a total of 145 kilograms of uranium enriched to 20 percent, up from the 109 kilograms the IAEA reported in February. Iran says it requires the higher enrichment level for the production of medical isotopes in the Tehran reactor. In the days before the talks, the Atomic Energy Organization of Iran announced that it had delivered nuclear fuel plates, produced domestically at the Isfahan nuclear complex, to the reactor. The announcement said that one of the plates was loaded into the core of the reactor to begin producing medical isotopes.

The international community remains concerned that the uranium enriched to 20 percent could be further refined and used for a nuclear weapon. Although weapons-grade uranium is enriched to 90 percent, the move from 20 percent to 90 percent requires much less work than beginning with uranium enriched to a reactor-grade level.

Jalili described the P5+1 proposal as “one suggestion” on uranium enrichment and said that any cooperation by Iran on halting enrichment to the 20 percent level was dependent on the “preservation” of Iran’s right to enrichment. The United States has indicated that it is not necessarily opposed to Iran producing uranium enriched to 5 percent if the proper safeguards are in place.

Iran also objected to the lack of sanctions relief in the P5+1 proposal. Iranian officials at the talks described that language as “unbalanced” and not in line with the “reciprocal” approach agreed in Istanbul, media outlets reported. An official from another country reportedly described Jalili as “relentless” in his pursuit of sanctions relief, which Carney said provides Iran with an “impetus” to take the negotiations “very seriously.” U.S. officials indicated that the sanctions relief that Iran was seeking would come later if Tehran followed through on any initial agreement.

News reports described the Iranian proposal as a five-point plan, which offered greater international access to its nuclear facilities in exchange for the easing of economic sanctions on its oil industry and recognition of its right to enrichment. It is unclear how the Iranian proposal dealt with the 20 percent enrichment question, but when Ashton mentioned the proposal in her statement at the end of the talks, she said that Iran “declared its readiness to address the issue.”

Increased Sanctions

U.S. Secretary of State Hillary Rodham Clinton quashed any speculation that there could be sanctions relief immediately resulting from the Baghdad talks, saying May 24 that the sanctions “will remain in place and continue to move forward.”

Tougher sanctions against Iran’s oil industry and central bank are scheduled to enter into force in the upcoming month. In the United States, the tighter sanctions are part of the 2012 National Defense Authorization Act, which was signed into law in December 2011. (See ACT, January/February 2012.) On June 28, the United States is scheduled to begin sanctioning all foreign banks that process Iranian oil transactions through Iran’s central bank. The president can waive those sanctions if the bank’s country has demonstrated a “significant reduction” in its Iranian oil imports.

In February, the Obama administration released a report indicating that global oil needs could be met by increasing the capacity of non-Iranian sources without creating a spike in prices. Under the defense authorization act, this finding was necessary for the sanctions to begin on June 28. As a result, banks that continue to process oil transactions without a wavier after that date will be prevented from opening accounts in the United States and will have limited access to any of their existing accounts. Iranian oil sold for cash or under barter agreements would be exempt from these sanctions.

As of April, the last month for which an official list was available, waivers have been granted to 10 European countries and Japan. South Korea is believed to be in the process of applying for a waiver, and during a May visit to India, Clinton pressed New Delhi to cut its oil imports from Iran. Although India indicated that it is planning to push local refineries to cut imports from Iran by 15 to 20 percent, the administration has not yet issued a waiver. India, Japan, and South Korea are among the top purchasers of Iranian oil. China, the largest importer of Iranian oil, does not have a waiver.

Further sanctions legislation is making its way through Congress. On May 22, the Senate passed legislation that would strengthen and expand existing sanctions against Iran’s energy and financial sectors. The legislation would broaden the criteria under which companies are placed on the sanctions list, which covers foreign firms that invest in Iran’s energy sector and do business with Iranian firms involved with uranium production and the Islamic Revolutionary Guard Corps. The House of Representatives passed its own version of the bill last year.

The EU’s sanctions will tighten on July 1 when its embargo on the import of Iranian oil goes into effect. After the conclusion of the Baghdad talks, British Foreign Secretary William Hague left little room for doubt that, without “urgent, concrete steps” by Iran to address the international community’s concerns about its nuclear program, EU sanctions would enter into force as planned on July 1. Hague said that if Iran failed to respond in a “serious manner,” the pressure from sanctions “will intensify.”

In addition to limiting oil imports to EU member countries, the package passed by the European Parliament in January will strengthen sanctions on Iran’s financial sector and prevent European insurers from providing protection and indemnity for tankers carrying Iranian oil. Without this insurance, any countries continuing to import Iranian oil will be forced to look elsewhere for insurance on the tankers’ contents. China and India are reported to be making such arrangements.