Iran nuclear deal faces sanctions relief doubt in Congress

Washington: Iran agreed to curtail its nuclear activities starting 20 January under a deal with world powers, triggering the easing of some sanctions and the start of a six- to-12 month timetable to reach a permanent accord.

Iran and the so-called P5+1 countries—China, France, Russia, the UK and the US, plus Germany— reached an understanding on how to implement a deal reached in November, US President Barack Obama said in a statement on Sunday.

Iran has agreed to specific actions that halt progress on its nuclear program and roll back key parts of the program, Obama said. The agreement restricts Iran’s nuclear activities and imposes more intrusive inspections. In return, Iran will benefit from sanctions relief, which the US values at $6 billion to $7 billion over six months.

It’s unlikely the implementation accord will quell bipartisan efforts in Congress to escalate pressure on Iran with further sanctions. Iran has threatened to abandon talks if Congress votes to tighten economic restrictions and Obama repeated on Sunday his vow to veto additional sanctions while negotiations on a broader deal continue.

As many as 59 senators have signed on in support of sanctions legislation by New Jersey Democrat Robert Menendez and Illinois Republican Mark Kirk. House Majority Leader Eric Cantor, a Virginia Republican, said in a statement that the implementation deal only furthers a deeply flawed agreement.

Netanyahu warns

Israeli prime minister Benjamin Netanyahu, who also opposed the agreement, declared on Monday at the funeral for former prime minister Ariel Sharon that his country wouldn’t let Iran acquire nuclear weapons capability. Iran has asserted its program is for peaceful purposes, though the US, Israel and other nations say the Islamic Republic is seeking a weapons capability.

Brent crude has lost 3.2% since the accord in November. Futures for February settlement rose 21 cents, or 0.2%, to $107.46 a barrel on the ICE Futures Europe exchange on Monday.

Under the accord, Iran is to immediately begin actions to eliminate within six months its entire stockpile of 20% enriched uranium, which could be most quickly processed to fuel nuclear weapons, according to one of three US administration officials who briefed reporters on Sunday on the condition that they not be identified.

Uranium centrifuges

Iranian officials also agreed not to install or operate more advanced uranium centrifuges and to take steps to prevent use of current equipment for 20% enrichment, which will be verified as part of a tougher inspection regime by the International Atomic Energy Agency, one US official said.

Negotiations on a permanent agreement— to be completed within six to 12 months— will begin within a few weeks, Lebanese al-Mayadeen television reported, citing Iranian Deputy foreign minister Abbas Araghchi.

Obama has said he sees no more than a 50-50 chance those negotiations will succeed, while emphasizing it’s important to seek such a diplomatic solution before the possibility of military action. One of the officials yesterday said that, while Iran’s behaviour was encouraging, the odds are unchanged.

US secretary of state John Kerry told reporters in Paris on Sunday that the next phase in the talks will be very difficult.

Suspended sanctions

Also, the nations will suspend sanctions on Iran’s imports and exports of gold and other precious metals, with some restrictions, and will expedite license applications for parts and services for its civil aviation industry. They will also take steps to facilitate financing of humanitarian trade through non-US financial institutions, the official said.

Iran will get access to $4.2 billion in oil revenue held in foreign banks, to be released in monthly increments tied to its compliance with the commitment to eliminate the 20% enriched uranium stockpile, the official said.

Iran’s compliance will be monitored by the IAEA and the sanctions relief will be stopped and reversed if the country fails to meet its obligations, the first administration official said. At that point, he said, the administration would support moves by Congress to impose further sanctions.

IAEA Inspections

The implementation agreement substantially expands the IAEA’s powers. It will inspect Iran’s Fordo and Natanz enrichment facilities daily, rather than weekly, and for the first time get access to centrifuge production facilities. Iran is also obligated to resolve outstanding questions about suspected past nuclear militarization tests, including activities at its Parchin military facility, a US official said.

“As this agreement takes effect, we will be extraordinarily vigilant in our verification and monitoring of Iran’s actions”, Kerry said on Sunday.

The accord starts a six-month timetable to reach a final agreement. That period could be extended a further six months by mutual consent.

Iran’s oil exports, the country’s largest foreign-currency earner, plunged last year as US and European Union sanctions meant that banks and insurers couldn’t handle Iranian sales of the fuel. BLOOMBERG