BICOM

Executive summary

A meeting in Geneva over the weekend between envoys of the five permanent members of the UN Security Council plus Germany, and Iranian chief nuclear negotiator Saeed Jalili, has seemingly met with failure. The subject under discussion in the meeting, held under the auspices of EU Foreign Policy Chief Javier Solana, was the Iranian uranium enrichment programme. In a significant development, the meeting was attended by US Under-Secretary of State William Burns.

The meeting came in the wake of Iran’s failure two weeks ago to accept the package of incentives offered by the major powers, in return for the suspension of uranium enrichment.[i] Iran declared itself willing to discuss elements of the package, but continued to insist on its right to continue uranium enrichment. The meeting ended in disappointment, with a continued refusal by Teheran to agree to freezing enrichment in return for no increased sanctions against Iran.[ii] The talks concluded with a demand by the six powers that Iran give an unequivocal ‘yes or no’ response on the original incentives package offer given five weeks ago. Teheran was told to give this answer within two weeks.  An Iranian failure to comply is likely to result in further sanctions.

While there has been much discussion in recent weeks of a softening US and EU stance toward Iran, it may well be that the reciprocal aspect of closer American involvement in diplomacy will be the expectation that European and other allies will concede that tougher measures are necessary, if and when it becomes unmistakably clear that Iran has no interest in dialogue except for the purpose of obfuscating and buying time. As it looks now, an additional effort is being made to give diplomacy a chance to work. But the events in Geneva may well have been an important milestone on the way towards a conclusion in some western capitals that harsher measures may prove necessary in frustrating Iranian nuclear ambitions

This analysis will address the following questions: what took place in Geneva, what action is likely to follow this meeting’s failure, and what were the reasons for the atmosphere of optimism in the build up to the talks?

Guarded optimism, followed by disappointment

Despite Iran’s equivocal response to the incentives package, hopes had been high for a possible breakthrough in the week leading up to the talks in Geneva. The guarded optimism derived from a number of factors. Firstly, a series of conciliatory moves by the US towards Iran took place in the week prior to the talks, and there were hopes that Iran might show a more flexible stance in response to these. The US moves included the announcement that Under-Secretary of State William Burns would attend the Geneva talks. Burns’ participation represented a major shift, as this was the first high-level direct negotiation between US and Iranian representatives in nearly three decades.[iii] In addition, US officials spoke of the possibility of Washington opening an interest protection bureau in Teheran to handle contacts between the two countries. At present, US interests in Iran are represented by the Swiss embassy.[iv]

The mood of optimism was enhanced by comments from Iran seeming to suggest that Teheran did not consider that there was a realistic possibility of a US or Israeli strike on Iranian nuclear facilities. Oil prices fell slightly in the course of the week, and analysts considered that this too derived from the new mood of cautious hope.[v]

The offer discussed at Geneva was the so-called ‘freeze for freeze’ formula. According to this proposal, Iran would agree not to expand its uranium enrichment programme. In exchange, the six powers would hold off on imposing increased sanctions against Teheran. (The UN Security Council has already passed three sanctions resolutions against Iran. The existing sanctions include visa bans on officials, and measures against companies believed to be linked to the nuclear programme.) This phase would continue for six weeks, after which, it was hoped, talks would resume on the issue of a complete cessation of uranium enrichment.[vi]

From the outset of the 19 July talks, however, Iran made clear that it rejected the ‘freeze for freeze’ offer. A member of the Iranian delegation, Kevyan Imani, told reporters gathered at Geneva’s city hall that there was ‘no chance’ of a suspension of uranium enrichment.[vii]

Iranian Chief Negotiator Jalili gave an oblique and ambiguous response to the proposal. He refused to speak directly about the issue of uranium enrichment, and the Iranians presented a vaguely worded document at the meeting which spoke about cooperation without relating directly to Iran’s nuclear activities.[viii]

The talks concluded with a demand by the six powers that Iran give an unequivocal ‘yes or no’ response on the original incentives package offer given five weeks ago. Teheran was told to give this answer within two weeks.

If no positive response emerges from Iran over the next two weeks, there is a consensus that this will lead to a new round of sanctions.  The EU recently took measures against a major Iranian bank, and in the coming days, new measures against Iran’s banking system are due to be discussed. [ix] Discussions at the Security Council on a new sanctions resolution, meanwhile, are likely to take place in September.

Next moves and implications

All six of the major powers have given their approval in principle for further sanctions against Iran if Teheran fails to give a positive response on the package of incentives. However, there is no consensus on the form that sanctions would take. While the UK and US are thought to favour tough new measures targeting the Iranian oil industry, it is considered unlikely that Russia or China would agree to this. Iran depends on foreign oil refineries, and these would be vulnerable to sanctions. A ban on the import of petrol and diesel from Iran has also been discussed. Iran is, of course, a massive oil producing nation, but Teheran lacks the technology to refine oil. Sanctions in this regard could serve to both prevent Iran from developing the means to refine oil, and cause direct damage to the economy by preventing the import of petroleum and diesel fuel.

However, China has extensive economic relations with Iran (as does Germany), and Russia is pursuing a general Middle East policy of opposition to the west. (It is interesting that while Russia’s once warm and burgeoning strategic relationship with Iran has cooled, Moscow continues to oppose firm measures against Iran – apparently more because of its desired role in the region rather than because of hope for improved relations with Iran.) Future sanctions are therefore unlikely to take this form. Instead, lesser measures aimed at the freedom to travel and the financial assets of leading figures in the Iranian regime are more likely.

The possibility of ‘unilateral sanctions’ by the EU, or by those countries most committed to preventing the emergence of a nuclear Iran – including the UK – should also be noted and must not be underestimated. Given the difficulties of developing a sufficiently tough response with the agreement of all Security Council powers, if Iran remains intransigent these are likely to come onto the agenda.[x]  

Iran’s refusal of the latest international offer will strengthen the hand of those in Europe, the US and Israel who have maintained throughout that Teheran is engaged in a policy of ‘buying time’.  According to this view, the ambiguous and stalling responses of the Iranians – pledging commitment to dialogue in principle while simultaneously rejecting any move which would place a practical hindrance on their nuclear development – are intended simply to keep the international community at bay until the Iranian nuclear programme passes the point of no return. [xi]

Conclusion

Recent reports have noted that in the US, voices in the Administration arguing for the importance of maintaining dialogue with Iran have been gaining ground. [xii] The more conciliatory direction recently taken by the US may have as much to do with international realities as with any deep-rooted conviction that dialogue with Iran will bring results. First of all, as noted above, it would be impossible under current conditions to build an international coalition for a tougher line against Iran. While all UNSC powers might support sanctions in some form, there is no consensus for measures of a severity likely to have an effect. Secondly, a possible military strike would be hard to carry out, might well not achieve the goal of dealing a long-term setback to the Iranian nuclear programme, and could see a furious Iranian response. The response could take the form of strikes against Israeli and US interests – and could also include the blocking of the Straits of Hormuz, a move which would send oil prices skyrocketing, with grave consequences for the world economy.

Senior US analysts have intimated in recent weeks that the Iranians are experiencing serious technical difficulties in various aspects of their nuclear programme. This may mean that Washington is operating on the assumption that there is still sufficient time to allow diplomacy a real chance.

Nevertheless, it would be mistaken to assume that the current US attempts at dialogue necessarily mean that a tougher stance further down the road is no longer a possibility. Rather, it may well be that the reciprocal aspect of closer American involvement in diplomacy will be the expectation that European and other allies will concede that tougher measures are necessary, if and when it becomes unmistakably clear that Iran has no interest in dialogue except for the purpose of obfuscating and buying time. As it looks now, the events in Geneva on Saturday may well have been an important milestone on the way toward this point.

---

[i] Julian Borger, “Iran given two week deadline to end nuclear impasse,” the Observer, 20 July 2008. www.guardian.co.uk 

[ii] Yossi Melman and Barak Ravid, “No breakthrough on Iran nuclear talks in Geneva, another round in two weeks,” Haaretz, 20 July 2008. www.haaretz.com

[iii] George Jahn, “In talks, Iran says no to suspending uranium enrichment,” Associated Press, 19 July 2008. www.oregonlive.com 

[iv] Ibid. Since the Islamic revolution of 1979, the Swiss Embassy has served as the vehicle for the transferring of messages between the US and Iran.  

[v] “Powers wield sanction threat after Iran stalemate,” Sharq al-awsat, 20 July 2008. www.asharq-e.com

[vi] “Iran given two weeks to halt enrichment,” Associated Press, 20 July 2008. www.jpost.com

[vii] Ibid.

[viii] Borger. 

[ix] See Herb Keinon, “EU set to blacklist top Iranian bank,” Jerusalem Post, 29 April 2008. www.jpost.com

[x] Prime Minister Gordon Brown’s speech to the Knesset, in which he noted that “Iran has a clear choice to make: suspend its nuclear programme and accept our offer of negotiations or face growing isolation and the collective response not of one nation but of many nations,” was a good indication of the growing mood of resolve among some European leaders on this issue.  www.number10.gov.uk

[xi] See Yossi Melman, “Are US-Iran ties undergoing significant change,” Haaretz, 20 July 2008. www.haaretz.com

[xii] Leonard Doyle, “Condi’s coup: how the neo-cons lost the argument over Iran,” Independent on Sunday, 18 July 2008. www.independent.co.uk