BICOM

What happened: The US and Iran have exchanged their views on the EU’s final text agreement to return to the JCPOA, as Iran ramps up the pressure by announcing new uranium enrichment.

• The US received a new response from Iran yesterday according to reports, which they described as “not constructive”.
• Meanwhile, according to the IAEA, the UN’s nuclear watchdog, Iran has begun enriching uranium with one of three cascades of advanced IR-6 centrifuges recently installed at its underground enrichment plant at Natanz.
• Iran is using the cascade to enrich uranium to up to 5 per cent purity, whilst the other two IR-6 cascades at the plant have yet to be fed with nuclear material.
• Also this week, Iran’s President Ebrahim Raisi cooled the reported progress made in EU-mediated negotiations between the US and Iran on returning to the JCPOA by saying that without an agreement on the IAEA probe into past Iranian activity (see below), no agreement with the US will be reached.
• He said: “The safeguard is a principle. All the safeguard issues should be resolved as a principle in the talks. Without resolving the safeguard issues, an agreement doesn’t make sense. The agreement should put an end to the safeguard issues, and other issues that Iran is pursuing.”
• A senior White House official noted last week that a return to the JPOCA “is closer than it was two weeks ago,” but cautioned that the outcome remains uncertain “as some gaps remain”.

The latest development in JCPOA talks

• The senior official also revealed some components of the potential deal between the US and Iran:
  • In the event of a return to the JCPOA Iran would be Iran would be prohibited from enriching and stockpiling uranium above 3.67 per cent – pushing Iran’s breakout time to a minimum of 6 months (half the time of the original JCPOA target in 2015.)
  • Iran would not be permitted to have any of the 20 and 60 per cent enriched uranium that it is stockpiling today.
  • The advanced centrifuges Iran is operating today would be stopped and stored in a warehouse in Iran under international supervision. All the centrifuges at the fortified underground enrichment facility at Fordow would also be removed.
  • Iran would redesign the plutonium-based Arak nuclear reactor to ensure that the spent fuel cannot be reused to produce weapons-grade plutonium.
  • In addition to the nuclear constraints, the IAEA would again be able to implement it comprehensive inspections regime as agreed under the JCPOA. Much of that international monitoring would remain in place for an unlimited amount of time.
  • The agreement’s implementation would take place in several stages, with both parties turning to the next stage only after full implementation of the steps they committed to taking.
  • The reimplementation of the JCPOA, the third stage, is expected to take place four months after the agreement is signed. Iran will finish implementing all of the limitations on its nuclear program and resume the IAEA inspection regime on its nuclear sites. In return, the US would lift all secondary sanctions and engage with the private sector on how to invest in Iran.

What gaps remains? One of the key sticking points is an Iranian demand in the new agreement that the IAEA closes its investigations into past Iranian activity, which is suspected of being related to nuclear weapons.

• In 2018, Israeli intelligence seized a set of Iranian files from a Tehran warehouse, which contained new photographic evidence and information that the Islamic Republic had a nuclear weapons programme up until 2003.
• In 2019 and 2020 the IAEA requested access to three Iranian sites where it believed nuclear material had been present, based on evidence from the archive, and found man-made uranium particles.
• Since then, Iran has obstructed IAEA access to the sites and has refused to provide explanations to account for the presence of this uranium, nor has Iran explained its activities at any of the sites.
• This led the IAEA Board of Governors to censure Tehran in June 2020 and June 2022 and call on it to cooperate immediately with the investigation, despite Iran having a legal obligation do to so pursuant to its Non-Proliferation Treaty safeguards agreement.
• As part of the current negotiations aimed at restoring the JCPOA, the EU is trying to resolve the disagreement about the IAEA probe by offering to end it if Iran credibly accounts for the origins of the man-made uranium particles inspectors found in 2019 and 2020.
• The final proposal put forth by EU negotiators would reportedly close the matter if Iran “duly addressed” the outstanding issues. If Tehran did so, the P5+1 would submit an IAEA resolution “removing the need for the Board’s consideration of these issues” and deem it “no longer necessary” for “the [IAEA] Director General to report on those issues,” effectively halting the probe.
• However, IAEA Director General Rafael Grossi has maintained that the IAEA would not back down on its legal obligation to investigate Iran until “we can clarify the very things that are still in need for clarification”.
• More importantly, it appears that the US might see a resolution to the probe differently than the IAEA. US negotiator Robert Malley has spoken about how a resolution lies in Iran showing where the undeclared nuclear material traced in Iran is now and where the equipment it was believed to be entangled with is now.
• A key question is whether Grossi will push for answers from Iran to clarify the origin of this material – which Israeli intelligence believes came from Iran’s nuclear weapons work – and not just the location of the material and equipment today.
• It is expected by both sides that the four-month period between signing the deal and JCPOA reimplementation day will give time to reach an agreement between the IAEA and Iran on the investigations.

What is Israel saying: Prime Minister Yair Lapid and US President Joe Biden spoke for a full hour on Wednesday discussing Iran and the agreement to facilitate re-entry into the JCPOA.

• Prime Minister Lapid told the president that Israel is committed to acting by itself without restrictions on preventing Iran from acquiring the ability to build nuclear weapons. Lapid also wanted clarifications that the new agreement will not allow Iran to go through Russia or China to bypass the non-nuclear related sanctions placed on Iranian entities.
• Biden said that he would not compromise on issues that are unrelated to the JCPOA, such as the status of the Iranian Revolutionary Guard and the IAEA’s investigations. However, he remains committed to a policy that seeks to reach an agreement and will not deviate from that.
• Last week Lapid said: “Israel is not against any agreement. We are against this agreement because it is a bad one. Because it cannot be accepted as it is written right now.”
• “On the table right now is a bad deal. It would give Iran a hundred billion dollars a year. This money will not build schools or hospitals. This is a hundred billion dollars a year that will be used to undermine stability in the Middle East and spread terror around the globe,” Lapid said.
• Alternate Prime Minister Naftali Bennett also noted: “There is still a chance to stop this agreement and worlds need to be overturned. In April we were closer to signing, and with determined action we succeeded in preventing a new deal from being signed. For an entire year we prevented an agreement. That achievement can be repeated now as well.”
• He added that a return to the original JCPOA agreement would mean only a two-and-a-half-year delay in the Iranian nuclear programme, and that Israel needs to insist on changing at least one clause in the agreement that pertains to the Iranians’ right to develop, manufacture and install centrifuges. The ban on developing, manufacturing and installing centrifuges is scheduled to expire in early 2025.
• “That means that in the interim the Iranians will be able to manufacture enough centrifuges to fill multiple stadiums and then, whenever they make the decision to do so, to break out to a bomb, let’s say in 2026, they can break out within days to 20 bombs,” said Bennett.

Domestic Israeli politics: Prime Minister Lapid is trying to form a united front toward the US and its European allies.

• On Monday Lapid gave Opposition leader Benjamin Netanyahu a briefing on the policy and security actions that Israel is undertaking in order to influence the negotiations.
• According to Knesset law, the prime minister is obligated to hold security briefings with the opposition leader as needed, and no less than once per month. However, Netanyahu declined to meet Lapid (and Bennett before him) until two weeks ago, against the backdrop of the fighting in Gaza.
• However, after the briefing Netanyahu criticised Lapid, telling reporters: “I am more worried after the meeting than beforehand,” he said. “We will support any public step against Iran. Sadly, Lapid and [Defence Minister Benny] Gantz have been asleep at the wheel for the past year, and now they are also doing nothing in Congress or the US media.”
• Lapid has also struggled to maintain cohesion with Mossad chief David Barnea, who came out publicly against returning to the JCPOA last week. Whilst Lapid was informed about the public briefing from Barnea beforehand, he was caught by surprise from Barnea’s harsh tone.

Gantz visits the US: Defence Minister Benny Gantz visited Washington last week where he tried to influence the proposed agreement from Israel’s perspective. He met with National Security Advisor Jake Sullivan as well as visited CENTCOM’s headquarters in Florida.

• Gantz said before his trip: “We are in contact with our American partners and with countries in the region that are no less threatened by Iran and, of course, without going into detail, we are focused on our ability to defend ourselves and on addressing things that will guarantee Israel’s security for many years to come.
• “We will do everything we can to influence the agreement. You need to bear in mind, this isn’t an agreement between us and the Iranians. Israel isn’t party to this agreement, and it will know how to preserve its freedom of action as needed.”
• The focus of Gantz’s visit to the US was “the day after” if an agreement is reached, and mainly the question of how to guarantee that the huge sums of Iranian money could be freed up by the agreement do not end up being funnelled to pro-Iranian militias.

What are Israeli analysts saying?

• Ofer Shelah, a former Yesh Atid MK and member of the Knesset Foreign Affairs and Defence Committee, urges the Israeli leadership to adopt a different stance entirely towards Iran and its nuclear programme. Shelah argues that the rhetoric and policies enacted by all Israeli governments in the past decade “may have won points at home … but they have done very little to distance Iran from a bomb.” Shelah says: “Israel must act in cooperation with the international community headed by the US and with its allies in the region to create checks and balances in the face of Iranian interests in multiple locations. It must carry out assassinations inside Iran only in the context of the nuclear programme …”
• Tamir Hayman, former director of the IDF Military Intelligence Directorate, says if the JCPOA is restored, Israel must prepare for the possibility that Iran will renew its enrichment programme in 2030. “This means first and foremost building the [military] ability to unleash a sophisticated attack to destroy Iran’s nuclear project without bringing about an escalation on Israel’s northern border. No less important: Israel must begin immediately building international legitimacy, particularly vis-à-vis the US, for an Israeli attack.” Hayman adds: “There is no question that Iran will use the money that will be freed up in order to build up its power and to improve its economic situation … but in that sphere Israel has developed impressive abilities to deal with that threat. In conclusion: The agreement, if it is in fact achieved, will be worse than the previous one, but it will not be a disaster.”
• Former head of the Defence Ministry’s Political-Military Affairs Bureau Amos Gilad and former national security adviser Maj.-Gen. Yaakov Amidror say that Israel should prepare to protect itself with or without the JCPOA. “The Iranian threat is a major strategic threat to the State of Israel. It should be understood that this is not just a vision, but that the Iranians are investing enormous efforts into developing threatening capabilities. In Lebanon, according to foreign publications, they have 150,000 rockets aimed at Israel, as well as long-range missiles, cyber and terror capabilities, and above all – the fact that they are on the verge of going nuclear,” Gilad said.
• Amidror said, “This is a bad deal, and it is good that Israel has made it clear that it is not bound by it. The diplomatic options were exhausted after the Americans decided to pursue an agreement at almost any cost. I don’t see any way that does not involve force to convince the Iranians, because Iran does not stop under any diplomatic or economic pressure. This requires us to ensure that we are prepared for a military option.”

Looking ahead: It remains to be seen how close the US and Iran are in terms of their view of the EU’s final proposal.

• The exchanges between the US and Iran may leave no other choice than to engage in a further round of talks to produce a final version of the agreement. Following an informal meeting of European foreign ministers in Prague on Wednesday, EU foreign policy chief Josep Borrell said he is “hoping that in the coming days we are not going to lose this momentum and we can close the deal”.
• According to Hayman, the most sensitive and important negotiation issue from Israel’s perspective is an Iranian demand for an automatic break-in mechanism for nuclear threshold status. This is a de facto guarantee in Iranian eyes to kickstart its nuclear programme in the event a future American president decides to pull out of the agreement for a second time.
• This means allowing Tehran to quickly return to the situation of enrichment it is at today without being penalised.
• The US has agreed to supply Israel with four KC-46A refuelling planes by 2025-2026. The planes are viewed as a necessary component for Israel to strike Iran’s nuclear installations if required. However, some Israeli officials would have preferred the Biden administration to have sped up the timetable for supplying at least two of the planes, but the Americans refused.