Iran-IAEA standoff, assassination of IRGC personnel and Iran’s retaliation, 20-year agreement between Iran and Venezuela, & more

This week's edition of the Iran Bulletin will cover the?Iran-IAEA standoff, stalled?nuclear talks?over the IRGC, US enforcement of?Iran sanctions, strengthening?Iran-Russia trade, the 20-year agreement between?Iran and Venezuela, the?assassination of IRGC personnel?and Iran’s retaliation, as well as Iran’s plan to launch?new satellites.

For Iran Strategy Deconstructed, Marc Finaud, Head of Arms Proliferation at the Geneva Centre for Security Policy (GCSP), shares his views on Iran’s retaliatory measures against the IAEA resolution and how the country’s response can impact the future of stalled nuclear talks.

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IAEA-Iran standoff heats up

On June 8th, the International Atomic Energy Agency (IAEA)?passed a resolution?criticizing Iran for failing to provide a convincing explanation of its nuclear activities at three undeclared sites. China and Russia were the only two countries that opposed the resolution.

The resolution was mildly-written and refrained from passing the file to the United Nations Security Council, which could have triggered multilateral sanctions against Iran. Nonetheless, Iran retaliated by limiting the IAEA’s access to its nuclear sites. Following the IAEA announcement, Iran?disconnected?more than a dozen IAEA cameras while keeping 80% of the agency’s cameras active at its nuclear sites.

In response, IAEA Director General Rafael Mariano Grossi?asserted?that Iran’s retaliation inflicts a “fatal blow” to the negotiations, warning that in three to four weeks, the agency will be unable to retain “continuity of knowledge” about Iran’s nuclear activities.

It remains likely that this limited timeline may escalate diplomatic efforts to revive the JCPOA and force the opposing parties to find a resolution on outstanding negotiating issues, including disagreements over the delisting of IRGC from the US FTO blacklist.

For this week’s Iran Strategy Deconstructed, we asked Marc Marc Finaud, Head of Arms Proliferation at the Geneva Centre for Security Policy (GCSP) to share his analysis on Iran’s retaliatory measures in response to the resolution passed by the IAEA’s 35-nation board of governors earlier this month.

Iran Strategy Deconstructed

Iran’s Dangerous brinkmanship on nuclear safeguards

By Marc Finaud, Head of Arms Proliferation, Geneva Centre for Security Policy (GCSP)

The row over Iran’s nuclear programme has reached a new dangerous stage. One year after Trump withdrew from the 2015 Iran Nuclear Deal (JCPOA) and reimposed sanctions in 2018, Iran began a series of retaliatory measures of suspension of its obligations, including on the level of uranium enrichment, number and type of operational centrifuges, and the actual enrichment facilities, among others.?

Those measures were intended to exert pressure for a US return to the agreement and the lifting of sanctions as a result. They were presented as incremental and rapidly reversible, and indeed, although they eventually led to uranium enrichment of up to 60%, their combined effect was not dramatic on Iran’s capacity to get closer to a nuclear weapon.?

However, Iran’s recent decision to turn off the CCTV cameras installed by the IAEA for 24/7 monitoring of sensitive installations can affect the Agency’s surveillance work to certify that Tehran’s nuclear activities remain peaceful. This step was adopted as a response to the initiative of the E3 (France, Germany, UK) and the US to submit to the Board of Governors of the IAEA a resolution calling on Iran to cooperate with the IAEA, including on access to sites of interest.

Iran understands that a resolution of the current stalemate in the Vienna talks to restore the JCPOA can only result from diplomacy, but it believes that such brinkmanship can deliver US acceptance of the necessary concessions demanded by Tehran. This is a dangerous calculation even if it is true that the Biden administration missed earlier opportunities to avoid such escalation in his first months in office.

IRGC terror designation: Last remaining obstacle to reviving JCPOA

This week, US State Department spokesperson Ned Price?discussed?stalled nuclear negotiations between Iran and world powers, stating that the US awaits "a constructive response from the Iranians, a response that leaves behind issues that are extraneous to the JCPOA.” He also stated that Washington still remains ready to rejoin the Joint Comprehensive Plan of Action (JCPOA), in light of Iran’s reducing cooperation with the IAEA.?

The term “extraneous” was a likely reference to Iran's push for the delisting of the Iranian Revolutionary Guards Corps (IRGC) from the United States' Foreign Terrorist Organization (FTO) blacklist. The Trump administration designated the IRGC as a terror organization in 2019–the first time that a country’s official army was placed under such designation.

The FTO listing effectively barred all former and current IRGC members from entering the United States and criminalized engagement with the organization. The designation also has the potential to impact trade relations between current and former IRGC personnel with persons and entities involved in the US market. Nevertheless, the decision to designate the IRGC was likely?designed?to undermine President Biden’s return to the JCPOA, as US lawmakers remain seriously?opposed?to such a compromise.

In late May, Israeli Prime Minister Naftali Bennett?announced?that during an April 24th phone call, he learned that President Biden had decided to keep the IRGC on the terror list. While the announcement was a likely move to prevent a potential compromise on the IRGC delisting, the White House and US State Department have so far refused to publicly comment on whether the IRGC decision remains final.

The refusal to publicly comment on the issue has kept the window of diplomacy open, as both sides continue to?exchange messages?vis-a-vis intermediaries. Iranian Foreign Minister Hossein Amirabdollahian recently stated that Iran had proposed a?new negotiating package?to the Americans, while U.S. sources have?dismissed?this claim.

US moves to enforce sanctions amid stalled negotiations

This past week, Washington?imposed?sanctions on Emirati and Chinese companies, as well as a network of Iranian firms that facilitate the export of Iranian petrochemicals.

According to the U.S. Treasury Department, Washington imposed sanctions on three firms in Iran, two in Hong Kong, and four operating in the United Arab Emirates. The US also sanctioned two persons–Indian national Mohammad Shaheed Ruknooddin Bhore and Chinese citizen Jinfeng Gao.

In a statement, Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson argued for a return to the JCPOA, while stating that "absent a deal, we will continue to use our sanctions authorities to limit exports of petroleum, petroleum products, and petrochemical products from Iran.” The Under Secretary’s comments signaled a shift in Washington’s negotiating strategy, demonstrating that the US is prepared for a?no-deal scenario?and won’t retreat from its position on the IRGC issue.

Meanwhile, Iran’s Deputy Foreign Minister for economic diplomacy downplayed the sanctions and called them ineffective, stating that “our petrochemical industry and its products have long been under sanctions, but our sales have continued through various channels and shall continue to do so.”

Iran and Russia strengthen trade relations

Iran and Russia have signed a?memorandum of understanding?on the establishment of mutual trade centers. One center will be located in St. Petersburg and the other will be established in Tehran in order to reinforce trade relations between the two countries. The two centers will facilitate trade on transportation, energy, electronics, agriculture, pharmaceuticals, food, and construction materials. Iran and Russia have long?presented?the International North-South Transport Corridor as a viable alternative to the Suez Canal.

This latest development in the two countries’ bilateral relations comes amid Russia’s increasing international isolation–Russia’s invasion of Ukraine led to the formation of an unprecedented Western-led sanctions regime against the country. In recent weeks, Russia has publicly?acknowledged?that it will seek Iran’s advice on sanctions-busting, given Iran’s long-standing experience of living under US and EU sanctions for years.

During the Vienna nuclear talks, Russia had?pressed?all stakeholders for guaranteed trade ties with Iran, hoping to?ensure?that sanctions on Russia do not torpedo its financial relations with Iran. Russia likely intends to utilize trade relations with post-JCPOA Iran to circumvent Ukraine-related sanctions.

Iran and Venezuela sign 20-year cooperation plan?

During Venezuelan President Nicholas Maduro's state visit to Iran, the two countries?signed?a 20-year "cooperation road map." The two countries look to boost strategic ties and strengthen trade as well as increase cooperation on tourism, agriculture, science and technology, and energy.

In his meeting with Maduro, Iranian President Ebrahim Raisi?stated?that "The Islamic Republic of Iran’s foreign policy has always been to have relations with independent countries, and Venezuela showed that it has had incredible resistance against threats and sanctions by enemies and imperialism."

The two oil-rich nations continue to help one another circumvent U.S. sanctions. After the meetings, the two leaders attended a virtual ceremony, during which the Iranian government officially?delivered?an Aramax oil tanker--the second of the four Aframax oil tankers ordered by Venezuela.

Assassinations against IRGC personnel: Iran retaliates across the region

In the past week,?three?Iranian IRGC aerospace personnel have mysteriously died, as Israel presses on with its?shadow war?on Iran. These deaths follow the recent attacks against Iranian defence personnel and installations, including the assassination of IRGC Colonel Hassan Khodaei. Iran blamed the assassination on Israel, and Israeli Prime Minister Naftali Bennett?announced?that “immunity is over” for Iran, tacitly taking responsibility for the killings.

While Israel has been successful in carrying out targeted assassinations and attacks against Iranian security personnel and installations, they have failed to curtail Iran’s support for Hamas and Hezbollah. Moreover, it hasn't slowed down Iran’s nuclear program as the country is now within weeks of nuclear?breakout capability.

Pointing to these facts, in an op-ed for the Atlantic Council, nonresident fellow Danny Citrinowicz?concludes?that “Israel is achieving only a Pyrrhic victory against Iran. At best, Israeli attacks are stalling the program; at worst, they are incentivizing Iran to move faster…the bottom line is that Israel is piling up tactical successes while its Iran strategy is failing.”

Meanwhile, Iran has also claimed that it has begun retaliating to Israeli-sponsored assassinations and sabotage attacks. In early June, Iranian state-affiliated media?reported?on a drone strike targeting Israeli intelligence operatives in Erbil, Iraq. Israel has also?warned?its citizens in Turkey to immediately leave the country upon reports of an imminent Iranian threat. This warning was issued, following reports of Iran?targeting?Israeli personnel in the United Arab Emirates as well as Iranian-backed?hackers?targeting Israeli policy-makers and installations in the country.

These latest developments indicate that the Middle East will probably turn into a war theatre between Israel and Iran, dragging other regional countries into conflict if diplomatic efforts to revive the JCPOA fail in the coming weeks.

Iran prepares to launch new satellites?

Satellite images?show?that Iran is preparing for a space launch at the Imam Khomeini Spaceport in Iran's Semnan province. The images show that a rocket has been placed on a transporter, being readied to be lifted and installed on a launch tower.

While Iran has declined to comment on a potential launch, Iranian news media have?reported?that seven homemade satellites are ready for lunch by March 2023, the end of the Persian New Year.

The timing of the launch correlates with stalled nuclear talks in Vienna. This may be interpreted as a signal to Washington that further delay in concluding the JCPOA talks and continued unilateral sanctions against the country will propel Iran to develop more advanced ballistic missiles–as the technology used for these launches can also be used to develop Intercontinental Ballistic Missiles (ICBMs) with the capability to carry nuclear warheads.

For now, under the direction of Iranian Supreme Leader Ayatollah Khamenei, Iran has voluntarily?limited?its missile range to below 2,000 kilometres, avoiding further tensions with the U.S. and its NATO allies.

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