Teething pains or trouble ahead?

ON THE face of it, last July’s nuclear deal between Iran and six world powers (known as the Joint Comprehensive Programme of Action) looks to be in good shape. Last weekend Iran announced that Boeing, an American aircraft maker, is to sell 20 airliners to its national carrier for around $25 billion. That followed a deal in January to buy 118 planes worth $27 billion from Boeing’s European rival, Airbus.

Nothing could better symbolise the transformation of Iran’s relations with the outside world than the re-equipping of its state airline with Western aircraft. However, both deals depend on the US Treasury issuing export licences (Airbus planes have many American-made parts, including engines). The approvals will probably be granted. But the uncertainty feeds a growing Iranian perception that America is using its remaining sanctions to stop Iran from getting its reward for meeting its nuclear obligations.

On that front, the news is mostly good. A month ago, the International Atomic Energy Agency (IAEA) issued its second report on Iran’s compliance with the deal. The impression it gave was of Iran acquiescing in all the verification and monitoring procedures required. It also appeared to be meeting its commitments in terms of freezing work on its heavy-water reactor at Arak, maintaining its stock of heavy water at permitted levels and continuing to abide by agreed levels and quantities of uranium enrichment. Mark Fitzpatrick, a proliferation expert at the International Institute for Strategic Studies, says the IAEA found “little to complain about”.

Yet some worry that the IAEA is giving Iran too easy a time. David Albright of the Washington-based Institute for Science and International Security laments a lack of technical detail in the agency’s reporting, and a consequent loss of the promised full transparency.

Mr Fitzpatrick reckons that the absence of specifics reflects a new co-operative relationship between Iran the IAEA, and that member governments are getting more information than is being put into the public domain. Mr Albright is less confident. He thinks that the IAEA has given in to Iranian pressure for secrecy and that the White House has not pushed back. His fear is that by cutting Iran too much slack, for example over the cap on low-enriched uranium, the calculations on the time it would take from “breaking out” of the deal to producing a nuclear weapon (the deal aims for at least a year) could be affected.

Mr Albright is particularly worried about reports that Iran’s Atomic Energy Organisation has been shopping on the sly for carbon fibre, a material it would need if it were planning to build advanced uranium centrifuges. He says: “They could be stockpiling for a surge in enrichment when the [nuclear deal] starts to expire in 10 to 15 years; or they could be planning for a breakout capacity at a clandestine facility if the deal collapses.” Mr Fitzpatrick agrees America must ensure that the IAEA provides rapid notification of any backsliding.

For now, that seems unlikely. The costs of breakout for Iran would be very high. Yet the accusation that America is denying Iran the sanctions relief it has earned, stoked by opponents of the deal, could provide an excuse. John Kerry, America’s secretary of state, is busily encouraging European banks to finance investments in Iran, something their US counterparts are still barred from doing. He fears that if the benefits fail to materialise soon the standing of President Hassan Rohani and other reformers will be damaged.

Still a risky place to do business

But without cast-iron legal reassurance from Washington that its enforcement agencies will not come after them, European banks may not want to risk it. Previous sanctions-busters have been hit with multi-billion dollar fines. And business in Iran is uncertain at the best of times: corruption is rife and the Islamic Revolutionary Guards Corps has its fingers in nearly every major deal.

Iran’s neighbours are also reserving judgment about the nuclear agreement. It has removed, at least for some time, the threat of Iran as a “threshold” nuclear power. A recent report by Robert Einhorn and Richard Nephew (both former negotiators with Iran) for the Brookings Institution, a think-tank, argued that the nuclear deal had reduced the risk of proliferation in the Middle East, with nuclear “hedging”, even for Saudi Arabia, a much lower priority than before.

But there is also a widely shared belief that the deal has if anything increased Iran’s misbehaviour in the region. The Gulf Arabs, in particular, remain convinced that Iran has only postponed its nuclear ambitions, and will use the next 15 years to develop more advanced centrifuges and missile delivery systems.

In the short term, the greatest threat to the nuclear deal may well be Iran’s disappointment. The Iranians expected big benefits from sanctions relief; if these do not materialise, their enthusiasm may cool. Other risks lie ahead: the election of a President Trump, perhaps, or hardliners becoming even more assertive in Tehran. If Iran is found to be cheating, too, that would undoubtedly scupper everything. The nuclear deal was not a one-off event. If it is to reach its 15th birthday, it needs to be nurtured by all sides.