Analysis: Iran Responds to “Final” Nuclear Deal Proposal

Negotiation Status: PAUSED

• Talks should be over and the deal should be dead—but negotiations could soon be reopened, yet again.
• The EU set August 15 as the deadline for Iran to approve its final nuclear deal text, saying that there was no room for further negotiation.
  • EU Foreign Policy Chief Josep Borrell firmly set the deadline on August 8, stating, “What can be negotiated has been negotiated, and it’s now in a final text.”
    • A statement by the E3—Britain, France, and Germany—confirmed on August 5 that “there will be no re-opening of negotiations.”
•  Instead, Iran responded with additional, long-standing demands that are now being considered by the United States.
  • Still, US State Department Spokesman Ned Price told reporters on August 16, “We have received Iran’s comments on the EU’s proposed final text [to revive JCPOA], and we’re in the process of studying them. We’re at same time engaged in consultations with EU and our European allies on the way ahead.”
  • Reporters repeatedly tried and failed to get an answer from Price on what it meant when he said that “what could be negotiated has been negotiated,” with Price evasively responding, “The big issues have been discussed. They have been tabled. We believe they have been largely settled.”

Iran’s response to the EU “final” text:

• To be clear – Iran said no to the supposed final text proposed by the EU.
  • Tehran would prefer the narrative to be that they said “yes” and simply have a few minor final demands. However, their outstanding demands are not minor, and the EU and US both clearly previously stated that there is no further room for negotiations.
• Before Iran sent the response on Monday, Foreign Minister (FM) Hossein Amir-Abdollahian said, “there are three issues that if resolved, we can reach an agreement in the coming days.”
  • The three key outstanding demands were:
    1. the lifting of sanctions on the Islamic Revolutionary Guard Corps (IRGC);
    2. the ending of an IAEA investigation into evidence of nuclear activity at undeclared Iranian facilities; and
    3. guarantees that the United States won’t withdraw from a deal after the 2024 presidential elections.
  • Yet, reports suggest that the EU-proposed text included such satisfactory concessions on two of the issues – the IRGC sanctions and the IAEA investigation – that the Iranian reply did not contain any further demands regarding them.
    • Politico reported that the EU proposal calls for the end of the IAEA probe “if the IAEA confirms that Iran has provided credible answers into the origin of the uranium traces prior to the so-called reimplementation day — the day that the nuclear deal will go into effect.”
      • Importantly, the report noted that, “There is no final confirmation that Iran has accepted this EU proposed deal on the IAEA safeguards investigation — or whether Iran has taken it off the table — but it seems at least in the current reply, there is no more mention of it.”
    • Al-Arabiya reported that the text “includes assurances from the US that it will lift sanctions on some IRGC-linked businesses,” and The Cradle reported that sanctions against the IRGC will “no longer extend to ‘partner companies’ that engage in transactions” with the terrorist organization.
      • Politico first reported that the EU text included assurances that “Europeans and other non-Americans could conduct business with Iranian entities engaged in ‘transactions’ with the IRGC without fear of triggering US sanctions, as is currently the case, provided their primary business partner was not on a US sanctions registry.”
• Thus, the key outstanding Iranian demand at the moment is the creation of some sort of guarantee that would either keep the United States from withdrawing from the deal in the future or protect Iran’s benefits under the deal in the case of a US withdrawal.
  • The Iranian demand about “guarantees” appears to consist of two separate proposals:
    • 1. That something be added to the deal to impose such a “heavy price” on the United States for withdrawing—likely in terms of how quickly Iran would restart its nuclear program—that it would be deterred from doing so;
      • An adviser to Iran’s negotiating team, Seyed Mohammad Marandi, said, “What is important for Iran is that there are assurances that if the United States suddenly leaves the deal again…it comes at a price.”
      • He also said, “Iran wants inherent guarantees where Iranians would be able to restart their enrichment program, to become like what it was before the deal very swiftly so that the US will have an incentive to remain in the deal.”
    • 2. Guarantees that, if the United States withdraws, Western companies doing business in Iran would be allowed to continue that business.
      • The Cradle reported that, “if the US decides to unilaterally exit the deal again, there will be a three year and one month grace period during which foreign companies will be unaffected by sanctions.” It is unclear how such a guarantee could be enforced.

Is an agreement imminent?

• The answer is still maybe. It appears that the “firmer language“ employed by the EU when they set the August 15 deadline was not nearly as definitive as they made it seem, and Iran is now attempting to put the ball back in America’s court by setting a deadline of Friday August 19 for the United States to respond.
  • Ned Price on August 17 refused to provide a timetable for when the administration will respond, repeating that it is studying the Iranian response and coordinating with the EU.
  • Russian chief negotiator Mikhail Ulyanov tweeted on August 17 that there was a “great chance to cross the finish line,” adding, “The final result depends on how the US react to the last Iranian reasonable suggestions.”
• In a tweet suggesting that the pressure is on Western countries to accept Iran’s proposal while Iran is happy to continue dragging out negotiations, Marandi on August 18 wrote, “Iran is waiting for the US and EU to accept a fair deal to revive the JCPOA. The weather in Europe and North America starts getting cold in September.”
• As The Wall Street Journal wrote, “One option is for the US response to Iran to be the basis for an altered EU draft text that could be sent to the parties for approval. Another would be for ideas to continue to be exchanged between capitals with no strict deadline for ending the talks.”
  • Continuing talks only serves Iran’s interests, as it continues to advance its nuclear program without facing the comprehensive, global maximum pressure campaign it would face if talks were abandoned.

Additional comments and reports:

• Iran International English on August 18 released a list of concessions the United States has reportedly agreed to give Iran that is circulating among conservative circles close to Iranian President Ebrahim Raisi’s administration. The list includes:
  • the removal of sanctions on 17 banks;
  • the immediate release of $7 billion worth of Iranian assets in South Korea;
  • sanctions relief for 150 Iranian institutions including the Execution of Imam Khomeini’s Order (EIKO);
    • EIKO was designated pursuant to US Executive Order 13876 and is not a nuclear-related designation.
  • the sale of 50 million barrels of oil in 120 days;
  • the annulment of three Trump Executive Orders on Day 1;
  • the exemption of foreign companies from sanctions in the event of a US withdrawal.
• National Security Council spokeswoman Adrienne Watson rejected any notion that the United States has yet accepted any concessions, saying, “Reports that we have accepted or are considering new concessions to Iran as part of reentering the 2015 nuclear deal are categorically false”
• Israeli Prime Minister Yair Lapid relayed a message urging President Biden to walk away from negotiations, reportedly saying, “The EU sent Iran a final offer, which does not comport with the principles to which the Americans committed, and established that the offer was ‘take it or leave it.’ Iran refuses the offer, and therefore the time has come to get up and go. Anything else sends a message of weakness.”
• When asked if Iran’s recent string of planned and attempted attacks against U.S. officials and citizens on U.S. soil would affect negotiations, Ned Price essentially suggested that they actually increase the need to reach an agreement, saying, “Iran would act with far greater impunity … if it had what it could conceive as the shield of a nuclear weapons program.”
• On August 16, top US officials including the Secretary of State and National Security Advisor released statements regarding the Iranian-held American hostage Siamak Namazi. There are currently at least 4 Americans being held hostage as political prisoners in Iran. Yet a prisoner-exchange deal remains “separate from this deal.”
  • Ned Price said on August 16, “efforts [to release hostages] are ongoing. We’ve been clear throughout that we’re not tying the fates of American citizens to the fate of a proposition, namely a mutual return to compliance with the JCPOA that is far from certain.”