Full Frontal? Verifying a Nuclear Deal with Iran

Jeffrey Lewis 0:09

Hello, you're listening to the Arms Control Wonk podcast. I'm Jeffrey Lewis. I'm the founding publisher of Arms Control Wonk and the director of the East Asia Nonproliferation Program at the James Martin Center for Nonproliferation Studies at the Monterey Institute. That's always a mouthful. Aaron Stein's not with us this week. He's enjoying an extended weekend in Istanbul. So instead, I invited my friend Chris Bidwell.

Come and talk to us about Iran. Chris is a senior fellow for nonproliferation law and policy at the Federation of American Scientists. He is a retired Navy officer, and he is the chair of the Nonproliferation, Arms Control, and Disarmament and Interest Group of the American Society of International Law. How are you doing, Chris? I'm doing fine, and thanks for inviting me to be on the podcast today, Jeffrey.

Christopher Bidwell 0:55

Ah, it's going to be a lot of fun. So you've got a report coming out. Well, yes, it's a little report. It's a great report, though. We're getting ready to do the launch of it on Wednesday. And what the title is going to be is Verification Requirements for a Nuclear Agreement with Iran. And we've got four task force members, myself, Ward Kittrey, John Lauder, and Harvey Rishikoff.

And we got together and petitioned and received an out-of-cycle MacArthur grant. To look at this issue of verification as the Iran deal is is floating around in the news pretty prominently on most days, except maybe this week.

Jeffrey 1:38

You know what they you know what they call this in in the English premier league, when you get down into crunch time, what do they call it? Squeaky bum time. Squeaky bum time.

Christopher 1:47

Well, it's, it's, you know, we're getting there with, with regard to these Iran negotiations are supposed to end here on the 24th, this coming Thursday The p5 plus one and iran will meet on the outskirts of the u.n general assembly meeting that's supposed to start the following week so the heavy hitters will be be talking and we've only got about two months to go before the deadline runs so it's timely to get the report like this out yeah absolutely how did you go about the it was a task force right yeah it's a task force and We basically got together and wrote down, you know, started brainstorming, writing down ideas of things that we thought would be necessary to, to, to verify a possible deal with Iran.

And then we, we kind of whittled them down and some fell on the list. Some got added on the list. The more we talked to people around town basically broke it down as it first started out with a workshop. I think this was in May or June. I think my memory's gone. I apologize. Then we went up to the Belfer Center up at Cambridge and Harvard and NDU and then a couple other governmental agencies talked to and said, well, what do you think of our ideas so far?

And allowed us to refine the ideas. People that we had interviewed, I showed the report to and asked for comments. So it's a well-massaged document, as these things often are.

Jeffrey 3:09

I know absolutely the feeling. So what did you find?

Christopher 3:13

Well, what we found was we're going to make six recommendations for six elements of an effective agreement and three proposed U.S. government actions to facilitate effective implementation of the agreement. And the first one is somewhat controversial, and it was probably the one we wrestled with the most, as I recall. And it is that Iran should provide a comprehensive declaration of That is correct and complete, that famous IAE term, concerning all aspects of its nuclear program, both current and past.

And we realized right off that that is a tall order when you're asking somebody to, potentially asking somebody to make a confession. But the thinking on this was, if you're going to have a deal at all, Congress has got to vote in this with regards to the sanctions aspect. I'll get into that a little later. But something's got to pass muster that that the U S government Congress and the executive feel they can detect a breakout.

They can detect a sneak out or break out. There's, there's two theories. There's two schools of thought that Iran might try to, to break out, you know, based on, on its known facilities, or there may be additional secret facilities that they'll, that they're, they're working in. And either way, you know, could those, those could be a problem.

But the inspectors need a baseline, and we think of it in terms of the way here in the United States we would do a 1040 form. You get your blank 1040 tax form, and you fill it in, and you give it to the IRS and say, if I've declared everything, I probably can sleep better at night. If I haven't declared everything, they may look at the report and go, we've got a few more questions for you, Chris.

The idea, though, is if you don't have this baseline baseline, You don't know where the program really is, and you don't know where to start asking your questions. The other thing that we do emphasize is we ask Iran to talk about what they did, not why they did. If they want to talk about, you know, in response to questions about the bridge wire detonators, they can say, well, they had a civilian application.

That's okay. I don't care about the why or what the excuse is to why you did it. I want to know what they did. And that takes a little of the sting of them having to embarrass themselves. They may not want to. It has been done in the past, South Africa and Libya. But I don't think we're there with Iran.

I think they're not going to want to do that kind of confession. The other part of this is we have a recommendation for a consultative commission of what I would call nonpolitical types, more technical experts to work on details. And one of the reasons we have this consultative commission is so as we're establishing that baseline, we can kind of get work through the issue of is enough enough?

Is this declaration going to be perfect and complete and correct? No. Can we get it to the point where it's good enough? I recall in the Iraq case in 1991-92, You know, Iraq was asked as part of the UN plan, give us a declaration of your WMD. And, you know, I think it was a one-page document since we have no WMD.

Right. You probably want to see something a little more detailed than that. But not so detailed as to be embarrassing. Just enough to know that they're serious. Because we need to know, I think we, the U.S. government, formerly the U.S. government, would want to know, is Iran really serious about, you know, Putting limits on its nuclear program, or is this just an excuse to try to get sanctions relief?

And once we get sanctions relief, they go back to the usual business. Why is that important?

Jeffrey 7:11

Well, let me press you on that. Oh, well, okay.

Christopher 7:14

I'll give you a chance to ask a question, Jeff. I'm sorry.

Jeffrey 7:17

No, no, no, no. It's fine. It's fine. Look, our listeners are... I mean, they love this kind of stuff. So long answers are fine. But I... You know, I think there's a lot on the table there. And, and one of the things that I've been concerned about and that I wanted to press you on and just talk about is, so I, I wrote this piece for foreign policy expressing some concern that if the Iranians come too clean upfront that that's going to provide so much anxiety I think in the part of folks in the United States and some of our allies that it could be really hard to sustain A process that actually gets us to an agreement where there's full disclosure.

And the example that I worried about or mentioned was in the early 2000s, the Japanese tried to negotiate a deal with the North Koreans on the fate of the people they'd abducted. And the problem, and I think it's an interesting public policy problem, is The assumption was everybody wanted the North Koreans to come clean because that's how you'd want a person to do it.

But as soon as the North Koreans admitted that, like, yeah, no, they were horrible people. They'd actually kidnapped these poor human beings. You know, their lives had been horrible. Some of them had committed suicide. The outrage was so much that then support for the deal collapsed. And we're just now, like a decade later, the Japanese are getting around to trying it again.

So did you think I mean, of course, I know you did, but that's my way of asking. How do you think about this question of dealing with the sensitivity of the information, whether it's going to leak or how it's going to be portrayed in the press?

Christopher 8:57

Well, there will be the I told you so's, but I don't think it's a general rule. Most people in the United States and the world at large, I think most people believe Iran was doing something it probably shouldn't have. I don't think there's too much doubt on that. So I don't think anybody's going to be surprised if Iran does a full accounting of what it was doing.

But this is why the what-not-why aspect of the recommendation is so important. We realize that swinging a bat and bashing Iran for being evil and pointing the finger gets you nowhere.

Jeffrey 9:35

Hey, just as an aside, how bad do you think it is, like on a scale of 1 to 10, if they tell you – if they tell us everything they've done, how bad do you think it's going to be? Well, how much they've done or how much is the – Yeah, I mean I'll just – I think it's going to be like – it's like a 9.

Christopher 9:53

I'm probably closer to an 8. Yeah, okay. But – You take the under – They're probably doing – and this is the other reason why the declaration is important. You look at earlier arms control negotiations. We know some of the things Iran did. I suspect there's some confidence in our intelligence community, and they probably know a few things.

But then again, they probably don't know everything. But now the interesting thing is what's on the other side. Iran probably knows we know some things, but they don't know what it is we know or can't be sure in some cases of everything we know. So the declaration becomes a little bit of a test. And sometimes in declarations, in historical examples, and I can't think of one off the top of my head right now.

I apologize. But I've seen cases where, oh, we thought we would declare this, and nobody really knew we were doing that, some of those other cases. So you can see where this becomes an important tool. That's why I go back to establishing a baseline, a baseline to talk about Iran's activities. That both sides can agree on. At least they'll both agree to the declaration.

We'll agree that what Iran has declared is in fact something they've done. It may not be complete, but it will be accurate as to what it is.

Jeffrey 11:10

And so you have a commission, right? So I presume... Given that, you know, even in the case of South Africa and Libya, we had to go back over time and we found things either that were deliberately omitted or just omitted because governments are big and complicated. How do you see that process playing out?

Christopher 11:29

Well, part, you know, and that was that was a problem in Libya is you pointed out your paper, you know. You found two tons of chemical weapons.

Jeffrey 11:38

Yeah, what's two tons of mustard gas among friends? Well, probably a deal breaker.

Christopher 11:44

But we'll put up fences, Mr. Hatfield and Mr. McCoy. But with regards to the Libby case, yeah, governments are big. I always attribute that to governments are big. I think it was pretty clear Gaddafi decided it was in his best interest That they change their policy. And I'm hoping Iran sees it in their best interest, and I actually honestly think it is in their best interest because they can grow their economy and everybody can be happy and better off without the strain of the economic sanctions.

And I don't think all sanctions are causing Iran a problem, but I think the economic, what I call the business choice sanctions, are the ones that prevent large insurance companies and large banks from doing big business with Iran.

Jeffrey 12:32

So what are the other elements?

Christopher 12:35

The other elements of the report?

Jeffrey 12:38

Yeah. Just because you mentioned sanctions, and so I get the sense that we probably have to take the recommendations as a package.

Christopher 12:49

Well, we said it's a risk-based analysis. And basically, okay, if you do all nine of these things, you've reduced your risk significantly of getting surprised, of Iran cheating and you not seeing it. If you do none of them, you greatly increase your risk. If you do half of them or something in the middle, and that's a political decision.

We weren't going to try to make a political decision. We were just saying if you do this, you've got a better chance of catching cheating on the part of Iranians. And if you don't, you're increasing your risk. Now politicians are free to make that choice. But the thing that makes this as an arms control problem A little more difficult than the problems in the past, the asymmetry of the leverage.

Our leverage on Iran has, for the most part, in the last three years, been those economic sanctions, those business choice sanctions, which basically tell large insurance companies or banks like BNP Paribas, who just got recently fined for $9 billion, and that wasn't the hard fine. That wasn't the problem fine for them. That was just a minor add-on.

They're also excluded from doing certain business in New York and doing transactions in dollars. That's what's really hurting them as a corporation. We have these laws in place that created this sanctions regime, and Iran wants relief from that. It's quite understandable. And Iran wants to give up as little as possible to get that relief. But what we want is not an exchange of sanctions relief on their side.

We want them to stop their program, and we want access to verify that it's stopped. And so unlike a START treaty or something like that where we both want to limit the numbers of delivery vehicles, we want access to see what was a decently hidden program. And in exchange for that, we're willing to give up some sanctions relief.

The problem is those sanctions are based in law, and if we give those up, putting the laws back in place, Could be a several-year project building an international coalition because it wasn't just the United States that was providing these sanctions. It was pretty much a European and major Asian economies, too, all swimming in the same direction with regards to economic sanctions.

If we turn that off, it may take a few years to rebuild it again. In the meantime, Iran goes, well, we decided we were going to let all the inspectors in, and we changed our mind last week.

Jeffrey 15:16

We're so sorry. That's going to create a problem. That's one of the things I wanted to ask about in terms of what kind of cheating scenarios you see, because you know, one of my hobby horses has been, I don't think breakout using a declared facility like Natanz or even Gordo is all that likely. But I do worry about covert facilities.

Christopher 15:39

We call it sneak out.

Jeffrey 15:40

Yeah.

Christopher 15:41

The facility X that we don't know about or, or at least isn't publicly discussed.

Jeffrey 15:46

Right. So I wondered how you think about those two risks in terms of the, the, you know, six elements, three things the U S government should do. You know, are they, do you treat those equally or?

Christopher 15:58

The six plus three were, were designed to try to look at, at both problems. You know, the And with regards to Iran, we, of course, want them to deal with it. And I think that's pretty much a foregone conclusion. If there's a deal, they will send an additional protocol, which should give the IAEA inspectors the right to go in and take a hard look around and see if there's anomalies.

And then they come back and do reports and get anomalies. We thought of a consultant. Another recommendation is this consulting commission. Which should include representatives from Congress, but also other aspects of the Iranian government. What do I mean by that? The Majis, the Revolutionary Guard, other people in Iran and the U.S. that have a stake in this problem.

Because as you pointed out with the Libya thing, it's quite possible that one hand of the government didn't get the memo that, hey, we're giving this stuff to the Americans, turn it all over.

Jeffrey 17:00

What's the plan for getting Congress involved? That's an interesting wrinkle. Well, Congress could get involved in two ways.

Christopher 17:10

One, as part of this consultative commission, they could have either an elected official or somebody representing their interest on the commission. But then we also talk about a joint congressional executive in the actions for the U.S. government. We talk about an executive branch commission to monitor compliance with the agreement, similar to what was done for the Commission on Security and Cooperation in Europe, the OCSE, to monitor the implementation of the 1975 Helsinki Accords.

Basically, because Congress has leverage in this thing, they need an ability to work with the executive to know, Basically what's going on, you know, both you know, classified and unclassified. And this commission idea was, it was something that that you know, seemed to have been a, for the Helsinki court seemed to have been a positive a positive approach in, in an arms control agreement.

And we, we we threw that in there. Well, we didn't throw it in there. We deliberately put it in there. Cause we thought that's, that's a way to keep a vested a community that's vested in the outcome of, of, of these, Monitoring and verification activities well-informed so you don't get that accusatory back and forth in press reports and bad speeches in Congress and television appearances accusing the executive of all kinds of misdeeds.

Jeffrey 18:34

Well, it does seem like that's a tough balance to strike. I mean, I know that you're thinking about this in terms of The optimal verification arrangement.

Christopher 18:46

And I don't want to press you too much on, on, on politics, but that's something we could do without asking the Iranians, you know, that's a U S only the second commission.

Jeffrey 18:54

Yeah.

Christopher 18:55

I call it the Helsinki option. This is, you know, the U S can do that on its own.

Jeffrey 18:58

I just wonder if our politics are functional enough to support, maybe I shouldn't be so cynical. Yeah. Well, I'm an optimist.

Christopher 19:09

You know, if, if, If everybody's operating on the same sheet of music, both the executive and the congressional branches of government, legislative branches of government, the chances of a loud debate on the news channels and accusations and counter-accusations gets lowered because there is at least a common sheet of music. Now, they may deviate from that common sheet of music.

But at a base, there's some commonality of knowledge, of understanding of the problem. That's why creating this internal U.S. commission we think is a good idea. It relieves some of that. Will it relieve all of it? No.

Jeffrey 19:51

But it should relieve some of it. So in terms of – you had mentioned the rate, I guess I would call it, the rate that we trade sanctions for verification. Right. One of my questions to you is, we have this leverage in the form of sanctions at the moment. One of the things I worry about is that the Iranians seem to have been reasonably successful in European courts in starting to chip away and undermine those sanctions, particularly given your interest in the legal side of things.

I mean do you think these are a wasting asset that we need to trade in sooner or later, or do you think that we can – if the deal falls apart, do you think we could sustain the sanctions regime relatively indefinitely?

Christopher 20:45

Well, this is the trick I see with sanctions or some of the hard parts. With sanctions, they work when they're international. You compare our sanctions with something like Cuba, for instance. Where we've had the same sanctions. They've not really been updated all that much for the last 50 years now, is it? Yeah, I guess it's, yeah, well, 50 years, and Castro's still there.

The pressure was never brought because, as you know, you can buy Cuban cigars in any other country but the United States, and And smoke them at your leisure.

Jeffrey 21:21

And I've got to tell you, Chris, not to get in trouble here, but I've got a friend whose family is Cuban, and literally two nights ago, we each had a very nice Cuban cigar on my back deck.

Christopher 21:31

Bringing a little goody from the old country.

Jeffrey 21:34

Yeah, I don't know how they got them through customs, and I don't want to know.

Christopher 21:37

Yeah, don't ask too heavily. But anyway, what has made the Iranian sanctions effective, and what I mean by effective is put pressure on Iran. I think it's well understood by most commentators that they're at the table because of the sanctions pressure. I mean, their economy at one point was dropping 40%. Their foreign currency reserves were depleting at a pretty rapid rate, and they had to do something to stop the bleeding.

They've right now stopped the bleeding. One of the things we recommend is to keep the current laws in place. And as we've been doing through the JPOA, You know, give a little bit up for an action, and an action results in a loosening. I think we did 4.6 and 2.4 recently, a billion dollars of sanctions relief. You know, a taste for staying at the table.

One of the things where we've tied in this relationship to the Declaration A big chunk of sanctions relief should not come and the law should remain in place and only temporary relief given until we see a declaration that, you know, it won't be perfect, but starts to tell us that, okay, they're, you know, especially if they pop up with a couple of things that we don't know about already, we'll know, okay, they're getting very serious about, you know, coming clean on their program.

And again, not why they did it, just what they did.

Jeffrey 23:03

But do you worry about the Iranians succeeding in European courts in terms of gutting the sanctions? I mean it seems like there have been a series of court cases.

Christopher 23:10

No.

Jeffrey 23:10

No, you're not worried about that at all?

Christopher 23:12

Yeah. I'm not worried about that because the court cases go to the – if you're putting somebody on a blacklist or a designated list or not allowing a transaction, those aren't the same as the business choice sanctions where you go to a major insurance carrier in Europe. And they're choosing not to do business with Iran, even in those areas where they could.

They're choosing not to underwrite the food shipments, which are perfectly legal under the current sanctions regime, some medicine. It's just, you know, the environment has created a, there's too many problems, I'm not going to go there. And it was kind of a paradigm shift in the last two years with European, you know, the big banks and the insurance companies in Europe.

They kind of, ah, sanctions, well, we'll just, you know, work around this. But they kind of got religion when these billion-dollar fines kept getting popped up and then the exclusion of being able to trade dollars in New York. And that's not affected by some of those European court rulings.

Jeffrey 24:12

Well, let me ask you then about the converse question, which is for cases like that, do we run or I shouldn't say run the rest, but do we face a situation like we had with North Korea with Banco Delta Asia where the North Koreans comply and we want to give them back the money?

Christopher 24:27

We tried very hard to give them back the money and that became a little bit of a stumbling block.

Jeffrey 24:32

I mean, I recall they actually discussed at one point giving it to them in gold and trucking it over the border, but finally they found a Russian bank.

Christopher 24:41

Right, because banks and insurance industry operate on reputation, and you'll find in boardrooms of the major banks and insurance companies in Europe. I was surprised to learn this as part of our study. I found out that just like the military, they do tabletop exercises, and they'll tabletop, hey, what if we can't pay a claim someday? Something comes in too big.

We don't have enough reserves. What's the crisis? How do we work through the crisis? What happens if one of our major, you know, another executive life tragedy happens and our bond portfolio collapses and our financial stability is gone? They war game this kind of stuff out. How do we solve it? Well, recently they started a war game, I found out.

Some of them started war gaming. What happens if we get hit with sanctions? And it's not the two, three, five, nine billion dollar fines that are hurting them. It's that reputational risk thing, the same thing that made solving the Bank of Delta Asia a problem. So even though it's a small bank like that, Is nobody wanted to touch it because they were poison.

And eventually you had to work out, and it was some funky arrangement, I can't remember off the top of my head right now, but it had to go through five separate banks to finally get a transaction where we could give Bank of Delta Asia their money back. It's that reputational risk issue that isn't always as affected by the court rulings in Europe.

That's why I'm not as concerned about it. They're problematic, but they're not disasters for the current sanctions regime. What would be disasters for this current sanctions regime is If it becomes a U.S.-only sanctions, and if they don't get updated, you know, sanctions is like a cat-and-mouse game. The cat moves, the mouse moves. The cat moves, the mouse moves.

The cat moves, the mouse moves. And you have to have the political will as the cat to keep responding to each mouse's move. So far over the last three years, that political will has been there in the international community, both the U.S. and Europe and major Asian economic powers. Will that continue? And how does this deal work?

If it breaks down, how it breaks down will have a very serious effect on whether or not sanctions will remain in place. If it's seen as too heavy-handed with the U.S., yes, that'll be a problem. If it's seen as, hey, the Iranians walked away from a decent deal, sanctions will probably still go forward.

Jeffrey 26:54

Well, I was going to say, I think that's one of the most interesting things about this negotiation from a public policy perspective. And I try to impress this upon my students, which is you can imagine a perfect deal if And you can imagine that people of goodwill can work out any problem. But when you actually get to the kind of nitty-gritty questions of how you implement a deal, even if everybody is acting in good faith and doing the best they can, it can really be quite tricky.

Christopher 27:25

Yeah, and the politics make it tricky. And part of the reason why we had the Consultative Commission at what I call the low political level, more technical experts working on operational problems, is to try to Have people vested in the process to try to sort that out to the extent possible without as much political interference. If you get the consultative commission to agree on things, then it comes back up to the political masters.

The problem is framed better, and the solutions we think will be more apparent. So the report comes out, what, Wednesday? Wednesday at noon, yes. It will be on the FAS, Federation of American Scientists, website. And personal copies available in my office for anyone who wants to stop by and say hi.

Jeffrey 28:11

Are you going to have a press conference?

Christopher 28:14

We've invited members of the press to attend, and we'll see who shows up.

Jeffrey 28:18

All right, great. Well, hey, Chris, it's been fantastic talking to you.

Christopher 28:22

It's always fantastic talking to you, Jeff. And thank you for having me on your podcast this weekend. I look forward to seeing you again.

Jeffrey 28:28

Yeah, maybe at Wilton Park. We can have a little of the warden scotch.

Christopher 28:32

Ah, yes. Good old... The lubricant that solves all arms control dilemmas.

Jeffrey 28:39

All right. Thanks for coming, Chris, and thank you for listening.