A Year Later, the Iran Deal Is Alive and Well

President Hassan Rouhani. Wikimedia Commons/Hamed Malekpour.

It's halted proliferation, though U.S.-Iran relations are still as tense as ever.

One year ago this week, Iran and the P5+1 (the United States, Russia, Great Britain, France, Germany and China) agreed on the Joint Comprehensive Plan of Action (JCPOA). As we have previously written, the success of this agreement will need to be assessed over a period of years—not months—and will be dependent not only on Iran’s behavior but also on the policies pursued by the other parties to the deal. Still, at the one-year mark, it is important to stand back and evaluate the progress to date. On the most important measure—whether the deal has been effectively implemented—the answer is a resounding yes. However, there are open questions about Iran’s regional behavior that could undercut the agreement, and vigilance will be needed over the long-term to ensure that effective implementation continues.

Implementation of the Nuclear Agreement

On the nuclear front, Iran has exceeded expectations. Most experts and government officials did not believe that Iran would be able to execute its initial nuclear obligations under the JCPOA until the spring or summer of 2016. Instead Iran was able to dismantle two-thirds of its centrifuges and ship out 97 percent of its low enriched uranium (LEU) by January of 2016, taking its overt dash time to a nuclear weapon from a matter of weeks to a full year. Meanwhile, Iran has submitted to an unprecedented inspections and verification regime that makes it extraordinarily difficult for it to pursue a meaningful covert program.

There have certainly been complications. Iran’s continued testing of ballistic missiles has been highly provocative—though restrictions on such testing were not part of the JCPOA. Moreover the threat of a ballistic missile is not nearly as severe without a nuclear warhead, which is why the agreement focused primarily on restraining Iran’s nuclear capacity. There have been numerous concerns of questionable Iranian proliferation behavior, including a recent report from German intelligence agencies stating that Iran was covertly procuring materials for ballistic missiles that in some cases could also have nuclear applications. While these reports are concerning, upon closer examination it appears that this Iranian work was conducted in 2015, before the JCPOA took effect. If there is evidence that this effort continued into 2016, it would raise much more fundamental concerns about the deal.

Ultimately, such complications will continue to arise through the course of the agreement, and the United States and its partners will have to vigilantly oversee implementation. The bottom line is that on core nuclear issues Iran has fulfilled its most important obligations and significantly set back its program.

When it comes to economic relief under the deal, Iran has begun to receive the benefits of the bargain, notwithstanding complaints from Iranian officials that they have received scant reprieve from sanctions and that the United States is dragging its feet on fulfilling its commitments. Dozens of Iranian banking ties have been established with international financial institutions, oil sales have quickly risen to levels seen prior to the imposition of the toughest sanctions several years ago, and European and U.S. business leaders have announced major new deals with Iranian companies. The IMF predicts a robust positive growth rate for Iran this year, and continued progress on economic diversification and inflation.

Iran’s self-imposed economic problems will mean a slow pace of change, quite apart from the restrictions of remaining sanctions, but the trend line is unambiguous. Dissatisfaction voiced in Iran over the slow pace of economic change should be viewed primarily as a political attempt to exact greater sanctions concessions from the West and a result of unrealistic expectations in the aftermath of the agreement. It is also a tactic by which Iranian pragmatists hedge themselves politically with hardliners at home.

Regional Challenges

While implementation of the nuclear agreement has been largely effective, the same cannot be said of regional dynamics in the aftermath of the nuclear agreement. Iran has continued to pursue problematic policies across the region supporting sectarian Shia militias in Iraq, increasing its support for Bashar al-Assad in Syria, and maintaining its backing of Hezbollah. Though there was always cause for skepticism that there could be significant breakthroughs on these issues following the JCPOA, and the agreement was not designed to address these challenges, it is disappointing to see that little progress has been made in these domains with Iran in the last year.

The reaction to the deal of America’s traditional allies has been mixed. Israeli opposition, which was public and significant in the run-up to, and immediate aftermath of, the agreement, has become much more subdued. Now, the Israeli leadership and security establishment has begun to slowly adapt to the post JCPOA world and largely shifted focus to other issues in the U.S.-Israel relationship.