Iran Talks Stall Over Ending of Sanctions

As March 31 deadline nears for nuclear agreement, Tehran wants U.N. sanctions lifted right away; U.S., Europeans say ‘no way.’

By Laurence Norman And Jay Solomon, WALL STREET JOURNAL, March 19, 2015 7:27 p.m. ET

LAUSANNE, Switzerland—When international sanctions on Iran would be lifted has emerged as one of the largest remaining stumbling blocks to an agreement to constrain Tehran’s nuclear program by a March 31 deadline, according to U.S., European and Iranian officials.

Tehran’s negotiators in Switzerland, according to these diplomats, have hardened their position that United Nations sanctions on their country be repealed at the front end of any deal reached this month with the U.S. and other global powers.

The U.S. and its European allies are demanding the U.N.’s sanctions be suspended or terminated in a phased time-frame over years.

They believe sanctions relief should only come after Iran addresses concerns about its past nuclear work and is given a clean bill of health by the U.N.’s nuclear watchdog, the International Atomic Energy Agency.

The Iranians “say it’s a deal breaker. They don’t want it at all,” said a senior European diplomat involved in the Lausanne talks, referring to Iran’s position on the U.N. sanctions. “There’s no way that we would give up on that…. No way.”

The official said it would take much more than a year or two for U.N. sanctions to be lifted.

“If you’re talking about the IAEA certifying that the Iranian program is clean, I think it will take years by any measure,” the European official said. U.S. officials on Thursday voiced the same position.

Tehran has long demanded that all Western and U.N. sanctions on its energy, finance, and transportation sectors be lifted early and quickly once a deal is concluded. U.S. and European officials have consistently said Tehran’s position is unrealistic.

The two sides have narrowed some of their differences on the sanctions issues, however.

There is wide agreement that many of the unilateral sanctions the U.S. and European Union imposed on Iran could start to be suspended within months, if not weeks, of a deal being stuck.

This would boost Iran’s economy as the EU could resume purchasing oil from Iran and restrictions on Iranian banks could be lifted. Iran could also begin repatriating some of the over $100 billion in oil revenue frozen in overseas accounts.

Still, the Obama administration and its European allies view the broader U.N. sanctions as the backbone of their overall efforts to exert financial leverage on Tehran. Washington fears removing them could rapidly undermine more specific American and European penalties on Iran.

The U.N. sanctions cover a range of products that could be used in Iran’s nuclear program, including dual-use goods that could also be used for purely commercial purposes. The sanctions are enshrined under Chapter Seven of the U.N. charter, providing a strong legal basis to ensure their enforcement.

Iran is subject to a sanctions committee staffed by a special panel of U.N. experts who oversee enforcement of the restrictions. The sanctions committee can block contracts with Iran it believes breach the sanctions rules—sometimes because of objections from a single country.

The Iranians “hate the proliferation sanctions,” said the European official. “We are very…logical. We say we will lift it when the IAEA is satisfied.”

IAEA Director General Yukiya Amano has said that the agency could come to a broad conclusion on Iran’s past nuclear activities in a “reasonable” timeframe if Tehran fully cooperates with the Agency’s investigation into Iran’s past nuclear activities. Many Western officials believe this past work was aimed at gaining nuclear weapons know-how, which Tehran denies.

However, the IAEA has said Tehran must speed up its cooperation. It says Iran has failed to turn over key documents and give the agency access to key sites and scientists who worked on its program.

The standoff over sanctions came as Secretary of State John Kerry and his Iranian counterpart, Javad Zarif, held their fourth straight day of extensive face-to-face negotiations in the Swiss lakeside city of Lausanne. U.S. officials said the diplomacy could continue through the weekend in a bid to make the March 31 deadline. Others warned it may simply be impossible to meet the deadline.

“I don’t think we have made sufficient progress,” the European official said. “A lot of issues remain on the table.”

U.S. officials had initially believed Iran’s delegation would return to Tehran on Friday to coincide with the beginning of the Persian New Year, Norwruz.

Republican lawmakers have pledged to enforce new sanctions on Iran if an agreement isn’t reached by March 31. And the chairman of the Senate Foreign Relations Committee, Sen. Bob Corker (R., Tenn.), said he’ll begin drafting legislation next week that, if passed, would give Congress the power to approve, amend or kill any deal the Obama administration strikes with Tehran and other global powers.

The reelection of Israeli Prime Minister Benjamin Netanyahu this week is also expected to increase pressure on the White House to stiffen its negotiating positions.

Mr. Netanyahu has sharply criticized the U.S.’s diplomacy and has worked with Congress to demand Iran accept a nearly complete dismantling of its nuclear infrastructure, a position the Obama administration has said is no longer viable.

Israel’s leader on Thursday called for broadening the sanctions on Iran to try and force Tehran to give up its nuclear program and also cease its support for Middle East militant groups, such as Hezbollah in Lebanon and Hamas in the Palestinian territories.

“The most important thing is that the lifting of restrictions on Iran’s nuclear program would depend on Iran’s change of behavior, that it would stop supporting terrorism, stop its aggression against just about every country in the region, and stop calling [for] and threatening the annihilation of Israel,” Mr. Netanyahu told NBC News. “I remain committed to that and I think that’s the right policy.”