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The Deal That Got Away the 2009 Nuclear Fuel Swap with Iran

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The Deal That Got Away the 2009 Nuclear Fuel Swap with Iran PROJECT ON MANAGING THE ATOM The Deal That Got Away The 2009 Nuclear Fuel Swap with Iran Sahar Nowrouzzadeh Daniel Poneman REPORT JANUARY 2021 Project on Managing the Atom Belfer Center for Science and International Affairs Harvard Kennedy School 79 JFK Street Cambridge, MA 02138 www.belfercenter.org/MTA Statements and views expressed in this report are solely those of the authors and do not imply endorsement by Harvard University, Harvard Kennedy School, the Belfer Center for Science and International Affairs, or the U.S. Government. Design and layout by Andrew Facini Copyright 2021, President and Fellows of Harvard College Printed in the United States of America PROJECT ON MANAGING THE ATOM The Deal That Got Away The 2009 Nuclear Fuel Swap with Iran Sahar Nowrouzzadeh Daniel Poneman REPORT JANUARY 2021 To my fellow public servants across the U.S. government working on Iran. —Sahar Nowrouzzadeh To the memory of my mother, Delores Poneman. —Daniel Poneman ii The Deal That Got Away: The 2009 Nuclear Fuel Swap with Iran Acknowledgments The authors wish to acknowledge the contributions of a number of individuals in the preparation of this paper. The paper benefited from the insights of Steven Aoki, Matthew Bunn, William J. Burns, Robert Einhorn, Glyn Davies, Mohamed ElBaradei, Newell Highsmith, Gary Samore, Puneet Talwar and James Timbie. We would also like to pay special gratitude and respect to Martin (“Marty”) B. Malin for his insights and review of this paper. Marty passed away on April 19, 2020, but his invaluable contributions to the Belfer Center community and nuclear security live on. Belfer Center for Science and International Affairs | Harvard Kennedy School iii About the Authors Sahar Nowrouzzadeh is currently on a sabbatical from the U.S. Department of State* and an Associate and former Research Fellow with the Project on Managing the Atom at the Harvard Kennedy School’s Belfer Center for Science and International Affairs. Beginning her tenure as a career civil servant within the U.S. government in 2005, she has focused on Iran across multiple U.S. administrations. She served as a Director for Iran and Iran Nuclear Implementation on the White House National Security Council (NSC) staff from 2014 to 2016 and was charged with covering the Iran portfolio on the Secretary of State’s Policy Planning Staff between 2016 and 2017. At the NSC, she was part of President Barack H. Obama’s team responsible for supporting the negotiation and implementation of the Joint Comprehensive Plan of Action (JCPOA) reached between the P5+1, the European Union and Iran in 2015. She also previously served as a Team Chief and Analyst at the U.S. Department of Defense and a Foreign Affairs Officer and an interim Persian Language Spokesperson at the U.S. Department of State. She is the recipient of such awards as the State Department Superior Honor Award, a National Intelligence Meritorious Unit Citation and the Secretary of Defense Medal for the Global War on Terrorism. Sahar is pursuing her PhD in Political Science at Boston University. She earned her master’s degree in Persian Studies from the University of Maryland-College Park in 2007 and her bachelor’s degree in International Affairs with a double concentration in International Economics and Middle East Studies from the Elliott School of International Affairs at the George Washington University in 2005. Sahar knows several languages, including Persian, Spanish and Arabic. She was born and raised in Connecticut. *The views and opinions expressed in this publication are those of the authors and do not reflect the official policy or position of the U.S. government. iv The Deal That Got Away: The 2009 Nuclear Fuel Swap with Iran Daniel Poneman is a Senior Fellow with the Harvard Kennedy School’s Belfer Center for Science and International Affairs and the President and Chief Executive Officer of Centrus Energy Corp. Prior to his appointment in October 2014, Poneman had been Deputy Secretary of Energy since 2009, in which capac- ity he also served as Chief Operating Officer of the Department. Between April 23, 2013, and May 21, 2013, Poneman served as Acting Secretary of Energy. Poneman’s responsibilities at the Department of Energy spanned the full range of President Obama’s all-of-the-above energy strategy, including fossil and nuclear energy, renewables and energy efficiency, and international cooperation around the world. He participated in the Deputies’ Committee at the National Security wCouncil. He played an instrumental role in the Department’s response to crises from Fukushima to the Libyan civil war to Hurricane Sandy, and led the Department’s efforts to strengthen emergency response and cybersecurity across the energy sector. He also led the U.S. delegation to the October 2009 technical negotiations with Iran concerning the TRR fuel swap proposal. Poneman first joined the Department of Energy in 1989 as a White House Fellow. The next year he joined the National Security Council staff as Director of Defense Policy and Arms Control. From 1993 through 1996, Poneman served as Special Assistant to the President and Senior Director for Nonproliferation and Export Controls at the National Security Council. Prior to assuming his responsibilities as Deputy Secretary, Poneman served as a principal of The Scowcroft Group for eight years, providing strategic advice to corporations on a wide variety of international projects and transactions. Between tours of government service, he practiced law for nine years in Washington, D.C. – first as an associate at Covington & Burling, later as a partner at Hogan & Hartson. Poneman received A.B. and J.D. degrees with honors from Harvard University and an M.Litt. in Politics from Oxford University. He has published widely on energy and national security issues and is the author of numerous books includ- ing Double Jeopardy: Combating Nuclear Terror and Climate Change, Nuclear Power in the Developing World and Argentina: Democracy on Trial. Going Critical: The First North Korean Nuclear Crisis (coauthored with Joel Wit and Robert Gallucci), received the 2005 Douglas Dillon Award for Distinguished Writing on American Diplomacy. Poneman is a member of the Council on Foreign Relations. Belfer Center for Science and International Affairs | Harvard Kennedy School v Table of Contents Abstract ............................................................................................................1 Introduction .....................................................................................................3 An Iranian Request to the IAEA and an “Ingenious” Proposal .......................4 An October 1 Meeting in Geneva and a Tentative Understanding ................. 11 Skepticism Grows ...........................................................................................12 The “Green Movement” and a Backdrop of Political Crisis in Tehran .......... 14 The “Vienna Group” and an Ad-Ref Agreement .......................................... 16 A Tentative Understanding Unravels.............................................................25 Conclusion and Lessons Learned ...................................................................31 Bibliography ......................................................................................................... 48 Belfer Center for Science and International Affairs | Harvard Kennedy School vii The main hall for the IAEA’s Talks on Supplying Nuclear Fuel for Iranian Research Reactor, Vienna, Austria, 19 October 2009. Dean Calma/IAEA Abstract In October 2009, an opportunity arose to break the longstanding impasse over Iran’s controversial nuclear program. President Barack H. Obama had broken with his predecessor, President George W. Bush, by committing the United States to participate fully in the P5+1 (the United States, China, France, Russia, the United Kingdom, plus Germany) nuclear negotiations with Iran without pre-condi- tions. Following a 15-month hiatus, a round of talks among the P5+1, European Union (EU), and Iran took place on October 1, 2009. On the margins of that meeting it was agreed, in principle, that Iran would ship out the majority of its stockpile of 3.5% low-enriched uranium (LEU) in exchange for the other parties further enriching this material and fabricating it into fuel assemblies for Iran’s Tehran Research Reactor (TRR)—a reactor primarily used to produce radioisotopes for medical treatments and diagnoses. The critical technical contours and details were set to be negotiated by experts in Vienna, Austria, on October 19. Over three days of intense negotiations in Vienna, sponsored by the outgoing Director General of the IAEA and Nobel Peace Prize Laureate Mohamed ElBaradei, U.S. negotiators joined with French and Russian counterparts to secure Iran’s agreement, pending final review in respective capitals, to what became known as the “TRR fuel swap proposal.” A confidence-building measure of mutual benefit, the proposal was welcomed by many as a “win-win” solution that would potentially create much needed time and space for more comprehen- sive negotiations and a larger diplomatic breakthrough to curtail Iran’s increasingly advanced nuclear program. While these difficult negotiations succeeded in producing an ad refer- endum agreement on the TRR fuel swap and included the highest-level bilateral engagement between the United States and Iran since the 1979 Belfer Center for Science and International Affairs | Harvard Kennedy School 1 Iranian Revolution up to that point, the deal ultimately
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