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U.S. Department of State

Diplomacy in Action

Background Briefing on the JCPOA Implementation


Special Briefing
Senior Administration Officials
Via Teleconference
Washington, DC
September 17, 2015

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MODERATOR: Thank you so much and thank you all for joining. It’s been a while since we had an Iran deal conference call, so I was missing this, so I’m glad we had a chance to get on the phone today. And thank you for doing so on such short notice.

Today’s call will be all on background as senior Administration official. First, I’ll introduce [Senior Administration Official One] to say a few words, then we’ll turn to [Senior Administration Official Two] who will talk through a little bit of the nuclear steps we expect to start seeing happen as Iran starts to meet its commitments under the JCPOA. And then finally, I’ll turn it over to [Senior Administration Official Three] to talk a little bit about what we’ll see on the sanctions side – really, to just lay out for folks what they should expect going forward in the coming weeks and months as this deal is implemented.

And then we’ll get to your Q&A, so please do ask questions. We’ll get to as many as possible. This call is embargoed until the end of the call, please, so we can have folks focusing on the questions and not on tweeting. And other than that, again, all senior Administration officials. And with that, I think I will turn it over to [Senior Administration Official One] to give a few remarks, then we’ll go on to [Senior Administration Official Two] and then to [Senior Administration Official Three].

SENIOR ADMINISTRATION OFFICIAL ONE: Thanks very much, [Moderator]. Now that we passed the – or passing the 60-day congressional review period, we’re pretty energized and excited as a government to move forward on implementing this deal very energetically and consistently and working hard on it. It’s going to be a really big job. Those of you who have been following the negotiations know and have read the deal know that there are literally hundreds of requirements and milestones and road marks along the way to fully implementing this deal. And we’re ready to get started in making sure that we and our partners in the deal do our part in bringing this deal forward because it’s going to be really important not only for our security, but for the security of our partners and allies, particularly in the region but around the world.

We’re organizing our efforts here at the State Department to play a coordinating role for all of the moving interagency pieces of this, and there’s going to be a lot of it. We’ll have a small but highly skilled, highly talented, and highly energetic staff working with me here at the State Department, working with the other agencies who will be involved – obviously, the Energy Department, the Treasury Department, our intelligence and law enforcement colleagues throughout their respective communities and other agencies, of course working very closely with the NSC to stay on top as we move forward on implementing and achieving these road marks, road – milestones along the way.

We’ll have a – in addition to working internally within the U.S. Government, we’ll be constantly communicating with one another as we go forward, but we’ll also have a diplomatic component. There are a lot of questions that will require ongoing constant attention and consultation with our partners in implementing that deal. Even for the rest of this month we anticipate regular encounters and sessions with our counterparts – our fellow negotiators for the deal – in moving forward. Of course, an important role we’ll play in this office is also making sure we keep the Congress informed, which is going to be a very important part of moving forward on this, and we’ll be coordinating that effort as well.

I’ll stop there, look forward to taking your questions.

MODERATOR: Great. Thanks, [Senior Administration Official One]. Now let’s turn it over to [Senior Administration Official Two] to say some words about the nuclear steps.

SENIOR ADMINISTRATION OFFICIAL TWO: Thank you, [Moderator]. As I think you all know, the deal, as [Senior Administration Official One] just said, is extraordinarily complex and there’s a lot that Iran needs to do before it can actually get the sanctions relief that we’re offering in the deal. Specifically, Iran needs to take major changes to its core nuclear infrastructure. And so all of these steps need to happen starting on adoption day, which we think is going to be about October 18th, before sanctions relief is issued.

So starting on adoption day, about October 18th, we expect that Iran is going to need to make major changes to its Natanz enrichment facility. That will involve taking out thousands of centrifuges and putting them into IAEA-monitored storage. It will also involve taking out a very large amount of infrastructure, specifically some of the pipework and electrical infrastructure that allows for the enrichment process to work. All of this is going to take a lot of effort and probably a fair amount of time. But the key point in this action that the Iranians will undertake as well as the others is that the ball is really in Iran’s court. It’s difficult for us to fully predict how long it’s going to be until sanctions relief is implemented because we can’t offer that relief to the Iranians until they take all of these steps at Natanz, at Fordow, at the Arak reactor. And so we really structured the deal in such a way that they are required to do all those things before sanctions relief. So at Natanz, they need to do those things.

They also need to ship out to another country the vast majority of their enriched uranium stockpile. As you remember from the deal and from previous conversations that we’ve had, Iran currently has a stockpile of around 12,000 kilograms of enriched uranium hexafluoride or the equivalent in other chemical forms, and it needs to get the vast majority of that material out. This is going to be somewhat complicated for them to do. They haven’t shipped material like this out of the country. And so they have to get that total amount down to 300 kilograms. Again, we expect the process to start on October 18th and then take months after that to implement all of these steps.

In addition, we expect at the Fordow facility for Iran to need to take out the – about two-thirds of its centrifuges and associated infrastructure, and here again we’re talking about the physical dismantling and removal of a large amount of pieces of equipment, pipework, electrical infrastructure, and things like that. So there’s going to be a lot of physical work to be done. Iran hasn’t started this activity yet because adoption day hasn’t come around, but we do expect that there will be significant movement in the months after October 18th.

At the Arak reactor – this is the heavy-water research reactor – the center of that reactor, the calandria, is going to be pulled out and filled with concrete so that it can’t be used again. That will take out the possibility of Iran using the reactor as it’s currently designed to produce plutonium for weapons, and that’s another big, physical task that Iran needs to undertake.

In addition to those things, though, Iran will be, over the months after adoption day, working with the IAEA to put in place the increased transparency measures. So in this regard, we’re talking about new technologies that Iran has agreed to implement at its facilities; active electronic seals that will provide for much more real-time monitoring – systems that don’t exist anywhere else in the world that they’ll have to iron out, including online enrichment monitoring, which tells the IAEA in essentially real time the enrichment level of different – of cascades that are operating. In addition, Iran needs to put in place transparency measures at its uranium mills so the IAEA has continuous monitoring about the material that’s coming out of the uranium mills to prevent conversion to a covert nuclear path and continuous monitoring at the centrifuge manufacturing facilities.

So this is going to involve a lot of work with the IAEA, a lot of installation of hardware, a lot of testing, and essentially a lot of back and forth to make sure it all works right. And then the IAEA, importantly, has to verify that all of these steps, be they physical changes to facilities or modifications to transparency protocols and things like that – all of these things have to be verified that they’ve actually been undertaken before sanctions relief is offered, and essentially the interaction – or the intersection of those two things is implementation day.

So implementation day will be when the IAEA tells us that it is in a position to verify that Iran has taken all those steps, as well as Iran providing to the IAEA in writing its desire – its intent to implement the Additional Protocol, to yet again abide by modified code 3.1, to do several other things like that that involve information transferred to the IAEA.

So all of these are going to take a while, but frankly, the ball’s in Iran’s court, and until they do that, sanctions relief will not be provided.

MODERATOR: Great. Thanks, [Senior Administration Official Two]. So just to be clear for folks, the next date is October 18th that we’re tracking towards. That’s adoption day, when that Iran will begin taking these steps and you’ll start seeing some of what [Senior Administration Official Two] mentioned. And then implementation day is a date unknown at this point, which will be when they’ve completed those steps.

So with that, I’m going to turn it over to [Senior Administration Official Three], who is our sanctions guru who can talk a little bit about that, and then we’ll go to questions.

SENIOR ADMINISTRATION OFFICIAL THREE: Sure. Thanks, [Moderator], and thanks, [Senior Administration Official Two] for that description. It gives a good jumping off point for talking about the sanctions, because in many ways the sanctions relief as part of this deal really mirrors and is intentionally intended to mirror the nuclear steps that Iran will take.

So the first step in this process, as [Senior Administration Official Two] mentioned, is adoption day. Like Iran, while Iran will start preparing for most of its nuclear steps with respect to Natanz, Fordow, Arak, we’ll start preparing for sanctions relief. We’ll – that will manifest itself by the issuance of some waivers with respect to sanctions. Now, these waivers won’t actually be effective on adoption day, and this is something that we’ll be very clear about publicly. These waivers will be essentially issued and they will take effect on the day that the IAEA verifies that Iran has completed all of its specific steps – specific steps with respect to its nuclear program. So this is kind of our first procedural step that we’ll take. That will eventually take effect later.

The President will also instruct his agencies to begin preparations with respect to sanctions relief, so you could envision that – an instruction to Treasury to State to start taking all the steps necessary to actually effectuate all of the relief down the road.

So at the same time, the EU will be taking a similar step in the sense that they will take – they will adopt a regulation that will also effectuate their sanctions relief, but again, taking effect only on implementation day once we’ve received the IAEA’s report. So it’s kind of putting these – both these documents into a suspended state until such time as the IAEA makes its report and activates the sanctions relief.

So that would move us then down the road to once Iran actually completes all of those steps – when the IAEA gives us that report and we feel comfortable that they’ve completed those steps on implementation day. Then kind of the three different buckets of sanctions will – essentially the UN sanctions, the EU sanctions, and the U.S. sanctions will all have some different kind of – different – some different things will happen to each of those.

On the UN framework – as you all know, the UN Security Council resolution was already passed on July 20th. That resolution currently doesn’t do much in the sense that all the first steps that resolution does is endorse the deal, it provides for some certain exemptions for the actual implementation of the JCPOA in the interim time period, but the rest of the resolutions are all in place and all those sanctions remain in place and will be in place until implementation day.

On implementation day, though, that resolution provides for a roadmap and a series of steps that would occur on that day. Specifically, it will on that day terminate all the past resolutions, so it will terminate 1737, 1803, 1747, 1929. It will terminate all those resolutions, but then it will re-establish, recreate prohibitions from those resolutions and bring those back to life if you were – if it were for a period of time in the future. These include the prohibitions on transfers of nuclear-related commodities, Nuclear Suppliers Group controlled commodities. These are prohibitions that prevent the transfer of these sensitive technologies to Iran. Those will remain in force for a period of 10 years beyond implementation day and they will be complemented by a procurement channel – a mechanism that we created in the JCPOA that will allow for the approved procurement of these technologies if they are for the agreed nuclear program in the JCPOA, but they will otherwise be prohibited by the UN Security Council resolution. So the Security Council resolution will re-establish that particular bucket. It will also re-establish prohibitions on missile-related transfers or transfers of technologies related to missiles, so these are the Missile Technology Control Regime controlled commodities. And it will re-establish the prohibitions on the transfers of conventional arms. Those will stay in place, I think as you all know – we’ve talked about this many times – those will stay in place for a period of time of eight years and five years, respectively, or until the IAEA reaches its broader conclusion.

So that’s kind of what happens on the UN framework on implementation day. Again, the resolution 2231 kind of comes to life on that day and makes a series of changes.

On the EU front, the regulation that they will have adopted on adoption day will also go into force on that day. And so by virtue of that, they will be relieving a number of their economic and financial sanctions, including the oil embargo, the – and a number of the financial and banking-related sanctions and transportation sanctions. These are all of what we call the nuclear-related sanctions. And in the case of the EU, those have been all kind of clearly delineated in their various pieces of legislation, so this regulation will essentially – will simply put those in a state of suspense. There will be a – there will be a Council decision that will remain in force throughout the period of the JCPOA that will allow us to snap those sanctions back into place, but the actual implementing regulations will be removed on implementation day, and so that the actual sanctions relief can be effectuated.

Lastly, that brings us to the U.S. sanctions. We too will be taking steps to relieve the U.S. nuclear-related sanctions. Again, we’ll be doing it such that they are effectively suspended and can be snapped back in the future. So the waivers that I discussed earlier that would be issued on adoption day would actually take effect on that day. And so from that period forward, they would be periodically – those waivers would be periodically renewed, and again, leaving the legislation in place such that we could effectively snap it back in the event of Iranian noncompliance.

So that’s kind of how the sanctions relief will play out between now and implementation day. I think we’ll leave it there for now.

MODERATOR: Great. Thanks so much, [Senior Administration Official Three]. I really appreciate that. And now I think we’ll go to questions, so if the operator could remind folks on the call how to ask a question.

OPERATOR: Certainly. And ladies and gentlemen, if you do wish to ask a question, just press * then 1 on your phone.

MODERATOR: Great, so I think we’re ready to get started with questions.

OPERATOR: Our first question comes from the line of Michelle Kosinski with CNN. Please go ahead.

QUESTION: Hi there. Back in July, Iran was saying that before any of this happens, they would need to go through a lengthy legal process for it to be ratified in Iran. So what can you tell us about that, as well as how that could affect your projected timeframe? And secondly, while we’re talking about timeframes, among all of the things that you listed, can you give us a ballpark of how long you expect this to take for Iran to make all of those changes? I mean, are we talking six months? Are we talking a year or longer? Thanks a lot.

MODERATOR: Thanks, Michelle. I’ll take the first part and maybe [Senior Administration Official Two] can take the second part, or if other folks want to jump in as well. Look, we’ve always said that we’re not going to get into Iran’s internal domestic politics or how they address this deal back at home. I think that’s certainly the case now. There are dates delineated for when first adoption day starts, so October 18th, and then when they have to do other things and address other issues. So they know what their responsibilities are. Just as we had to deal with the political process back here, they know what those are, and we expect them to operate under the timeframe that was laid out in the JCPOA regardless of what kinds of domestic political processes they have to undertake, certainly.

So [Senior Administration Official Two], do you want to --

SENIOR ADMINISTRATION OFFICIAL TWO: Sure. And on the question of how long these steps would take, it’s going to be at least months, but it’s very difficult for us to predict precisely long it would take because we don’t know the Iranian system, obviously, as well as they do. It’s a question that really is theirs to answer. What I can say is that we have a very clear understanding of what needs to take place. The timeframe is up to Iran. They clearly have motivation to try to accomplish those steps as soon as possible. But look, this is a very complicated deal. There’s a lot they have to do, and therefore inherently there’s going to be months after October 18th for them to accomplish that. And that said, I wouldn’t want hazard a guess as to how many months. That’s really a question that’s more appropriate for the Iranians because they’re best positioned to answer.

MODERATOR: Great. Thanks, Michelle. I think we’re ready for the next question.

OPERATOR: That comes from the line of Brad Klapper with Associated Press. Please go ahead. Possibly your mute button is on, Mr. Klapper. We can’t hear you.

QUESTION: Yes, you were right; sorry about that. I know we’ve went over this in the past, but can you remind me what the relationship is on the settling of the PMD issue and getting to implementation day? And then can you also go over a little bit what these waivers that the U.S. would take would pertain to, these initial kind of implementation-day-effectuated relief steps?

MODERATOR: So [Senior Administration Official Two] probably on the first and then [Senior Administration Official Three] on the second.

SENIOR ADMINISTRATION OFFICIAL TWO: Sure. So on the first question, as you recall, the JCPOA says that the steps that Iran has to take on the roadmap that it’s agreed to with the IAEA with relation to PMD have to be completed by October 15th. So December – mid-December is when the IAEA will publish its formal report on PMD, but by October 15th Iran needs to complete the actions it specified in the roadmap, to include providing the IAEA with the technical meetings and information that’s spelled out in that.

On that, we have indications in press today, in fact, that Iran and the IAEA are moving forward with that. There is information that they have engaged in several days’ worth of meetings in Tehran, so – this week – and therefore it appears as if that process is well underway. But the short answer to your question is October 15th is when we expect for that – those interactions to be completed.

QUESTION: Can you still hear me?

MODERATOR: Yes, Brad. Your line’s still open.

QUESTION: Yeah. I just – without – I mean, what is the – is getting to implementation day conditional on a resolution of this PMD issue, or is that separate to getting from adoption day to implementation day?

SENIOR ADMINISTRATION OFFICIAL TWO: Yeah – no, the steps in the JCPOA are sequential, so absolutely we need to have the Iranians execute all of the commitments in their roadmap with the IAEA by – on PMD by implementation day for implementation day to take effect.

MODERATOR: Great. And then [Senior Administration Official Three] on the waiver issue.

SENIOR ADMINISTRATION OFFICIAL THREE: Sure. And I mean, just to be specific on that if it wasn’t obvious, there won’t be sanctions relief if those steps don’t get completed. So that’s an integral component of it that, to get to implementation day, to get that sanctions relief, must be completed.

So with respect to the waivers, I mean, essentially what they will be is they – it will be the same waiver that if we were to have done this on implementation day, it will lay out every single piece of legislation or statutory provision that we need to waive in order to provide the sanctions relief. So this will include the legislative sanctions with respect to Iranian oil sales, with respect to Iran’s transportation sector, with respect to banking – essentially that whole group of nuclear-related economic sanctions that are described in the deal. And so, essentially, most of the sanctions that deal with Iran’s major sectors of its economy will be – the actual text of how we would waive them will be laid out in this waiver. The only difference is that it won’t actually be effective until the IAEA issues its report.

And the only reason for this is, like I said at the beginning, really to mirror the Iranian process. They have a lot of preparatory steps to take. It was important to them that we be seen as preparing as well, but it’s very different to prepare paperwork than it is to take centrifuges out and take out a core of a reactor. So this was just attempt – an attempt to try to mirror that process, demonstrate progress on our end, but it won’t have any practical effect as far as relieving any sanctions. There will be no actual sanctions relief that takes place as a result of these waivers until implementation day, until Iran completes all of its steps.

MODERATOR: Great, thanks. I think we’re ready for the next question.

OPERATOR: Comes from the line of Robin Wright with The New Yorker. Please go ahead.

QUESTION: Hi. Thanks very much for doing this. One question on how Iran is going to achieve all these technical steps. They have talked in the past about getting help from other countries, particularly China. Do you know if there are plans or if there has been outreach to try to bring in expertise from other countries to help both do it and to expedite the process?

And secondly, why October 18th? Is there – the Iranian parliament is not supposed to vote on this – well, they claim their deadline is October 22nd.

SENIOR ADMINISTRATION OFFICIAL TWO: (Inaudible) the UNSCR.

QUESTION: Sorry?

MODERATOR: Sorry, go ahead. Continue that. We thought you had stopped talking. Sorry, go ahead.

QUESTION: So I’m interested in why the 18th if that’s before the Iranian parliament actually votes to accept it itself.

MODERATOR: So just on that last piece – and [Senior Administration Official Two] or [Senior Administration Official One], correct me if I’m wrong – it’s my understanding it was 90 days from the adoption of the UN Security Council resolution, which happens to be November 18th.

SENIOR ADMINISTRATION OFFICIAL ONE: October 18th.

MODERATOR: October, October. Yes, thank you – yes, it’s October 18th. Yes. So that’s my understanding, that that’s the timing on that.

SENIOR ADMINISTRATION OFFICIAL TWO: So on the other question about other countries being involved in this – so there are going to be – there’s going to be involvement of other countries in a number of areas, specifically when the Arak reactor is redesigned and when the Arak reactor is rebuilt. Those activities will benefit from other countries’ involvement. Probably China will take a large role in that, as well as other P5+1 countries.

But that action doesn’t need to happen on implementation day. The action that is necessary by implementation day to be confirmed by the IAEA is that the center of the existing reactor is taken out and filled with concrete. The process of designing – or redesigning a reactor and actually rebuilding the reactor will take a substantially longer amount of time on the order of a year or so, and so we expect that to be a longer-term process.

Similarly, we expect some assistance in – from other countries in providing activities at the Fordow facility. Some of the changes to the infrastructure there, some of the other international projects that are – undertake there will also benefit from international cooperation. Those things as well don’t need to happen by implementation day, but they’ll happen as part of the implementation of the agreement, which just starts on implementation day.

MODERATOR: And I would say – and [Senior Administration Official One], feel free to jump in here too – obviously, a large part of [Senior Administration Official One]’s role is interagency coordination here in the U.S., but also working with other partners – who are playing key roles in this. So making sure we’re all taking the steps we need to take and helping each other out if we can help out. I don’t know, [Senior Administration Official One], if you want to say anything else on the diplomatic piece of that, but that will obviously be a key part of those conversations as well.

SENIOR ADMINISTRATION OFFICIAL ONE: No, that’s right, [Moderator]. I think as I mentioned in my opening statement, for the next few weeks, for example, at various venues there are going to be dozens of experts consulting on the technical aspects of these questions all working together towards making sure that we get all of these steps implemented as soon as possible.

MODERATOR: Great, thanks. Let’s go on to the next question.

OPERATOR: And that comes from the line of Margaret Brennan, CBS, now. Please go ahead.

QUESTION: Hi, thanks for doing this. Just a follow-up on that. Can you clarify, when you talk about redesigning and rebuilding a reactor at Arak taking a substantial amount of time, are you saying that by implementation day, literally, the core does not need to be ripped out of Arak but the plan and the execution needs to technically be mapped out?

And my second question has to do with sanctions. Do you have any specific timeframe between when the sanctions are lifted and when Iran will actually realize some of that cash and some ability to trade? I understand there are layers and layers of regulation. Is there a timeframe for when this will actually make a difference for Iran in a practical sense?

MODERATOR: Yeah. [Senior Administration Official Two], clarify on the first one because --

SENIOR ADMINISTRATION OFFICIAL TWO: Sure.

MODERATOR: Yeah.

SENIOR ADMINISTRATION OFFICIAL TWO: No, so it’s very clear that the reactor that exists today has to – we have to remove the calandria, physically take it out, pour concrete in so it cannot be used. The design that the reactor will be converted into we have a rough idea of what that is already, and the details are in the JCPOA itself. But we don’t have yet from the Iranians or the Chinese is the engineering document that’s going to actually be necessary to make the changes in the reactor, and then obviously the construction of it, which will take a longer amount of time. It is not necessary for Iran to have rebuilt the reactor before implementation day. What is necessary is they have to remove the calandria, the center, the core of the reactor, by implementation day and make sure that it can never be used, because that’s what poses the proliferation challenge.

So the longer term we’re looking for the Arak reactor to become useful again in providing nuclear research and things like that in Iran, but from the proliferation standpoint we first and foremost care about getting the existing design dismantled and the core being physically pulled out of the reactor and filled with concrete.

MODERATOR: Right, because that has to happen before implementation day and before sanctions relief. And also one thing to keep in mind from the JCPOA as well is that the P5+1 has to sign off on the eventual redesign of the Arak reactor, whenever that happens. So even though the Chinese will primarily be helping them with that, we have to sign off on that to make sure our proliferation concerns are addressed.

So with that, I think [Senior Administration Official Three] can do the sanctions stuff.

SENIOR ADMINISTRATION OFFICIAL THREE: Yeah. No, that’s a really good question. I’m glad you asked it, actually, because I think there’s a common misperception that on implementation day a big suitcase full of cash shows up in Tehran and all of a sudden they have all this money, which I think is really – does a disservice to what actually is going to happen.

On implementation day, essentially, the rules, the sanctions that prevent Iran from doing a lot of this sort of business will be lifted, will be suspended, and so they’ll be able to start doing that type of business. But it’s going to take them some time, it’s going to take their economy some time, to dig out of the hole that it’s been in as a result of these sanctions. I mean, for example, our Treasury Department, I think, estimates that it will take until 2020 to get Iran’s GDP back to where it would have been in 2012 – or where it would have been today had these sanctions not been ramped up as aggressively as they were in 2012.

So that’s the sort of thing where for a long-term, macroeconomic perspective it’s going to take a long time for their economy to realize or to get back to where it could have been had we not engaged in this sort of effort. But on the more – on the kind of more micro level, on implementation day these sorts of – a lot of these transactions will become allowable, will be able to be done by the international community. So if a country wants to start buying Iranian oil, they’ll be able to buy that oil right away. Will Iran be able to provide that much more oil because – probably not. They’ll have to build up their production capacity and work towards the point where they can actually increase the amount of oil they sell over time.

So in each case there will be things that will be immediately possible to do, but it will take time for Iran to really enjoy the full benefits of that. We expect though – I mean, look, Iran is a big market. We expect that companies will be looking to do business there once these sanctions are lifted, and they’ll be able to enjoy the sanctions relief that they anticipate. But with any sort of economic recovery it’s going to take a significant amount of time.

MODERATOR: Great, thanks. I think we have time for a couple more questions, so let’s move on to the next one.

OPERATOR: That comes from the line of Paul Richter with LA Times. Please go ahead.

QUESTION: Yes. As you know, there are a lot of members of Congress who are already lining up to support new steps to try to prevent Iran from misbehavior in the region. They’re talking about penalties. And I wonder if you have any concern that new non-nuclear penalties imposed on Iran might have the effect of depriving it of the money they’re expecting and undermine their support for the deal.

MODERATOR: Thanks for the question, Paul. Look, I know there are a lot of ideas floating out there on the Hill right now, and the President and Secretary Kerry have both been clear that we are absolutely open to having a conversation with Congress particularly about how we increase security assistance to the Israelis, also how we increase the capabilities of the Gulf states to push back on Iranian activities in the region. We are very open to having those conversations. You saw that the White House announced that Prime Minister Netanyahu will be coming to Washington to meet with the President. Obviously, those conversations will inform our conversations with Congress about what can be most helpful. So that’s obviously what we’re focused on when it comes to conversations with Congress, and the team on the phone here is really focused mostly – or entirely, I should say – on how we implement this deal. And we’ll keep talking to Congress about how we can support Israel, how we can support the Gulf states, and what that eventually might look like. But certainly, we’re committed to having those conversations and we’ll see how that all plays out.

I think let’s go on to the next question.

OPERATOR: And it comes from the line of Barbara Slavin with Al-Monitor. Please go ahead.

QUESTION: Yes, hello. Thank you. My question is about the use of dollars by Iran. There’s a provision in the JCPOA that says that U.S. bank notes will be provided to Iran, but there are going to be no U-turn transactions; our banks are still going to be blocked from having anything to do with Iran. So how is that going to work? How will Iran be able to use dollars?

SENIOR ADMINISTRATION OFFICIAL THREE: No, that’s a good question. It’s also one that gets misunderstood. So to be specific, there’s nothing that says in the JCPOA that bank notes will be provided to Iran. Specifically, what we intend to do is to cease the application of the sanctions that are related – so we have specific sanctions – an executive order, to be specific – that said that – that allowed for us to sanction companies that provided Iran U.S. dollar bank notes. In other words, if a company around the world decided to give Iran U.S. dollars, they could be sanctioned for doing that. What we’re going to do on implementation day is those sanctions will no longer be in force, and so if somebody gave Iran or an Iranian entity U.S. dollars – U.S. bank notes, specifically – that would no longer be sanctionable.

Now, that’s a big difference, as you very, I think, astutely note – that’s a very big difference in being able to be able to easily do business in U.S. dollars around the world, because one of the things that I probably should have mentioned at the top is that there are going to be a lot of sanctions, specifically in the United States, that will remain in place. And among those are our primary domestic embargo, most of which was put in place for reasons that both (inaudible) and are unrelated to the Iranian nuclear program. And so among those is the prohibition on being able to use the U.S. financial system. And for most major – most large dollar transactions around the world, they would need to be able to do – go through the U.S. financial system, go through New York. That will not be allowed as part of this – I mean, that is – those sanctions are not being lifted as part of this deal. And it will not be allowed to do what you – as you correctly called U-turn transactions, transactions that would be ultimately going through New York or through the U.S. financial system.

So it will not be necessarily easy to use U.S. dollars for major business transactions. That said, they’ll have options to use other currencies, and we expect that they’ll be able to do what they need to do. But the point is that there are going to be some sanctions – and some fairly significant sanctions – that will remain in place.

QUESTION: Yeah. I’m just confused because it does say here specifically – I’m looking at the JCPOA – “provision of U.S. bank notes to the Government of Iran.”

SENIOR ADMINISTRATION OFFICIAL THREE: That’s in reference to the title of the sanctions. So it was sanctionable for a non-U.S. company to provide U.S. bank notes to the Government of Iran. So in other words, if you or – let’s just say a bank, a European bank – decided to provide bank notes to Iran. That European bank could be sanctioned in the United States, could have its access to the United States cut off.

After implementation day, that European bank would not be sanctioned for that sort of thing. So if, for example, a European bank has U.S. dollars and it – in its vaults and it provides it to Iran in its account somewhere there, that particular offense would not be sanctionable. It would not – we would not be – we would not sanction or cut off that European bank from doing business in the United States. That’s very different, though, than being able to route a financial transaction through the United States and actually --

QUESTION: Okay.

SENIOR ADMINISTRATION OFFICIAL THREE: -- settle a transaction through the U.S. financial system. That will still not be allowed. So I apologize for not explaining the provision part of your question. That’s really just a reference to the title of what is currently sanctionable.

QUESTION: Okay. Well, I’m still confused about what they’ll do with these dollars, but – (laughter).

MODERATOR: Well, Barbara, maybe we can follow up offline, and [Senior Administration Official Three] I’m sure can talk for hours about this topic as well.

QUESTION: Sure. Appreciate it.

MODERATOR: Yeah, absolutely. So I think we have time for two more questions, Operator, if you want to move on to the next one.

OPERATOR: Okay. Next one comes from the line of Bahman Kalbasi with the BBC. Please go ahead.

QUESTION: Thank you for doing this. Regarding the enrichment and the uranium, is that on October 18 as well? Do they have to be sending the 98 percent out or diluting them, or does that process have to start on October 18? That’s one.

And then second one: In terms of, as you said, these sanctions, waivers will be issued but they will be suspended. They won’t be – they can’t be referenced in terms of companies being able to go in and do business, or is that suspension not – I was a little confused on the suspension part of the waivers.

SENIOR ADMINISTRATION OFFICIAL TWO: So the response to the first question is, in short, yes. Iran needs to reduce its stockpile down to 300 kilograms by implementation day. So the IAEA, when it goes into the country now, it weighs how much uranium – enriched uranium that Iran has. That weight comes to 12,000 kilograms and change.

When they go in on implementation day, they have to find that that weight is no more than 300 kilograms and the enrichment level is no more than 3.67 percent. As you rightly said, that will obligate Iran to either ship it out of country or dilute a lot of the current stockpile – about 98 percent – down to that level, down to 3.67. So all of that has to happen before implementation day happens.

SENIOR ADMINISTRATION OFFICIAL THREE: On the second question on the waivers, I apologize. So suspension is kind of a term of art, but – so let me explain it a little bit more clearly, which I should have done before. So essentially, in the first step of this we will be waiving the sanctions using the President’s executive waiver authority. What that means is the legislation itself will remain in place. Obviously, the President does not have the ability to just terminate legislation. That would take an act of Congress, which will happen in the future. I’ll come to that in a second. But in the meantime, we’ll be waiving those sanctions for periods of 120 to 180 days, kind of depending on the specific statutory provision – there are dozens of them that will be getting waived – and these will be continually renewed.

And so what I mean by “suspension” is not such that they won’t be affected. In other words, companies can still – will be able to do the business that was previously prohibited by those sanctions. It will no longer be prohibited to do – to engage in those economic activities. But we’ll be able to snap those sanctions back into place because at the stroke of a pen, or the lack of a stroke of a pen, the President could decide or the Secretary of State could decide to no longer sign those waivers and the sanctions would be back in force. So that’s kind of what we call our domestic snapback option, those waivers the President no longer decides to sign, the waivers that he would – that he would otherwise be doing under this deal.

Fast forward to a period of eight years down the road – and I should have mentioned this in the opening – is when we would seek to – we committed in the deal to seek legislative termination of those same sanctions. In other words, in eight years we, the Administration or the administration at the time, would be committed to seeking legislation that would terminate those actual statutory provisions and from that point forward would no longer need to waive them because they would no longer be in existence.

QUESTION: So on October 18th, if I may do the follow-up, the theatrics or the sequence of it will be we will get an IAEA report, say in the morning, then there will be a bunch of waivers signed and published or issued on – during the day, and by midnight this is all now allowed to – activity that wasn’t allowed the day before is allowed. Is that how you see --

MODERATOR: No. Hey, it’s [Moderator]. Sorry, let me jump in here.

QUESTION: Yeah.

MODERATOR: So October 18th is what we call adoption day.

QUESTION: Right.

MODERATOR: Starting on that day, the Iranians will begin to take all of the steps they are committed to take before they get sanctions relief. So that is 90 days from when the Security Council resolution passed. So October 18th, adoption day. Starting on that day, on and after that day, they will be taking these steps. At the conclusion of those steps, which we don’t know the date of that – it could be some months, as [Senior Administration Official One] referred to. That will be what’s called implementation day, when the IAEA will have confirmed that they’ve taken all these steps and then Iran will indeed get the sanctions relief that – the processes for getting that relief will begin according to what [Senior Administration Official Three] said.

Experts, correct me if I’m wrong on any of that.

SENIOR ADMINISTRATION OFFICIAL THREE: Can I just restate what I said to make sure I said it right the first time? So – because I kind of jumped ahead on you – ahead of you on the question, so I apologize.

So adoption day we have waivers that get issued that will not yet be effective. So this is not the suspension point, but this is the fact that we will issue waivers. They will not be effective; it will just be our preparatory work for later down the road. That waiver will become effective on implementation day, and when it becomes effective those waivers will continue to be renewed until ultimately eight years down the road when we seek legislative termination. So in the intervening period between adoption day and implementation day, despite the fact that that waiver will be issued, it will be ineffective and companies would not be able to engage in any of the activities that are prohibited under those regulations. After implementation day those regulations, those laws, would no longer be – would no longer be enforced, and they would continue to be waived until the end when we terminate them or seek termination in Congress.

QUESTION: Thank you.

MODERATOR: Now, let’s, Operator, go to the last question. Then I and maybe [Senior Administration Official One] could say a few things to wrap up. So go ahead and go to the last question.

OPERATOR: Okay. That comes from the line of Barak Ravid with Haaretz newspaper. Please go ahead.

QUESTION: Hi, thanks for doing this. A question to [Senior Administration Official One]. In the implementation part of the deal, I guess, will – part of it will be a lot of consultations with your allies? And I was wondering if one of your next trips might be to Israel to start discussing this.

SENIOR ADMINISTRATION OFFICIAL ONE: Yeah, I haven’t yet made a travel schedule yet. A lot of it’s going to be dictated by the needs of the various points in the implementation process, up to and including beyond implementation day. Obviously, we know that Israel is intently focused on this agreement, and we want to work very closely with them and keep very open channels of communication. So I can’t say where my first meeting with Israeli counterparts will be, but I can tell you there will be some.

MODERATOR: Great. And of course, as you know, Barak, and Prime Minister Netanyahu will be coming to Washington to meet with the President. Obviously, that will be a key meeting in terms of having discussions about where the relationship goes forward.

Just in terms of scheduling, so to get everybody on the same page before we take off here, you’ll see experts starting to meet again. They’ve been in constant communication, but you’ll see those meetings happening during the UN General Assembly, obviously. There’ll be a lot of activity. People will be in New York for that. There will be a lot of discussion about implementation of the deal. And then we’ll head towards October 18th, which, as we’ve said, is the day on which Iran will start taking the key nuclear steps. We don’t know how long those will take. They’ll take some months, and then after that point we will move forward with our commitments after they’ve done all of that. So I don’t know if, [Senior Administration Official One], you have any final words to say, and then after that we will wrap the call.

SENIOR ADMINISTRATION OFFICIAL ONE: Thanks, [Moderator]. I would just say at the end we know the whole world is really interested in the successful outcome of this agreement, and we’re going to be absolutely committed as a government as we go forward in implementing it in being transparent about what we’re doing. There are going to be a lot of questions and concerns from many sides as we go forward, and I view it as absolutely essential to our effort that we keep things transparent to the extent we can and open. So my team and I look forward to getting together in a format like this or in other formats as we go forward in the months ahead just to make sure that people have the opportunity to float questions and concerns and we can address them.

MODERATOR: Great. Thanks, everyone. Again, this is all as senior Administration officials. If you all have follow-ups or additional questions, you know how to find me, certainly. And with that, we’ll conclude the call and look forward to talking soon as we move forward. Thanks, all.



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