Parchin Revelations May Boost Criticism of Iran’s Potential Foreign Investors

The newfound publicity for the uranium findings illustrates, however, that while the IAEA may not have found evidence of very recent illicit activities, it did uncover information that arguably confirms the suspicions that already existed about Iran’s past work. This is how the White House officials interpreted the situation when speaking about the uranium findings in recent weeks.

Those findings involved only two particles of uranium, which the IAEA described as being too slight a basis for any firm conclusion. However, experts within the US government indicated that they find alternative explanations – such as that the particles were accidental contamination from the inspectors themselves or that they came from depleted uranium used in conventional weapons – to be implausible. Instead, they regarded the particles to be leftover evidence of nuclear weapons work that supposedly ceased over a decade ago, thus confirming earlier suspicions and undermining Iran’s persistent denials that it had ever used Parchin for nuclear research and development.

Still, the White House responded to the mention of uranium in the December report by privately deciding that it supported the notion that Iran had stopped the relevant work long before entering into the negotiations that concluded last summer. Instead of pushing the Iranian regime for confessions regarding its past activities, the Obama administration determined to look to the future and present the JCPOA as a means by which Iran’s further activities could be monitored even if it refused to come clear about Parchin and other activities.

Naturally, there was serious dissent against this approach, and the Wall Street Journal now reiterates that some critics believed that the White House didn’t go far enough and should have pushed for such retroactive transparency. Indeed, some nuclear experts argued that future monitoring of Iran would be greatly improved if the world community and the IAEA obtained a more complete account of the baseline from which Iran would be starting in any current rush for a nuclear weapon.

Insofar as the uranium aspect of the IAEA report was glossed over in the past, the newfound attention given to it by current reports also serves to reiterate the criticism that existed and still persists regarding the Obama administration’s assessment of the JCPOA and its broader policy toward Iran. Consequently, the reports may further contribute to the contentious dialogue regarding foreign investment in the Islamic Republic and the possibility of Western entities being penalized under current or renewed economic sanctions against it.

If this proves to be the case, it comes at a crucial time, as recent reports have indicated that Iran is in talks with what would be the first major US-based company to return to the Iranian market, if the prospective deal is finalized. Reports last week noted that Iranian officials had claimed that deal was already secured, but on Monday The Guardian indicated that it was still at the discussion stage. However, that same report confirmed that if the deal goes through and is given final approval by the US Treasury Department, it will involve approximately 100 commercial jets, thus nearly matching the 118 being sold to Iran by Boeing’s French competitor Airbus.

If the renewed scrutiny of Parchin leads to renewed outcry coming from the Republican-dominated Congress regarding White House policy on Iran, it may serve to undermine confidence in final US approval. And in a larger sense, it may simply make the Iranian market seem less stable.

In the meantime, this perception may be further encouraged by current conditions in the Middle East. Certainly, the region as a whole is notoriously unstable in general, especially given the rise of the Islamic State of Iraq and Syria in recent years. Yet there has been little indication that that conflict had seriously impacted domestic circumstances in Iran, even though the Iranian Revolutionary Guard Corps has been intimately involved in the defense of Bashar al-Assad in Syria, the fight against Sunni dissidents in Iraq, and the Houthi rebellion in Yemen.

But on Monday, Agence France-Presse and numerous other global news outlets conveyed Iranian claims about the disruption of a large-scale Sunni terrorist plot, thereby potentially giving the impression that Iran may not remain insulated from nearby conflicts for very long. AFP pointed out the previously, increased police presence in Iranian cities had led to speculation about possible terror threats. However, Iran denied this, perhaps partly out of concern for the impact that such threats would have on investor confidence.

Meanwhile, Iran’s involvement in these same conflicts threatens to further undercut investor confidence in an indirect way, given the effect of that involvement on regional competitors, chiefly Saudi Arabia. The Sunni kingdom backs non-IS Sunni rebels in Syria and the government of President Abed Rabu Mansour Hadi in Yemen. This has helped to stoke resentment between the two competing states at a time when Iran is trying to compete with Saudi Arabia to reclaim market share for its sanctions-damaged oil economy.

Especially following the severance of diplomatic relations between the two countries following attacks on the Saudi embassy and consulate in Iran, this situation has been characterized by some analysts as including “economic warfare.” Forbes reported on Monday that Iran had raised the prices of its oil in response to the Saudis doing the same. But this was apparently a short-term response to outside conditions, which will shortly evaporate to push prices down again. The Organization of Petroleum Exporting countries has been striving to stabilize depressed prices, but Iranian refusal to participate has prevented Saudi Arabia from seeing the plan through, for fear of Iran underselling its competitors and gaining too much wealth and influence.

Forbes indicates that Iran still refuses to cooperate with the Saudis and can be expected to continue pumping oil in an attempt to attract foreign investment, even if it has to cut prices. Meanwhile, Saudi Arabia appears to still be committed to forcing Iran into just such a position, thereby making prospects as unprofitable for Iran as possible, and potentially undermining investor interest that may also be held down by political scrutiny and regional instability.