March 29, 2021
US-Iran return to nuclear deal likely this year
[Notice: The Critical Threats Project frequently cites sources from foreign domains. All such links are identified with an asterisk (*) for the reader’s awareness.]
This essay offers an assessment and forecast of the course of negotiations to return the US and Iran to compliance with the 2015 nuclear agreement. It does not endorse or reject those negotiations, the deal, or any specific concessions or demands the US might make.
The US and Iran will likely have returned to compliance with the provisions of the 2015 Joint Comprehensive Plan of Action (JCPOA) by the end of 2021. The timing of such a return is unclear, and it is not clear that there will be a formal bilateral announcement of the resumption of compliance with the agreement. The return to compliance will likely be phased, with each phase characterized by the announcement of the lifting of some US sanctions followed by Iran’s return to compliance in some aspect of its program. This process may be formal and may or may not include verification by third parties. It may also be informal, with the US lifting or announcing its intention to lift some sanctions and Iran then bringing parts of its program back into compliance. The start of serious negotiations about Iran’s missile program, regional activities, or an extension of the sunset provisions of the JCPOA is very unlikely. The year will thus likely end with a straightforward return to the JCPOA as it was written with no meaningful changes or additions.
An alternate hypothesis that the supreme leader has decided or will decide against returning to the deal is considered in the appendix.
Efforts by the Joe Biden administration to return to the JCPOA are shrouded in the diplomatic and rhetorical theater common to almost any major hard-nosed international negotiation effort. Iranian officials have made various demands and interposed various obstacles to the establishment of a formal, overt negotiating process. American officials have made various offers, a few concessions, some demands, and a few oblique threats. Iran has rapidly escalated its violations of the nuclear provisions of the JCPOA, generating increasingly forceful rhetorical responses from the European signatories and even a warning from Moscow. But when all the theater and efforts to gain leverage are set aside, the outlines of the resolution are clear. The only real question is whether Iran’s Supreme Leader Ayatollah Ali Khamenei wants to rejoin the agreement on the terms the Biden administration is offering. One important data point suggests he does.
Iranian officials have been consistent in one demand throughout 2021: The US must lift sanctions before Iran either enters into negotiations or comes back into compliance with the nuclear provisions of the JCPOA. The near-unanimity on this point among Iranian leaders suggests the supreme leader has made clear his insistence on this issue. Foreign Minister Mohammad Javad Zarif has dropped or modified a demand for “reparations” for the economic damage to Iran resulting from the Donald Trump administration’s maximum-pressure campaign. The Iranian government has also repeatedly rejected the idea of altering the deal to extend the sunsets or of negotiating about Iran’s missile program or any other activities.
The US, for its part, has consistently refused to commit to lifting sanctions before Iran has come back into compliance with the agreement. It has also held to its determination to engage in negotiations about the sunsets and the missile program. It has, however, taken an action that could be construed as a small concession on February 18, 2021, by formally revoking the Trump administration’s assertion that it had activated the “snapback” provision of the JCPOA causing all UN Security Council–imposed sanctions to be reimposed. The Security Council and the other signatories to the JCPOA had all rejected the Trump administration’s assertion that snapback had been activated, but the Biden administration’s formal announcement of its revocation can be seen as a concession in that it was a change in the formal US position on the agreement. Rumors that the US either had allowed or would allow other countries to release frozen Iranian assets have also circulated. Both the US and South Korea have denied reports that South Korea would release Iranian assets frozen by Seoul, with the US announcing it would not permit that before Iran returns to compliance with the JCPOA and South Korean officials stating they would not act without US approval. An Iranian official’s statement that Iraq had released frozen assets has not been confirmed or denied.
Media reports of a stalemate or impasse resulting from the disagreement about the sequencing of the lifting of sanctions and Iran’s return to compliance are likely misleading, however. Zarif offered a framework for a piecemeal return to the deal along the lines outlined above on February 1, 2021. A Biden administration leak on February 8, 2021, indicated the White House was considering such an approach, which it dubbed “less for less.” Neither side has subsequently rejected a phased return to the agreement, despite all the vitriolic rhetoric surrounding other issues. A phased return to compliance by both sides thus remains by far the likeliest outcome of the Biden administration’s efforts to restore the JCPOA.
The phased-return approach has a major advantage for both sides, assuming that each desires a return to full compliance with the JCPOA: It does not require any formal negotiations, agreement, or announcement. Once the Biden team becomes persuaded Tehran will participate in a less-for-less approach, it can simply start by announcing it will lift a certain tranche of sanctions by a certain date if Iran complies with a specified part of the JCPOA nuclear conditions. The Iranians can then comply with that provision by that date, after which that tranche of sanctions can be lifted. This approach poses little risk to the Biden team’s objectives since sanctions can be waived with a presidential pen and reimposed with the same pen if the Iranians do not comply. It also poses little real risk to Tehran’s ambitions, since most of its overt nuclear escalations were likely aimed at generating leverage rather than creating real new capabilities. Undoing any escalations will not likely set the Iranians back in any objective they set out to achieve. That assessment is independent of the assessment, considered later in this essay, that the Iranian leadership has not decided to achieve breakout capacity at this time.
The disadvantages of this approach to both sides are therefore largely perceptual. The Biden administration can and likely will be accused of making preemptive concessions despite its promises not to do so. Iranian hardliners will assault the government for surrendering to US pressure by reversing any part of the parliament-mandated nuclear escalation steps before the US has fully lifted all sanctions. President Biden will likely accept the heat of such accusations in pursuit of restoring the agreement. Will Khamenei?
One important data point suggests he will. The head of the Central Bank of Iran announced on February 25, 2021, that laws bringing Iran into compliance with international financial-transparency regulations would likely be approved. The Iranian parliament passed those laws in 2018, but the laws were challenged and effectively tabled by Iranian government bodies largely controlled by the supreme leader. They are the target of ferocious attack by Iranian hardliners and the Islamic Revolutionary Guards Corps (IRGC) because they would expose both the corruption in which those individuals and the entities they control engage and the mechanisms by which they undertake and conceal that corruption. Subsequent discussion of the reconsideration of these laws revealed that the supreme leader approved President Hassan Rouhani’s request to review them now, an action that makes sense only if Khamenei desired to have them approved, since they were already effectively dead. Pressure against approving them is mounting, though, and their final fate is unclear.
But the supreme leader’s decision to reconsider these laws, likely favorably, in late February 2021 strongly suggests he decided he will likely accept the restoration of the nuclear deal. These laws are essential for luring international investment in Iran. Failure to pass them was one of the principal obstacles preventing Iran from receiving the full benefit of sanctions relief following the JCPOA’s implementation in 2015. They are far less important if Iran remains under sanctions than if the sanctions are lifted. European states and America’s Asian allies have shown no real willingness to invest in Iran while full American sanctions remain in place. Russia and China, on the other hand, are likely far less concerned about Iran’s compliance with international financial standards, though it is conceivable Khamenei thinks he has to show more transparency to attract investment from Chinese businesses. It is therefore hard to read Khamenei’s decision on these laws as anything other than laying the groundwork to allow Iran to benefit from the lifting of sanctions following the resurrection of the JCPOA. That assessment stands whether or not the laws are approved. Khamenei could ultimately decide the domestic price of approving them is higher than he is willing to pay for the benefit. He may also wait to allow their approval until he is certain that US conditions for lifting sanctions will be acceptable. His original decision to encourage their approval at all nevertheless indicates his expectation that Iran will return to the deal.
The timing of the start of any recompliance process is unclear. The Iranian government has said it desires to have sanctions lifted before a new presidential administration takes office, which would likely occur in July 2021. Zarif and other Iranian officials are increasing rhetorical pressure on the US to lift sanctions quickly, warning that failure to do so before the election could impose a long delay on the process as a new Iranian administration settles in. The US government is not responding to this pressure with any public signs of concern about any delays. Experts’ assessments of the significance of the Iranian elections for the fate of the JCPOA are mixed, but the administration appears to have decided it does not have to restore the deal while Rouhani is in office.
This view is likely correct. Rouhani’s successor is likely to be a hardliner, quite possibly an IRGC general, who opposes the JCPOA. They would certainly be a much more difficult negotiating partner than Rouhani is and might interpose obstacles and delays in a phased restoration of mutual compliance. But the supreme leader is the final decision maker in Iran. If he has decided to bring Iran back into compliance in return for sanctions relief, the Iranian president will have to accept and implement his decision. The balance of preelection pressure therefore rests more heavily on Rouhani than on Biden.
The timing of any restoration of compliance with the deal does affect the likelihood of any formal agreement or announcement. Rouhani has an interest in taking credit for “compelling” the US to lift sanctions and restoring the deal on which he staked—and largely lost—his political capital. A hardline successor is much less likely to want their name prominently associated with a straightforward restoration of an agreement they have most likely loudly opposed. They might be willing to take credit for a different deal they could portray as more beneficial to Iran, but the path to negotiating and implementing one would likely take far longer than the Biden administration would be willing to accept without having secured a return to the JCPOA as it currently is. If a formal or de facto agreement is not reached before the new Iranian administration, therefore, the likelihood of an informal, private, or de facto arrangement rises significantly.
None of these nuances affects the likelihood that Iran will engage in serious negotiations about its missile program or extending the sunset provisions of the JCPOA, to say nothing of curtailing its regional activities. That likelihood approaches zero. All senior Iranian officials, including Rouhani and Zarif, have repeatedly rejected engaging in any such negotiations. The supreme leader has also done so. Hardline presidential candidates have opposed such negotiations as well.
The Biden administration would lose its primary sources of pressure to demand further negotiations once it returned to full compliance with the JCPOA, moreover. The sanctions the agreement requires the US to lift are more than sufficient to satisfy Tehran for quite some time. Iran’s experience when those sanctions were lifted shows that bringing investment back to Iran will be a slow and difficult process, a fact that effectively reduces the value and importance of remaining sanctions, which were not the primary obstacles hindering foreign investment. The Biden administration’s frequently reiterated determination to avoid conflict with Iran, reduce US support for Iranian adversaries Saudi Arabia and the United Arab Emirates, and withdraw American forces, including carrier battle group rotations from the Middle East, also reduce pressure on Iran.
If the Biden team hopes to bring Iran to the negotiating table to get concessions its predecessor could not gain in 2014, therefore, it will likely have to offer a lot more in return. Its recognition of this fact is captured in the phrase “more-for-more.” But Tehran has said and shown it values its missile and drone programs at least as highly as it does its nuclear program. The missile program can be seen as existential for the regime since it is Iran’s principal deterrent against nuclear-armed Israel and the US’s overwhelming conventional military power. The prospect of adjusting the JCPOA to Iran’s perceived detriment by extending restrictions the regime has repeatedly called unjust even when it accepted them will also raise tremendous antibodies in Tehran. The absence of an amenable interlocutor in the Iranian presidency will raise the bar for any such negotiations even higher.
Considering the leverage the Biden administration will already have conceded even before attempting to launch new negotiations, it would likely have to offer enormous concessions to persuade Khamenei to drink more deeply from this poisoned chalice. Iran would likely insist on the full lifting of all US sanctions and a US security guarantee for the Islamic Republic. Khamenei’s suspicions of the US are so high he might demand the withdrawal of US forces from the Middle East and a commitment not to send certain categories of military forces back to the region. It is hard to imagine that even those concessions would be enough to persuade Iran to give up or seriously curtail its missile program, which is aimed at both threatening and deterring Israel as well. It is also hard to imagine what guarantees Iran would accept vis-à-vis Israel, short of its denuclearization, in return for giving up its missiles. An agreement seriously constraining Iran’s missile program would thus likely require a fundamental geopolitical transformation of the Middle East—something unlikely to be accomplishable within a single presidency, if at all—or an unexpected transformation of the Iranian regime.
President Biden can thus likely obtain a restoration of the 2017 status quo but not a change to it. That includes a timeline of declining restrictions on the Iranian nuclear program that begins in 2023 and continues for seven years. After that phaseout, the primary meaningful constraints on the Iranian nuclear program will be its commitments under the Nuclear Non-Proliferation Treaty and its Additional Protocol. Iran’s missile and drone program will continue to advance and expand unchecked, and Iran will continue to pursue its regional activities at its discretion.
Appendix: Alternate hypotheses
The supreme leader may be willing to reenter the JCPOA, but only if the US meets his maximalist demands. His Nowruz speech reiterated the demand that the US first remove all sanctions, and Iran verify the sanctions have been removed, before Iran returns to its JCPOA commitments. This rhetorical line is not new and reflects Khamenei’s consistent public position. It is an obvious negotiating ploy, but it could also reflect his final offer. He refers in this speech, as in many previous speeches, to the perfidy of the US in pulling out of the deal and states Iran cannot and must not trust the US to honor any agreement. Khamenei may be unwilling to accept any partial reentry or any reentry plan that does not see the US fully lift sanctions for some time before Iran comes back into compliance.
The Biden administration will likely find it very difficult to accept such terms. It would amount to a complete reversal of repeated policy statements that the US will not lift sanctions before negotiations. Defending a partial reversal of those statements in the context of a less-for-less agreement would be much easier than defending the complete abandonment of that position. If the supreme leader stands on this position, therefore, resuming the JCPOA this year becomes unlikely.
Evaluating the supreme leader’s likely willingness to accept a less-for-less deal thus rests on evaluating his willingness to reenter the deal or allow it to remain dead. That is the subject of the next alternate hypothesis.
The supreme leader may not wish to rejoin the JCPOA or may be willing to allow the deal to fail if his maximalist demands are not met. There is ample and insufficiently examined evidence that the supreme leader does not regard a resumption of the JCPOA as in Iran’s interests. He suggested the deal itself might have been a mistake:
Some say . . . opportunities should not be lost. Yes, we also believe that opportunities should be seized, and opportunities should not be lost, but do not rush either. Haste is sometimes more dangerous and harmful than losing an opportunity. An example is that we in the case of the JCPOA . . . we hurried to do our work. And they did not do their work. They did not fulfill their commitments.
But Khamenei’s reluctance to rejoin the deal stems from more than his suspicions of the US. Rouhani advanced the deal in the first place based on a view of Iran’s interests that argues for deepening Iranian involvement in the global economy. Rouhani has argued that Iran can defend itself against future sanctions by entangling itself so deeply with the European and Asian economies that America’s allies will not accept the pain of imposing or adhering to renewed sanctions in the future. He also argues Iran will benefit most from accepting globalization and trading extensively with the world. The assumption that Iranian leaders hold this view has likely framed the entire US approach to pursuing the JCPOA and its resurrection.
Khamenei has repeatedly and explicitly rejected that view of Iran’s interests, however. He continually advocates for autarky, a position he reiterated forcefully in his Nowruz speech. Hardliners repeatedly echo this position, arguing that Iran can produce whatever it needs domestically and that an autarkic economic model would sanctions-proof Iran forever.
The Biden administration should not dismiss the possibility that Khamenei really means it. If he sincerely believes Iran is better off with an autarkic economic model than with an integrationist one, he may see the JCPOA as bad all around. It imposes constraints on the Iranian nuclear program in return for benefits Khamenei sees as inherently harmful. In this case, he may either refuse to reenter the agreement or continue to make demands he thinks the US cannot or will not meet to sabotage any reentry.
This hypothesis is the least likely of those considered in this essay. Khamenei could simply end the discussion by refusing to entertain a return to the deal, and he has not done so. He has said, on the contrary, he would reenter the deal on certain conditions that create space for negotiation. He has directed his subordinates to obtain sanctions relief if possible. It is also noteworthy that Mohammad Bagher Ghalibaf, the hardline speaker of Iran’s parliament, has called for the government to get sanctions lifted. The secretary of Iran’s Supreme National Security Council, Ali Shamkhani, also continues to suggest that Iran desires sanctions to be lifted. Shamkhani is among those most likely to voice Khamenei’s desires accurately (his position is closest to that of the US national security adviser) and is very unlikely to be far away from the supreme leader’s positions. These statements all suggest Khamenei desires having sanctions lifted, despite his apparent preference for autarky.
But Khamenei appears to be much more ambivalent about the value of the JCPOA than many in the West seem to accept. The fact that an autarkic approach to Iranian economics would be devastating for the Islamic Republic does not mean Iran’s ideological leader might not seriously prefer it. His ambivalence could lead to intransigence that the Biden administration does not feel it can meet with concessions, which could, in turn, lead to both sides failing to return to their JCPOA commitments.
The supreme leader may have decided to pursue a nuclear-weapons breakout capability. We cannot dismiss this most dangerous course of action. Iran has continued work on various missile systems, including satellite launch systems, that could support work needed to develop reentry vehicles suitable for nuclear-weapons use. Some of Iran’s violations of the JCPOA, moreover, likely help Iran make permanent advances toward a breakout capability even if they are rolled back. The installation of cascades of advanced centrifuges and experiments with using them to enrich uranium, all barred by the deal, provide valuable experience and lessons learned for Iranian engineers even if those specific cascades are subsequently dismantled and the enriched uranium downblended. The various concerns raised by inspectors of the International Atomic Energy Agency about undisclosed or unexplained materials or facilities also raise the possibility that Iran continues to pursue research and development covertly.
Evidence to support this hypothesis is thinnest of all, making it impossible to assess with any degree of confidence. It is included here for completeness and to highlight how Iran has the technical capability to pursue nuclear-weapons breakout whenever it chooses, and it clearly was doing so in the early 2000s. US policymakers must examine this given that Khamenei, let alone his successor, will continue to make this choice indefinitely. They must also constantly consider the possibility that he has changed his mind about the desirability of pursuing a nuclear-weapons arsenal, particularly if he has decided Iran does not need the sanctions relief available if he returned to the JCPOA.
 The author is extremely grateful for the superb work and support of Iran team lead Nicholas Carl and the Iran team interns Sahar Soleimany, Samuel Ramtin, and Zahid Ali. This assessment draws from the outstanding tracking and assessment they conduct daily of Iranian regime statements and activities.
 Nicholas Carl, “Iran File: Iran Prepares for Nuclear Talks with Joe Biden’s Administration,” Critical Threats Project at the American Enterprise Institute, January 19, 2021, https://www.criticalthreats.org/briefs/iran-file/iran-file-iran-prepares-for-nuclear-talks-with-joe-bidens-administration; and Reuters Staff, “Election Looming, Iran’s Rouhani Says Hardliners Sabotage Goal to Lift Sanctions,” Reuters, March 17, 2021, https://www.reuters.com/article/us-iran-nuclear-idUSKBN2B91CX.
 France 24, “France, Allies to Lodge Complaint at UN Nuclear Watchdog over Iran’s Activities,” February 3, 2021, *https://www.france24.com/en/middle-east/20210302-france-allies-to-lodge-complaint-at-un-nuclear-watchdog-over-iran-s-activities; and RIA Novosti, “V MID prizvali predotvratit’ krizis v situatsii s iranskoy yadernoy sdelkoy” [Foreign Ministry Urged to Prevent Crisis in Situation with Iranian Nuclear Deal], March 17, 2021, *https://ria.ru/20210317/sdelka-1601674902.html.
 Ali Arouzi and Saphora Smith, “Iran’s Ballistic Missile Program is Non-Negotiable, President Hassan Rouhani Says,” NBC News, December 14, 2020, https://www.nbcnews.com/news/world/iran-s-ballistic-missile-program-non-negotiable-president-hassan-rouhani-n1251072.
 Reuters Staff, “U.S. Seeks to Extend, Strengthen Nuclear Pact with Iran, Blinken Says,” Reuters, February 22, 2021, https://www.reuters.com/article/us-iran-nuclear-us/u-s-seeks-to-extend-strengthen-nuclear-pact-with-iran-blinken-says-idUSKBN2AM1NN.
 Michelle Nichols, “U.S. Rescinds Trump White House Claim that All U.N. Sanctions Had Been Reimposed on Iran,” Reuters, February 18, 2021, https://www.reuters.com/article/us-iran-nuclear-un/u-s-rescinds-trump-white-house-claim-that-all-u-n-sanctions-had-been-reimposed-on-iran-idUSKBN2AI2Y9.
 Agence France-Presse, “Blinken: No Iran Funds from S. Korea Before Nuclear Compliance,” Voice of America News, March 10, 2021, https://www.voanews.com/usa/blinken-no-iran-funds-s-korea-nuclear-compliance.
 Arshad Mohammed and Jonathan Landay, “Iran's Zarif Hints at Way to Bridge Nuclear Deal Impasse,” Reuters, February 1, 2021, www.reuters.com/article/iran-usa-nuclear-int/irans-zarif-hints-at-way-to-bridge-nuclear-deal-impasse-idUSKBN2A13HW.
 Arshad Mohammed and John Irish, “U.S. May Weigh Baby Steps to Revive Iran Nuclear Deal,” Reuters, February 8, 2021, https://www.reuters.com/article/usa-iran-nuclear-int/u-s-may-weigh-baby-steps-to-revive-iran-nuclear-deal-idUSKBN2A82C4.
 Iranian officials have been adamant that they will not resume negotiations about the JCPOA or anything else until sanctions are lifted. That stance is not at odds with a less-for-less approach that does not require any formal negotiations. As noted below, Iran can simply match US partial sanctions relief with partial compliance without any formal agreement with Washington. Foreign Minister Zarif indicated that Iran would not accept a step-by-step agreement, but President Rouhani quickly corrected him. One can read the supreme leader’s Nowruz speech as rejecting any sort of less-for-less approach, but one can also read it as the continuation of a bargaining approach and the way Khamenei will shape the public narrative even if he accepts less-for-less. We consider the possibility that his statement does reflect his actual position in the appendix. Iranian Students’ News Agency, “Rouhani Khetaab beh Amrikaa: Emrouz va Fardaa Nakonid” [Rouhani’s Address to America: Do Not Do It Today and Tomorrow], March 10, 2021, *https://www.isna.ir/news/99122015213; and Omer Carmi, “Khamenei Continues Playing Hardball in Nowruz Speech,” Washington Institute for Near East Policy, March 22, 2021, https://www.washingtoninstitute.org/policy-analysis/khamenei-continues-playing-hardball-nowruz-speech.
 The purpose of this assessment is to consider the likely path of the Biden administration’s efforts to restore the JCPOA. This assessment does not evaluate or take any position on the JCPOA itself or on attempting to restore it. References to the advantages to the US of any particular approach are meant only within the context of the Biden team’s stated policy objectives.
 This assessment stands regardless of the validity of the argument made in R. James Woolsey et al., “Iran Probably Already Has the Bomb. Here’s What to Do About It,” National Review, March 19, 2021, https://www.nationalreview.com/2021/03/iran-probably-already-has-the-bomb-heres-what-to-do-about-it/. The specific violations of the JCPOA Iran has undertaken over the past year or so are separate from the bases on which Woolsey et al. argue that Iran could already have nuclear-weapons capability, which revolve primarily around undeclared nuclear facilities and the ability to field operational nuclear weapons without testing them. If the Iranians have such facilities and capabilities, the scaling back of activities in the declared facilities will leave them unaffected.
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 Reuters Staff, “Iran’s Missile Programme is Non-Negotiable, Says Rouhani,” Reuters, December 14, 2020, https://www.reuters.com/article/iran-nuclear-usa-int/irans-missile-programme-is-non-negotiable-says-rouhani-idUSKBN28O1KU; and Tehran Times, “Zarif Utterly Rejects JCPOA Renegotiation,” March 5, 2021, *https://www.tehrantimes.com/news/458785/Zarif-utterly-rejects-JCPOA-renegotiation.
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 Carmi, “Khamenei Continues Playing Hardball in Nowruz Speech.”
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 Tehran Times, “Ghalibaf: Iran’s Fate Not Hanging on Arizona, Georgia, Michigan,” November 15, 2020, *https://www.tehrantimes.com/news/454669/Ghalibaf-Iran-s-fate-not-hanging-on-Arizona-Georgia-Michigan.
 Parisa Hafezi, “Iran’s Supreme Leader Reappears in Public, Hits Out at U.S.,” Reuters, December 16, 2020, https://www.reuters.com/article/iran-khamenei-int/irans-supreme-leader-reappears-in-public-hits-out-at-u-s-idUSKBN28Q0XJ.
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 Amanda Macias, “Iran Launches First Military Satellite in Latest Show of Force,” CNBC, April 22, 2020, https://www.cnbc.com/2020/04/22/iran-launches-noor-its-first-military-satellite.html.
 Jack Dutton, “Iran Must Come Clean About Hidden Uranium to Revive Nuclear Deal, IAEA Chief Warns,” Newsweek, March 23, 2021, https://www.newsweek.com/iran-must-come-clean-about-hidden-uranium-nuclear-deal-iaea-chief-1578158.