 some kind of reimposition of sanctions. So it kind of takes the veto equation, the UN veto equation out of reimposition of sanctions. Is that? That's exactly right. So if any state party, obviously, keep on talking as if this is a treaty, if any party to the agreement submits a notification to the security council saying there has been a violation, sanctions will automatically be reimposed 30 days later. There's a whole dispute resolution mechanism to go through first, but that's kind of the business action. In order not to reimpose sanctions or in order to reimpose only partial sanctions, you would have to have another resolution. So if Russia or China, say, submitted another resolution saying no, no, no, we don't want any sanctions reimposed on Iran, the US could always veto that resolution. So any one party always including Iran for that matter, not that it would be rational behavior for Iran to reimpose sanctions itself, but any one of the seven states that's part of this agreement has the power to reimpose sanctions. Okay, thank you very much for sketching that out for us. Tanaka-san, let me ask you just quite simply how this is all viewed from Tokyo in terms of the lead up to the conclusion of the deal and kind of where we go from here. Is this a burden and opportunity? What is the general view? Yeah, sure. Japan is quite happy with the deal itself given its non-proliferation longstanding policy of pursuing promoting and promoting non-proliferation activities. Now, given the deal, we could say that yes, Japan or Japanese businesses could re-enter the Iranian market because in the past years, the severe amount of the US and other unilateral sanctions and not to forget the United Nations Security Council resolutions have made it quite difficult for even for us to deal with Iran and especially when we were lifting certain amount of Iranian crude oil that had say created an obstacle for us to import Iranian crude. Now that the sanctions relief is within the framework of JCPOA, we believe that this could open the way or gate for the Japanese businesses to re-enter the Iranian market. But having said that, that is basically still on paper and we need to actually move quite cautiously forward to see whether this is the case or not. There are several bankings or the financial sanctions that were heavily placed on Iran by the Treasury here in Washington and that has made a lot of foreign banks including the Japanese banks to stay away from dealing with Iran and that sort of an atmosphere hasn't changed much and that sort of a force, I mean, even if it may not be enforced, a threat that in future, once again, these kinds of say severe sanctions, banking sanctions would be placed and that these banks will be heavily penalized, the threat is there and the concerns remain. But also I would like to say that if the sanctions regime is not lifted or does not move in a way that the Iranians have anticipated, eventually it could jeopardize the entire framework of this JCPOA. Of course they are in the way of lies to comply with what they have committed already. But if the government of Rouhani, present Rouhani, could not deliver the actual of what is actually on the text and to change it to a reality, then he would start facing severe challenges from his own entity within the government and also from the Majlis, even though that the recent elections in Iran have placed a more say moderate figures into the next forthcoming next session of the Majlis. Still the Majlis themselves have a way of thinking and that would not make the life for the present easy. And just a week ago, given the Iranians were celebrating the Noruz, their New Year's holidays, there was a contradicting statement coming from two political leaders, one from Ayatollah Haminay, the Supreme Leader and the other from the President himself. The Ayatollah was quite frustrated about the conditions of today's sanctions removal. He considers that it is not enough and that there are obstacles created by or at least presented by the United States and others that the sanctions relief would not work in reality. While the President was trying to persuade the government, persuade his own people that gradually the sanctions are being removed and that the Iranian economy is on its path for revival. Oh, thank you. And Suzanne, so I guess if I'm looking at national interest perspective from Japan, clearly you mentioned Tanaka-san, the non-proliferation interests. I assume there's essentially a broader regional stability interest in the Middle East, but this business opportunity, this economic interest is certainly clearly there. Suzanne, before we dive into some of the developments within Iran and their view on this deal, from the U.S. perspective, how would you assess kind of how Washington assesses its national interest in the context of this deal? I mean, clearly it was a highly contentious issue, did not necessarily pass with a majority of support, political support within the government, but we have it now and how do you evaluate U.S. interests in this respect? Thanks very much and thank you for allowing me to be part of this very interesting conversation, particularly the last panel and the parallels and disconnects with the North Korea negotiations. I think leave us all with a lot to discuss. In terms of the U.S. interest in this deal, it was quite clear that President Obama from even his time on the campaign trail as Senator Obama was interested in pursuing negotiations with Iran on this particular issue. He made it a priority of his administration, continuing to pursue diplomacy with Iran even at moments when the political fortunes from the Iranian side did not seem particularly opportune. I would point to there, the October 2009 fuel swap deal that was quickly disavowed and quickly collapsed under political differences between the two sides. It came only months after the eruption of political discontent and massive protests in Tehran. This was an administration here in Washington that was looking for diplomacy, toward diplomacy, to address the nuclear issue with Iran. My own presumption, and it's from the reading of the various interviews that the President has given on this issue and including the most recent one which Jeffrey Goldberg published in The Atlantic, is that in a region that was particularly beset by turmoil, the President viewed the nuclear issue with Iran as one very urgent threat where there was some potential for identifying common interests and striking a bargain that was mutually worthwhile to both sides. And as I said, he continued to pursue this. He launched or authorized the back channel diplomacy that went on again during the sort of least opportune moments of the Ahmadinejad presidency in Tehran and which came to fruition in many respects after the election of Hassan Rouhani as Iran's President in 2013. For the President, the sanctions regime that was put in place on Iran was always a means to an end and the end was this nuclear deal. So his rationale for doing so wasn't simply about the region security, but I think as he articulated in the interview with Jeff Goldberg most recently, this deep and abiding commitment to non-proliferation and interest in seeing potentially the most urgent and destabilizing threat to the global non-proliferation regime managed, if not perfectly cured through some sort of negotiated arrangement. And now that we have that, I think it's quite clear that the President is continuing to and determined to see it forward, to see it implemented in full and to see it succeed in terms of achieving the very objectives that it was intended to do. But as Tanaka-san has suggested, we have a fundamental ambivalence here in Washington which is that we are committed to seeing the deal through committed to the implementation of the deal, but the deal does not even begin to solve are the broader sets of issues and concerns that we have about Iranian behavior and we will be using the same tools we continue to have in place of fairly onerous sanctions regime on Iran, using the same tools that we have promised to forestall as part of the nuclear deal to address those other concerns with respect to Iran. And simply with respect to our other partners around the world whose cooperation, including in a special in Japan is cooperation made the nuclear deal possible. They have now a very different set of interests in looking at Iran, which is to say that they are free to pursue their economic interests, whereas the US government will continue to be organized in such a way as to try to prevent the facilitation of business with Iran, except in so far as those avenues that have been laid out under the JCPOA permit. And so I think the alliance relationship becomes even more important today than it was during the long lead up to the JCPOA itself. And continuing to ensure good consensus between the US and its most important allies, and particularly those allies that have historically important trade and investment relationships with Iran is probably going to be a crucial aspect. So can I ask a little bit more detail then when you talk about, in a sense, the US is almost encouraging Japan to kind of help follow through or join the follow through in the areas that are allowed now or encouraged, but that there are other areas of economic engagement or that are kind of still linked to either bad behavior on missiles or bad behavior on support for terrorism or et cetera. Where do those lines fall in terms of what type of economic activity engagement with Iran is kind of open now, and encouraged in that sense. Either. I'll start. And I think most importantly and often I think undervalued here in Washington is that the comprehensive trade and investment embargo for US businesses remains almost wholly intact with respect to Iran. So there are a few carve-outs that are included in the JCPOA, particularly for airline parts. Continuing carve-out, which is true of all sanctions under US law for agriculture and medical products, and some carve-out potentially for licensing foreign subsidiaries of US companies to do business with Iran. But in effect, the rest of the US trade embargo on Iran stands. So in fact, no US person, whether inside the US government or not, can have any role in facilitating any kind of business with Iran even by third countries and third companies. That said, of course, the Treasury Department has to make good on the sanctions relief that was committed under the deal and did so through waivers and has done so through additional provision of guidance to US companies that are looking to understand what they can and cannot do, in particular the airline parts and airline sales. But there are a number of other very powerful measures which were very much part of the sanctions regime that led up to the deal that can target transactions between Iran and their Iranian entities and third countries that continue to, I think, reinforce this sense of over-compliance in the global financial sector, which is that the long reach of the US Treasury Department to target particular transactions, particularly back in time, sometimes stretching back several years between financial institutions and Iranian entities which are determined to be involved with terrorism, involved with other aspects of Iranian behavior that are specifically designated under US law, makes banks sort of look at this and say we need to be very careful before we tread into this waters because we could find ourselves in two years the subject of a judgment by the Treasury Department that we had in fact dealt with a designated entity. The lack of clarity surrounding the role of the revolutionary guards and its function in the Iranian economy also compounds this sort of difficulty on the part of companies and financial institutions around the world outside of the United States to ensure that they are in fact following US law and not sort of getting themselves potentially in a situation where they have exposed themselves to some kind of legal vulnerability. So I think that there is going to be a very, there's been a rush to travel to Iran, business tourism is at an all time high, but I think particularly major deals, ones that rely on considerable external financing are going to inevitably move relatively slowly and that raises the very specter of Iranian dissatisfaction that my fellow panelists spoke to. Right, right, and yet that satisfaction in some ways is critical to kind of keeping some of the momentum going. Tanaka San, please. Apart from what Susan just mentioned, I'd just like to point out that there are certain items that are off limits in dealing with Iran, like the high tech commodities and also some export regulated items that may not be allowed to ship to Iran. And these are the lines that the businesses, regardless of being a Japanese or European or any third country, apart from the United States, when dealing with Iran, they have to be extremely careful of what they're trying to sell and who to sell being the counterpart entity, whether it's the IRGC related entity or not. It's quite clear that on the SDN list of the treasury, there are a lot of names of entities and individuals, but actually it's not that clear whether these are all, these are all and that what sort of a connection the other party would have with these certain individuals or entities that are listed there. And to find out, finding out whether they are clean or not is very difficult. And when you start sort of, when you start entering into a business negotiation with the Iranians or a Iranian entity, one particular aspect that I always find it quite amusing, if I may use the term amusing is that they try to say, portray themselves that they have good connections within the government or government entities that they are say, first of all, a reliable and also a well-connected partner to do the business in Iran and with Iran. But that usually tends to mean that they are some, in a larger sense, that they are somehow connected with a high probability with IRGC. And that's sort of a conundrum is always there. And for the ordinary Iranians, they, I mean, they do dislike the IRGC because they bully in their daily life. But at the same time for the businesses within Iran, even for the private sector, they consider sometimes these kinds of well-connected entities and powerful people very useful because they can find a way to extradite some of the business transactions and even custom clearances. So they sometimes are very proud that they have that sort of a connection within themselves. And we have, on our part, we have to be extremely careful of those. But does that mean that we have to really go only for those who say that we are not totally connected with the government entities or have anything to do with the personnel in the government? Right, right. Well, James, let me ask you a little bit, then because a key issue is how motivated Iran or the Iranian leadership is to implement this deal, they clearly seem to be motivated for these economic reasons and they're demonstrating that in the context of performance to date on the requirements that they've been given in terms of disclosure and moving towards collaboration or cooperation with the IAEA on the transparency and verification, how has that gone so far? Kind of the mechanics of the implementation of the verification side, what does that tell you in terms of their motivation? Well, the implementation of the nuclear part of the deal, I think has gone very well so far. You know, the IAEA and its most recent report, the only issue was Iran's stockpile of heavy water, very, very briefly by a small amount exceeded the limits that were required. And then that was while heavy water was being shipped, being packaged to be shipped out of the country, so then the stockpile of heavy water dipped back down below the limit. The fact that the IAEA reported that I think has set a very good precedent that any violation of the deal will be reported. The fact that it was very clear that it was kind of an inadvertent breach that was minor and very short lived and was corrected immediately, I think was a good sign for the implementation of the nuclear part of the deal. Much more problematic, I mean, has been the implementation of the bits of issues that were never really covered in the deal. And I can alluding here to Iran's ballistic missile program. You know, there are no limitations on ballistic missiles in the deal itself. There is some pre-vague language in the Security Council resolution. And the concern, Iran has been testing ballistic missiles, the US has already put one round of sanctions on Iran, which happened the day after implementation day. And the question that I have here, and I don't know the answer is, how long is this sustainable for? I mean, is it sustainable for Iran to test ballistic missiles? We put sanctions on Iran, we just keep on doing that and that's just the price of doing business. Or at some point is one side or the other gonna get a bit fed up with what's going on and the deal will start to come apart on an issue that actually really isn't covered by the deal. In terms of what implementation tells me about the views of the Iranian government or its different components, actually very little in my opinion. I mean, you know, I'm no expert on Iranian domestic politics. I mean, Suzanne knows much more about Iranian domestic politics than I do. But the conventional wisdom is that within and, you know, amongst the supporters of the deal within the government, there's kind of the people who in principle hate the deal but view it as the least of various evils and very, very strongly don't want it to turn into a border rapprochement with the US. And then there are people who actually kind of view it as potentially the first step of turning into a border rapprochement of the US. At this stage, either side has incentives to comply with the deal. So the fact that Iran is complying with the deal actually doesn't really tell me much about the relative power balance between those two constituencies. Well, since we have Suzanne and Tanaka-san here, let me ask you your assessment. How precarious is this agreement within the context of Iranian politics and the results of the recent election? Both of you, yeah, please. Well, let me go first. Yes, there are opponents and there are those who support them and there are those who are optimistic about the future and there are those who are skeptic from the beginning, quite skeptic about the entire agreement. But having said that, I think the key issue or the core issue here is how to sustain this agreement itself for the Iranians. If this falls apart, I think there are no other options for them. They would certainly get severe sanctions back into place and they have to live with that until there is another opening, hopefully within another 20, 30 years time. And how long would that be enough for the people to manage their livings? And that is a question they have to ask. But there are other issues as well. I'd like to say that for the Iranians, especially for those so-called hotline elements that have been opposing the deal, first the negotiation and then the deal, they have a very perverse element or perverse nature when they express their antagonism against the deal or any negotiation with the United States. When they see that the other party, maybe it could be the United States, it could be Japan or any other third party, are comfortable with the deal. They consider that the negotiating team led by Foreign Minister Zarif have given up their national interests in the eyes of the Americans or the others. But when they see that there is a certain amount of dissatisfaction amongst their neighbors or the international community, then they are quite happy about that because that shows that they haven't given up everything. So at least if the international community unilaterally or unanimously supported the deal, I believe the internal conflict or internal opposition to the deal itself would have been much higher. But so far, surprisingly, this sort of a balance was well maintained domestically inside Iran. I believe in a way that the Israelis and some other neighbors of Iran have helped in the way by opposing the deal. Yeah, I think that's an excellent point. And if you want further evidence of it, you need only look at Tabnak, which is a very influential Iranian news website run by a former commander of the Revolutionary Guards. Published an interview last week with the deputy foreign minister, Arakji, who is someone who's been part of the negotiation since the Ahmadinejad period and is considered to be a bit more hard line leaning than perhaps his boss, foreign minister Zareef. And Arakji emphasized how much sort of contention there was in the negotiations, how they often almost came to blows, how security had to be called in on multiple occasions and people were concerned about the safety of one another because they were getting to such difficult issues. So I think you've heard some of this before also from Zareef who won great acclaim for demonstrating Iranian resolve and refusal to push back, at least by his Twitter account. I think there's a bit of an imbalance in the domestic opposition on both sides. You often hear, well, they have hard liners, we have hard liners, they have opposition to the deal, we have opposition to the deal. I don't think there's actually an equivalence there. I think that the opposition within Iran was much more significant around the decision to come to the negotiations in the way that they did in the summer of 2013 and to pursue this deal in the way that they did. There was a lot of contention. You even heard repeated speeches from the Supreme Leader Ayatollah Khamenei laying out red lines that were totally unsustainable. All sanctions must be removed, was one of them and many others that were completely inconsistent with the stated objectives of the United States and the other members of the P5 plus one. So there was a debate within Iran as the negotiations were going on. I think once the deal was concluded and once it had, and it was only concluded with the approval of Ayatollah Khamenei, there was less contention around the implementation and I think that's part of the reason why the Iranians move more quickly than at least some of the experts on this side expected that they might in terms of fulfilling their obligations under the early part of the deal. And why I don't get as concerned when I hear the pushback or the criticism from Revolutionary Guards and others who are identified as hardliners on the Iranian side. I think the greater concern is this concern about disillusionment. We've seen this from Khamenei in the past where he in fact, he had to have approved the 2003 agreement that Rouhani negotiated for suspension of Iran's uranium enrichment, the Paris Accords. And yet by 2005, he was convinced that Iran had been sold a bill of goods and he had in fact Rouhani during his eight years out of the role of nuclear negotiator was very much in the political hinterlands. He was routinely criticized, publicly criticized, viciously criticized even by Ayatollah Khamenei for his role in negotiating that deal. So I think that the concern that we all need to have as Tanaka-san has suggested is how do we sustain this deal? How do we avoid the situation in which the Iranians feel as though they didn't get what was promised to them? And there I think we have to be very careful because I think there's a degree of utilitarian rhetoric on quite a degree of utilitarian rhetoric on the Iranian side. When Ayatollah Khamenei comes out in his Noru's speech and says, we haven't had the sanctions relief we were promised, I have no doubt that Javad Zarif understood very clearly what the limits of US sanctions relief was going to do for the Iranian economy. I have no doubt that Rouhani and his economic advisors did as well. How far and how articulately they communicated that to the Supreme Leader, I can't say. But the Iranian side was well aware that this was not going to be a sort of speedway to massive and quick new investment in Iran. It was going to be an open door, but with a lot of potential roadblocks along the path. And so I think we have to be careful not to use every sort of sound of concern from Iran as evidence that in fact we need to be doing more to help reassure them that we have in fact done what we've done. In effect, if Iran continues to abide by the deal and correspondingly if Iran's behavior and other aspects of its foreign policy does not create the perception among the international business community that there are potentially other risks out there that we have to be watching for, then I think we will see the kind of investment that Iran is looking for begin to flow in in the fashion that Iran's president and others are hoping to build upon. But if in fact we see a situation in which the banking restrictions remain so opaque that the concerns of the international community about the reliability of their investment in Iran and this is why it's so important, I think that the Japanese concluded a bilateral investment treaty. There are other mechanisms to satisfy some of the uncertainties about Iran, about investing in Iran. And those are important mechanisms to see this deal fulfilled. Right, in the context of that, I mean you have the bilateral investment treaty, the Japan Bank of International Cooperation, as I understand is a $10 billion program to support Japanese investment in the region. There is a guarantee on the Iranian side, as I understand it in that regard. But it's still slow to implement for all these reasons that you talk about in terms of who you're dealing with. Just quite a quick comment. Yes, the facility that has been negotiated with Iran and Japan, the Japanese government that involves JBIC, J-B-I-C, JBIC, is there again on paper. Yeah. It's reached, the agreement has been reached, but the problem is that the Iranian government owes money to JBIC that they haven't paid back. And until that outstanding loan is not solved, resolved, this new commitment or this new mechanism for promoting Japanese investment in Iran with the assurance from the Central Bank of Iran would not work, it would not fly. It is there on paper, but again, there are certain hurdles that the Iranians have to overcome. Right. Which I think is an example of why not all of the challenges of doing business with Iran are to do with sanctions. Right, and you talk about disillusionment and if I go back to the North Korean case, it struck me from our earlier discussion that it was a rather unique situation where the U.S. had a lot more control over whether or not North Korea was disillusioned. Now, you could argue whether or not, as Bob Golucheev even mentioned, whether they always kind of intended to cheat or whether they got disillusioned along the way, but it wasn't so much, you definitely had to have, what's that? Those aren't mutually incompatible. I think you can intend to cheat and also become disillusioned. That's true, that's true. The impression I have on the Iranian case is that there is a broader regional dynamic at play, regional and then also international that makes this kind of in some ways more complex, but could offer more opportunities to compensate for it. So it doesn't all rest on one actor in this regard. And I guess I wanted to ask a little bit to Tanaka-san about if Prime Minister Abe, who might go to Iran and the region in August, for example, a very historical visit, how does Iran and the Iran deal, in a sense, fit within Japan's broader Middle East foreign policy? And then in the context of also U.S.-Japan alliance cooperation, I know we're collaborating to try to deal with the Syrian refugee crisis. We're coordinating programs in that regard. We're looking at ways to apply regional, not solutions per se, but policies or coordinate regional policies. How does this fit in the broader regional perspective? Yeah, thanks for asking. First of all, I believe that our Prime Minister considers that holding this deal together is extremely important since it's there now. And for that to happen and to maintain this deal being implemented by both parties, we also need to show that we are ready to deal with Iran. And that our Prime Minister may be willing to travel or going to travel to Iran is going to send a quite a strong signal in this regard. And apart from that, our oil dependency on Middle East is extremely high. It exceeds over 80% of our total consumption and demand. And from time to time, although the figures vary at this moment, at this current moment, we rely heavily on two sources from the Middle East, from the Persian Gulf. One is Saudi Arabia. The other is the United Arab Emirates. Two combined together, it reaches roughly 65%. This is extremely high. Even though Iran is still within the Persian Gulf and its oil has to reach the international market through the Strait of Homoes and even through the Strait of Malacca to reach Japan, heavy reliance on two states up to 65% is not a healthy situation for our energy security. So if we can deal with Iran and also that have them slightly extend their share in the Japanese market, that could relieve our, say, concerns of what is going to happen in the kingdom because recently we've been hearing a lot about the kingdom itself being extremely, maybe, say, internally unstable. And that could have some impact on our future oil procurement. And the other part about the U.S. Alliance, Japan's and Japanese and U.S. Alliance, I believe that we would not say cross the red line if there's a red line. Regardless of how Mr. Abe might think that he needs to mend relations or have better relations with Iran, if Washington is not really happy about it, it's not the way that our government functions. It's very difficult for a Japanese prime minister or any minister to have a blind eye, turn a blind eye to what Washington may not dictate but still would request. The similar thing is his possible trip to Moscow. It has been always on the table because we have to deal with Moscow in the sense that we have to reclaim our Northern territory which has been under occupation by the Soviet forces and the Russians since 1945. But again, if Washington with Mr. Obama is not happy about that, then I don't think it's going to be manageable. Yeah, well, the U.S. election is clearly going to be a big factor going forward. So hopefully we'll have more clarity on that before too long. Before I go into the audience, James, I wonder, I don't know if you can help me out with this question or not, but it's something that I was reading about in preparation for today. Reference to use of technology or enhanced use of technology to increase the IEA's confidence in what it's verifying or making sure things are being followed the way they're being followed. And some suggestion that I was reading about that technology still has not necessarily yet been deployed. I don't know exactly what that technology is referring to or what the opportunities are there, but a light bulb went off in my head in the context of Japanese contributions to not only the economic side of the equation, but also just technically kind of the verification side. Is there some potential role? Nobody's got more experience with the IEA and verification issues than in Japan probably. I'm really testing my knowledge here of like Annex M or whatever it is, of the nuclear section of the JCPOA. There is a fairly vague paragraph within the JCPOA about the use of modern technology, and I would have to go back to the exact wording. The most recent report from the IEA on Iran does say that Iran has accepted seals that transmit information to inspectors and to the use of online enrichment monitoring so that the IEA can continually verify the level of enrichment in Iran's centrifuge cascade. I actually think the real challenge with Iran though is not verifying what's going on at declared facilities. Iranian declared facilities, the declared enrichment plants, even before the JCPOA, but especially after the JCPOA, are much, much smaller than enrichment plants elsewhere in the world. I mean, not just Japan, but I mean if you look at huge Yurenko plants that are under safeguards, and the smaller a plant is in terms of the throughput, the easier it is to safeguard. So, years ago I did the calculations myself. If Iran wants to divert material from a declared facility, the amount of material it could remove without getting detected in all probabilities measured in grams. I mean these very, very small quantities Iran could remove from a declared facility. So, the new technology is somewhat helpful in reducing the safeguards burden on the IEA, on making it cheaper for the IEA to do verification. But in no way, you know, the IEA could do the verification of the declared facilities very, very well, even with before the JCPOA. The real verification challenge is verifying the existence of undeclared facilities. And the JCPOA, the measures contained in the JCPOA go so far beyond anything that has existed anywhere else for tackling that extremely tough problem. So, you know, to give one example, some of the provisions that I mentioned earlier, the safeguards on uranium mines and mills, the very front end of the fuel cycle, that doesn't sound like it's to do with undeclared facilities. Actually, it really is, because if Iran wants to build a secret facility, it needs to get the uranium from somewhere. Now that domestic uranium mines have greater controls on them, if Iran tries to divert material from these mines, then it has a higher probability of getting caught. So now it's pushed to building a new secret mine, which is, again, another opportunity for detection. So, I actually think that when it comes to the real tough verification challenge, which is undeclared facilities, the JCPOA goes so far above and beyond what exists in any other country in the world, that what I hope is the JCPOA will become a model for other countries, rather than thinking about the other countries as a model for the JCPOA. There is some potential role for technology or at least the technical aspects of verification in the context of building confidence on the political side. Usually, we tend to switch it the other way, that it's really more all about politics rather than the technology verification. I wanna give people in our audience a chance to ask questions. Are there any other kind of comments or issues are there? Now, based on what we've talked about or something I've missed, I guess I had a whole long list of questions, but I do wanna get to audience. So please feel free to raise your hand and ask a question if you like. I have a question here from this gentleman. We have a microphone coming to you and just let us know who you are, where you're from. Hi there, I'm Thaneer Mukherjee. I'm a student of the American University. I'm studying Asia-Pacific maritime strategy. And also I've studied things about nuclear proliferation and the deal that has gone through. On that question, I mean, thank you so much for your comments and you guys are expert on nuclear politics around the world. We see a lot of things talking about sanctions in Iran and North Korea, but do you think the international atomic agency and the powers that are in the business of nuclear politics are kind of biased towards these problems or they have double standards because certainly such regulations were not imposed on Israel or on Pakistan when they were going through a nuclear program. Even to a certain extent, India did not have such extreme sanctions being imposed on them when they adopted a nuclear program and were going through nuclear politics in their region. So why do you think this double standard towards Iran and North Korea because they're not aligned towards the United States and when it comes to other states, much less harsh actions are taken. Softball question to start off with here. Who would like to start off James? Yeah, I mean, my answer is quite simple. Iran made a legally binding commitment not to acquire nuclear weapons and to abide by IEA safeguards. So did North Korea. So they actually violated a legally binding commitment. Israel, India and Pakistan, whether you think their nuclear weapons programs are a good thing or a bad thing or a threat to international security or not, they never actually violated, actually India did violate a binding commitment to the US to use heavy water for peaceful purposes. But none of those states was signatories to the MPT. So there is a real difference there in terms of the binding international agreements which those states violated. Iran, India, Pakistan didn't violate North Korea and Iran did. And I think that difference matters to me. Now, there may be one complaint to endless numbers of double standards in the regime, but to my mind, if you want to live in a rules-based nuclear order in which we constrain proliferation and reduce nuclear risks through diplomacy and rules rather than preemptive war, there have to be prices if you break the rules. I guess I would add too that, at least in the Korean case, I can't speak for the other, but you do have a country that invaded the other, that invaded a US ally now albeit many years ago, but that matters. And the program was accelerated in the context of actually a withdrawal of US nuclear weapons on the peninsula. So in that sense, I kind of understood North Korea's concern at the time that the US had nuclear weapons based in South Korea. And so that was kind of unfair, disproportionate, but there was a real opportunity to denuclearize that peninsula and clear went the other direction. But I don't know, Suzanne. I just wanted to point to something that maybe underscores James's point. The reason that you had such severe sanctions on Iran was that there was a consensus within the international community that this was a violation that warranted pressure to reverse. And that consensus did not come because of US-Iranian estrangement. It maybe came to some extent in defiance of that estrangement. We had worked, Washington had worked for most of the past three decades to try to get Europe, Japan and other countries to go along with economic pressure on Iran for a variety of concerns about its behavior and found almost no traction under any circumstances, even with the most egregious Iranian actions. This case was considered a genuine threat to peace and security. And I think the fact that you had the vast consensus, even among countries that were genuinely disinterested in sanctions as a tool of US policy that had some affinity and had trade relations with Iran willing to jeopardize their own business relations with Iran really underscores that there was a genuine threat to the international order that was perceived here on a wide basis and that this wasn't a sort of case of US use of its overwhelming power to try to punish a rogue state. Anakazan, can I ask you if in the context of evaluating how this deal is implemented going forward? And to some extent I get concerned often between the United States and Japan, do we evaluate a situation differently? And where the US is willing to do X or Y and Japan is thinking, well, maybe not right now or maybe not Y. Do you worry at all or can see a situation where the US might be quicker? Could be depending on how the election goes perhaps to kind of take this stool away from the table before Japan thinks it's ready. How do we manage kind of jointly evaluating where we are in the context of implementation? Well, whether or not Iran is, I mean, whether Iran is completely abiding by its commitments, I think this is the case where IAEA steps in and we would be quite comfortable with what they would report. But with regards to the reward that Iran was supposed to get, meaning the sanctions relief, I believe there is a certain amount of say, room for disagreement and possible frictions between Washington and Japan. In the past, well, let me take you back to the 1990s when we were trying to persuade Iran to be more open under the then President Rafsanjani. We were trying to extend Iran a soft loan that they would build a hydroelectric power plant. We were able, we managed to provide Iranians the first trench, but when the time came for the second trench to be provided, the so-called policy of dual containment came into place and then that we were trapped in between. And eventually we had to cancel the deal. We had to cancel the agreement. And in the Japanese history, post-war history, this was the only incident that ever happened never before and never later after that. So there are certain issues and certain moments, I believe, that there will be differences. But it would not lead, I believe, it would not lead to that, just like I said, regarding Mr. Abe's possible visit to Moscow or to Tehran, that it would not lead to a point that we would totally disregard the view of Washington. And we should, in the context of some of your earlier comments about Japan or Japanese banks and other entities being slow to engage with Iran because of some concern or lack of clarity about where the pitfalls are in some of US policies or laws, et cetera. In theory, that should be relatively easy to manage between the alliance if we had, you just sit down together with the US authorities who are responsible for those things and share intelligence or share assessments. Would this be okay? Would this not be okay? A little unrealistic to think that you're gonna have a level of consultation, but yeah. One thing. During the 90s or even the 2000s, a lot of Americans that I talked to about Iran always complained that Japan has taken the advantage that the United States or the US companies are not in the Iranian model or the primary sanctions enforced since 1995. But actually, that is not true. I believe the Japanese companies and businesses would be much, say, relaxed if they saw the American sanctions still be lifted and the primary sanctions lifted and that we could compete in the Iranian market in a healthy manner because that would alleviate a lot of our, say, concerns and our, say, necessary measures that we have to take in prior to dealing with Iran. Put a lot of lawyers out of business. Have a question here? Hello. Chris Burke, Independent Energy Analyst. My question concerns the level of investment that Iranians expected. We saw the collapse of oil and gas prices in the last 18 months and that possibly the Iranians were disappointed and the investment didn't flow in, but that was because of an economic consideration rather than a political consideration. So do you see greater interest in investing in Iran and commerce with Iran as driven by oil and gas prices in part? And would Iranian satisfaction go up if somehow oil and gas prices were able to rise or projections about rising oil and gas prices in the future might spur such investment? Well, I believe that the only field or sector that we may be investing in Iran is not confined, is not confined to oil and gas. Iran has a vast, say, variety of industries and they are quite capable of managing, I mean, to a certain degree by themselves, but also they want modern technology and also financing. So they are looking for a joint venture partnership. That could happen, but also that has to, for that to happen, the financial sanctions have to be totally alleviated because that's sort of a concern and that's sort of the non-functioning of the financial system cripples the daily life and also the dealing with Iran. I'd just add that I think Iran remains an attractive potential destination for investment in energy simply because of the known size and scope of the resource and the sense that the Iranians have a lot there to work with, but the financial sanctions, as has been said, as well as low oil prices, will raise the bar for projects and the willingness of companies to actually put real money on the table, real in the tens and hundreds of billions and real time because you're looking at an investment profile that stretches at least a decade, if not longer, and the concerns about what happens at the end of eight years, what happens as the various limitations under the deal begin to expire and even more on a shorter timeframe, what happens next year with the US presidential election and the promises on the part of various Republican candidates to either rip up or renegotiate the deal, inevitably creates a degree of opacity, but I don't think the Iranians in truth are surprised. They could clearly understand the context of international energy markets, despite the fact that they'd been relegated to this very small position in them as a result of the sanctions over the past five years, and I think that if anything, from the Iranian side, there's a desire to use this moment as an opportunity to sort of diversify their portfolio, diversify the economy, strengthen the basis of the non-oil sectors and the extent to which the economy has moved away forcibly as a result of sanctions from one that was heavily dependent on oil revenues to one that is less dependent on oil revenues. That's not an easy thing to do. Iranian administrations, various governments have been promising to do that for 100 years now, but the fact that there is an opening for an investment at a time where there is some uncertainty about long-term energy investment in Iran is actually somewhat desirable from the perspective of Iranians, and it also helps satisfy, if you follow Iran, you've heard a lot about resistance economy and whether or not that's actually in opposition to the reopening of the economy under the post-deal environment. In effect, the resistance economy is one that is not dependent upon the volatile international energy markets, and so people like Rooney and others can kind of spin international investment in non-oil sectors in a way that's more favorable from the perspective of hardliners and those who are concerned about the dependence and the potential vulnerabilities that these pose. So there are some potentially positive scenarios from the Iranian political perspective. Other questions? Talala Absi from the Embassy of Bahrain. My question is about how much is really the effect of lifting the sanctions when it comes to increasing investments? Sorry. Correct? Yeah. I was thinking that how much is it really due to lifting sanctions or the sanctions system when you also have shortcomings within the Iranian economy or environment when it comes to corruption, arbitrary decisions, and existing regulations? Because some companies fist that in the past and assume companies would fist that. Yeah. I mean, and also just more broadly, how is the regional economic situation right now? I mean, it's got to be pretty tough shape more broadly. I mean, if you talk about the oil producing countries and also the gas producing and also exporting countries, well, with the exception of Kuwait, the UAE and Qatar, I mean, the others are in dire situation because of the lower oil prices and gas prices. But for some others, there are some say savings from the past that would give them certain amount of breathing space for a time, for several years most. But there are other factors that are now giving, bringing their life into misery in a lot faster manner, is the ongoing war or the civil war in Syria and in Yemen. Those who are involved there are obliged to spend a certain amount of military expenditure, which they never anticipated in the beginning. And for the Saudis, I believe the war in Yemen is costing them heavily, both on their financial issues, portfolios, and also for the political say repetition of the country or the kingdom. I think the question brings out a fundamental issue for Iran, which is that the sanctions have been, in some respect, a convenient distraction from the underlying structural issues that have confronted Tehran since the revolution, and which each Iranian government in different ways since the post-war era, since your time in Tehran, have endeavored to solve but never fully dealt with in a way in a successful fashion corruption, the continuing distortions of an economy that is heavily subsidized, and just the underlying central role of the state and state affiliated companies in a way that very much dampens competition. And so I think if anything, the Rouhani economic team is a pretty strong one, stronger in part because they have been through this experience of attempting to launch and implement economic reform, many of them during the Rafsanjani and or Khatami periods with mixed results in both administrations. And so they're fairly sanguine about how difficult this is and how even in a perfect free environment for capital flow into Iran with no sanctions whatsoever, no ambiguity in the sanctions regime, that there would still be significant economic challenges that the government faces. And I think you see right now this real debate going on within the Iranian leadership about exactly how to solve it and it will be interesting to watch it play out and to see which faction ends up on top. On the list of Iranian kind of incentives or reasons to have nuclear weapons, I assume on top would be to maximize leverage vis-a-vis the United States. But what else is on that list? In other words, are there other regional security dynamics or other things that could change in the region given the dynamism of the fluidity of the situation there that could actually push their calculation back into a nuclear direction independent of this deal with the United States? And I'm thinking of whether it's Saudi Arabia or whether it's some other. You're looking to contenders possibly will be Israel. But of course, I mean, having one nuclear warhead as the Iranians usually argue about this viewpoint is that having one nuclear warhead would not do anything because the Israelis are presumably holding roughly 200 or so. So against a single, against 200 warheads, a single warhead would not do anything. And I believe that for the Iranians, having the Lebanese Hizbullah would be a much stronger secondary strike force than having a nuclear warhead. I wouldn't, I wouldn't only look to external drivers for why Iran might develop nuclear weapons. I mean, we know from plenty of other case studies, I mean, including North Korea, that in the real world, most countries that proliferate do so through multiple pressures simultaneously acting, some external, some internal. So, if we're thinking about what might make Iran change its minds about the deal, I mean, lots of countries have viewed nuclear weapons, including North Korea, as being a way of propping up the regime. Whether that's right or wrong is a different story. Whether it actually helps you prop up the regime is a different story. But it doesn't strike me as impossible that Iran, if the regime does to find itself under extreme pressure, might start viewing nuclear weapons through that frame, for example. Well, and once the program, I mean, we know that a program has, probably suspect that a program existed at one time, which means there are stakeholders. I do think this is where, you know, Iran's other bad behavior around the region becomes so relevant to the debate on the nuclear deal and the Iran's nuclear program. My own read is that Iran, the original motivation for the program was very much rooted in the sense of it. And the fact that the program was effectively restarted during the war quietly, I think underscores to what extent they, you know, it was not motivated by Israel, it was not even really motivated by the United States so much as it was motivated by this sense of concern that the regional states with assistance and facilitation by the United States were determined to subvert the Iranian revolution and potentially end Iran as an independent sovereign state. So, you know, I think the sort of answer, the rejoinder to that today is Qasem Soleimani and Iran's expeditionary foreign policy in Yemen, in Lebanon, in Syria, and to the extent that that appears to be successful, particularly as they, you know, once again, they face, there's a lot of awareness of ISIS and the sectarian dimension of ISIS today. And so, so long as Qasem Soleimani and the Iranian Revolutionary Guard appear to be on the offensive around the region, then the drivers for reverting to a nuclear deterrent are perhaps less urgent. If, in fact, you know, the kind of Iran's game around the region becomes more constrained, you could certainly see, I think, a reversion to this reliance on the ultimate deterrent capability as one that would be, you know, Iran's ultimate defense against what is seen as a broadly orchestrated American conspiracy played out through regional actors. We have time for another question or two, if anyone would like to jump in. I have one hand there, yes. I'm Diana Friedman with International Technology and Trade Associates, and I was wondering if any of the panelists could address kind of US side risks associated with the possibility that the US might take actions that are still technically consistent with the JCPOA but serve to undermine it in a way such as Congress passing visa waiver program restrictions that now prevent European and Japanese business people from traveling to the US if they visited Iran in the past five years without obtaining a visa and other kind of effective restrictions and deterrence to international business. Good question, because we actually had a visa. We went through the visa waiver process to get our panelists here. We didn't go through the visa waiver process. We had to go through the visa process. The visa process, that's right. Any thoughts on that? Yeah, you raised a huge risk there and I would divide this into two parts. The US has always said that nothing can, the US has always correctly said that nothing can the JCPOA prevent the reimposition of sanctions for non-nuclear reasons. And I think the ballistic missile program is the paradigm example of this. I mean, the Obama administration has made it clear that it's gonna keep on imposing sanctions in return for Iranian missile tests. The Iranians said, the Supreme Leader himself said prior to implementation day that any new sanctions will be considered as a violation of the JCPOA. Now when the US imposed sanctions the day after implementation day, there was grumblings and unhappiness but there wasn't withdrawal from the agreement. So one issue I have is if we continue as we should to implement sanctions that are proportionate to Iranian violations on the missile program on human rights or on anything else, is that sustainable? Is Iran just gonna accept that as the price of doing business and we accept it as the price of doing business and we continue implementing the nuclear part in spite of sanctions on other aspects? Separately there's then the possibility that Congress imposes uses the missile testing as an excuse to impose disproportionate sanctions. I don't think it's a secret that there are because it's not a secret because members of Congress say openly that they oppose the deal and they're looking for ways to try and destroy it. So I think if Congress is proposing manifestly disproportionate sanctions for non-nuclear violations and I think the deal is and the president this or a future president doesn't veto them then I think the deal is probably done for but fortunately we aren't there yet. I think the other factor in that calculation is how far into the deal we are and to what extent Iran has been able to recapture international investment because I think the snapback feature is an interesting perhaps one that we ought to study as a model for other ways to work and sustain UN Security Council consensus around a particular issue but ultimately the return of Security Council sanctions is not a tremendous threat for Iran. What was generally disruptive to the Iranian economy was the willingness of the Japanese for example to ban new energy investment in Iran the willingness of the European Union to embargo imports of Iranian oil. None of that snapback snaps back automatically and so for the Iranians there's a time sequencing issue here where three, four years in if in fact you've managed to secure a decent flow of investment from Europe and Asia where that had been curtailed prior to the deal is there a greater willingness on the part of the Iranians to push back against US measures that are completely legitimate and not dealt with under the deal that address non-nuclear aspects of Iranian behavior and say look, we've done our part they're not fulfilling and by the way, Europe what are you gonna do? Japan what are you gonna do? Are you really gonna pull back out of these projects now because we're not willing to continue abiding by our agreements when the United States continues to put sanctions on us so I think that the enforcement and compliance issues become more complicated as time goes on rather than less. I would imagine we're gonna see an element of this in the potentially in the arms sales side of things because that's something that's connected sanction wise to the agreement but I could see a situation as time goes on where certain sophisticated systems from China or Russia are being sold to Iran and there are disagreements about whether that's consistent or by secondary sanctions and that. But regarding the arms sales to Iran the language is much clearer here than the missile ballistic missile tests. Security Council resolution two to three one actually does have a clause that any sale of arms to Iran for the next five years term has to be approved by the Security Council. I'm meaning that there are veto powers for the United States and other Western powers to stop the deal. But the problem here is whether a Suhoi 30 is going to fall under this category or not or the S 300 anti-aircraft missile system it would be included in this program and I mean there are some debates over that but eventually it would come to the Security Council changes. Well I wanna begin to bring this to a close I guess a couple thoughts that I have and then I'd be interested if there are any final thoughts from the panel. I'm struck in the process of preparing for this and talking about this today that we have an incredibly precarious and complex agreement with Iran right now that I think we're lucky to have and can be very positive and productive over time but really requires a lot of follow through and commitment over time to realize that. It is embedded within a regional dynamic that I don't think you can separate it from and therefore in the US Japan context I think this is a really interesting foreign policy challenge for our alliance thinking in terms of kind of broad regional kind of multidisciplinary or interagency cooperation in a part of the world that we're not used to cooperating that closely. We have a lot more experience doing this in a Northeast Asia context or even to some extent the Southeast Asia context. So that's a great challenge for us but I think it's also a good opportunity for our alliance to deepen in this regard or to further flesh out some of these channels of communication. We have relatively similar overlapping interests at least at the high level in terms of non-proliferation and stability in the region and open commerce. So that is the positive and we have a few other minor political, our political environments are definitely different in terms of how policy decisions are made. Topics is a much more sensitive topic politically within the United States for sure. But I'm glad we've had a chance to talk about it a little bit today and I don't know if there are any further thoughts that are paneled. Don't sure, we may have to continue this, make this an annual gathering. We'll get together next year and hopefully you got a multiple entry visa this time. That's good. Well, thank you so much for your participation today and to our audience for your participation and being with us and as your reward, we're downstairs, we're gonna have a reception so please do join us there. And but before we adjourn, please join me in thanking our panelists for their observations today. Thank you. Thank you very much... ...you're welcome. Thank you very much for joining us. And I hope that that's over. Thank you very much. So, we will now move to the other panel who want to hear what you think and I will wait until then. Well and then of course we will begin with the last questions you had for me. I just wanna to go over them and to our audience and I will go once we feel the value