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«Russo-Iranian Relations and the Vienna Nuclear Agreement Lana Ravandi-Fadai | Nov 2015 Russo-Iranian Relations and the Vienna Nuclear Agreement* ...»

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Since 2007/8, relations have deteriorated but they have not fallen apart. A series of agreements and disagreements from both internal and external pressures continue to guide the relations between Russia and Iran. During the Russian-Georgian conflict in August 2008, for example, Iran did not overtly denounce either side. A primary obstacle in Russo-Iranian relations had been the question of determining the legal status of the Caspian Sea. Before 2000, Russia and Iran shared approximately the same stance on this question, based on the principle of all marine resources falling under the common ownership of the Caspian littoral states. Moscow subsequently revised its approach in favor of dividing the Caspian Sea into national sectors, an approach that Iran objected to. The Caspian question was not confined solely to territorial disputes, but includes a whole range of economic and geopolitical factors,11 including mining and bio-resources, the construction of gas and oil pipelines, and the prevention of third parties from intruding into the region, including militarily. The final legal status of the Caspian Sea and its resources continues to affect the development of Russo-Iranian relations. On 29 September 2014, however, the presidents of the five countries bordering on the Kozhanov N. “Russian-Iranian Economic Relations: Opportunities and Challenges” The Maghreb Review, Vol. 37, № 3 – 4, 2012. p. 230.


Caspian were able to agree upon key principles for dividing up the territory: the national sovereignty of each country extends from the shore 15 nautical miles into the sea, and for a further 10 nautical miles each respective country is to have exclusive rights to the exploitation of natural resources. The remainder of the Caspian is given over to their joint use. Thus it would seem that in principle, at least, one of the major hurdles to an agreement has now been overcome.

In July 2005, Iran acquired observer status in the Shanghai Cooperation Organization (SCO). The decisive factor was the full support of Iranian candidacy from Russia.

Tehran’s main goal, however, remains full membership in the SCO. Iran tried but ultimately failed to gain full SCO membership at the Yekaterinburg summit in June 2009, when Russia was chairing the SCO. This was likely a result of the unstable situation and mass demonstrations in Iran following the disputed re-election of President Ahmadinejad.

It was not only politics that destabilized relations, however, but also perceptions.

Ahmadinejad's visit to the SCO summit in Yekaterinburg, which was portrayed by official Iranian media sources as an indication of support for him by SCO members (particularly Russia), provoked a flurry of criticism of Moscow from the Iranian opposition. The opposition began to spread rumors that Russia helped Iranian intelligence services suppress opposition protests in the summer and autumn of 2009, thus tarnishing Russia's image among a certain segment of the Iranian middle class and intelligentsia and complicating—on yet another front—relations between the two countries. Indeed, a negative image of Russia has existed in Iranian society since well before now; some would argue that it has been developing for centuries. This historically negative attitude among the Iranian population toward Russia changed much less than the policy of the Iranian government after the dissolution of the Soviet Union.


Popular opinion does exert pressure, if indirectly and indeed if it is heeded, on Iranian foreign policy decisions regarding Russia. According to Iranian scholar Hamid Shirzad, poor public opinion stems from two main issues: “The Iranian people have a generally negative attitude towards Russia. This is for two reasons: firstly, the errors of Stalin's policy in Iranian Azerbaijan; and secondly, the policy of the Soviet Union outside of Iran, which is also perceived negatively by Iranians.”12 Interestingly, some Iranians informally interviewed, cited the emphasis in Iranian education on the Qajar period, in which Iran was forced to give up territory after losing two major wars to Russia, as a source of the lingering antipathy toward their northern neighbor.

Yet cultural ties are strong between Moscow and Tehran. Persian poetry evenings, Iranian film festivals and other cultural events are often held in Moscow, where there is an active Iranian Cultural Center, as well as in other Russian cities. While there are fewer Russian cultural events held in Iran (Russia does not yet have a cultural center in Tehran, where the Russian Embassy shoulders that responsibility), many Iranians display a keen interest in Russian culture despite any lingering political misgivings. A look at the shelves of most Tehran bookstores will reveal a large selection of Russian literature translated into Farsi. It is also worth noting that five aspiring Iranian filmmakers are enrolled at the Russian film school VGIK this year under a newly initiated cultural exchange program.

The Current Climate In recent years, political contacts and dialogue between Moscow and Tehran have grown. This is likely due to the re-election of President Vladimir Putin, who has always Interview with Hamid Reza Shirzad, PhD in International Relations, conducted in Tehran on December 24, 2006 by Nikita Filin. Published in “The Social-historic Development of the Islamic Republic of Iran (1979-2008): Factors of Stability in State Power.” Appendix 2. Moscow: 2012, p. 273.


had a rather more propitious view on Iran than former president Medvedev, combined with an accelerating deterioration in US-Russian relations. Compared to 2010 and 2011, which witnessed the most significant decline in Russo-Iranian relations since the early 2000s, 2012 and 2013 were marked by numerous reciprocal visits of Iranian and Russian officials. During this period, Russian Foreign Minister Sergei Lavrov visited Iran for the first time in four years. In February 2012, the Russian Minister of the Interior visited Iran. In January 2013, during a working visit to Iran, the Minister of Internal Affairs of the Russian Federation, Vladimir Kolokoltsev, signed an agreement on a “Legal Alliance” between the Ministries of Internal Affairs of Russia and the Islamic Republic of Iran. This was the first agreement to define the forms and methods of cooperation in the fight against crime. There have also been numerous mutual visits at the level of deputy and foreign ministers.

Nonetheless, economic relations between the two countries have fallen on harder times of late. Largely due to sanctions imposed on Iran, there has been a considerable decrease in the volume of Russo-Iranian bilateral trade since 2011, when it amounted to $3.75 billion.13 In 2014, trade between the two countries totaled merely $1.7 billion according to World Bank data. The expulsion of Iran from SWIFT in 2012 remains a serious impediment to Russian banks working with Iran. Recent negotiations between major Russian companies and Iranian officials on a variety of projects yielded few results. After two years of negotiations, Gazprom Neft refused to develop the Azar oil field. This was likely due to public and private entities in Russia with financial stakes in the West fearing reprisals for continued operations in Iran. Now, however, with Gazprom Neft and other Russian companies themselves under sanctions, any stigma of

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developing business ties with Iran may disappear, and relations could move forward on this front.

In spite of all of this, there have been a number of positive trends in trade and economic ties between Russia and Iran, beginning in 2012. In the first six months of 2012, Iran exported $203.5 million worth of goods to Russia, 9.3% more than in the same period of 2011.14 According to the Customs Administration of Iran, in the period from March 21, 2012 to August 21, 2012, more than 267 tons of various types of cement in excess of $20 million were exported to Russia (for the Iranian fiscal year 21 March 2011 to 20 March 2012, the export of cement to Russia totaled only $6 million).

The absence of Western competition has provided new opportunities for Russian businesses. There has also been a significant increase in the supply of chemical products from Russia to Iran, namely various catalysts for petroleum and petrochemical products. These products were first exported in 2012 at a value of $4.35 million in the first half of the same year. The exhibition “Advanced Russian Technologies,” held in Tehran in February 2012 with the participation of the Russian Trade Mission in Iran, contributed to establishing initial contacts between Russian producers of catalytic agents and Iranian consumers.15 Given these numbers, there is obviously great potential for the development of Russo-Iranian contacts in these economic spheres. Of particular interest are the contacts being made at the level of small and medium-sized businesses, for example, Russian companies from Astrakhan, Stavropol, Krasnodar Krai and the Republic of Tatarstan, which lack close contacts with Western businesses, see Ministry of Economic Development of the Russian Federation), http://www.ved.gov.ru/articles/1197 ibid.


Iran as a receptive and lucrative market for their goods. Due to the lack of official data, however, the scale of cooperation on this level remains difficult to judge.16 With the 2013 election of President Hassan Rouhani, Russo-Iranian Relations began to assume a new form. On September 13, 2013, the presidents of the two countries met in Bishkek and expressed their intention to further increase bilateral contacts. Early in 2014, Russia and Iran held negotiations regarding the supply of Iranian oil to Russia in exchange for goods with a total projected volume of roughly $20 billion. Furthermore, stronger Western sanctions against Russia in light of the deteriorating military and political situation in Ukraine are pushing Russia towards Iran and could result in the strengthening of relationships, including in the field of military cooperation. Indeed, the Iranian Minister of Foreign Affairs Mohammad Javad Zarif has visited Moscow repeatedly in the past two years, most recently in August 2015.

Looking Ahead

Russo-Iranian relations have a long history, which includes episodes of both collaboration and antagonism. Frequent changes in strategic priorities have at times brought the two countries closer and at others pushed them apart. The factors outlined here, together with the existing prerequisites for political and economic dialogue, should make for a firm foundation on which to establish close co-operation in the years to come. Yet, the interplay of internal and external factors may soon undergo another qualitative change. With sanctions imposed against Russia and US-Iranian relations enjoying a mild détente, Shariati’s decade-old question as to whether Russia would abandon Iran under pressure from the West might be turned on its head. The question then becomes: If the West uses Russia as a bargaining chip with Iran, will relations with the United States prove more important to Iran than those with Russia?

Kozhanov N., Russian-Iranian Economic Relations: Opportunities and Challenges.


Fallout from the July 14 2015 agreement signed in Vienna, may determine the answer, at least in the short term. The agreement will usher in a paradigm shift in IranianRussian relations, if not the global political network: after 10 years of official and unofficial negotiations, an accord on the Iranian nuclear program was signed by the Islamic Republic and the P5+1 (the five permanent members of the United Nations Security Council — China, France, Russia, United Kingdom, United States—plus Germany). The details of “The Joint Comprehensive Plan of Action” (JCPOA) are well known. The deal requires transparency and limitations on nuclear work from Iran for the next 15 years in exchange for a gradual lifting of some sanctions. What is yet to be seen, however, are the ramifications for the Iran-Russia nexus, politically, economically, and militarily. In order to determine the future of Russia-Iranian relations, the Russian contribution to the negotiations and their motivations must first be determined. Given that many observers see largely negative repercussions for Russia, the question here is whether Moscow actively facilitated the agreement.

The answer here is yes; Russian proposals largely determined the final form of the signed agreement. The success of the negotiations was clinched by the “concept of phasing and reciprocity” floated by Russian diplomats, whereby each step toward compliance by Iran is to be accompanied by a corresponding step from the P5+1 and the United Nations in easing sanctions.

A closer examination of the agreement reveals that an unshackled Iranian economy may bring benefits to Russia. In terms of global security, many of the advantages the agreement promises for Western European and North American countries also apply to Russia: Iran can join the coalition of Western countries in fighting terrorist threats in Middle and Near East. The blocking of this potential has been keenly felt in recent years with the spread of ISIL-led chaos and Shia-Sunni conflicts erupting in Syria, Yemen, Iraq and other countries. It was Iran that effectively saved Baghdad from ISIL fighters and then helped to stabilize the situation in the capital. In short, Tehran’s role in world


affairs will increase, and while this may not accord with the wishes of every state, an enhanced role for Iran has the potential to help resolve critical problems in the region.

Nor can Russia and the West afford to be indifferent to the likely effect of this agreement on internal Iranian politics. Regardless of where the credit really lies — and it is certainly spread among all the parties to the agreement as well as previous administrations whose missteps and intransigence set the stage for a new track — this will be scored internally as a victory for the liberalizing elements in Iranian government, who have achieved what other previous governments were unable to. A strengthened economy, membership in the Shanghai Cooperation Organization (SCO), and other fruits the compromise may bring should only strengthen the reformist movement’s hand.

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