By Mohammad Hadi Shamkhani

Why there is no news of extending 20-year agreement between Iran and Russia

February 22, 2021 - 17:45

Iranian Foreign Minister Mohammad Javad Zarif confirmed in August that Iran is willing to extend the 20-year agreement with Russia. The 20-year agreement ends in March 2021. 

"The agreement's extension is on our agenda and can be considered if the Russian friends are ready to have another long-term contract, but the agreement's extension is definitely on our agenda," Zarif told reporters when asked whether Iran renews the agreement. 

The top Iranian diplomat did not comment on the message he was delivering on behalf of President Hassan Rouhani to Russian President Vladimir Putin, saying, "If it were to be broadcast on television, it would be said in Tehran."
This development, in the absence of details of Rouhani's message to Putin, raised questions, including whether Iran is reviewing its relationship with Russia.

After a 25-year agreement between Iran and China, which has been accompanied by a lot of media coverage and debate, and according to the declared desire of Iran to extend the comprehensive cooperation agreement with Russia, it seems that Iran has adopted a new strategy to develop its relations and cooperation following existing challenges with Europe. 
But there are a few things to keep in mind about a possible non-extension of the agreement between Iran and Russia.

1.    The reason behind Putin’s reluctance to not receive Iran’s Parliament Speaker Mohammad Baqer Qalibaf and what was Qalibaf's message?

Will Putin's reluctance to receive Qalibaf indicate Russia's disinclination in the field of strategic relations or the extension of the cooperation document?

No one has an answer to this question yet. But the problem is that the Russians' unwillingness deal with Iran is not unreasonable, especially if the speaker of the Iranian parliament carries a message to Putin instead of the head of the country's diplomatic apparatus. Putin's hesitation to meet with Qalibaf is questionable, and it is not unlikely that the reason is hidden in the nature or quality of Iran-Russia bilateral relations.

2. Have the United States or Russia set a precondition for Iran regarding the Joint Comprehensive Plan of Action or subsequent talks?

The agreement was also opposed at the time (at the time of signing) and provoked a reaction from the Americans. "Some may like this agreement and some may not. Our countries will work for our interests," said General Leonid Ivashov, a senior Russian Defense Ministry official at the time. 

The agreement at the time was also a signal to the U.S. administration of George W. Bush that Iran and Russia intend to further limit U.S. influence in the region.

“We are particularly concerned about the sale of advanced conventional weapons or sensitive technologies, such as nuclear technology,” said Richard Butcher, a State Department spokesman at the time.

Naturally, extending this treaty or changing it into a comprehensive long-term strategic agreement will again provoke a negative reaction from the United States. Because such a reaction was made in response to the planned 25-year document of cooperation between Iran and China. Basically, the United States seeks political and economic isolation of Iran. Therefore, Iran’s cooperation with any country is viewed as a violation of Washington’s Iran policy. The White House has sought to weaken Iran’s economy over the past few years by pursuing a policy of “maximum pressure.” For this reason, any loophole to get out of this situation will undermine U.S. policy of pressure.

In order to secure its interests and to state that its options are not limited, Iran has sought bilateral agreements with important countries in order to improve its economic situation in the future in addition to circumventing sanctions. China, as the world's economic power, has been a serious option for Iran for long-term cooperation, and according to Iran's foreign minister, Tehran and Beijing are close to the long-term agreement. Russia, like another world power, is on the agenda of the next long-term agreement, and naturally will not be the last country in this regard.

Since these measures by Iran will thwart U.S. efforts to undermine Tehran, any future agreement between Iran and Russia or any other country will come under attack by media outlets.

In such cases, the countries behind the Iranian sanctions will become more Catholic than Pope and pretend to defend Iran's national interests! Because such agreements, in addition to paving the way for Iran, are not good news for an international order pursued by the U.S. They will reduce American political and economic influence exponentially.

The issue of the JCPOA and Iran-U.S. talks, although has always been raised in the form of Iran-5+1 talks, this time, because of Donald Trump's withdrawal from the JCPOA, has pushed the Iranian and American sides towards the need for bilateral and not multilateral talks.

Now that Democrats have won the elections in the U.S., the relations between Washington and Moscow are expected to worsen as the White House will probably add human rights pressures to U.S. sanctions on the Kremlin; so the assumption that the U.S. will exert pressure on Iran not to renew its strategic agreement with the Russians is not far from mind.

Given the growing need for Iran-U.S. talks to break the JCPOA deadlock, will Washington this time try to declare preconditions such as limiting Iran-Russia strategic relations as a hidden and undeclared precondition for negotiation or lifting sanctions?

The Iran-Russia-China strategic agreement, especially the projected 25-year strategic agreement with China, has always been considered as an exit route for Iran to evade U.S. sanctions. And given that Iran has used agreements with Russia and China as a leverage to persuade the United States to return to the JCPOA commitments, a delay in extending the agreement between Iran and Russia have led some analysts to speculate whether the United States has a hidden precondition for lifting sanctions.
In other words, according to American logic, Iran is not supposed to benefit from the fruit of the JCPOA and the lifting of sanctions, as well as strategic relations with Russia and China.

Has this left the 20-year Iran-Russia agreement frozen?

3.  The essence of Iran-Russia relations is regulated by a thermometer of tension with the United States, not the interests of both sides.
This is especially important when we know that Iran and Russia usually define their relationship in terms of confronting the United States, not just mutual interests. Some analysts, like Professor Hassan Beheshtipour, believe that "Iran-Russia relations have always been dependent on Russia's relations with the United States."

4. The mood of the 20-year agreement between Iran and Russia has never been favorable.

When Mr. Putin visited Tehran during the first Ahmadinejad government, various promises were made under the agreement. The promises envisaged a 40 billion dollars tradeoff. But now we see the transactions stand at two billion dollars maximally. This in itself can be an incentive for the contract not to be extended and the unwillingness of both parties to renew the agreement.

"Naturally, U.S. sanctions are very effective because Russian companies are either under pressure from U.S. sanctions themselves or are subject to sanctions if they want to cooperate with Iran," said Beheshtipour. "That is why it was argued that exchanges between Iran and Russia should be done in rubles and rials. In the meantime, banks should create the ruble-based credit for Iranian businessmen and rial–based credit for Russian businessmen so that dollar is excluded from the exchanges between the two countries, but such a thing has not been achieved at all. "

The Iranian expert also noted, "It was recently announced that some Russian banks could conduct economic exchanges in rubles and rials. Well, if that happens, one of the obstacles to the development of Iran-Russia cooperation will be removed. The next issue is insurance. Insurance is one of the important issues that if Iranian goods are exported to Russia or Eurasia, they must be insured and the insurance companies that are agreed upon by the two countries should be able to start their activities in this field, which unfortunately are still at the beginning of the road."

Beheshtipour stressed, "The next issue is that Iran has made some progress in the Eurasian tariff system. Russia means Russia and Kazakhstan and Belarus and Armenia. Russia has set certain standards for its own imported goods that Iran must observe in order for its goods to be exported."

"Although this obstacle has become less important than the past, Russia has still set a series of specific standards for imported goods, which make it difficult for Iran to implement those standards, and this obstacle still stands in the way of cooperation between the two countries," the analyst highlighted.

The Iranian professor stated, "Over the past few years, Mr. Putin has personally sought to resolve the problems between Iran and Russia, but at the banking, insurance, and oil investment fields, there have been little cooperation due to the fear of sanctions and disruptions by the Americans. I do not know what Mr. Zarif means by the 20-year cooperation, but before that, the agreement was for a period of ten years with a value of 40 billion dollars. I do not know how they want to increase these exchanges and cooperation, because I think the increase in exchanges between the two countries is a gradual process."
5. What does the content of the 20-year Iran-Russia agreement say about an extension?

The agreement, titled "Treaty on the Basis for Mutual Relations and the Principles of Cooperation between the Islamic Republic of Iran and the Russian Federation", was signed on March 12, 2001, in Moscow in the presence of the presidents of the two countries.

The term of this agreement, which has been approved by the parliaments of the two countries, is originally 10 years, but after the end of the term, it has been extended twice for 5 years each.

Article 21 of the treaty states: "This treaty shall be concluded for a period of ten years, and unless either party notifies the other party in writing of its intention to terminate the treaty at least one year before its expiry, it shall automatically be extended for the next five years. This treaty was drafted in Moscow on March 12, 2001, in two versions in Persian and Russian, each of which has the same text."

"This treaty contains an introduction and twenty-one articles. Article 6 of the treaty mentions and specifies cooperation between the two countries in the field of energy, including nuclear energy, and the parties will assist in the development of their long-term and mutually beneficial relations in order to pursue joint projects in the fields of transport, energy, including the peaceful use of nuclear energy, the construction of nuclear power plants, industry, science, technology, agriculture, and public health." 

Other sections also mention cooperation between the two countries in various fields of economy, energy, transportation, politics, and security.

The treaty marked a diplomatic breakthrough in the meeting of the two countries' presidents, which was almost the first meeting at that level in 40 years.
According to Article 21 of the treaty, if Iran or Russia did not intend to publically terminate the treaty one year before its expiration, it will be automatically extended.

Considering all the aforementioned issues and speculations, it is obvious that the extension or non-extension of the Iran-Russia agreement is affected by various variables at bilateral and international levels: from the U.S. plan to limit Iran's relations with Russia as a precondition for lifting sanctions, to the Russians' perception of the inefficiency or poor performance of the agreement and that the costs outweigh the benefits.

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