Fact Check: Will implementing the nuclear agreement cost Iran $42.5 Billion?

On the eve of the Joint Comprehensive Plan of Action’s (JCPOA) ‘Implementation Day,’ Ahmad Ali Moghimi, the MP for Neka, Behshahr, and Galougah, claimed that implementing the nuclear deal will cost Iran $42.5 billion. Mr. Moghimi, who opposed the nuclear agreement in parliament, said that “in the course of the nuclear talks, we promised to fulfill three commitments: get rid of the [Arak] reactor, hand in 14,000 centrifuges, and ship 9,700 kg of uranium out of the country. Completing this whole process will cost the country $42.5 billion or 130 billion rials, equivalent to three years of our country’s total budget for construction.”

IAEA Cost Estimate

Late last summer Yukiya Amano, Director General of the International Atomic Energy Agency (IAEA) announced that the “JCPOA’s implementation will require an annual budget of $10.5 million,” and that this amount includes the costs of the application of the additional protocol, verification, and monitoring of Iran’s nuclear obligations, and the cost of the inspectors. Amano called on IAEA member countries to contribute financial resources to meet the costs of implementing the JCPOA, which are projected to total $105 million over ten years. Needless to say, there is a colossal gap between this figure and Mr. Moghimi’s claim of $42.5 billion.

The Cost of Not Implementing the JCPOA

There is some disagreement over the exact costs and benefits associated with the implementation of the JCPOA and the effect of sanctions, but even the most radical opponents of the nuclear agreement have never claimed that implementing the deal  would cost Iran anything close to $42.5 billion. The closest example is a separate claim, made by the Fars News Agency, that the opportunity cost of dismantling nuclear facilities and forgoing future reactor construction would cost the country $18 billion.

Contrary to the claims of Mr. Moghimi, senior officials in President Rouhani’s administration have stated that much greater costs will fall on Iran if sanctions are continued and the JCPOA’s commitments are not fulfilled.

Mohammad Nahavandian is President Rouhani’s Chief of Staff and the Chair of Iran’s Chamber of Commerce, Industries, and Agriculture. In his meeting with members of the Majlis special commission on the JCPOA, Mr. Nahavandian said that Iran’s production and exports have plummeted at least 15% due to the sanctions imposed on the sector. He claimed that “Iran’s global share of oil sales used to be 2.5 million barrels (bpd), and has declined to 1.5 million barrels.”

Akbar Torkan, President Rouhani’s senior advisor also stated that “for Iran, each day of delay in implementing the provisions of the Vienna agreement would cost $100 million.”

The Majlis Research Centre (the Islamic Consultative Assembly Research Centre) has also published a number of reports on this question, and assessed the impact of the JCPOA on industry and the petrochemical, mining, and agricultural sectors to be positive and leading to decreased costs – in addition to an improved business climate. Mansour Haghighatpour, a member of the Foreign Policy and National Security Commission in Majlis, has also said that “Iran will stop economic losses of 2.5 billion rials per day when the JCPOA is implemented and sanctions are removed.” Iran’s Central Bank governor, Valiollah Seif, has declared that implementing the JCPOA will release $30 billion of blocked funds to the Central Bank.

Verdict

We rate Ahmad Ali Moghimi’s claim as “outrageous” — extremely false — because the MP for Neka, Behshahr, and Galougah offered no evidence to support his contention that implementing the JCPOA will cost Iran $42.5 billion or 1,300,000 billion rials. On the contrary, the director general of the IAEA projects the costs at $105 million over ten years, to be borne by member countries, and several official sources indicate that Iran stands to realize significant economic and financial benefits from its implementation.