Iran File

Zarif’s resignation feint can’t stop mounting hardliner pressure

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Key Takeaway: Iranian President Hassan Rouhani could have suffered a major blow when Foreign Minister Mohammad Javad Zarif tendered his resignation on February 25. It appears instead to have triggered Supreme Leader Ali Khamenei to intervene to keep Zarif in office, however, potentially strengthening Zarif’s hand and restoring his standing following Zarif’s embarrassment during the recent visit to Tehran of Syrian President Bashar al Assad.

Zarif was the architect and key public face of the nuclear deal that Rouhani has held up as the most significant accomplishment of his presidency, and whose preservation is his key legacy. Zarif’s departure from the administration would have deprived Rouhani of an important and popular ally in the face of mounting pressure from regime hardliners determined to destroy Rouhani’s policies and discredit him personally. His resignation attempt may have been meant to force the Supreme Leader and Rouhani to back him publicly or lose a key player at a critical time. If so, this mini-drama is unlikely to curtail growing hardliner frustration and discontent over the Joint Comprehensive Plan of Action (JCPOA) and the perceived failures of the Rouhani Administration. Revised February 27This edition of the Iran File was revised on February 27, in light of breaking news.   

Zarif resigned immediately after Assad’s unannounced *visit to Tehran. Reports suggest that the Iranian Foreign Ministry was not even notified of Assad’s visit, in which he did not participate. This rebuff was likely the immediate cause of Zarif’s resignation. Hardliners rejoiced at the news of Zarif resigning. Hardline parliamentarian and staunch Zarif critic Karim Ghodousi *reportedly handed out sweets during a session of Parliament after news of Zarif’s resignation broke. Zarif soon recalled his resignation, however, and returned to work on February 27.

Reformist news outlet Emtedad claimed on February 26 that Rouhani opposed Zarif’s resignation and that a “high-level regime official” (supposedly Supreme Leader Ali Khamenei) told Rouhani that Zarif’s resignation would not be expedient for the country. Rouhani formally elected not to accept his resignation on February 27, likely after Khamenei expressed his support for that decision. Zarif’s retraction of his resignation quickly followed.

Hardliner pressure against reformists, which has resurged in recent weeks, likely contributed to Zarif’s decision to resign. Eighteen parliamentarians *signed a motion to interpellate Rouhani on February 18. This follows a previous failed impeachment attempt against Rouhani in August 2018 and an impeachment attempt against Zarif in December 2018. Parliamentarians cited 14 grievances, including the Rouhani Administration’s approach to the effectively failed JCPOA. They accused Rouhani, and thus implicitly Zarif, of “consuming all of the diplomatic capabilities and capacity of the country for the JCPOA.” The motion quickly died but it signifies a trend of growing discontent among hardliners over the JCPOA and Europe’s failures to offer Iran the economic assurances it demands from the deal. Iran has already begun to push the envelope with Europe since the U.S. withdrew from the nuclear deal in May 2018. Zarif’s resignation attempt may stave off hardliner attacks and mounting pressure only temporarily.

Zarif is unlikely to curb strengthening hardliner trends regarding the ratification of key FATF legislation. Iran and Europe have yet to operationalize the recently-established Instrument in Support of Trade Exchanges (INSTEX) between Europe and Iran. The operationalization of INSTEX -- and likely of any follow-on special purpose vehicles (SPV) focused on sanctioned trade such as oil -- are implicitly tied to Iran’s completion of the remaining Financial Action Task Force (FATF)-related action items. Iran’s hardline-dominated Expediency Discernment Council (EDC) has already stiff-armed the ratification of the two remaining bills that Iran needs to implement in order to necessitate Iran’s accession to global anti-money laundering/counter-terror finance (AML/CFT) standards. Zarif is often *present for EDC deliberations over the bills as a subject matter expert and has played a crucial role in reformists’ efforts to get the bills passed in order to appease European concerns over Iran’s illicit finance environment. Reformists’ efforts to persuade hardliners to pass the two remaining bills is becoming increasingly unlikely, considering that recently-extended FATF deadline of June 2019 is soon approaching. Zarif’s continuance as Foreign Minister may extend the fight but it in no way ensures Rouhani’s victory against the growing hardliner tide in Iran.