News

UN Report Shows Need for Honesty and Improved Inspections

By Simon Chin and Valerie Lincy

There was not much news in the International Atomic Energy Agency’s latest report on Iran, which was distributed on February 19:  Iran continues to respect the restrictions of an interim nuclear deal struck with the United States and its partners; Iran also continues to stonewall the Agency’s long-standing investigation of “possible military dimensions” to the country’s nuclear program.  Yet the Agency’s report did highlight two essential elements of any acceptable nuclear agreement: intrusive inspections and genuine cooperation from Iran.

Iran has not offered such cooperation to the IAEA, despite a November 2013 agreement in which Iran promised to provide “timely information […] aimed at ensuring the exclusively peaceful nature” of its nuclear program.  According to the latest report, the Agency has been waiting since last August for Iran to explain “credible” allegations that it experimented with high explosives and conducted studies on neutron initiators – work which is “relevant to the development of a nuclear explosive device.”  Iran’s only response has been to call the Agency’s concerns “mere allegations” that “do not merit consideration.”  These questions remain unanswered to this day.

The reason is that, for Iran, talks with the United States are the center of gravity.  An agreement struck with the United States would dictate the degree to which Iran is required to come clean about any past weapon-related work.  Iran perceives no need to address weaponization questions separately with the IAEA, and has not been required to do so by the terms of the interim accord.

A “good deal” should compel Iran to account for its nuclear history and explain its past weaponization efforts.  This accounting requires genuine cooperation – the opposite of the obstructionist attitude Iran has had vis-à-vis the IAEA.  Such cooperation would be a sign of good faith from the Iranians.  And as a practical matter, the international community must understand the progress Iran has made in weaponization.  This progress is critical to estimating how long it would take Iran to “breakout” of any agreement and build nuclear weapons.  The time for “breakout” is central to the P5+1’s negotiating position.

The IAEA’s report also highlighted the need for intrusive inspections.  Iran is still barring the IAEA from visiting the site at Parchin, which has been linked to high explosives testing.  Also off limits has been Mohsen Fakhrizadeh, a military scientist considered an essential source of information about alleged weaponization work.  And Iran is only providing “managed access” to key sites such as plants for producing centrifuges and heavy water.

Such inspections must also provide a way to find any secret sites, ones Iran could use in a “sneakout” attempt to make bomb fuel as well as the components of a nuclear device.  Most analysts believe that an Iranian “sneakout” is a greater threat than an overt “breakout,” which would be detected more quickly.  In its report, the IAEA re-iterated that it “is not in a position to provide credible assurance about the absence of undeclared nuclear material and activities in Iran, and therefore to conclude that all nuclear material in Iran is in peaceful activities.”  In order to provide such a credible assurance, IAEA inspectors must have prompt access to any sites they suspect of forbidden activity and to any Iranian engineers and scientists they wish to question.  This would be a far more intrusive inspections regime than exists now.

Meanwhile, four days of nuclear talks wrapped up in Geneva on February 23 with momentum moving in favor of an agreement on general principles.  The New York Times reported yesterday that the two sides are discussing a “phased agreement,” in which Iran’s “breakout” capacity would be constrained for the first ten years of the deal, with the restrictions relaxed in the deal’s second phase.

Pennsylvania Man Pleads Guilty to Attempting to Ship Industrial Machine to Iran via Dubai

On May 20, 2014, Pennsylvania businessman  Helmut Oertmann pleaded guilty to attempting to ship a horizontal lathe (also known as a bar peeling machine or “peeler”) to Iran via Dubai without obtaining a necessary license from the U.S. Commerce Department.  These machines are used, among other things, in the production of high-grade steel for aircraft.  Oertmann, 76, is the CEO of Hetran, Inc., an engineering and manufacturing firm incorporated in New York and located in Orwigsburg, Pennsylvania.  Oertmann received a sentence of twelve months’ probation from U.S. District Court Judge Yvette Kane on December 3, 2014.  He and his company were fined $337,500, while an additional penalty of $500,000 was suspended by the judge for two years and will be waived if neither Oertmann nor Hetran commit further violations during that period.

According to court documents, in June 2009 Hetran was contacted by both FIMCO FZE, an Iranian company with offices in Iran and the United Arab Emirates (UAE), as well as Crescent International Trade and Services FZE, an affiliated company based in the UAE.  FIMCO describes itself as working in the oil, gas, and petrochemical industries.  In 2009, FIMCO representatives sought a price quote for the peeler from Hetran.  A group of Hetran employees then traveled to Dubai in mid-June 2009 to meet with Iranian representatives of FIMCO and Crescent.   During this meeting, the Iranian representatives told Hetran that they intended to buy the peeler and transship it to Iran via Dubai.  Given the U.S. embargo against Iran, Hetran employees suggested handling the transaction through the company’s Indian or German offices, with non-U.S. personnel providing the necessary training.

About a week after this meeting, Oertmann met with Suniel Malhotra, a sales at Hetran India.  The two agreed that a Dubai company would be listed as the end-user for the peeler and that the purchasers could then “do with it what they want.”  Oertmann also directed that the contract for the order should be executed through Hetran India rather than the company’s Pennsylvania headquarters.  Discussion about how to disguise the end use destination continued between 2009 and 2012, while the peeler was being built.  In July 2011, Crescent issued a purchase order for the peeler in the amount of $895,000.

In June 2012, Hetran attempted to export the peeler from Pennsylvania to the UAE with Crescent International in Dubai falsely identified as the machine’s end-user.  However, the peeler was reportedly intercepted by authorities and returned to Hetran, which apparently later sold it to a Russian firm.

A 2012 indictment against the Iranian individuals involved in this scheme was unsealed at the time that charges were filed against Oertmann.  These defendants are Khosrow Kasraei, a FIMCO manager; Mujahid Ali, FIMCO’s financial manager; and Reza Ghoreishi, a FIMCO senior sales engineer.  All three men are charged with conspiring to violate U.S. export laws and could receive up to 10 years imprisonment and a fine of up to $250,000.  Their corporations could also be fined $1 million each.

Helmut Oertmann could have faced up to 10 years in prison and a fine of $250,000, while Hetran Inc. could have been fined up to $1 million.

Suniel Malhotra, Hetran’s sales representative in India, was initially also a defendant in this case, but the charges against him were dropped in 2013.

Sources:

[1] Amended Information, United States of America v. Helmut Oertmann and Hetran, Inc., Case Number 1:14-cr-00111-YK, U.S. District Court, Middle District of Pennsylvania, May 21, 2014.

[2] “Schuylkill County Firm and Chief Officer Charged with Shipping Machinery to Iran In Violation of U.S. Export License Requirements,” Press Release, U.S. Department of Justice, April 23, 2014.

[3] Tom Fontaine, “Pa. Men To Plead Guilty to Smuggling Equipment to Middle East,” Pittsburgh Tribune-Review, April 23, 2014.

[4]  Indictment, United States of America v. Mujahid Ali, Khosrow Kasraei, Reza Ghoreishi, FIMCO FZE, Crescent International Trade and Services FZE, and Suniel Malhotra, Case Number 1:12-cr-00306-YK, U.S. District Court, Middle District of Pennsylvania, December 5, 2012.

[5] “Chief Officer of Engineering Firm Sentenced for Attempted Illegal Shipment to Iran,” Press Release, U.S. Department of Justice, December 3, 2014.

Related Library Documents: 

Pennsylvania Firm and Chief Officer Charged with Shipping Machinery to Iran in Violation of U.S. Export License Requirements
Amended Information, United States of America v. Helmut Oertmann and Hetran Inc.
Chief Officer of Engineering Firm Sentenced for Attempted Illegal Shipment to Iran

What Does a One Year “Breakout” Really Mean?

By Simon Chin and Valerie Lincy

In the ongoing nuclear talks with Iran, the P5+1 appear to have coalesced around one main objective: ensuring that Iran would need at least one year to produce enough fuel for a nuclear weapon using its declared facilities and material in a “breakout” scenario.

In testimony before the Senate Foreign Relations Committee on January 21, Deputy Secretary of State Antony Blinken explained that the Obama administration’s “entire focus is on ensuring that as a practical matter [Iran] is not able to produce enough material for a bomb in less than one year.”  And on the sidelines of the Munich Security Conference last month, British Foreign Secretary Philip Hammond declared a “one-year minimum breakout period” to be the P5+1’s “key red line” in the negotiations.

The assumption is that one year would allow the international community sufficient time to detect any violation; impose a new round of sanctions; and if sanctions fail, to take military action before Iran succeeds in making a bomb’s worth of fuel.  But when did this objective become the P5+1’s “key red line”?  What does a one year warning really achieve?

The first prominent mention of this benchmark appears to originate from Gary Samore, in a January 2014 interview with Jeffrey Goldberg for Bloomberg View. Dr. Samore, who had recently stepped down as the Obama administration’s WMD coordinator, argued that imposing a breakout time of one year would be a compromise that the administration would “settle for”: “If we were confident that we would have a year’s advance notice that they were starting to break out – to produce weapons-grade uranium – that would give us more than enough time to destroy the facility.  If the Iranians accepted this, I think the White House would go along.”

In the year since this interview, the one-year benchmark had become the administration’s official position. In an October 2014 interview, Secretary of State John Kerry declared that the P5+1 had “set a very clear standard” for the nuclear talks with Iran: “We’ve pledged that our goal is to shut off each pathway sufficient that we know we have a breakout time of a minimum of a year that gives us the opportunity to respond if they were to try to do that.”  Unlike Dr. Samore, however, Secretary Kerry did not explicitly invoke the possibility of a military response.

Yet any agreement that restricts Iran’s breakout capability to one year necessarily would rely upon the threat of military force for enforcement. One year is not enough time for new sanctions to take hold.  Robert J. Goldston, a physics professor at Princeton University, writing in the Bulletin of the Atomic Scientists on February 10, argued that it is “illusory” to believe that any new round of international sanctions would “change the leadership’s decision to build a nuclear weapon” in one year. He continued: “If Iran felt that extreme circumstances […] required it to visibly break a new international agreement at a declared, safeguarded facility […] then no financial sanctions of any kind would change its course.”  Military action becomes “the best bad option” in such a scenario, according to Dr. Goldston.

However, some supporting the administration’s negotiating position may not see that the logic of a one-year breakout benchmark requires the threat of military action on the back end.  In a February 12 column in the New York Times, Roger Cohen equated the “dismantlement camp” – those who say “every Iranian centrifuge much go” – with “a war camp.”  On the other side stands the “curtailment camp”: those seeking a deal that combines “intensive verification […] an extended period of much-reduced enrichment […] and assuring that Iran is kept at least one year from any potential ‘breakout’ to bomb manufacture.”  Yet Mr. Cohen left unanswered how the international community should respond to a theoretical Iranian violation of a “curtailment” agreement.

Beyond the specific case of Iran, the P5+1’s position also has implications for the nuclear non-proliferation regime.  An agreement allowing Iran to maintain enrichment activities would represent a concession to a country that has repeatedly violated the Nuclear Non-Proliferation Treaty, failed to come clean about the history of its nuclear program, and has been subject to U.N. Security Council resolutions calling for the suspension of enrichment.  Such an agreement would give ground on non-proliferation standards for the sake of reaching an accord.  Allies, in the region and elsewhere, could seek similar deals allowing some enrichment or reprocessing capability, as long as that capability kept them at least one year from a breakout.

The rationale for the P5+1’s one-year benchmark is not clear.  Dr. Samore, in his Bloomberg interview, stated that the Obama’s administration’s strategy throughout the negotiations has been “to buy time.”  This one-year benchmark may be an effort to do so.  But that objective may not deliver the stable resolution to the Iranian nuclear problem that the world is hoping for.

President Obama Rules Out Extension in Nuclear Talks

By Simon Chin and Valerie Lincy

President Barack Obama publicly ruled out another extension of the ongoing nuclear talks with Iran if no agreement on the principles of an accord is reached by late March. In remarks at a joint press conference with German Chancellor Angela Merkel on February 9, President Obama asserted that the Iranians had been presented with “a deal that allows them to have peaceful nuclear power but gives us the absolute assurance that is verifiable that they are not pursuing a nuclear weapon.” If Iran fails to agree to this “basic formulation,” the President continued, “I don’t see a further extension being useful.”

In his remarks, President Obama stated that the outstanding issues in the talks “are no longer technical” but rather a question of whether Iran has “the political will and the desire to get a deal done”: “We’re at a point where they need to make a decision.” If a framework agreement is reached by March 24, then negotiators will have until late June to finalize details.

Meanwhile, the outlines of the deal now being discussed were reported by the Associated Press on February 3.  According to the AP, the United States and Iran are discussing a proposal that would allow Iran to continue running “most” of its almost 10,000 centrifuges but “reconfigure” them to reduce their output of enriched uranium. This proposal reflects a large shift in U.S. policy, from seeking to deny Iran a nuclear weapon capability to managing and limiting that capability—a shift that has drawn criticism from editorial boards and former government officials.

Under the terms of the reported compromise, Iran would keep online most of the 10,000 first-generation IR-1 centrifuges it is currently operating, but the centrifuge cascades would be re-piped to reduce their efficiency in producing enriched uranium. The agreement would also reportedly include other restrictions, such as a limit on Iran’s storage of uranium hexafluoride gas and a requirement for Iran to ship out most of its production of enriched uranium. The proposed reduction in centrifuge efficiency would be a more readily reversible measure than an outright reduction in the number of centrifuges.

It is unclear whether the proposed compromise would meet the Obama administration’s objective of imposing a “breakout time” of one year on Iran. That is, ensuring that Iran would need at least one year to produce fuel for a nuclear weapon. In a breakout scenario, if Iranian scientists were to restore their existing centrifuges to their current efficiency, Iran could theoretically produce enough highly enriched uranium using natural uranium feed for one bomb in about six months.[1]

The critical question, therefore, becomes how long it would take for Iran to restore its centrifuge cascades.  In testimony before Congress in December 2014, David Albright, President of the Institute for Science and International Security, stated that disablement steps on centrifuges (more extreme than those mooted in the compromise) “appear to be reversible in less than six months of diligent work.”  Dr. Albright also observed that “there is no practical experience in disabling centrifuge plants” and that the timetable for restoration “could be shorter.”  If the process of restoring Iran’s cascades back to their original configuration were, in fact, to take less than six months, the proposed agreement would fall short of the Obama administration’s one-year benchmark for breakout.

Concerns over the possible compromise were raised by the Washington Post’s editorial board on February 5 and by former Secretary of State Henry Kissinger in Congressional testimony last month. The Post observed that the Obama administration, once intent on eliminating Iran’s enrichment capability, “now appears ready to accept an infrastructure of thousands of Iranian centrifuges.”  Dr. Kissinger observed that the nuclear talks with Iran have evolved from “an international effort … to deny Iran the capability to develop a military nuclear option” to a “bilateral negotiation” between the U.S. and Iran “over the scope of that capability.”  The impact of this shift, Dr. Kissinger observed, “will be to move from preventing proliferation to managing it.”  He warned that other countries in the region will want to match Iran’s capability, which could result in several more virtual nuclear weapon states.

Footnotes:

[1] Assuming (1) it takes 4,000 SWUs to produce 20 kg of HEU from natural uranium; (2) Iran’s centrifuges achieve their current average annual output of about .8 SWUs; (3) Iran operates 10,000 IR-1 centrifuges— it would take roughly 6 months to produce 4,000 SWUs.  

Related Iran Watch Library Documents: 

Remarks by President Obama on Iran Nuclear Talks in Press Conference (Excerpts)
Testimony of David Albright before the Senate Committee on Foreign Relations on “Next Steps to Achieve a Comprehensive Deal”
Testimony of Henry Kissinger before the Senate Committee on Armed Services on “Global Challenges and U.S. National Security Strategy”

Iran Launches Another Satellite; E.U. to Close Sanctions Loophole

By Simon Chin and Valerie Lincy

Iran conducted a successful satellite launch on February 2, sending the Fajr satellite into orbit aboard the Safir rocket.  The launch marks Iran’s fourth successful attempt to place a satellite into orbit, but the first since the Joint Plan of Action was signed in November 2013.  The launch once again raised the contentious issue of whether Iran’s ballistic missile program is or should be part of Iran’s ongoing nuclear talks with the P5+1.

Iranian news outlets reported that the Fajr satellite, weighing 52 kg, was deployed to a 250 to 450 kilometer orbit.  The two-stage Safir rocket is reported to be 22 meters long, with a diameter of 1.25 meters and a weight of 26 tons.  This diameter would be able to accommodate a nuclear warhead, although the rocket has so far carried only satellites weighing between 15 and 52 kg.

This latest launch once again raises the issue of Iran’s ballistic missile program.  The Safir rocket  “can serve as a test-bed for long-range ballistic missile technologies,” according to a 2013 report on missile threats by U.S. military intelligence.  There is little doubt that Iran’s space launch program is providing the country with the means to develop long-range missiles, including an intercontinental-range ballistic missile (ICBM).

Iranian Electronics Industries (IEI), a wholly-owned subsidiary of the Ministry of Defense Armed Forces Logistics, designed and built the satellite and its related communications systems, while the Aerospace Industries Organization (AIO) developed the Safir launch vehicle.  AIO is also a subsidiary of the Ministry of Defense and oversees Iran’s missile production.  Both entities have been sanctioned by the United States and the European Union for their links to Iran’s nuclear and/or ballistic missile program.  Following the launch, Iran’s Defense Minister Hossein Deqhan boasted that “sanctions haven’t stopped Iran’s scientific growth; the youth of the Islamic Iran have built the Fajr satellite and sent it into the Earth’s orbit successfully….”

According to Iranian news reports, Iran plans to launch three more satellites using a larger and more advanced launch vehicle.  Between March 2015 and March 2016, the three satellites will be carried by the Simorgh, a two-stage space launch vehicle.  According to Iran’s space agency, the Simorgh can place a 100 kg satellite into 500 km orbit.  The launcher is said to use a configuration similar to that of North Korea’s Taepodong-2 ballistic missile.  The 2013 U.S. military intelligence report warned that the Simorgh “could serve as a test bed for developing ICBM technologies.”

In response to the launch, U.S. State Department spokesperson Jen Psaki claimed that Iran’s ballistic missile capabilities are indeed part of the nuclear talks between Iran and the P5+1.  Iranian Deputy Foreign Minister Seyed Abbas Araqchi, however, insisted that “raising and negotiating the country’s defensive and missile capability in Iran’s nuclear talks with the Group 5+1 … has never been allowed in the past nor at present nor in future.”

Meanwhile, the European Union is set to close a loophole in its sanctions regime.  The loophole has enabled a series of successful legal challenges to the E.U.’s asset freezes and travel bans against Iranian firms and individuals.

On January 22, the E.U.’s General Court struck down sanctions against Bank Tejarat, an Iranian bank blacklisted by the E.U. and the United States in 2012 for directly supporting the Iranian nuclear program and helping other Iranian banks evade sanctions.  The court ruled that the E.U. failed to present evidence linking the bank to proliferation activities.  The evidence, however, was confidential and under current court rules, all evidence must be shared with counsel representing the entities challenging sanctions.  Consequently, many E.U. member-states have been reluctant to offer sensitive intelligence as evidence to the court.

The Bank Tejarat ruling is just the latest in a series.  Over the past 2 years, the court has overturned a number of E.U. designations imposing sanctions against entities tied to the Iranian nuclear and missile programs.  Perhaps the most notorious decision was the overturning in December 2014 of the designation of Hamas as a terrorist organization.

This loophole should be closed following an E.U. minister’s meeting on February 10.

Related Iran Watch Library Documents: 

Comments by Spokesperson Jen Psaki on Iranian Satellite Launch (Excerpts)
Remarks by U.S. Ambassador to the EU Anthony Gardner on Economic Sanctions (Excerpts)

Obama Administration Wins Delay on Sanctions from Senate Democrats

By Valerie Lincy and Gary Milhollin

The Obama administration sent two top officials to Congress twice in the past week, to defend ongoing nuclear talks with Iran and to argue against two Iran-related bills gaining ground in the Senate.  The lobbying effort was partially successful, as Senate Democrats today announced plans to delay a vote on new sanctions until after a late March negotiating deadline.

In a January 21 hearing before the Senate Foreign Relations Committee, Under Secretary of the Treasury for Terrorism and Financial Intelligence David Cohen and Deputy Secretary of State Antony Blinken were repeatedly asked to justify their opposition to the prospective sanctions proposed by Senators Kirk and Menendez, which would take effect only if no final deal is reached or if Iran reneges on its terms.  Deputy Secretary Blinken argued that such sanctions would be perceived as a violation of the interim nuclear accord by Iran and by U.S. negotiating partners.  He warned that the sanctions “could provoke Iran to walk away from the negotiating table,” or that they could lead Iranian negotiators “to adopt more extreme positions,” and that other countries would be less willing to enforce existing sanctions or adopt new ones.  He called on Congress to “be patient for a few more months to fully test diplomacy.”

It seems this call was at least partially successful.  At a Senate Banking Committee hearing one week later, Senator Menendez called for postponing a floor vote on the new bill until after March 24, the deadline the administration has given for arriving at a “framework agreement” on the core elements of a final deal.  In a January 27 letter to President Obama, Senator Menendez and nine other Senate Democrats said that while they “remain deeply skeptical” about Iran’s intentions in the talks, they are willing to delay a vote, “in acknowledgement of […] concerns regarding congressional action on legislation.”

This decision may buy the administration some time, but it places additional pressure on the late March deadline.  Little detail emerged from the most recent round of multilateral talks, which concluded last week in Geneva, or from bilateral U.S.-Iran talks, held late last week in Zurich.  It does not appear that negotiators are much closer to reaching agreement – even a basic “framework agreement” – on the most controversial aspects of Iran’s program than they were last November, when talks were extended.

Senators also grilled Under Secretary Cohen on sanctions during the January 21 hearing.  He argued that sanctions had been “vigorously enforced,” including the period since the interim accord was struck in November 2013.  Since then, according to Under Secretary Cohen, “the United States has sanctioned nearly 100 individuals and entities that were helping Iran evade our sanctions, aiding Iranian nuclear and missile proliferation,” among other sanctionable activity.

Meanwhile, European Union sanctions continue to be challenged in court.  In the latest such example, the European General Court struck down sanctions against Bank Tejarat in a January 22 judgment.  On the same date, the Court struck down sanctions against a handful of companies associated with the Islamic Republic of Iran Shipping Lines (IRISL) that operate in Cyprus, Germany, and Malta.  The European Union now has two months to appeal these decisions or to reimpose sanctions under new grounds.  In most past challenges, the EU has chosen to do one or the other, thus limiting the effect of these cases.

Bank Tejarat, which is also on the U.S. blacklist, has helped other designated Iranian banks evade sanctions, and has facilitated the purchase of yellowcake uranium by Iran’s Atomic Energy Organization.  It has also facilitated payments on behalf of U.N.-sanctioned entities such as the Shahid Hemmat Industrial Group (SHIG) and the Ministry of Defense Armed Forces Logistics (MODAFL).

Showdown on Iran Sanctions

By Valerie Lincy and Gary Milhollin

The debate over new Iran sanctions heated up last week, as President Barack Obama called for Congress to “show patience,” while Senate leaders finalized language on two sanctions bills.

The bill sponsored by Senators Mark Kirk (R-IL) and Bob Menendez (D-NJ) received most of the President’s attention during a joint press conference with British Prime Minister David Cameron on January 16.  This bill would impose new sanctions after the June 30 negotiating deadline, if no final deal is reached or if Iran reneges on the terms of a deal.  A vote reportedly is expected in the Senate by early March – in advance of a deadline the United States has set for reaching a “framework agreement” with Iran.

The President had nothing good to say about the bill, which he threatened to veto.  He claimed that it would “jeopardize the possibility of getting a deal over the next 60 to 90 days,” would “potentially fray” the global enforcement of existing sanctions, and could “fracture” unity among the P5+1 countries negotiating with Iran.  He also warned that war would become more likely, and that the world would view the United States as the cause of diplomacy’s failure.

Despite the President’s dire predictions, which were echoed by Prime Minister Cameron, would prospective sanctions – taking effect only if talks fail – really cause Iran to walk away?  It seems unlikely.  The talks are in Iran’s interest: they limit some nuclear activity but do not require the dismantlement of any nuclear infrastructure; they provide some sanctions relief and freeze what had been international momentum toward more sanctions; and they have essentially led to an acceptance of uranium enrichment in Iran.  The Kirk-Menendez bill would not threaten any of those gains unless Iran left the negotiating table.

That said, the new sanctions bill would not achieve much now that it would not achieve if passed in July, assuming no agreement is reached by the June 30 deadline.  As President Obama pointed out, Iranian negotiators are keenly aware that it would be easy for the President to get new Iran sanctions through Congress.

The prospect that a final deal may not be achieved is growing.  A series of talks that began on January 14th and concluded on the 18th yielded little.  According to a French negotiator, “the mood was very good, but I don’t think we made a lot of progress.”  In an article in the National Interest on January 14, former State Department negotiator Robert Einhorn argued that throughout 2014, “Iran has not budged on enrichment” or on the term of a final deal.  Unless Iranian leaders “show sufficient flexibility” on these points, “there will be no deal” he argued.  Talks resume in Geneva in early February.

Meanwhile, the State Department quietly imposed additional sanctions on several well-known proliferators late last year, which it announced in a Federal Register notice on December 30.  Using the Iran, North Korea, and Syria Nonproliferation Act, the State Department designated Iranian entities involved in missile work and their Chinese suppliers, including Milad Jafari, Iran Electronics Industries, and the Islamic Revolutionary Guard Corps, along with Chinese national Li Fang Wei (Karl Lee) and his company LIMMT (Dalian Sunny Industries), and Beijing-based Wah Cheong Tai Company.  The sanctions apply for two years and ban the U.S. government from procuring from, contracting with, or providing assistance to the entity.

GOP Threatens to Boost Sanctions

By Gary Milhollin and Valerie Lincy

Senator Mark Kirk, Republican of Illinois, repeated last week a widely held prediction:  The Senate, now controlled by his party, will vote new sanctions against Iran as one of its first items of business.  The most likely vehicle will be the bill he and Senator Robert Menendez (D-NJ) introduced in late 2013 (S. 1881 or the Nuclear Weapon Free Iran Act).  The bill bristles with tough-sounding provisions, faces a White House veto, and could dominate debate over Iran for the next month.  But the interesting question is:  What would it really accomplish?

The bill operates in stages.  First, it imposes sanctions.  These include measures requiring countries to further reduce Iranian oil imports to “de minimis” levels within one year and the expansion of financial sanctions to “strategic sectors” in Iran (construction, mining, and engineering), as well as to entities operating in special economic zones and free trade zones controlled by Iran.  The bill then allows the President to suspend these sanctions.  But only if he certifies that certain conditions exist.  One condition is that the Iranians continue to negotiate toward a final deal.  Another is that they don’t violate the interim accord that now exists.  These are the main requirements cited in support of the bill.  The curious thing is that Iran seems unlikely to run afoul of either.  It is true that Iran has shown little stomach for getting rid of its centrifuges or dismantling its nuclear infrastructure, but it has shown even less for abandoning the talks.  And Iran has been careful not to breach the letter of the interim accord.  The bill also bars acts of terrorism, and testing a missile with a range above 500 km, but Iran could satisfy those requirements too if it wanted to keep the talks going, which it apparently does.  So, once the bill is whittled down enough to survive a veto, and contains even fewer hurdles than it does now, what can it hope to achieve as long as negotiations continue?

The administration has warned that any bill, even one having no effect as long as Iran is “proactively and in good faith engaged in negotiations,” would be a provocation.  It would risk having Iran quit the talks in protest.  U.S. Ambassador to the United Nations Samantha Power warned on January 12 that with more sanctions, “Iran would be able to blame the U.S. for sabotaging the negotiations” and countries that have heretofore supported U.S. sanctions would balk at strengthening them.  And if Iran quit the talks, the bill itself would have caused a breach of one of its own requirements – that Iran keep talking.  In effect, the bill would have torpedoed the talks and replaced them with sanctions.  Perhaps its sponsors do not believe Iran actually would walk out.  Or perhaps they are willing to accept such an outcome because they view Iran’s participation in the talks as disingenuous, and stronger sanctions – or their looming prospect – as the only way to cut off Iran’s path to nuclear weaponry.  More will come to light in the coming weeks, when the Senate debate begins.

More may also come to light this week as talks resume in Geneva – about two months ahead of the preliminary March deadline set by the United States.  Secretary of State John Kerry has said he hopes Iran and the P5+1 can reach a “political agreement” on the “major elements” of a final deal by then.  If they do, the Senate bill would allow the President to suspend the sanctions if  the deal meets Congress’ additional requirements, including the dismantlement of Iran’s “illicit” infrastructure, compliance with U.N. resolutions, the resolution of questions about possible military dimensions to its nuclear program, and enhanced monitoring by international inspectors.

Plus Ca Change…More Sanctions and Hopeful Comments Ring in New Year

By Valerie Lincy and Gary Milhollin

Nuclear negotiations with Iran assumed a familiar pose in the waning days of December and the first days of 2015.  Positive comments by both sides accompanied little progress.  In an interview with National Public Radio on December 29, President Barack Obama entreated Iran yet one more time to “get right with the world.”  The President said that reaching a nuclear deal – which he described as “possible” – would give Iran “a path to break through” its isolation, while allowing the country “to develop a modest nuclear power program.”  In a speech on January 4, President Hassan Rouhani echoed this sentiment and sought support for a nuclear compromise saying “we can’t have sustainable growth while we are isolated” and arguing that “our cause is not linked to a centrifuge.”

Nuclear talks held in mid-December reportedly yielded a document outlining areas of agreement and of disagreement, along with various ways of resolving remaining disagreements.  One dispute  is over the amount of enriched uranium Iran would be allowed to keep.  Iran has over 8,000 kg of low-enriched uranium, theoretically enough to fuel seven nuclear weapons after further enrichment and processing.  The proposed solution is to send some amount of this material (along with enriched uranium produced in the future) to Russia.  The next round of negotiations will take place next week in Geneva.

Meanwhile, the U.S. Treasury Department continued to enforce existing sanctions.  New measures were announced on December 30 targeting six individuals and three companies.  Under Executive Order 13622, aimed at those that provide financial support to the Government of Iran or its Central Bank, Treasury blacklisted Hossein Zeidi, Seyed Kamal Yasini, Azizullah Asadullah Qulandary, Asadollah Seifi, Teymour Ameri, and the Dubai-based Belfast General Trading for helping Iran obtain hundreds of millions of dollars in U.S. bank notes.  According to Treasury, the individuals helped convert Iranian funds into U.S. dollars and deliver the funds using “couriers to hand carry this money to Tehran.”

In addition, Asia Bank official Anahita Nasirbeik was blacklisted for converting and facilitating “the delivery from Moscow to Tehran of U.S. bank notes valued at more than $10 million to representatives of the Iranian government.”  Asia Bank is an Iranian-owned bank based in Moscow that was previously designated by Treasury.

Two Tehran-based technology firms were also added to Treasury’s blacklist on December 30.  Douran Software Technologies was designated under Executive Order 13628, which targets censorship, for supporting government efforts to filter web pages and monitor computer activity.  Abyssec was designated under Executive Order 13553, which targets human rights abuses, for supporting the Islamic Revolutionary Guard Corps’ “offensive information operations capabilities.”

Also on December 30, Treasury updated the names and flags of 30 blacklisted vessels affiliated with the Islamic Republic of Iran Shipping Lines (IRISL).  The changes suggest that IRISL is no longer easily able to use flags of convenience in order to disguise the origin of its vessels.  In all 30 cases, vessels that had been flagged Hong Kong, Bolivia, or Malta, for example, have reverted to Iranian flags.  Similarly, the changes to vessel names reported by Treasury suggest that IRISL has given up on using generic vessel names for blacklisted ships in an effort to disguise their origin.  For example, vessels named “Begonia” or “Celestina” have been renamed “Neshat” and “Termeh.”  IRISL made most of these name and flag changes in 2012, according to the Equasis website, so Treasury is essentially playing catch up.

Sanctions are also headed for debate in the new U. S. Congress, which will be controlled by Republicans.  The Senate is expected to take up quickly a bill introduced in 2013 by Senators Mark Kirk (R-Ill.) and Robert Menendez (D-N.J.) that would increase sanctions if Iran walks away from the existing negotiations or fails to abide by the nuclear restrictions of the interim nuclear accord, which has been extended until June.  A separate bill would require Congress to approve any final deal before sanctions could be lifted permanently.  Both bills have wide support and could pass over White House opposition.  Whether they could survive a veto is more doubtful.

Pakistan Missile Milestones – 1961-2014

1961: Establishment of the Space and Upper Atmosphere Research Commission (SUPARCO), Pakistan’s space agency.

1962: The U.S. National Aeronautics and Space Administration (NASA) helps train Pakistani scientists and engineers. Pakistan launches its first sounding rocket.

1985: Congress passes the Pressler Amendment barring U.S. aid unless the U.S. president can certify Pakistan does not possess a nuclear explosive device.

1985: Establishment of the Combat Development (CD) Directorate, which conducts research and development on ballistic missiles in cooperation with SUPARCO.

1989: According to Pakistani sources, Hatf-1 and Hatf-2 ballistic missiles are fired to ranges of 80 and 300 kilometers respectively. Pakistan and China also sign a ten-year cooperation agreement in defense science, technology and industry, including joint procurement, research and development, production and technology transfer.

1990: President Bush can no longer certify Pakistan has no nuclear weapons. The United States suspends military aid to Pakistan.

July 1990: Pakistan’s first satellite, the 50 kg Badr-A (Badr-1), is launched as part of a test flight of China’s Long March 2E booster, according to Aviation Week and Space Technology.

1991: The United States sanctions two Chinese entities and Pakistan’s SUPARCO for missile proliferation activities.

April 1991: The Washington Post reports that U.S. intelligence agencies have spotted what appears to be a number of launch vehicles for Chinese M-11 ballistic missiles in Pakistan.

December 1991: A Chinese Foreign Ministry spokesman announces that China’s Ministry of Aerospace Industry and Pakistan’s SUPARCO have signed an agreement on cooperation in the peaceful application of space sciences and technology.

January 1992: The New York Times cites senior Bush administration officials as stating that China has delivered guidance systems for M-11 ballistic missiles to Pakistan.

June 1992: The U.S. Department of Commerce amends the Export Administration Regulations (EAR) to clarify which destinations will require a validated license “when an exporter knows that the items will be used in the design, development, production or use of missiles.” Pakistan’s Hatf series is among the missile programs targeted.

1993: The United States sanctions Pakistan’s Ministry of Defense and ten Chinese entities for missile proliferation activities.

1994: Pakistani Prime Minister Benazir Bhutto says the testing and deployment of India’s Prithvi surface-to-surface missile “threatens to trigger a missile race in the subcontinent.”

1995: U.S. intelligence says it has strong evidence that Pakistan is building storage sheds, mobile launchers and maintenance facilities at the Sargodha military airbase for Chinese-supplied M-11 missiles.

May 1995: The periodical Flight International reports U.S. authorities are warning that Pakistan’s SUPARCO has approached companies in several European countries to acquire, among other items, composites, specialist alloy, and a range of production and testing equipment for producing ballistic missiles.

March 1996: Taiwan confiscates 15 tons of ammonium perchlorate, used in the production of missile propellant, from a North Korean freighter bound for SUPARCO.

June 1996: Intelligence reports claim that Pakistan has uncrated and deployed the M-11 missiles.

July-December 1996: The U.S. Central Intelligence Agency (CIA) states that Pakistan is making “strong efforts to acquire an indigenous capability in missile production technologies,” and that China “was a major supplier to Pakistan’s ballistic missile program, providing technology and assistance.”

October 1996: The Washington Post reports that, according to a classified U.S. National Intelligence Estimate, Pakistan may have developed nuclear warheads to mount on its M-11 missiles. U.S. intelligence officials also state that China is assisting Pakistan to build a missile factory in a Rawalpindi suburb, anticipated in a year or two to be able to produce most of the major components of a Chinese M-11 missile.

December 1996: Hong Kong custom officers raid a Chinese vessel and find 10 metric tons of ammonium perchlorate. The cargo is believed to have been shipped by the North Korean company Lyongaksan and bound for SUPARCO.

1997: The CIA states that Chinese and North Korean entities continue to provide assistance to Pakistan’s ballistic missile program, which is “critical for Islamabad’s efforts to achieve independence from foreign sources and to produce long-range ballistic missiles.”

April 1998: Pakistan tests the new Ghauri (Hatf-V) missile. The Ghauri is a nuclear-capable, liquid fuel medium-range ballistic missile (MRBM), with a range of 1,300 km.

May 1998: The U.S. State Department imposes two-year sanctions on Khan Research Laboratories (KRL) and Changgwang Sinyong Corporation of North Korea for cooperating on missile development.

May 1998: Pakistan conducts a series of underground tests of nuclear devices in response to recent Indian tests. The United States proceeds to implement sanctions, in place by November 1998, on a large number of Indian and Pakistani research, development, and production entities involved in space and missile technology.

July 1998: The Commission to Assess the Ballistic Missile Threat to the United States, led by Donald H. Rumsfeld, concludes that Pakistan has acquired production facilities to build the Ghauri (Hatf-V) MRBM, which is described as a version of the North Korean Nodong. It also concludes that Pakistan possesses M-11 missiles obtained from China and may be able to produce the “Tarmuk” missile based on the Chinese M-11.

August 1998: Pakistan claims it has recovered an American Tomahawk missile, which was fired during an American attack against terrorist camps in Afghanistan. Some Pakistani officials claim the find could help advance Pakistan’s missile technology, but American defense officials disagree.

September 1998: Pakistan completes a mobile, re-usable launcher designed for use with the solid-fuel, nuclear capable Shaheen-I (Hatf-IV) short range ballistic missile (SRBM).

January 1999: Pakistan announces it is ready to test the Shaheen-I (Hatf-IV) missile. The solid fuel missile has a range of 750 kilometers, and is designed to counter India’s nuclear capable Prithvi missiles.

February 1999: Indian Prime Minister A. B. Vajpayee and Pakistani Prime Minister Nawaz Sharif meet in Lahore, Pakistan. The leaders agree to exchange strategic information about their nuclear arsenals, to give each other advance notice of ballistic missile tests, and to increase efforts to resolve the Kashmir issue.

April 1999: Pakistan tests the liquid-fuel Ghauri-II MRBM in response to India’s test of the Agni-II missile. KRL officials claim that the missile has a range of 2,300 kilometers. Pakistan also successfully tests the Shaheen-I (Hatf-IV) missile.

September 1999: KRL successfully tests the engine of the new Ghauri-III intermediate-range ballistic missile (IRBM). The Pakistani Foreign Ministry claims the Ghauri-III will have a range of 2,700-3,000 kilometers, which would allow Pakistan to target all of India.

2000: Pakistan streamlines its command and control system with the establishment of the National Command Authority (NCA), with the Strategic Plans Division (SPD) as its secretariat. The NCA is given broad power over “all issues relating to nuclear and space technologies” in Pakistan, bringing all national strategic organizations under its authority. According to Feroz Hassan Khan, the NCA replaces the CD Directorate.

February 2000: Pakistan tests the 100-kilometer-range Hatf-1A solid-fuel, ballistic missile, developed by the Pakistan Atomic Energy Commission (PAEC).

March 2000: Pakistan unveils the road-mobile, solid-fuel, two-stage Shaheen-II (Hatf-VI) MRBM at the annual Pakistan Day parade. Pakistani authorities claim it has a range of 2,500 kilometers and can carry a 1,000 kilogram payload.

January 2001: Reported establishment of the National Engineering and Scientific Commission (NESCOM), which oversees Pakistan’s missile development efforts.

March 2001: The periodical Dawn cites Dr. Abdul Qadeer Khan (a.k.a. A.Q. Khan) as saying that Pakistani scientists are developing the nation’s first Satellite Launch Vehicle (SLV) under SUPARCO.

June 2001: According to a senior U.S. nonproliferation official cited in the periodical Nuclear Fuel, experts from KRL and experts from North Korea are cooperating on the development of solid-fuel missiles.

July-December 2001: The U.S. Director of Central Intelligence’s Unclassified Report to Congress on the Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions reports that Chinese entities continue to provide “significant assistance,” enabling Pakistan to move “toward serial production of solid-propellant SRBMs such as Shaheen-I and Haider-I.” The report adds that Pakistan “needs continued Chinese assistance to support development of the two-stage Shaheen-II (Hatf-VI) MRBM.”

August 2001: According to the Deputy Director of the CIA, John E. McLaughlin, North Korea transferred the 1,300 km-range Nodong ballistic missile to Pakistan.

September 2001: U.S. President George Bush lifts sanctions against India and Pakistan imposed after the 1998 nuclear tests.

May 2002: Pakistan reportedly successfully tests the Ghaznavi (Hatf-III) missile for the first time. The short-range, surface-to-surface missile is reportedly capable of carrying a nuclear weapon and has a range of 290 km. The Ghaznavi is reportedly based on the Chinese M-11.

May 2002: Pakistan successfully test fires the Abdali (Hatf-II) missile for the first time. The short-range, surface-to-surface missile has a range of 180 km and can carry a nuclear warhead.

January-June 2003: The U.S. Director of Central Intelligence’s Unclassified Report to Congress on the Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions reports that Chinese entities continue to provide assistance for Pakistan’s ballistic missile program despite a Chinese pledge to the United States in November 2000 to end such assistance to nuclear capable ballistic missile programs.

March 2004: The periodical Press Trust of India reports that Pakistan has test-fired the 2,000 km-range Shaheen-II (Hatf-VI) missile for the first time.

July 2004: During an interview with the periodical Asahi Shimbun, former Pakistani Prime Minister Benazir Bhutto is quoted as saying that Pakistan obtained missile technology from North Korea after Bhutto’s December 1993 goodwill mission. Bhutto emphasizes that missiles were not exchanged for nuclear technology.

September 2004: Pakistan’s National Assembly passes the Export Control on Goods, Technologies, Material and Equipment Related to Nuclear and Biological Weapons and their Delivery Systems Act. The finalized bill defines delivery systems as “missiles exclusively designed and adapted to deliver a nuclear or biological weapon.” It covers “every citizen of Pakistan or person in the service of Pakistan within and beyond Pakistan or any Pakistani visiting or working abroad, any foreign national while in the territories of Pakistan and any ground transport, ship or aircraft registered in Pakistan wherever it may be.”

August 2005: India and Pakistan reach an agreement on notification of flight-testing of ballistic missiles, following two days of talks on nuclear confidence-building measures.

August 2005: A Pakistani military spokesman reportedly announces that Pakistan has successfully tested its first nuclear capable, ground-launched cruise missile, the 500 km-range Babur (Hatf-VII).

August 2005: India’s Scientific Advisor to the Defense Minister states that Pakistan’s Babur (Hatf-VII) cruise missile is not supersonic or indigenously developed as claimed by Pakistan. New Delhi Force, an independent Indian magazine, alleges that the Babur resulted from the transfer of technology from China’s state-owned China National Precision Machinery Import and Export Corp. (CPMIEC) to Pakistan’s state-owned National Development Complex (NDC).

January-December 2007: The U.S. Director of Central Intelligence’s Unclassified Report to Congress on the Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions reports that private Chinese companies continue to sell equipment usable in ballistic missile, chemical weapon, and nuclear weapon programs to Pakistan.

March 2007: Pakistan reportedly successfully test fires the Babur (Hatf-VII) cruise missile, which it says is nuclear capable and has an increased range of 700 km.

April 2007: Pakistan establishes the Strategic Export Control Division (SECDIV), which will be the only authority approving the export of nuclear-related items and missile technology. The move follows the adoption of Pakistan’s Export Control Act in September 2004.

August 2007: Pakistan reportedly successfully tests its new Ra’ad (Hatf-VIII) air-launched cruise missile (ALCM). Pakistan’s military claims that the cruise missile has a range of 350 km and can deliver nuclear warheads.

April 2008: The Pakistan Army conducts the first successful training launch of the Shaheen-II (Hatf VI) MRBM.

June 2008: The existence of digitized blueprints for a compact, sophisticated nuclear weapon on computers linked to the A.Q. Khan network becomes public. The New York Times reports that nuclear experts believe the small, allegedly Pakistani-origin weapon would fit on medium-range missiles such as Pakistan’s Ghauri (Hatf-V) MRBM.

August 2009: According to the New York Times, the United States accuses Pakistan of illegally modifying American-made missiles to expand their ability to strike targets on land. An unannounced Pakistani missile test in April, detected by U.S. intelligence agencies, has led the United States to suspect Pakistan of modifying Harpoon anti-ship missiles sold to Pakistan in the 1980s.

April 2010: According to The Australian, Canberra blocks a shipment of two atomic absorption spectrophotometers by GBC Scientific Equipment to a Pakistani engineering company, citing concerns that the machines could be used to analyze metals used for centrifuges and missiles.

January-December 2011: The U.S. Director of Central Intelligence’s Unclassified Report to Congress on the Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions reports that Chinese entities, “primarily private companies and individuals,” continue to export missile-related equipment to Pakistan, and that China’s state-owned firms continue to serve as key suppliers of advanced conventional weapons to Pakistan.

April 2011: Pakistan successfully tests the Nasr (Hatf-IX) multi-tubed SRBM, a nuclear-capable missile with a range of 60 km. Pakistan claims that the addition of this missile to the country’s arsenal “addresses the need to deter evolving threats.”

August 2011: Pakistan’s first communications satellite, the PakSat-1R, developed jointly by SUPARCO and the China Great Wall Industry Corporation (CGWIC), is launched aboard a Chinese SLV from the Xichang Satellite Launch Center.

September 2011: Reports emerge that Chinese firms have sold or have attempted to sell equipment to Pakistan that could be used in its ballistic missile program. These transactions include: an illegal sale by the Chinese firm Polytechnologies of a coil-winding device and specialized optical chips to Pakistan’s Advanced Engineering and Research Organization; a planned sale of machinery by the Chinese company Jinan Metal Forming Machinery Engineering Co. to Pakistani defense organizations; and an attempted sale of 2,200 pounds of specialty steel by a Chinese company to Pakistan’s Aginel Enterprises.

January 2012: Nadeem Aktar is sentenced by a judge in Maryland to 37 months in prison followed by two years of supervised release for illegally exporting nuclear-related materials to restricted entities in Pakistan. These transactions included the supplying of 90 fixed coaxial attenuators to SUPARCO.

April 2012: Pakistan successfully tests the nuclear-capable Shaheen-1A (Hatf IV) IRBM, an improved version of the Shaheen-1.

May 2012: Pakistan successfully tests the Ra’ad (Hatf VIII) ALCM using the newly-developed Strategic Command and Control Support System (SCCSS) developed by the NCA.

September 2012: Pakistan successfully tests the Babur (Hatf VII) cruise missile using the SCCSS system.

November 2012: Pakistan tests the Ghauri (Hatf-V) MRBM using the SCCSS. Although announced as a success by the Pakistani military, local media report that the missile disintegrated during the flight.

November 2013: Pakistan successfully tests the Nasr (Hatf IX) SRBM in salvo mode, launching four missiles in succession.

May 2014: Pakistan successfully tests the Ghaznavi (Hatf III) SRBM as part of a field training exercise conducted by the Army Strategic Forces Command.

September 2014: The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) adds Pakistan’s Advanced Engineering Research Organization (AERO) and eight of its affiliate organizations to the U.S. Entity List for illegally procuring U.S.-origin items in support of Pakistan’s development of missiles and unmanned aerial vehicles (UAVs). The eight affiliate organizations are Vortex Electronics (Australia), Beijing Lion Heart International Trading Company (China and Hong Kong), Future Systems Pvt. Ltd. (Pakistan), IKAN Engineering Services (Pakistan), LT Engineering and Trade Services (Pvt) Ltd. (LTE) (Pakistan), Nazir and Sons International (Pakistan), Orion Eleven Pvt. Ltd. (Pakistan), and Izix Group Pte Ltd. (Singapore).