News

Two Los Angeles-Area Men Arrested in Conspiracy to Export Defense Items to Iran

Two men based in the Los Angeles area were arrested on October 26, 2016 on federal charges related to a conspiracy to export military aircraft parts and other defense items to Iran.  Zavik Zargarian, 52, of Glendale, California, and Vache Nayiran, 57, of Lakeview Terrace, California, were taken into custody and charged with violations of the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR).  Zagarian and Nayiran are both dual citizens of Iran and the United States.

The indictment, unsealed on October 26, also names Zagarian’s Glendale-based company, ZNC Engineering, along with two Iranian nationals believed to be in Iran: Hanri Terminassian, 55, and Hormoz Nowrouz, 56.

The indictment alleges that the five defendants participated in a scheme to purchase and illegally export fluorocarbon rubber O-rings to Iran.  O-rings have a variety of military applications and can be used in aircraft hydraulic systems and landing gear.  According to the indictment, Nowrouz, who is managing director of a company called Kalaye Sanaty Iran (KSI), would contact Tarminassian with requests to acquire the O-rings.  Tarminassian, who is a citizen of Iran and a legal permanent resident of the United States, would then contact Zargarian.  Zargarian used his company, ZNC Engineering, to purchase the O-rings from a California-based company. Tarminassian would then arrange for payment to be sent through Nayirian, who would assure the transfer of funds to Zargarian.  Nayrian would ship the O-rings to addresses in Dubai or Kuwait using deliberately falsified export documents that undervalued the items in order to avoid suspicion by the authorities.  Tarminassian would then arrange for the transshipment of the items to Iran, where the ultimate end-user was the Iranian Air Force. According to the indictment, the defendants exported more than 7,000 O-rings to Iran.

Federal authorities also accused three of the defendants of conspiring to purchase and ship jet fighter aircraft parts worth over $3.6 million to Iran.  According to the indictment, Zargarian, acting as an officer of ZNC Engineering, sought to acquire military aircraft parts from U.S.-based suppliers on behalf of Tarminassian. These parts include a pneumatic accumulator, a liquid oxygen converter, and a liquid oxygen tank, parts which can be used in F-14, F-15, F-16, and F-18 fighter jets.  Zagarian negotiated to purchase between 10 and 30 units of each item for Tarminassian from an undercover Homeland Security Investigations officer posing as a parts supplier.

The trial for Zargarain and Nayirian begins on December 20, 2016 in federal court before U.S. District Judge S. James Otero.  If convicted on all counts, Zagarian faces a maximum sentence of 115 years in prison and a $4,770,000 fine.  Nayiran faces 95 years in prison and a $3,700,000 fine.  Both defendants pleaded not guilty and were freed on bail on October 26.  Tarminassian and Nowrouz remain at large.


Sources:

[1] “Two Los-Angeles-Area Men Among Those Charged in Scheme to Smuggle $3 Million in Military Aircraft Parts and Defense Items to Iran,” Press Release, U.S. Attorney’s Office for the Central District of California, October 28, 2016.

[2] Indictment, United States of America v. Hormoz Nowrouz, aka Hormoz Naurouz; Hanri Terminassian; Zavik Zargarian; ZNC Engineering, Inc.; and Vache Nayirian, Case No. CR-14-00598, United States District Court, Central District of California.

Iranian Arms Shipments to Yemen Violate U.N. Resolutions

The United States and its allies have interdicted five separate weapons shipments from Iran to the Houthis in Yemen since April 2015—shipments that violate U. N. Security Council resolutions.  According to U.S. Vice Admiral Kevin Donergan, “We know they came from Iran and we know the destination.”[1] The U.S. State Department has also criticized Iranian arms smuggling to Yemen, including the provision of missiles to the Houthis.[2]

This lethal aid violates an arms embargo that was imposed as part of U.N. Security Council resolution 2231 implementing the nuclear agreement with Iran and the resolutions it replaced.[3] It also violates U.N. Security Council resolution 2216, adopted in April 2015, which imposes an arms embargo against the leadership of the Houthi rebels.[4] However, no action has been taken at the United Nations to punish these violations. In a little noticed report released this summer, the Secretary General raised concern over one Iranian arms shipment interdicted by the United States but concluded only that the U.N. was “still reviewing the information provided by the United States and the Islamic Republic of Iran” and that he would “provide an update on this arms seizure to the Security Council in due course.”[5]

Despite the interdictions, some Iranian arms shipments are clearly making it into Yemen. The U.S. State Department has publicly linked Iran to the ballistic missiles used by the Houthis to strike targets in Saudi Arabia. Last month, Saudi officials reported two separate interceptions of ballistic missiles launched from Yemen: one near the city of Taif on October 10, the other near the city of Mecca on October 28.[6] In an October 11 press briefing, U.S. State Department spokesperson John Kirby stated, “In the Saudis’ case, their cities, their citizens are under very real, darn-near daily threat from missiles being launched on the Yemeni side of their border, missiles that are provided by Iran to the Houthi rebels.”[7] Another State Department official later told IHS Jane’s that “Iran has provided critical capability and assistance to the Houthis in their campaign to attack Saudi Arabian territory with ballistic missiles and rockets.”[8]

The two failed attacks on U.S. Navy ships last month by cruise missiles launched from Houthi-controlled territory in Yemen have also grabbed headlines, though the Pentagon has not yet officially commented on the type or origin of these missiles.[9] Some naval analysts believe that the most likely missile used by the Houthis in this attack is the Noor, an Iranian variant of the Chinese C-802 anti-ship cruise missile.[10] Iran has officially denied involvement in the failed missile attacks on the U.S. ships, with a foreign ministry spokesperson saying, “The vague and contradictory remarks by American officials these past days are false, paranoid and inappropriate.”[11]

Iranian arms shipments seized by coalition forces

The following is a description of four Iranian arms shipments destined for the Houthis in Yemen and interdicted by U.S. or allied forces since September 2015.

September 2015: According to a U.N. Panel of Experts on Yemen, U.S. and Australian navy ships stopped the Nassir off the coast of Oman and seized the weapons onboard, including 56 TOW anti-tank guided missiles, 4 TOW optical sights, 4 TOW tripod mounts, 4 TOW launch tubes, 2 TOW battery sets, 2 TOW launch assembly units, 3 TOW missile guidance systems, 14 TOW battery assemblies, and 19 9M113 AT Konkurs.[12] After examining the weapons, the U.N. Panel noted that the equipment bore “the markings bearing the names of Iranian industrial companies” and that the “Konkurs missiles had markings with characteristics similar to Russian and Iranian markings, indicating that they were likely to have been maintained or overhauled in the Islamic Republic of Iran.”[13] Photos from the Panel’s report reveal the stamps of Iran Electronics Industries (IEI) and Shiraz Electronics Industries, both of which are Ministry of Defense and Armed Forces Logistics (MODAFL) subsidiaries and still subject to U.S. and EU sanctions.[14] The Panel also registered the presence of instructions written in Persian for the TOW system.[15]

February 2016:[16] Australia’s HMAS Darwin intercepted a small fishing vessel 170 nautical miles off the coast of Oman and discovered some 2,000 AK-47s, 100 RPGs, 49 PKM general purpose machine guns, 39 PKM spare barrels, and 20 60mm mortar tubes onboard.[17] The U.S. Navy has assessed that the arms originated in Iran, and U.S. military sources say the shipment was likely intended for Houthi rebels in Yemen.[18] Jane’s reports that the seized RPGs had green heat-resistant covers, a feature most often seen on RPG-7s manufactured by Iran’s Defense Industries Organization (DIO), an entity subject to U.N. sanctions.[19] One of the photos included in the report also shows that some of the machine guns found were North Korean Type 73s. This weapon is only in use by the North Korean and Iranian militaries, according to Jane’s.[20]

March 20, 2016: A helicopter operating with the French Navy’s frigate Provence encountered a suspicious dhow off the coast of the Yemeni island of Socotra. French forces boarded the craft and found a cache of arms hidden under fishing nets.[21] The U.S. Navy later confirmed the find to include almost 2,000 Ak-47s, 64 Dragunov sniper rifles, 9 anti-tank missiles, and other equipment.[22] An analysis by Jane’s again notes the presence of Type 73 machine guns in one of the photos provided by the French Ministry of Defense.[23]

March 28, 2016: Two U.S. Navy ships encountered and boarded a dhow transiting international waters near the Gulf of Oman and discovered a large weapons cache onboard, including 1,500 AK-47s, 200 RPG-7 and RG-7V Rocket Propelled Grenade launchers (RPGs), and 21 DshK 12.7mm machine guns. After interviewing members of the crew and analyzing the seized arms, U.S. authorities concluded the weapons had originated in Iran and were most likely bound for Yemen.[24] Iran has denied the allegation and claims it “has never engaged in such delivery.”[25]

Despite mounting public evidence of continued Iranian arms transfers to Yemen in violation of two U.N. Security Council resolutions, little appears to have been done at the United Nations. In a July 25 report, the U.N. official in charge of overseeing implementation of U.N. resolution 2231 stated that he “look[ed] forward to a formal reply in due course” from Iran about the report of the March 28 arms seizure.[26] However, no formal action has been taken. The other confirmed interdictions have not been raised publicly at the United Nations.

Under prior U.N. resolutions, a dedicated U.N. panel of experts was charged with monitoring the implementation of sanctions against Iran. This independent panel investigated possible violations and proposed sanctions designations in response. It played a valuable role in scrutinizing and publicizing a number of illicit Iranian arms exports. Unfortunately, in response to Iranian demands, the U.N. panel on Iran was dissolved when the nuclear agreement took effect at the beginning of this year. Now, it appears, officially documented reports of repeated Iranian violations face a dead-end diplomatic process at the United Nations, in which the absence of consensus among Security Council members stalls any action.


Footnotes: 

[1] Courtney Kube, “U.S. Officials: Iran Supplying Weapons to Yemen’s Houthi Rebels,” NBC News, October 27, 2016, http://www.nbcnews.com/news/us-news/u-s-officials-iran-supplying-weapons-yemen-s-houthi-rebels-n674181

[2] Daily Press Briefing, U.S. Department of State, October 11, 2016, available at http://www.state.gov/r/pa/prs/dpb/2016/10/263001.htm; Daily Press Briefing, U.S. Department of State, October 24, 2016, available at http://www.iranwatch.org/library/governments/united-states/executive-branch/department-state/state-department-spokesperson-john-kirby-comments-irans-supply-weapons-houthis

[3] “Resolution 2231,” United Nations, S/RES/2231 (2015), Annex B paragraph 5.

[4] “Resolution 2216,” United Nations, S/RES/2216 (2015), paragraph 14

[5] “Report of the Secretary General on the Implementation of Security Council Resolution 2231 (2015),” United Nations, S/2016/589, Section I paragraph 9.

[6] Jeremy Binnie, “Saudi coalition confirms longest-range Yemeni ballistic missile attack to date,” Jane’s Defenec Weekly, October 11, 2016, available via Jane’s Information Group (www.janes.com); “Yemen’s Houthis Launch Missile Toward Saudi Holy City,” Reuters, October 28, 2016, available at http://www.reuters.com/article/us-yemen-security-missiles-idUSKCN12S016

[7] Daily Press Briefing, U.S. Department of State, October 11, 2016, available at http://www.state.gov/r/pa/prs/dpb/2016/10/263001.htm

[8] Jeremy Binnie, “Analysis: US spokesman says Iran supplying missiles to Yemen,” Jane’s Defence Weekly, October 13, 2016.

[9] Dan Lamothe, “Navy launches Tomahawk missiles at rebel sites in Yemen after attacks on U.S. ships,” Washington Post, October 12, 2016, https://www.washingtonpost.com/news/checkpoint/wp/2016/10/12/more-missiles-fired-from-rebel-held-territory-in-yemen-at-u-s-navy-ships/

[10] Megan Eckstein and Sam LaGrone, “Admiral: Attacks Like Those on USS Mason Will Become More Common,” USNI News, October 27, 2016, available at https://news.usni.org/2016/10/27/22246; Sam LaGrone, “Destroyer USS Mason Unsuccessfully Attacked from Yemen,” USNI, October 10, 2016, https://news.usni.org/2016/10/10/destroyer-uss-mason-attacked-yemen

[11] “Iran denies role in attacks on US navy from Yemen,” AFP via Al-Monitor, October 20, 2016, http://www.al-monitor.com/pulse/afp/2016/10/yemen-conflict-iran-us.html

[12] “Letter dated 22 January 2016 from the Panel of Experts on Yemen established pursuant to Security Council resolution 2140 (2014) addressed to the President of the Security Council,” United Nations, S/2016/73, Annex 12.

[13] “Letter dated 22 January 2016 from the Panel of Experts on Yemen established pursuant to Security Council resolution 2140 (2014) addressed to the President of the Security Council,” United Nations, S/2016/73, Section III paragraph 82.

[14] “Letter dated 22 January 2016 from the Panel of Experts on Yemen established pursuant to Security Council resolution 2140 (2014) addressed to the President of the Security Council,” United Nations, S/2016/73, Annex 13.

[15] “Letter dated 22 January 2016 from the Panel of Experts on Yemen established pursuant to Security Council resolution 2140 (2014) addressed to the President of the Security Council,” United Nations, S/2016/73, Annex 13.

[16] “Third Illicit Arms Shipment in Recent Weeks Seized in Arabian Sea,” United States Navy, NNS160404-01, April 4, 2016, available at http://www.navy.mil/submit/display.asp?story_id=93990, accessed on September 23, 2016.

[17] “HMS Darwin Seizes Large Weapons Cache,” Combined Maritime Forces, March 6, 2016, available at https://combinedmaritimeforces.com/2016/03/06/hmas-darwin-seizes-large-weapons-cache/, accessed September 23, 2016.

[18] “Third Illicit Arms Shipment in Recent Weeks Seized in Arabian Sea,” U.S. Naval Forces Central Command Public Affairs, April 4, 2016, http://www.navy.mil/submit/display.asp?story_id=93990; Joshua Berlinger, “French seize weapons cache in Indian Ocean that may have come from Iran,” CNN, March 30, 2016, http://www.cnn.com/2016/03/30/middleeast/weapons-seizure-indian-ocean/

[19] Jens Kastner,“Combined Maritime Forces seize weapons shipment off Oman,” Jane’s Defence Weekly, July 3, 2016, available via Jane’s Information Group (www.janes.com).

[20] Jeremy Binnie, “US Navy seizes another Iranian weapons shipment in Arabian Sea,” Jane’s Defence Weekly, April 4, 2016, available via Jane’s Information Group (www.janes.com).

[21] “Combined Task Force 150: the frigate Provence carries out an important arms seizure off the coast of Somalia,” French Ministry of Defense, March 24, 2016, available (in French) at http://www.defense.gouv.fr/operations/autres-operations/ocean-indien/ctf-150-la-fregate-provence-realise-une-importante-saisie-d-armes-au-large-de-la-somalie, accessed September 23, 2016.

[22] “Third Illicit Arms Shipment in Recent Weeks Seized in Arabian Sea,” United States Navy, NNS160404-01, April 4, 2016, available at http://www.navy.mil/submit/display.asp?story_id=93990, accessed on September 23, 2016.

[23] Jeremy Binnie, “Analysis: Third Arabian Sea arms shipment seized in six months,” Jane’s Defence Weekly, March 30, 2016, available via Jane’s Information Group (www.janes.com).

[24] “Report of the Secretary General on the Implementation of Security Council Resolution 2231 (2015),” United Nations, S/2016/589, Annex II “Report dated 7 June 2016 from the United States of America regarding the implementation of Security Council resolutions 2231 (2015) and 2216 (2015).

[25] “Report of the Secretary General on the Implementation of Security Council Resolution 2231 (2015),” United Nations, S/2016/589, Annex I paragraph 3.1.

[26] “Letter dated 25 July 2016 from the Security Council Facilitator for the implementation of resolution 2231 (2015), United Nations, S/2016/649, paragraph 24.

Turkey Transshipment Chronology – 2000-2016

Turkey has emerged as a destination of concern for transshipment to countries involved in proliferation, including Iran and Syria. The following are significant events involving re-transfers or transshipments through Turkey.

October 2003: Authorities at the Italian port of Taranto intercept the BBC China vessel en route to Libya containing components for uranium centrifuges. The components are shipped on behalf of the proliferation network of Pakistani scientist Dr. A.Q. Khan. The shipment reportedly contains aluminum castings and dynamos supplied to Libya by Turkish companies connected to Henk Slebos, a Dutch businessman. Some components from Turkey are reportedly not detected during the inspection in Taranto and eventually reach Libya.

2005 – 2007: A German businessman transships 16 tons of graphite used in the production of rocket nozzles to Iran, using a Turkish intermediary. He falsely declared the graphite to be of low grade, to avoid seeking an export license. The businessman is later charged and confesses to the exports.

March 2005: Milad Jafari, an Iranian citizen, allegedly ships U.S.-origin fiber optic testing equipment from the United States to Turkey, for transshipment to Iran.

November 2005: Two Turkish companies, Tekno Elektrik (ETI Elektroteknik) and EKA, are reportedly discovered to have bought 40,084 ring magnets used in uranium centrifuge enrichment from Germany. 20,000 of these magnets were reportedly reshipped to Gulf Industries, a company based in Dubai, and the rest transshipped to Pakistan. These activities are reportedly part of an effort by the Khan network to supply a uranium enrichment plant to Libya.

November 2005: An investigation by the Turkish Customs Inspection Board reportedly reveals that Turkish companies transshipped millions of dollars’ worth of components to Libya, including ring magnets, frequency convertors, and centrifuge motors.

2004 – 2006: Press reports indicate that Step Standard Technical Part (Step A.S.), an Iranian-owned company based in Turkey, and Multimat Import and Export, its Iranian-owned affiliate, are involved in illegal transshipments of guided missile parts and dual-use nuclear-related material, including high strength aluminum tubes, from dozens of countries to Iran via Turkey.

July 2006: Milad Jafari allegedly ships an alloy product from the United States to Turkey for later transshipment to Iran.

2007 – 2008: Milad Jafari’s procurement network facilitates over $7 million worth of transactions for Iran’s Aerospace Industries Organization (AIO). Jafari uses companies in Iran and Turkey to procure metal products, including steel and aluminum alloys, for AIO.

January 2007 – May 2011: Four individuals allegedly conspire to transship restricted items from the United States, including pressure transducers, thermal imagers, and solenoid valves, to Iran via Canada, Mexico, Turkey, and the United Arab Emirates. The individuals are Abbas Moradi, Amirreza Sahebjamei, Shahin Tabatabaei, and Seyed Mohammad Akhavan Fatemi.

June 2008: Ankair, a Turkish airline, is temporarily denied export privileges by the Bureau of Industry and Security (BIS) after attempting to illegally re-export a U.S.-origin Boeing 747 air cargo plane to Iran.

September 2009 – August 2010: Saeid Kamyari, an Iranian resident, Oguzhan Aydin, a Turkish resident, and two companies, AGM Ltd. Co. and Blue Sky Aviation, allegedly attempt to procure aircraft parts for an F-14 fighter jet for transshipment to Iran, via Turkey.

July 2010: Milad Jafari is indicted and charged with exporting specialized metals with aerospace applications from the United States to Iran, via Turkey, for entities that have been sanctioned for involvement in Iran’s ballistic missile activities.

July 2010 – April 2015: A network of companies acting on behalf of Iran-based Faratel Corporation allegedly make at least 250 shipments of equipment related to uninterruptable power supply (UPS) technology to Iran. The conspiracy allegedly involves transshipping the equipment via Golsad Istanbul Trading Ltd., a company based in Turkey.

February 2011: The U.S. Treasury Department sanctions Macpar Makina San Ve Tic A.S. and Step A.S., two Turkish companies connected to Milad Jafari, for supplying goods and technologies to AIO in Iran.

March 2011: Asi Kiymetli Madenler Turizm Otom, a Turkey-based company, allegedly sends a $35,900 international wire to a Chinese company as part of an effort led by Reza Zarrab to assist Iranian entities in evading U.S. sanctions.

October 2011: AAG Makina, a Turkish equipment manufacturer, allegedly forwards U.S.-origin valve parts and a pressure transmitter from Turkey to Iran.

July 2012: Oguzhan Aydin, Saeid Kamyari, AGM Ltd. Co., and Blue Sky Aviation are indicted and charged with attempting to procure aircraft parts from the United States for transshipment to Iran, via Turkey.

February – March 2013: Amin al-Baroudi, a Syrian-born naturalized U.S. citizen, makes two trips from the United States to Turkey, smuggling U.S. origin goods, including military equipment, in his luggage. He later supplies these items to groups in Syria.

March 2013: Hossein Tanideh, an Iranian citizen, is arrested for using shell companies to ship nuclear materials from Germany and India to Iran, via Turkey. He reportedly shipped hundreds of nuclear-related items through these companies.

April 2013: Turkish authorities reportedly intercept a shipment of rifles, pistols, ammunition, and gas masks aboard a Libya-flagged vessel in Istanbul. The weapons reportedly originate in North Korea, but their final destination is unknown.

July 2013: On behalf of its CEO, Erdal Kuyumcu, New York-based Global Metallurgy exports 330 pounds of cobalt metal, which has nuclear and missile applications, from the United States to Turkey for transshipment to Iran.

August 2013: Abbas Moradi, Amirreza Sahebjamei, Shahin Tabatabaei, and Seyed Mohammad Akhavan Fatemi are indicted in California and charged with shipping restricted items from the United States to Iran via Canada, Mexico, Turkey, and the United Arab Emirates.

April 2015: A group of companies located in the Iran, Taiwan, Turkey, and the United States are indicted and charged with transshipping U.S.-origin dual use microelectronics to Iran-based Faratel Corporation, via Turkey and Taiwan. The defendants are Smart Power Systems Inc., Bahram Mechanic, Tooraj Faridi, Khosrow Afghahi, Arthur Shyu, Hosoda Taiwan Co., Ltd., Matin Sadeghi, Golsad Istanbul Trading Ltd., and Faratel.

January 2016: Amin al-Baroudi pleads guilty to conspiring to export U.S.-origin tactical equipment to Syria, via Turkey.

March 2016: Reza Zarrab, a dual citizen of Turkey and Iran, as well as Camelia Jamshidy and Hossein Najafzadeh, both Iranian citizens, are indicted and charged with conducting financial transactions on behalf of Iranian entities and concealing the beneficiary of these transactions by using companies located in Turkey and the United Arab Emirates in an effort to evade U.S. sanctions.

June 2016: Erdal Kuyumcu, a U.S. citizen, pleads guilty to conspiring to illegally export metallic powder that may be used in missile production and in nuclear and aerospace applications to Iran, via Turkey.

Another Iranian Bank Receives Early Sanctions Relief

Another Iranian bank has received sanctions relief earlier than anticipated under the nuclear deal with Iran.  The European Union’s sanctions on state-owned Bank Saderat Iran and its London-based subsidiary, BankSaderat PLC, which were originally set to last until 2023, were quietly lifted this week.  The decision was made in April, in response to Bank Saderat’s successful legal challenge of its 2010 designation.  However, instead of lifting the sanctions in April, the E.U. modified the reasons supporting the sanctions and extended them—but only for a period of six months, through October 22.  This is the latest in a series of concessions to Iran’s financial sector, beyond what was agreed to in the nuclear deal.

Bank Saderat was originally sanctioned by the E.U. in July 2010 for providing financial services to three entities linked to Iran’s nuclear and missile programs: Defense Industries Organization (DIO), Iran Electronics Industries (IEI), and Mesbah Energy Company.[1]  A number of legal steps followed: the bank challenged its sanctions designation in European court; in 2013, the court threw out the designation; the European Council appealed this decision; but on April 21, 2016, the European Court of Justice dismissed the appeal, citing a failure to provide evidence linking Bank Saderat to the proliferation activities of the three cited Iranian entities.[2]

On April 18, just before its appeal was dismissed, the E.U. modified the rationale supporting the sanctions on Bank Saderat and BankSaderat PLC.  The new justification only cited Bank Saderat’s handling of letters of credit in March 2009 on behalf of DIO, which was then and remains under U.N. sanctions for involvement in Iran’s nuclear and missile programs.[3]  The E.U. likely modified the rationale because one or more E.U. member-states were unwilling to provide sensitive information in open court.  In its appeal, the E.U. stated that its evidence concerning Bank Saderat’s support for Mesbah “comes from confidential sources which, if disclosed, would enable those who provided the information to be identified, endangering their lives and safety.”[4]

But in addition to modifying the rationale, the E.U. specifically extended the sanctions only until October 22, 2016.[5]  This set off action by other governments, with the United Kingdom lifting its sanctions against London-based BankSaderat PLC and its parent and unfreezing their assets this week.[6]  According to a senior E.U. official speaking on condition of anonymity, the six-month extension was “a political decision of the member-states taken at the time.”  The official noted that E.U. decisions related to sanctions are reached by consensus and declined to comment on why the E.U. decided to extend the sanctions on Bank Saderat only for six months and not until 2023, as set forth in the nuclear agreement.

Meanwhile, Bank Saderat and its subsidiaries remain on the U.S. blacklist for supporting terrorism.  Bank Saderat is one of Iran’s most important financial institutions and operates over 2,500 branches, including overseas offices throughout Europe and the Middle East.  According to the U.S. Treasury Department, Bank Saderat has been used by the Iranian government to channel funds to terrorist organizations, including Hizballah, Hamas, the Popular Front for the Liberation of Palestine-General Command (PFLP-GC), and Palestinian Islamic Jihad.  Between 2001 and 2006, the Central Bank of Iran used Bank Saderat’s London subsidiary to transfer $50 million to Hizballah fronts in Lebanon.[7]

Ever since the nuclear deal was implemented in January 2016, Iran has been complaining that the sanctions relief from the deal has not offered sufficient economic benefit.  This is largely a negotiating tactic, aimed at gaining additional concessions, particularly in the area of reintegrating Iran into the international financial system.  And it has worked.  Earlier this month, the Treasury Department relaxed its restrictions on dollar-denominated transactions with Iran and also now permits foreign companies to do business with non-sanctioned Iranian entities that are nonetheless minority-owned or controlled by an entity on the U.S. blacklist.[8]  In January, the U.S. also agreed to lift the U.N. sanctions on Bank Sepah and its London-based affiliate Sepah International, which had been blacklisted by the United Nations for supporting Iran’s ballistic missile program.[9]  Bank Saderat is yet another case of a major Iranian bank receiving sanctions relief earlier than anticipated and of Iran gaining an important concession beyond what was agreed to in the nuclear deal.


Footnotes: 

[1] “Council Implementing Regulation (EU) No 668/2010 of 26 July 2010 implementing Article 7(2) of Regulation (EC) No 423/2007 concerning restrictive measures against Iran,” Official Journal of the European Union, L 195/28, July 27, 2010, available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:195:0025:0036:EN:PDF, accessed on October 28, 2016.

[2] “Judgment of the Court (Fifth Chamber) of 21 April 2016 – Council of the European Union v Bank Saderat Iran, European Commission (Case C-200/13 P),” Official Journal of the European Union, 2016/C 211/02, April 21, 2016, available at http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:C:2016:211:FULL&from=EN, accessed on October 28, 2016.

[3] “Council Implementing Regulation (EU) 2016/603 of 18 April 2016 implementing Regulation (EU) 267/2012 concerning restrictive measures against Iran,” Official Journal of the European Union, L 104/8, April 20, 2016, available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32016R0603, accessed on October 28, 2016.

[4] “Judgment of the Court (Fifth Chamber) of 21 April 2016 – Council of the European Union v Bank Saderat Iran, European Commission (Case C-200/13 P),” EUR-Lex, Document 62013CJ0200, April 21, 2016, available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62013CJ0200, accessed on October 28, 2016.

[5] “Council Implementing Regulation (EU) 2016/603 of 18 April 2016 implementing Regulation (EU) 267/2012 concerning restrictive measures against Iran,” Official Journal of the European Union, L 104/8, April 20, 2016, available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32016R0603, accessed on October 28, 2016.

[6] “Financial Sanctions Notice: Iran (Nuclear Proliferation), Office of Financial Sanctions Implementation, HM Treasury, October 24, 2016, available at http://www.iranwatch.org/sites/default/files/uk-hmtreas-banksaderatdelist-102416.pdf

[7] “Fact Sheet: Designation of Iranian Entities and Individuals for Proliferation Activities and Support for Terrorism,” U.S. Department of the Treasury, Press Center, October 25, 2007, https://www.treasury.gov/press-center/press-releases/Pages/hp644.aspx

[8] “Frequently Asked Questions Relating to the Lifting of Certain U.S. Sanctions Under the Joint Comprehensive Plan of Action (JCPOA) on Implementation Day,” Office of Foreign Assets Control, U.S. Departmetn of the Treasury, October 7, 2016, available at http://www.iranwatch.org/library/governments/united-states/executive-branch/department-treasury/frequently-asked-questions-relating-lifting-certain-us-sanctions-under-joint-1

[9] Simon Chin and Valerie Lincy, “U.S. Surrenders Powerful Financial Weapon to Counter Iran’s Missile Program,” Iran Watch Policy Brief, October 6, 2016,  http://www.iranwatch.org/our-publications/policy-briefs/us-surrenders-powerful-financial-weapon-counter-irans-missile-program

U.S. Surrenders Powerful Financial Weapon to Counter Iran’s Missile Program

Last week, the Wall Street Journal reported that the Obama administration secretly agreed to lift United Nations sanctions on two of Iran’s missile financing institutions as part of a package of controversial accommodations with Iran in January.[1] Critics of the move have focused on an alleged “quid pro quo” in which the delisting of Bank Sepah and Sepah International was part of a “ransom” paid for the release of Americans being held in Iran.[2] But the decision to clear the banks also diminishes the ability of the United States and other governments to enforce U.N. sanctions on Iran’s ballistic missile program, which remain in place until 2023. Specifically, the United States has weakened its ability to target the Iranian banks that finance missile development—one of the most powerful means of countering Iran’s missile progress.

Bank Sepah and its London-based affiliate Sepah International were two of only a handful of banks that had been sanctioned by the United Nations, thus cutting them off from the international financial system. They were targeted for their support of the Aerospace Industries Organization (AIO) and two AIO subsidiaries also sanctioned by the United Nations, the Shahid Hemmat Industrial Group (SHIG) and the Shahid Bagheri Industrial Group (SBIG). Together, these entities oversee Iran’s solid and liquid fueled missile development. Yet the United States agreed to lift U.N. sanctions on Bank Sepah and Sepah International as well as to remove them from the U.S. blacklist.  This move came despite the United States calling Bank Sepah AIO’s “bank of choice”[3] as well as “the financial linchpin of Iran’s missile procurement network [that] has actively assisted Iran’s pursuit of missiles capable of carrying weapons of mass destruction.”[4]

U.S. officials have insisted that the nuclear agreement with Iran has not affected the continuation of sanctions on its ballistic missile program. Yet as part of the nuclear agreement, in addition to Bank Sepah and Sepah International, the United States removed from its blacklist seven other Iranian-controlled banks supporting Iran’s ballistic missile program, including banks that have provided financial services to Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), which controls AIO; banks that have facilitated the purchase of missile-related items; and banks that supported sanctions evasion by entities tied to Iran’s missile program. Four of the nine banks also have links to Iran’s Bank Saderat, which remains on the U.S. blacklist for its role in financing terrorism.

These nine banks remain on the U.S. Executive Order 13599 List, indicating that they are part of the Government of Iran or an Iranian financial institution and are therefore still off-limits to U.S. parties. However, the United States removed its secondary sanctions on these banks, which had extended U.S. sanctions to take aim at foreign parties that dealt with the banks. As a result, these banks are now able to reconnect to the SWIFT financial messaging service, which is critical for processing transactions. Many of the banks have also re-established commercial ties to Europe this year. One of the banks, the Export Development Bank of Iran, also extended a $1 billion line of credit in July 2015 to the Syrian Commercial Bank.

The nine Iranian-controlled banks linked to missile activity that were removed from the U.S. blacklist since the beginning of the year are described below.  No evidence has been presented indicating that these banks have stopped engaging in the behavior that warranted sanctions in the first place.  Yet these missile financing banks, while still cut off from the U.S. financial system, are now free to do business with the rest of the world.  Thus, the United States has weakened one of its most powerful tools to counter Iran’s ballistic program—the targeted sanctions that effectively cut off the banks that finance Iran’s missile activity from large parts of the global financial system.

  • Bank Melli has provided financial services to the key Iranian agencies responsible for the ballistic missile program, including AIO, the Defense Industries Organization (DIO), a missile manufacturer, and SHIG and SBIG, both of which remain subject to U.N. sanctions. Through its financial services, Bank Melli has facilitated numerous purchases of sensitive material for Iran’s missile program. It also has links to terrorism through its transactions on behalf of the IRGC-Qods Force. Bank Melli also has ties to Bank Saderat, with which it established Future Bank B.S.C. in Bahrain as a joint venture. While never under U.N. sanction, Bank Melli was the subject of a warning in U.N. resolution 1803 that called for financial institutions to “exercise vigilance” with respect to Bank Melli due to its links to nuclear and missile-related activities.
  • Export Development Bank of Iran (EDBI) has provided handled transactions for MODAFL and other entities associated with Iran’s missile program and has facilitated procurement activities. EDBI also allegedly served as an intermediary handling financing, including WMD-related payments, for Bank Sepah after Bank Sepah was sanctioned in 2007. In July 2015, EDBI extended a $1 billion line of credit to the state-owned Syrian Commercial Bank, a form of financial aid to the Assad regime.[5]
  • Bank Refah Kargaran has provided financial services to MODAFL and facilitated the millions of dollars of purchases by MODAFL of weapons-related items, including missiles. It has also served as a conduit for sanctions evasion, processing outstanding transactions for Bank Melli following the sanctions imposed on Bank Melli by the European Union. It also has ties to Bank Saderat and EDBI, with whom it founded Belarus-based Onerbank as a joint venture.
  • Europäisch-Iranische Handelsbank AG (EIH) is a German-based bank controlled by Iranian interests. It shareholders include Bank of Industry and Mine, Bank Mellat, and Bank Tejarat. EIH has reportedly done over a billion dollars of business for Iranian companies associated with conventional military and ballistic missile procurement, including AIO, DIO, and the Iranian Revolutionary Guard Corps (IRGC). In addition, it has acted as a conduit for payments on behalf of Iranian banks under sanction, including Bank Sepah, Bank Mellat, and Bank Saderat. When the nuclear agreement with Iran was announced, EIH stated that it was poised to “place its full range of services at the disposal of old and new customers.”[6] In March 2016, EIH extended lines of credit totaling over 480 million euros to Iranian banks, including Bank of Industry and Mine, Bank Mellat, and Bank Tejarat.[7]
  • Bank of Industry and Mine (BIM) helped several banks blacklisted for ballistic missile activity, including Bank Mellat and EIH Bank circumvent international sanctions, by concealing their involvement in payments. It is the majority stakeholder in EIH Bank and received a 108 million euro line of credit from the German bank in March 2016.[8]
  • Bank Tejarat has provided financial services for MODAFL and other Iranian entities linked to the country’s missile program. It has begun re-establishing commercial ties to Europe. Last month, ten bankers from Bank Tejarat reportedly attended a class on compliance and European banking in the Netherlands.[9] It also received a line of credit from EIH Bank in March 2016.[10]
  • Bank Mellat had been sanctioned by the United States for facilitating hundreds of millions of dollars in transactions for Iranian nuclear, missile, and defense entities. It also received a line of credit from EIH Bank in March 2016.[11]

Footnotes:

[1] Jay Solomon and Carol E. Lee, “U.S. Signed Secret Document to Lift U.N. Sanctions on Iranian Banks,” Wall Street Journal, September 29, 2016, http://www.wsj.com/articles/u-s-signed-secret-document-to-lift-u-n-sanctions-on-iranian-banks-1475193723

[2] Jordain Carney and Sylvan Lane, “GOP lawmakers slam secret agreement to help lift Iran bank sanctions,” The Hill, September 30, 2016, http://thehill.com/policy/finance/298711-obama-admin-agreed-to-push-for-iran-sanctions-relief-for-prisoner-deal-report

[3] “Iran’s Bank Sepah Designated by Treasury Sepah Facilitating Iran’s Weapons Program”, U.S. Department of the Treasury, January 9, 2007, https://www.treasury.gov/press-center/press-releases/Pages/hp219.aspx

[4] “Iran’s Bank Sepah Designated by Treasury Sepah Facilitating Iran’s Weapons Program”, U.S. Department of the Treasury, January 9, 2007, https://www.treasury.gov/press-center/press-releases/Pages/hp219.aspx

[5] “Syria ratifies fresh $1 billion credit line from Iran,” Reuters, July 8, 2015, http://ca.reuters.com/article/topNews/idCAKCN0PI1RD20150708?sp=true

[6] Europäisch-Iranische Handelsbank AG, LinkedIn, https://www.linkedin.com/company/europ%C3%A4isch-iranische-handelsbank-ag

[7] “Iranian banks open €480mn credit via IECB,” Mehr News, March 14, 2016, http://en.mehrnews.com/news/115212/Iranian-banks-open-480mn-credit-via-IECB

[8] “Iranian banks open €480mn credit via IECB,” Mehr News, March 14, 2016, http://en.mehrnews.com/news/115212/Iranian-banks-open-480mn-credit-via-IECB

[9] Mamta Borkar, “In an effort to play by international rules, Iranian banks take Dutch compliance course,” Sanctions Alert, September 26, 2016, http://sanctionsalert.com/in-an-effort-toplay-by-international-rules-iranian-banks-take-dutch-compliance-course/

[10] “Iranian banks open €480mn credit via IECB,” Mehr News, March 14, 2016, http://en.mehrnews.com/news/115212/Iranian-banks-open-480mn-credit-via-IECB

[11] “Iranian banks open €480mn credit via IECB,” Mehr News, March 14, 2016, http://en.mehrnews.com/news/115212/Iranian-banks-open-480mn-credit-via-IECB

Quietly, U.N. Signals Violation by Iran of New Resolution

According to a July 2016 report by the U.N. Secretary General, Iranian firms participated in a defense trade show in Iraq last March, in potential violation of U. N. Security Council resolution 2231.[1]  Under the resolution, prior approval is required by the Security Council for any arms transfer to or from Iran;[2] none was sought.[3]  What’s more, one of the firms participating in the trade show, the Defense Industries Organization (DIO), remains on the U.N.’s blacklist – even following the nuclear agreement.[4]  The report concludes that Iraqi authorities “should have frozen all of the entity’s funds, other financial assets and economic resources” pursuant to resolution 2231.[5]  However, two months following the report’s publication, no action has been taken to address these apparent violations.

The Fifth Iraqi Defense, Security, and Military Exposition (IQDEX) hosted over 100 companies in Baghdad on March 5-8, 2016, including six Iranian entities.[6]  The U.N. report specifically references DIO’s participation and includes a picture of the firm’s booth at the trade show.[7]  DIO is controlled by Iran’s Ministry of Defense Armed Forces Logistics (MODAFL) and, in addition to producing a range of military equipment, has been connected to gas centrifuge production and to Iran’s missile program.

Iran’s Islamic Republic News Agency (IRNA), boasted that MODAFL and its affiliates “actively [took] part in the Iraq Defense Exhibition” and that a number of ambassadors visited the Iranian showcase.[8] Al-Monitor reported that the items on display included “twinned combat boats, powerful sea engines, unmanned aerial vehicles, various mortars, different rockets and artillery systems, defense items such as advanced systems capable of identifying chemical and radioactive elements, as well as systems capable of designing and producing helicopter and reconnaissance aircraft.”[9]

Other Iranian entities listed as attending IQDEX include Marine Industries Organization, Aviation Industries Organization, and National Geographical Organization, also known as the Armed Forces Geographical Organization.[10]  All are subject to European Union,[11] Canadian,[12] Japanese,[13] and U.S. sanctions for ties to nuclear and missile proliferation.  A sixth Iranian entity, Shahid Meisami Group, was also listed as an exhibitor.  Less is known about this group, which does not appear on any publicly available restricted party list.  In 2003, an Iranian resistance group linked Shahid Meisami to chemical and biological weapon-related work and claimed that it housed the Biological Research Center of the Special Industries Organization,[14] a DIO subsidiary that is still subject to U.N. and national sanctions.[15]

The U.N. Secretary General has sought clarification on the trade show from both Iraq and Iran. Predictably, Iran claims that it did not violate resolution 2231 because no actual arms were transferred. Iraq’s response is more worrisome.  Iraqi representatives told the United Nations that the terms of the 14 page resolution are “lengthy, technical and confusing.”[16]  However, the resolution states clearly that countries must “take the necessary measures to prevent, except as decided otherwise by the U.N. Security Council in advance on a case-by-case basis, the supply, sale, or transfer of arms or related materiel from Iran” until five years following the adoption of the nuclear agreement (October 2020).[17]

Media coverage of the report around the time of its release this summer focused on the Secretary General’s expression of concern that recent Iranian ballistic missile launches were “not consistent with the constructive spirit demonstrated by” the nuclear agreement.[18]  The report’s coverage of Iranian arms exports that appear to constitute violations of resolution 2231, including Iran’s high-level participation at IQDX, received scant attention.   Nor does the Security Council appear to have taken any action following the report, some two months after its release.  Indeed, the evidence is mounting that there is no appetite for robust enforcement of the nuclear agreement and its implementing resolution, less than one year from when they took effect.


Footnotes: 

[1] “Report of the Secretary-General on the Implementation of Security Council resolution 2231 (2015),” United Nations, S/2016/589, Section V paragraph 32.

[2] U.N. Security Council resolution 2231 (2015), Annex B, paragraph 6b, July 20, 2015.

[3] “Report of the Secretary-General on the Implementation of Security Council resolution 2231 (2015),” United Nations, S/2016/589, Section II paragraph 10.

[4] “The List established and maintained pursuant to Security Council resolution 2231 (2015),” Section B, available at https://scsanctions.un.org/en/?keywords=iran.

[5] “Report of the Secretary-General on the Implementation of Security Council resolution 2231 (2015),” United Nations, S/2016/589, Section VI paragraph 35.

[6] “Exhibitors List,” The Fifth Session of the Security, Defense and Iraqi Military Industries International Fair, available at http://iqdexiraq.com/IQDEX2017/exhibitorslist.pdf.

[7] “Report of the Secretary-General on the Implementation of Security Council resolution 2231 (2015),” United Nations, S/2016/589, Section II paragraph 11, Section VI figure IV.

[8] “Baghdad Exhibit featuring Iran defense, military capabilities,” Islamic Republic News Agency (IRNA), March 5, 2016.

[9] Abbas Qaidaari, “Is Iran becoming a major regional arms producer?” Al-Monitor, March 24, 2016, available at http://www.al-monitor.com/pulse/originals/2016/03/iran-weapons-arms-experts-iraq-syria-lebanon.html.

[10] “Exhibitors List,” The Fifth Session of the Security, Defense and Iraqi Military Industries International Fair, available at http://iqdexiraq.com/IQDEX2017/exhibitorslist.pdf.

[11] “Consolidated List of Sanctions,” European Union, available at http://eeas.europa.eu/topics/sanctions-policy/8442/consolidated-list-of-sanctions_en.

[12] “Regulations Amending the Special Economic Measures (Iran) Regulations, Government of Canada, available at http://www.international.gc.ca/sanctions/countries-pays/iran_sema_regulations-iran_lmes_reglement.aspx?lang=eng&pedisable=true.

[13] “End User List, August 2016, Japan’s Ministry of Economy, Trade and Industry (METI), available at http://www.meti.go.jp/policy/anpo/law_document/tutatu/kaisei/20160329_3.pdf.

[14] “Press Briefing by Soona Samsami and Alireza Jafarzadeh,” National Council of Resistance of Iran, available at http://www.iranwatch.org/library/ncri-iranian-regimes-programs-biological-weapons-5-15-03.

[15] “The List established and maintained pursuant to Security Council resolution 2231 (2015),” Section B, available at https://scsanctions.un.org/en/?keywords=iran.

[16] “Report of the Secretary-General on the Implementation of Security Council resolution 2231 (2015),” United Nations, S/2016/589, Section II paragraph 12.

[17] U.N. Security Council resolution 2231 (2015), Annex B, paragraph 6e, July 20, 2015.

[18] “Report of the Secretary-General on the Implementation of Security Council resolution 2231 (2015),” United Nations, S/2016/589, Section II paragraph 8.

The Real Problem with Iran’s Nuclear Exemptions is Secrecy

The controversy over the Iran nuclear agreement was reignited last week, after a new report revealed secret exemptions Iran received in order to meet the requirements of the agreement.  The response to the report has been predictably polarized, reflecting the entrenched political positions either for or against the deal.  While the specific exemptions allegedly received by Iran appear minor, the report did raise a serious concern: the secrecy surrounding oversight of the agreement.  These exemptions were granted by the multilateral Joint Commission overseeing the agreement—a body that operates confidentially.  This Commission has the authority to issue additional exemptions in the future that could materially affect Iran’s nuclear weapon capability, and these decisions would remain hidden from the public.

The new report, published by the Institute for Science and International Security (ISIS), revealed that Iran was exempted from certain requirements of the nuclear agreement in order to expedite its implementation, which took place on January 16, 2016.  The exemptions fell into three categories, according to the Institute’s report.  First, 3.5 percent low-enriched uranium (LEU) contained in low level nuclear waste was not counted toward the 300 kilogram cap on LEU set by the agreement.  Iran also was given a pass on the near 20 percent LEU contained in “lab contaminant,” which was judged “unrecoverable.”  Second, Iran received permission to continue operating 19 hot cells larger in size than permitted by the agreement.  Third, Iran has been allowed to bypass the 130 ton limit on heavy water by storing “large amounts” of heavy water in Oman that nevertheless remained under Iranian control.

On their own, these reported exemptions may appear minor.  LEU in waste or lab contaminant cannot be put through a centrifuge, and therefore the effect on Iran’s breakout time (how long it would take Iran to produce one bomb’s worth of nuclear fuel) is minimal, unless this material is recovered.  That recovery process would have to be reported to the IAEA.  Larger hot cells could separate plutonium if misused, but to do so would violate both Iran’s nuclear safeguards agreement with the IAEA and the nuclear deal.  Still, the agreement specifically limits in size the hot cells Iran is permitted to operate for a good reason: their plutonium separation capability.  While the agreement authorizes the Joint Commission to review and approve the use of larger hot cells at Iran’s request, granting Iran an immediate exemption from this limit weakens the deal and could encourage Iran to seek additional such exemptions.  The heavy water issue is also troubling.  It suggests that Iran could use such overseas locations as a sanctuary for other nuclear materials in excess of the agreement’s restrictions and potentially as a storage location for new purchases.  It also exposes a weakness in the deal that gives Iran a financial incentive to produce excess amounts of heavy water as long as it is exported.

But more than the specific exemptions, the real problem is the secrecy with which they were issued by the Joint Commission.  This Commission, which includes representatives from each of the P5+1 countries, Iran, and the European Union, is the agreement’s dispute resolution and oversight body.  As State Department spokesperson John Kirby took pains to repeat at a recent press conference, “the work of the Joint Commission, as stipulated in the agreement itself, is to be confidential.”  Mr. Kirby would not comment on any specific decisions of the Joint Commission and even pointedly refused to use the word “exemption.”

The Commission’s secrecy is troubling because the agreement gives it the authority to review and approve exemption requests from Iran in a range of areas—exemptions that could materially affect Iran’s nuclear capability by loosening the very restrictions that the agreement imposes.  Specifically, the Joint Commission can approve exemptions for research and development on uranium-metal based fuel; the operation of additional larger hot cells; mechanical testing of new types of centrifuges; the export of enrichment or enrichment-related equipment and technology; and the development, acquisition, or use for non-nuclear purposes of multi-point explosive detonators that could be used for a nuclear explosive device.  Iran could receive an exemption on any of these issues, and the public might never know.

Keeping the Commission’s decisions secret weakens the deal.  It erodes public confidence that the deal is maintaining strict limits on Iran’s nuclear capability.  It raises concern among already skeptical governments not party to the agreement or directly privy to Commission decisions.  And it provides fuel to the deal’s political opponents, who want to see it fail.

The best outcome would be to make Joint Commission’s proceedings more transparent.  If exemptions granted by the Commission are reasonable, few would complain.  The agreement does allow the Commission to “adopt or modify” its procedures if all members agree, but the Commission is unlikely to do so in favor of greater transparency.  Iran, one of seven governments represented on the Commission, would surely object.

Even if the United States cannot change the Commission’s rules, the administration should brief Congress on Commission decisions in a comprehensive way.  It is not clear that this is happening.  According to the State Department spokesman, “the Administration has briefed Congress frequently and comprehensively on all the Joint Commission’s work.”  But Senator Bob Menendez, a senior member of the Foreign Relations Committee, told Reuters: “I was not aware nor did I receive any briefing (on the exemptions).”  And Congressional sources have told us that members of the Senate Intelligence Committee have not been briefed about the exemptions either.

The Joint Commission’s secrecy, together with the reduced nuclear reporting by the IAEA since the deal was implemented, has resulted in less visibility into Iran’s nuclear program and a troubling lack of transparency on how the agreement is operating.  Congress, independent experts, and the public know less rather than more about what is happening at Iran’s nuclear sites.   While the Obama administration promised that the deal would provide an unprecedented level of visibility into Iran’s nuclear program, reality so far has proven otherwise.

A History of Iran’s Nuclear Program

This is a brief history of Iran’s progress toward the ability to build a nuclear weapon. The emphasis is on achievements, rather than motives. The achievements presented here have been cataloged primarily by the International Atomic Energy Agency (IAEA).

Following a decade of steady expansion and years of diplomacy to halt the progress of Iran’s nuclear program, Iran agreed to an historic accord with six major world powers on July 14, 2015.  The agreement, known as the Joint Comprehensive Plan of Action (JCPOA), substantially reduced Iran’s known nuclear capability in return for sanctions relief. Under it, Iran has dismantled thousands of uranium-enriching centrifuges, shipped tons of low-enriched uranium to Russia, destroyed the core of a heavy water reactor capable of producing plutonium, and agreed to reconfigure the reactor so as to produce less plutonium.  Before the agreement, Iran might have—by illicit steps—been able to produce the fuel for a nuclear weapon in as little as a few months.  Now Iran would require about a year.  In addition, Iran has promised not to expand its capability beyond its present limit for at least ten years.[1]

The JCPOA was the culmination of years of controversy and diplomatic activity surrounding Iran’s nuclear program.  International interest in Iran was heightened dramatically in the summer of 2002, when the existence of two nuclear sites was revealed by an exiled Iranian resistance group.[2]  Within a year, the world realized that Iran had built or was building everything needed to produce enriched uranium, which could fuel nuclear weapons as well as nuclear reactors. The sites included a uranium mine at Saghand, a yellow cake production plant near Ardakan, a pilot uranium enrichment plant at Natanz, and a commercial-scale enrichment facility on the same site. In addition, Iran was continuing work on a 1,000 megawatt nuclear reactor at Bushehr and was building a heavy water production plant at Arak, next to which Iran planned to build a 40 megawatt heavy water reactor. Beginning in March 2003, following revelations that Iran had concealed nuclear work from the IAEA, the Agency began investigating Iran’s nuclear history.[3]  The IAEA now has the responsibility of monitoring and verifying the nuclear-related provisions of the JCPOA.

Iran has long maintained that its nuclear program is benign, legal, and authorized by its membership as a non-nuclear weapon state in the nuclear Non-Proliferation Treaty (NPT), which guarantees its members the right “to develop nuclear energy for peaceful purposes.”[4]  However, the United States has countered by contending that Iran has no need for nuclear energy and that its civilian energy program serves only to camouflage a nuclear weapon effort.[5] The JCPOA marks a shift away from this position, as the agreement will allow Iran to develop a commercial-scale uranium enrichment program after the first 10 years of the accord.

Early Nuclear Efforts

Under the Shah, Iran launched a series of ambitious nuclear projects that relied on assistance from the United States and Europe. According to Akbar Etemad, the President of the Atomic Energy Organization of Iran (AEOI), from 1974 through 1978, Iran was already carrying out nuclear research and education at the University of Tehran when the NPT entered into force on March 5, 1970.[6] The work centered on a five megawatt research reactor supplied by the United States, which began operation in 1967.

By the mid-1970s, according to Etemad, Iran had launched an extensive nuclear energy program. In 1974, the Shah set the goal of producing roughly 23,000 megawatts of electrical power from a series of nuclear power stations within twenty years. A host of contracts between Iran and nuclear suppliers in Europe and the United States followed: Iran struck a deal with Kraftwerk Union (KWU, a Siemens subsidiary) of then-West Germany to build two 1,200 megawatt reactors at Bushehr[7] and negotiated with the French company Framatome for two additional 900 megawatt reactors. In 1974, Iran reportedly invested $1 billion in a French uranium enrichment plant owned by Eurodif, a European consortium.[8] Etemad also described Iran’s indigenous work on the nuclear fuel cycle in the 1970s, including plans for a new nuclear research center at Isfahan and the exploration of uranium mining and ore processing.

The 1979 Iranian revolution halted this work for a number of years. The war with Iraq, which began in 1980, consumed resources and damaged Iran’s existing nuclear infrastructure. The two power reactors under construction at Bushehr were bombed several times,[9] after which Siemens abandoned the project.

During Akbar Hashemi Rafsanjani’s presidency, beginning in the late 1980s, Iran’s nuclear program revived. By the early 1990s, as Iran recovered from the war with Iraq, its nuclear program was once again moving forward, based on assistance from Russia, China and Pakistan. With China, Iran signed two nuclear cooperation protocols, in 1985 and again in 1990. And in 1995, Iran concluded a protocol of cooperation with Russia to complete the construction of the reactor at Bushehr and possibly supply a uranium enrichment plant.[10] Some of the items originally contemplated in these deals, like the enrichment plant, were never delivered as a result of pressure from the United States. Others, like Bushehr, served as a screen behind which Iran obtained sensitive equipment that would not be sold on its own because of its bomb-making potential. Throughout the 1990s, entities in Russia and China continued to help Iran, despite occasional pledges from their governments to curtail nuclear assistance. During this period, Iran is also believed to have received uranium enrichment technology through the black market network run by Pakistani scientist A. Q. Khan.[11]

The deals-official and illicit-struck by Iran in the 1990s allowed it to make important progress in its indigenous nuclear effort. By 2003, when the scope of its nuclear program became clear, Iran had already made progress towards mastering the technology needed to make enriched uranium[12], one of the materials that can be used to fuel a nuclear weapon. Because many of its nuclear experiments were conducted in violation of its inspection agreement with the IAEA, Iran was forced to provide new information on this work and to explain its purpose. Iran’s explanations, along with the results of the IAEA’s inspections, were published in a series of Agency reports beginning in June 2003.[13]

Seeking Nuclear Fuel

Iran’s pursuit of nuclear expertise has taken it down two differnt pathways to nuclear weapon fuel: uranium enrichment and spent fuel reprocessing to recover plutonium.  These materials are “fissile” because they are unstable and fission, or split, when struck by neutrons. Both can fuel a nuclear bomb or be used as fuel in a nuclear power reactor. However, producing nuclear fuel, regardless of its ultimate use, is a difficult task.

The Uranium Path

The difficulty in producing a concentrated amount of uranium 235-the fissile form of uranium needed to fuel a nuclear weapon-is that natural uranium contains only a small amount (.7%) of this isotope. Producing a concentrated amount of U-235 requires a series of steps that begins at the mine and ends with the production of enriched uranium fuel. Iran has sought to master each step in this process.

Mining and milling

Before uranium can be refined to fuel a reactor or a bomb, it must be mined. This is the first step in what is referred to as the “front end” of the nuclear fuel cycle. On February 9th, 2003, Iranian President Mohammad Khatami declared that his government intended to extract uranium from a mine at Saghand, in the province of Yazd.[14] The mine is a key part of Iran’s plan to produce nuclear fuel indigenously. According to Dr. Ghannadi-Maragh, the Vice President of Iran’s Atomic Energy Organization, the mine site consists of two deposits, with a combined reserve of 1,580,000 tons of uranium ore and an average grade of 553 g/tonne.[15]  The Saghand mine has an estimated annual production capacity of 50 tonnes of uranium, according to the IAEA.[16] The Gchine mine, located in the south of Iran near Bandar Abbas, has an estimated production capacity of 21 tonnes of uranium per year.  Iran reported that mining operations at Gchine started in July 2004.[17]  The reserve at Gchine is estimated at 40 tonnes of low but variable grade uranium.[18]

Once mined, uranium ore must be processed into a uranium concentrate called yellowcake. In February 2003, Iranian authorities admitted to producing yellowcake at a milling plant in Ardakan in Yazd Province.[19] The AEOI had approved the construction of a yellowcake production plant in 1994 and contracted with an Iranian company to build the plant in 1999.[20] The Ardakan Yellowcake Production Plant has a design capacity that corresponds to that of its associated mine at Saghand, 50 tonnes of uranium per year.[21]

China is believed to have been the source of the Saghand mining technology. Iran has admitted that Chinese experts participated in detailed exploration work for the mine. Experts from China’s Beijing Research Institute of Uranium Geology have conducted scientific exchanges with Iranian nuclear scientists and have explored in Iran in the past.

Conversion

Once mined and concentrated into yellowcake, the uranium must be converted to a gas. This gaseous form of uranium, called uranium hexafluoride (UF6), serves as the feedstock for centrifuges, which then enrich uranium to a form suitable for either reactor fuel or nuclear weapons. In 2000, the Iranian government informed the IAEA that a plant for uranium conversion was being constructed at Esfahan (Isfahan).[22]  In a speech to the IAEA in May 2003, Gholamreza Aghazadeh, head of the AEOI, said that the conversion facility, which is located at the Esfahan (Isfahan) Nuclear Technology Center (ENTC), would be used to convert yellowcake into UF6.[23]

The IAEA received preliminary design inforatmion on the Uranium Conversion Facility (UCF) at Esfahan in July 2000 and updated design information in April 2003.

According to the design information provided by Iran, the conversion plant was intended to have a number of process lines for transforming uranium compounds.  The planned process lines included steps for converting uranium ore concentrate into UF6 (yielding 200 t annually of UF6 ); converting low enriched UF6 into UO2 (yielding 30 t annually of UO2 enriched to 5% U-235); converting depleted UF6 into uranium tetrafluoride (UF4) (yielding 170 t annually of depleted UF4); converting low enriched UF6 into low enriched uranium metal (yielding 30 kg annually of uranium metal enriched to 19.7% U-235); and converting depleted UF4 into depleted uranium metal (yielding 50 t annually of depleted uranium metal).[24]

Iran’s activities at UCF have focused on the first two of these process lines: the conversion of uranium ore concentrate into UF6 and the production of UO2.  The other process lines are still planned.[25] Iran began conducting hot tests at UCF in May and June 2004, generating about 30-35 kg of UF6.[26] Since the start of conversion activities at UCF, Iran has produced 550 tonnes of natural UF6 at UCF, of which 185 tonnes have been transferred to the Fuel Enrichment Plant at Natanz.  Iran has also produced 13.8 tonnes of natural uranium in the form of UO2 at UCF, of which 13.2 tonnes have been transferred to the Fuel Manufacturing Plant (FMP) at Esfahan.  In November 2015, the IAEA reported that Iran has neither produced UO2 at UCF nor transferred any UO2 from UCF to FMP since January 2014.  Iran is continuing R&D activities at UCF on the recovery of uranium from scrap generated from conversion activities.[27]

China is widely acknowledged to be the source of information for the conversion plant. As part of a 1997 agreement with the United States to prevent new cooperation and to halt all existing projects with Iran in the nuclear field, China pledged to cancel a project to help Iran build a conversion plant. Despite this promise, however, China appears to have provided Iran with a blueprint for the plant. Iran admits that the conversion plant is based on a design provided by a foreign supplier in the mid-1990s. China is also believed to have given Iran design information and test reports for equipment.[28]

In addition, China supplied uranium compounds in 1991, which Iran did not declare to the IAEA and which allowed Iran to conduct laboratory tests of the processes to be used in the conversion plant. These compounds included 1000 kg of UF6, 400 kg of UF4 and about 400 kg of natural UO2.[29]

Enrichment

After uranium is mined and converted into a gaseous form, the U-235 isotope must be separated from the more abundant U-238 isotope in a process called enrichment. But because these two uranium isotopes are identical chemically, they cannot be readily separated by a simple chemical reaction. They must be parted by exploiting the slight difference in their weights. Uranium enriched to between three and five percent U-235 is typically used to fuel power reactors of the type Iran is constructing at Bushehr; uranium enriched to 90% or more U-235 can be used to fuel nuclear weapons.

There are a number of different ways to enrich uranium. Iran has focused on gas centrifuge enrichment and has also experimented with laser isotopic separation.

-Centrifuges

Centrifuge separation works by passing UF6 through high-speed rotational machines called centrifuges. The different weights of the uranium isotopes cause them to separate, with the heavier U-238 being thrown to the outside of the centrifuge and the lighter U-235 staying nearer the inside. Centrifuges require several repetitions with the enriched product to reach the desired level of concentration; more repetitions are required to obtain a higher concentration of U-235, which is necessary to produce weapon-grade fuel.

Iran’s centrifuge program was launched in 1985 at facilities controlled by the AEOI in Tehran.[30]  Around 1987, Iran received a centrifuge design through what the IAEA has termed a “foreign intermediary.”[31]  During this first phase of Iran’s centrifuge effort, Iran also obtained about 2,000 components from abroad.[32] According to a February 2004 Malaysian police report, Iran received two containers of centrifuge parts, worth $3 million, through the Khan network.[33]  This transfer allegedly took place between 1994 and 1995.[34]

In 1997, Iran moved its centrifuge development effort to the Kalaye Electric Company in Tehran.[35]  According to Iranian authorities, from 1997 through 2002, Kalaye was used to test and assemble centrifuges for uranium enrichment.[36]  In October 2003, after initial denials, Iran admitted that it had used 1.9 kg of UF6, allegedly imported from China in 1991, to test centrifuges at Kalaye.[37] This work took place between 1998 and 2002 and, according to Iranian officials, achieved an enrichment level of 1.2% U-235.[38]  The IAEA first visited parts of Kalaye in March 2003 and Agency inspectors were allowed to take environmental samples at the site during a follow-up visit in August 2003.[39] During this visit, inspectors noted that “considerable modification” had been made to the facility since their visit in March.[40]

Beginning in 2002, Iran’s centrifuge enrichment program was moved to Natanz,[41] the location chosen for a 1,000 centrifuge pilot plant and a commercial-scale facility intended to house over 50,000 centrifuges. According to Iran, the Natanz site will produce nuclear fuel for power plants using uranium enriched from three to five percent U-235.

The Natanz site was revealed publicly in August 2002 by the NCRI[42] and first visited by the IAEA in February 2003. In his report to the IAEA Board of Governors in March 2003, IAEA Director General Mohamed ElBaradei stated that the site included a pilot plant that was “nearly ready for operation, and a much larger enrichment facility still under construction.”[43]

Iran first used UF6 to test a centrifuge at the pilot plant in June 2003, and in August 2003 tested a ten-machine cascade using UF6.[44] Enrichment work at the pilot plant was suspended beginning in November 2003, following an agreement between Iran and Britain, France and Germany. However, Iran continued to manufacture centrifuge parts and assemble centrifuges at a number of workshops.[45]

The machines at Natanz are of an early European design, similar to the P-1 centrifuge that has been under the control of the Khan Research Laboratories (KRL) in Pakistan, and which was stolen from Western Europe’s Urenco program during the1970s and 1980s. According to a paper presented by France at a Nuclear Suppliers Group meeting in May 2003, Iran was believed to have improved on the Pakistani design and achieved “a model effective enough to consider enrichment on an industrial scale.”[46] Iran’s first-generation centrifuge is referred to as the IR-1.

In addition to the IR-1 centrifuge, Iran has a program to develop more advanced models. Iran received a design for the P-2 in 1994 from what the IAEA termed “foreign sources.”[47] The IAEA has concluded that Iran received the same drawings for the P-2 as Libya,[48] which received the design, along with P-2 components, through the Khan network. The P-2 uses a maraging steel rotor with bellows and is similar to another early European centrifuge design.[49] According to Iran, mechanical testing of the P-2 rotors began in 2002,[50] using carbon composite rotors manufactured domestically rather than rotors made with maraging steel, which Iran was unable to produce.[51] The AEOI contracted with a private company based in Tehran to produce the rotors and to conduct the tests, allegedly without using nuclear material.[52] Iran has procured magnets useful in the P-2 from Asian suppliers and has sought to acquire about 4,000 magnets suitable for the P-2 through a European intermediary.[53]

These investments in equipment and know-how  paid off. By the end of 2007, Iran had commenced feeding uranium hexafluoride gas into approximately 3,000 centrifuges it had installed at its site at Natanz. All were of the IR-1 variety. The number of these centrifuges then rose steadily. By late 2008 Iran had installed almost 5,000 centrifuges, and by August 2015, Iran had installed over 15,000 centrifuges and was feeding gas into more than 9,000 of them.  In February 2013, Iran began installing a more advanced centrifuge model at Natanz, referred to as the IR-2m.  By August 2015, 1,008 IR-2m centrifuges had been installed, though none had been fed with uranium gas. During this same period Iran made great strides in producing uranium hexafluoride at its Uranium Conversion Facility (UCF) in Isfahan. From March 2004 through February 2011, Iran produced a total of 371 tons of this material.[54]

The result was to enable Iran to produce, by November 2015, a stockpile of 8.3 tons of low-enriched uranium (enriched to 3.5% U-235), an amount sufficient to fuel seven nuclear weapons if further enriched to weapon grade.  Under the terms of the JCPOA, Iran was required to reduce its stockpile of low-enriched uranium to no more than 300 kilograms, a requirement Iran fulfilled by shipping most of its stockpile to Russia in December 2015.[55]

For the first 10 years of the JCPOA, Iran will be permitted to maintain no more than 5,060 IR-1 centrifuges at Natanz and will not be permitted to enrich uranium above 3.67 percent for the first 15 years.  All excess centrifuges were dismantled and stored at Natanz under IAEA monitoring.

Work at Natanz also included experiments at a pilot plant. These have concentrated on the development of more advanced centrifuges, including the IR-2m, IR-4, IR-5, IR-6, IR-6s, IR-7, and IR-8. Some of these machines have been tested with UF6. According to the terms of the JCPOA, Iran is permitted limited research and development activities and testing of these advanced centrifuge models for the first ten years of the agreement.  After ten years, Iran will be permitted to manufacture complete models of advanced centrifuges and begin installing and operating them at the Natanz facility.  After 15 years, Iran will be allowed to install and operate any type of centrifuge at any of its declared uranium enrichment facilities.  Iran’s aim is to make centrifuge operations entirely indigenous, developing not only centrifuge components but also measuring equipment and vacuum pumps.

The most sensitive endeavor at the Natanz pilot plant was  to increase the enrichment level of low-enriched uranium, an essential step to being able to fuel a nuclear weapon. Iran justified this action by claiming that the higher enrichment (to 20% U-235) is necessary to fuel a small  research reactor.  The interim nuclear accord struck with Iran in November 2013 halted this work.  By that date, Iran had produced 450 kg of this material.  According to calculations by the Wisconsin Project, Iran would theoretically need 120 kg of this 20 percent material in order to produce a bomb.

Until halting production in January 2014, Iran was using an experimental cascade of 328 centrifuges at Natanz to produce some 4.4 kg each month of 20 percent enriched uranium hexafluoride — a level of enrichment which accomplishes 90 percent of the work needed to process natural uranium to weapons grade.

Iran had also been making this 20 percent material at the Fordow Fuel Enrichment Plant.  Of the nearly 3,000 IR-1 centrifuges installed at the plant, about 700 were contributing to the production of 20 percent enriched uranium before this activity was halted in January 2014.[56]

Fordow was considered a troubling choice for this work. It consists of a series of chambers built into a mountain and fortified against air attack. The plant was built secretly and its existence was only revealed by President Obama in 2009.  Under the JCPOA, Fordow will be converted into a nuclear research center, and no uranium enrichment or enrichment-related research and development will be permitted in the facility for the first 15 years of the agreement.

-Laser Isotopic Separation

Because isotopes of different masses absorb different wavelengths of light, uranium isotopes can be separated by lasers precisely tuned to excite or ionize only the U-235. The U-235 is then separated out using a chemical reaction or magnetic forces that attract the excited atoms and leave behind the neutral ones. Iran has pursued two types of laser enrichment technology: the first, atomic vapor laser isotope separation (AVLIS), has achieved the greatest success; the second, molecular laser isotope separation (MLIS), appears not to have progressed as far.

Iran’s laser enrichment program began before the 1979 revolution and relied on assistance from at least four foreign sources.[57]  In 1975, Iran contracted with a foreign supplier for a laboratory to study uranium metal. The laboratory, which was established at the Tehran Nuclear Research Center (TNRC), contained two mass spectrometers. In the late 1970s, Iran contracted with a second supplier for help with the study of MLIS technology.[58]

Then, in 1991, Iran ordered a Laser Spectroscopy Laboratory (LSL) and a Comprehensive Separation Laboratory (CSL) from a third supplier.[59] Iran received 50 kg of natural uranium metal from the same supplier in 1993. Both laboratories were originally set up at the TNRC,[60] where, between 1999 and 2000, eight kilograms of uranium metal were used in AVLIS enrichment experiments.[61] The labs were then relocated to Lashkar Ab’ad in October 2002,[62] where further AVLIS enrichment experiments were carried out using 22 kg of the uranium metal.[63] Iran had previously established a pilot plant for laser enrichment at Lashkar Ab’ad.[64] According to Iranian laboratory reports supplied to the IAEA, the average level of enrichment in these experiments was between eight and nine percent, and occasionally as high as 15%.[65] This is above the level of three percent Iran had originally claimed.[66] The IAEA has estimated that Iran’s AVLIS installation at Lashkar Ab’ad had the capacity to produce one gram of uranium per hour, but could not operate continuously.[67]

Iran contracted with a fourth supplier in the late 1990s for information and equipment related to laser enrichment but secured only some of the equipment it had requested, which was delivered to Lashkar Ab’ad. This equipment was suitable for use in AVLIS experiments.[68]

After conducting this laboratory-scale work, and before informing the IAEA of it, Iran dismantled the relevant equipment and moved it to a storage facility at Karaj.[69]

The Plutonium Path

Iran has also sought the ability to produce plutonium, a second fissile material that can be used to fuel nuclear weapons. But because plutonium exists naturally only in trace amounts, it must be manufactured in a nuclear reactor. This is done by bombarding U-238 reactor fuel with slow neutrons. When the U-238 captures a neutron, the U-239 isotope is produced, which decays into plutonium 239.

Tehran Research Reactor (TRR)

In the late 1960s, the United States supplied the TNRC with a five megawatt research reactor, hot cells and 93% enriched uranium reactor fuel.[70]  The United States stopped the fuel supply after the revolution. In the late 1980s, Argentina reportedly helped Iran reconfigure the reactor’s core and later provided about 115 kg of uranium enriched to 20% U-235.[71] This fuel was delivered in 1992.

In October 2003, Iran acknowledged that between 1988 and 1992 it had irradiated depleted uranium dioxide targets (UO2) in the reactor and then conducted plutonium separation experiments in hot cells in a nearby building.[72] According to Iran, seven kilograms of UO2 were irradiated, three kilograms of which were processed into separated plutonium.[73]  The separated plutonium was presented to inspectors from the IAEA in November 2003 at the Jabr Ibn Hayan Laboratories, located at the TNRC.[74]  Iran estimated that it had produced 200 micrograms.[75]  However, the inspectors concluded that Iran understated the amount of plutonium and that the age of the plutonium was less than the 12-16 years Iran declared.[76]

Light-water reactor at Bushehr

Russia has constructed a 1,000 megawatt pressurized light-water reactor at the Iranian port of Bushehr. Russia took over the project in 1995, after Germany halted its construction of the plant. The plant is capable of contributing about four percent of Iran’s total electricity output to the national power grid.[77]  The facility is also capable of providing Iran with enough weapon-grade plutonium to construct approximately 35 nuclear weapons annually. This assessment is based on an estimate of the plutonium output from a typical 1,000 megawatt pressurized light-water power reactor.

To use the plutonium from Bushehr in a nuclear weapon, however, Iran would have to construct a plant to extract plutonium from the spent reactor fuel. Iran would also have to keep the spent fuel. Russia has an agreement with Iran to provide low-enriched uranium fuel through the first decade of the Bushehr plant’s operation, and the spent fuel will be returned to Russia in accordance with a protocol signed in February 2005. Iran has also agreed to allow the reactor and its fuel to be inspected by the IAEA, so any unauthorized use of the fuel would violate Iran’s obligations under the Nuclear Nonproliferation Treaty.

After years of delay, the billion dollar reactor has reached completion. Preliminary testing began in late February 2009 and delivery of the reactor fuel needed for start-up, some 82 tons, was completed in January 2008. The reactor was connected to Iran’s national grid on September 12, 2011, and commissioning for the reactor began in January 2012.  Iran took control of the Bushehr reactor from Russia in September 2013.

Despite Iran’s promises to return the spent fuel, Iran has made purchasing attempts that indicate it seeks a capacity to reprocess and manipulate spent fuel. According to a May 2003 French paper submitted to the Nuclear Suppliers Group, Iran has sought to acquire high density radiation shielding windows for hot cells and 28 remote manipulators from the French nuclear industry.[78] Such equipment is expressly designed for the extraction of plutonium from spent reactor fuel.

Heavy water technology

Iran has also sought to master heavy water technology. Iran decided to  develop a heavy water production plant and a heavy water research reactor at a site in the Khondab area near Arak, approximately 150 miles southwest of Tehran,. The existence of the heavy water production plant was first revealed by the NCRI in August 2002[79] and verified by commercial satellite imagery in December 2002.[80] The heavy water plant was inaugurated in August 2006 and, using satellite imagery, the IAEA has judged the plant to be operational.  Iran informed the IAEA that the two heavy water production lines at Arak would produce about 16 tons of heavy water annually.

On May 5, 2003, Iran also announced plans to build a 40 megawatt thermal heavy water research reactor, called the Iran Nuclear Research Reactor (IR-40), at the same site.[81] The reactor, fueled by natural UO2, was designed to use heavy water as both coolant and moderator.[82]  Iran has admitted that it received some foreign assistance for the design of the reactor; the United States suspects that Russia provided the help.

The heavy water reactorwas the subject of a visit by the IAEA in November 2010. The IAEA inspectors confirmed that civil construction at the site was “almost complete” and that some major equipment, including the pressurizer for the reactor cooling system and the main crane in the reactor building, had been installed. In May 2013, the IAEA confirmed that the reactor vessel had arrived at Arak and that major components had been installed at the reactor.  In June 2013, Iran installed the main reactor vessel at Arak.[83]

Under the terms of the JCPOA, Iran was required to remove the calandria from the reactor at Arak and fill it with concrete, rendering it inoperable.  The IAEA verified that Iran had fulfilled this requirement in January 2016.[84] Under the terms of the JCPOA, Iran is prohibited from pursuing the construction of the IR-40 reactor based on its original design.  Instead, with the assistance of an international consortium, Iran will redesign and rebuild the reactor to minimize the production of plutonium.  The nominal power of the redesigned reactor will not exceed 20 MWth.[85]

Iran has always claimed that the IR-40 is intended for civilian research and development and for the production of radioisotopes for medical and industrial use. However, most states that have built this type of reactor, which is widely considered larger than necessary for research, have used it to produce bombs. The well-known precedents are Israel’s Dimona reactor, supplied by France and Norway, and India’s Cirus reactor, supplied by Canada and the United States.

Some fuel for the original IR-40 reactor had been produced at the Fuel Manufacturing Plant at Esfahan.  On May 23, 2009, IAEA inspectors were able to visit the facility.  It was operational and had produced natural uranium pellets to fuel the heavy water reactor at Arak.  Iran ceased the production of fuel assemblies for the Arak reactor after the implementation of the Joint Plan of Action in January 2014.  All previously produced fuel assemblies remained at the Fuel Manufacturing Plant.

Weaponization?

Every country trying to develop a nuclear weapon has faced two challenges. First came the need to produce a critical mass of fissile material-uranium 235 or plutonium-the metals needed to fuel a first-generation bomb. The second challenge was to produce a device that could cause the uranium or plutonium to explode in a nuclear chain reaction. This second process is called weaponization.

A number of the activities and experiments Iran has undertaken, when coupled with its concealment efforts and its firm commitment to mastering the production of fissile material, suggest that Iran could be trying to make a nuclear device.

In September 2003, the IAEA discovered that Iran had produced polonium-210, a radioisotope with a half-life of 138 days.[86] Iran conducted Po-210 production experiments in the Tehran Research Reactor (TRR) between 1989 and 1993 by irradiating bismuth metal.[87] One of the best-known uses for Po-210 is as a neutron initiator in nuclear weapons.[88] It also has civilian applications, such as in nuclear batteries.[89] However, the IAEA considers the applications of Po-210-based nuclear batteries to be extremely limited.[90] Iran has said that the experiments were part of a study on neutron sources, but has been unable to provide documentation supporting this purported intent.[91]

There have also been reports that Iran has sought deuterium gas from Russia.[92] According to an intelligence report citing Russian sources that was circulated at the IAEA in July 2004, Iranian middlemen negotiated with companies in Russia to purchase deuterium gas after failing to produce it domestically. Deuterium gas is used, in conjunction with tritium, to boost the yield of fission bombs. Deuterium and tritium are hydrogen isotopes that release neutrons and energy when they fuse in thermonuclear explosions.

In addition, French intelligence services have reported that Iran has sought items useful for nuclear tests and simulation, including documentation on flash radiography equipment and pulse generators.[93] Iran has also tried to purchase machines that can be used to shape uranium or plutonium metal, such as isostatic presses and vacuum furnaces.[94] And according to a May 2003 media report, a Swede of Iranian origin arranged the purchase of 44 high-voltage switches for Iran from Behlke Electronic GmbH, a German company. The switches, which were reportedly seized by German customs agents, could be used to trigger nuclear weapons.[95][96][97]

Beyond its procurement efforts, the way in which Iran has organized and delegated its nuclear work to entities related to the defense ministry could suggest a military purpose. According to the IAEA, seven of the 13 workshops dedicated to the domestic production of centrifuge components are located on sites controlled by the ministry of defense.[98]

Moreover, if Iran received the same package of nuclear goods from the Khan network as did Libya-an eventuality that is widely suspected-then it could have received the same Chinese-origin bomb design. China is believed to have supplied Pakistan with a tested nuclear bomb design in the early 1980s. It is reportedly this design that the Khan network resold to Libya, along with documents in Chinese containing detailed instructions on how to manufacture parts for and assemble an implosion-type device.

Suspicions about Iran’s intentions have also been increased by Iran’s refusal to cooperate with the IAEA. In early February 2008, the IAEA presented member states, including Iran, with specific evidence that Iran had pursued work related to nuclear weapons. In its May 2008 report, the Agency listed eighteen documents supporting these allegations. Iran has called the documents “forged” or “fabricated,” and refuses to help the Agency investigate their validity by providing access to individuals, records and sites. For instance, it has barred IAEA inspectors from interviewing Mohsen Fakhrizadeh, former head of the Physics Research Center who was reportedly described by the IAEA as the Iranian military official in charge of Iran’s nuclear effort.

In 2011, the IAEA consolidated all of its outstanding questions about Iran’s alleged efforts to pursue nuclear weaponization research: the so-called “possible military dimensions to Iran’s nuclear program.” The analysis in the report was based on information that the Agency received from IAEA member states, from the Agency’s own investigative efforts, and from information provided by Iran.  The IAEA judged the allegations of work on nuclear weapons “to be, overall, credible” and “consistent in terms of technical content, individuals and organizations involved, and time frames.”[99]

The 2011 IAEA report contained detailed information about Iran’s effort to develop a nuclear weapon, including:

  • computer modeling of implosion, compression, and nuclear yield, as recently as 2009;
  • high explosive tests simulating a nuclear explosion but using non-nuclear material in order to see whether an implosion device would work;
  • the construction of at least one containment vessel at a military site, in which to conduct such high explosive tests;
  • studies on detonation of high explosive charges, in order to ensure uniform compression in an implosion device, including at least one large scale experiment in 2003, and experimental research after 2003;
  • support from a foreign expert, reportedly a former Soviet weapon scientist named Vyacheslav Danilenko, in developing a detonation system suitable for nuclear weapons and a diagnostic system needed to monitor the detonation experiments;
  • manufacture of a neutron initiator, which is placed in the core of an implosion device and, when compressed, generates neutrons to start a nuclear chain reaction, along with validation studies on the initiator design from 2006 onward;
  • the development of exploding bridgewire detonators (EBWs) used in simultaneous detonation, which are needed to initiate an implosive shock wave in fission bombs;
  • the development of high voltage firing equipment that would enable detonation in the air, above a target, in a fashion only making sense for a nuclear payload;
  • testing of high voltage firing equipment to ensure that it could fire EBWs over the long distance needed for nuclear weapon testing, when a device might be located down a deep shaft;
  • a program to integrate a new spherical payload onto Iran’s Shahab-3 missile, enabling the missile to accommodate the detonation package described above.[100]

Between 2011 and 2015, the IAEA regularly reported that the Iran was evading questions related to the Agency’s investigation of Iran’s alleged weaponization efforts.  When the JCPOA was agreed to in July 2015, Iran and the IAEA also signed a “Road-Map” agreement intended to resolve all of the IAEA’s outstanding questions related to this investigation.  As part of a separate agreement, the IAEA received environmental samples from the Parchin military base, which was a suspected site of nuclear weapons experimentation.  The samples were reportedly collected by Iranians under IAEA monitoring by video and still cameras and GPS tracking.[101]

On December 2, 2015, the IAEA issued its final report on Iran’s alleged weaponization efforts, concluding that Iran had a coordinated nuclear weapon-related program until 2003, and that some weapon-related activities continued through 2009.[102]  The IAEA report disclosed that Iran did not provide new information or meaningful information for most of the 12 outstanding issues in the IAEA’s investigation.  To many of the Agency’s questions, Iran offered no new information, or made denials without explanation, or gave explanations contradicted by other information available to the Agency.  Nonetheless, the IAEA Board of Governors voted unanimously to close the Agency’s investigation on December 15, 2015.[103]

Safeguards Violations

Under the NPT, Iran must allow the IAEA to inspect its nuclear-related material so that the Agency can verify its peaceful use. This includes what the NPT calls all “source or special fissionable material” and all facilities where such materials are being used, processed or produced anywhere on Iran’s territory or anywhere under its control. Iran must also tell the IAEA about changes to its nuclear material inventory and submit inventory change reports when necessary.[104] Finally, Iran is required to provide updated design information on its nuclear facilities and information on facilities where nuclear material is held or stored.[105]

In a report to the IAEA Board of Governors in June 2003, following four months of Agency inspections in Iran, IAEA Director General Mohamed ElBaradei concluded that Iran “has failed to meet its obligations under its Safeguards Agreement with respect to the reporting of nuclear material, the subsequent processing and use of that material and the declaration of facilities where the material was stored and processed.”[106]  Following that conclusion, the IAEA has documented a number of instances in which Iran violated its safeguards agreement by failing to report:

  • The import of nearly 2,000 kg of uranium compounds (1,000 kg of UF6, 400 kg of UF4 and 400 kg of UO2) in 1991,[107] allegedly from China;
  • The processing of 1.9 kg of UF6 (imported in 1991) in centrifuges at the Kalaye Electric Company, which produced 1.2% enriched uranium;[108]
  • The conversion of 9.43 kg of the UF4 imported in 1991 into UF6 in a laboratory at the TNRC;[109]
  • The production of uranium metal in a laboratory at the TNRC in the 1990s using 376.6 kg of UF4 imported in 1991;[110]
  • The production of 2.5 kg of UF4 using UO2 imported in 1991;[111]
  • The irradiation of several grams of UO2 in the TRR and its subsequent processing in a laboratory at the TNRC;[112]
  • The irradiation of 3 kg of depleted UO2 targets in the TRR and subsequent plutonium separation experiments carried out in hot cells at the TNRC, in which about 200 micrograms of plutonium were produced;[113]
  • The import of 50 kg of natural uranium metal in 1993;[114]
  • The processing of 30 kg of the uranium metal imported in 1993 in two series of AVLIS enrichment experiments: first between 1999 and 2000 at the TNRC using 8 kg of uranium, and second at Lashkar Ab’ad between October 2002 and February 2003 using 22 kg of uranium metal;[115]
  • Pilot-scale laser enrichment operations at the TNRC and Lashkar Ab’ad using imported equipment and failing to provide design information on these sites;[116]
  • The transfer of nuclear equipment and material used in laser experiments to a waste storage facility at Karaj, and failing to provide design information on this new site;[117]
  • The use of uranium compounds imported in 1977 and exempted from inspection (U3O8 and depleted UO2) and yellowcake imported in 1982 in experiments at two laboratories at the Esfahan (Isfahan) Nuclear Technology Center;[118]
  • The use of depleted UO2, which Iran had originally declared as material lost during experiments, to produce UF4 in a laboratory at the TNRC;[119]
  • Research and development work on a more advanced centrifuge, known as the P-2, which should have been disclosed to the IAEA in Iran’s October 2003 full nuclear report to the Agency. This omission violated Iran’s obligations under the IAEA’s Additional Protocol, which Iran had agreed to honor, pending ratification in the Iranian parliament.[120]

Footnotes: 

[1] Joint Comprehensive Plan of Action (JCPOA), July 14, 2015, (via Iran Watch): http://www.iranwatch.org/sites/default/files/iran_joint_comprehensive_plan_of_action.pdf

[2] New Information on the Top Secret Projects of the Iranian Regime’s Nuclear Program, Remarks by Alireza Jafarzadeh, National Council of Resistance of Iran, August 14, 2002, (via Iran Watch): /library/ncri-new-information-top-secret-nuclear-projects-8-14-02.

[3] Statement to the IAEA Board of Directors, Mohamed ElBaradei, Director General of the International Atomic Energy Agency (IAEA), March 17, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-director-generals-statement/statement-director-general-mohamed-6.

[4] Treaty on the Non-Proliferation of Nuclear Weapons, April 22, 1970: https://www.iaea.org/sites/default/files/publications/documents/infcircs/1970/infcirc140.pdf

[5] U.S. State Department Briefing with Deputy Spokesman J. Adam Ereli, November 19, 2004, (via Iran Watch): http://www.iranwatch.org/government/us/dos/us-dos-depspokesperson-111904.htm.

[6] Akbar Etemad, “Iran.’ A European Non-Proliferation Policy. Ed. Harald Muller. Oxford: Clarendon Press, 1987. p. 207.

[7] “Iran’s Nuclear Power Profile,” International Atomic Energy Agency (IAEA), updated on December 2002, p. 438, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/other-iaea-document/irans-nuclear-power-profile-iaea.

[8] Ali Asghar Soltanieh, Second Moscow International Nonproliferation Conference, September 30, 2003, (via Iran Watch): http://www.iranwatch.org/government/iran/iran-mfa-soltanieh-092003.htm.

[9] Bushehr Nuclear Power Plant Delayed by Another Year, Islamic Republic News Agency, August 22, 2004, (via Iran Watch): http://www.iranwatch.org/government/iran/iran-irna-sabouri-bushehrdelay-082204.htm.

[10] V.N. Mikhailov and R. Amrollah, Protocol of Negotiations, January 8, 1995, (via Iran Watch): /library/government/russia/russia-protocol-negotiation-between-iran-and-russia.

[11] Richard P. Cronin, Alan Kronstadt, and Sharon Squassoni, Pakistan’s Nuclear Proliferation Activities and the Recommendations of the 9/11 Commission: U.S. Policy Constraints and Options, January 25, 2005, p. 11-12, (via Iran Watch): /library/government/united-states/congress/congressional-research-service-reports/pakistans-nuclear-proliferation-activities-and-recommendations-911.

[12] Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA), November 10, 2003, p. 6-7, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[13] For access to all IAEA reports and statements on Iran, see: https://www.iaea.org/newscenter/focus/iran/iaea-and-iran-iaea-reports

[14] Iranian President Mohammad Khatami on the Right of all Nations to Nuclear Energy, Islamic Republic News Agency (IRNA), February 9, 2003, (via Iran Watch): http://www.iranwatch.org/government/Iran/iran-irna-khatami-yazd-isfahan-kashan-020903.htm.

[15] Mohammad Saeidi, “Nuclear Fuel Cycle Activities in Iran,” World Nuclear Association Annual Symposium, September 7, 2005, p. 3, (via Iran Watch): http://www.iranwatch.org/government/iran/iran-aeoi-worldnuclearassociation-saeidi-090705.pdf.

[16] Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/83, p. 2, November 15, 2004, (via Iran Watch): http://www.iranwatch.org/sites/default/files/iaea-iranreport-111504.pdf

[17] Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/83, p. 3, November 15, 2004, https://www.iaea.org/sites/default/files/gov2004-83.pdf

[18] Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2008/4, p. 5, February 22, 2008, https://www.iaea.org/sites/default/files/gov2008-4.pdf; Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/83, p. 3, November 15, 2004, https://www.iaea.org/sites/default/files/gov2004-83.pdf

[19] “Latest Developments in the Nuclear Program of Iran, in Particular on the Plutonium Way,” Presentation by France at the Nuclear Suppliers Group Information Exchange Meeting, May, 2003, (via Iran Watch): http://www.iranwatch.org/government/france/france-nsgpaper-2003-.htm.

[20] M. Ghannadi-Maragheh, “Iranian Nuclear Fuel Cycle Experience,” World Nuclear Association Annual Symposium, September 3, 2003, p. 4-5, (via Iran Watch): http://www.iranwatch.org/government/iran/iran-aeoi-worldnuclearassociation-ghannadi-090303.pdf.

[21]  Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/83, p. 3, November 15, 2004, https://www.iaea.org/sites/default/files/gov2004-83.pdf

[22] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/40, p. 5, June 6, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-3.

[23] Reza Aghazadeh, “Iran’s Nuclear Policy: Peaceful, Transparent, Independent,” IAEA Headquarters, May 6, 2005, p. 5, (via Iran Watch): http://www.iranwatch.org/IAEAgovdocs/iran-iaeastatement-aghazadeh-050603.pdf.

[24] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 1, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[25] Implementation of the NPT Safeguard Agreement and relevant provisions of Security Council resolutions in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2015/50, p. 10, August 27, 2015, https://www.iaea.org/sites/default/files/gov-2015-50-derestr.pdf

[26] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/60, p. 9, September 1, 2004, https://www.iaea.org/sites/default/files/gov2004-60.pdf

[27] Implementation of the NPT Safeguard Agreement and relevant provisions of Security Council resolutions in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2015/65, pp. 11-12, November 18, 2015, https://www.iaea.org/sites/default/files/gov-2015-65.pdf

[28] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 1, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[29] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/40, p. 2, June 6, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-3.

[30] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 8, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[31] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 8, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[32] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 8, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[33] Press Release by Inspector General of Police in Relation to Investigation on the Alleged Production of Components for Libya’s Uranium Enrichment Programme, Royal Malaysia Police Office, February 20, 2004, (via Iran Watch): /library/government/malaysia/royal-police-office/press-release-inspector-general-police-relation-investigation-alleged-production-components-libya%E2%80%99s.

[34] Press Release by Inspector General of Police in Relation to Investigation on the Alleged Production of Components for Libya’s Uranium Enrichment Programme, Royal Malaysia Police Office, February 20, 2004, (via Iran Watch): /library/government/malaysia/royal-police-office/press-release-inspector-general-police-relation-investigation-alleged-production-components-libya%E2%80%99s.

[35] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 8, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[36] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 8, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[37] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 9, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[38] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 9, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[39] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/63, p. 7, August 26, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-2.

[40] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/63, p. 7, August 26, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-2.

[41] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 8, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[42] Alireza Jafarzadeh, New Information on Top Secret Projects of the Iranian Regime’s Nuclear Program, National Council of Resistance of Iran, August 14, 2002, (via Iran Watch): /library/ncri-new-information-top-secret-nuclear-projects-8-14-02.

[43] Mohammed ElBaradei, Statement to the International Atomic Energy Agency (IAEA) Board of Governors, March 17, 2003, (via Iran Watch): http://www.iranwatch.org/international/iaea/iaea-iranvisit-031703.htm.

[44] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/63, p. 7, August 26, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-2.

[45] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/34, p. 8, June 1, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-ira-11.

[46] Latest Developments in the Nuclear Program of Iran, In Particular on the Plutonium Way, Nuclear Suppliers Group: France, 2003, (via Iran Watch): /library/government/france/france-nsg-paper-latest-developments-nuclear-program-iran.

[47] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency, (IAEA): GOV/2004/11, p. 8, February 24, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-0.

[48] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/34, Annex p. 6, June 1, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-ira-11.

[49] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency, (IAEA): GOV/2004/11, p. 8, February 24, 2004, (via Iran Watch): http://www.iranwatch.org/international/IAEA/iaea-iranreport-022404.pdf.

[50] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/34, Annex p. 6, June 1, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-ira-11.

[51] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency, (IAEA): GOV/2004/11, p. 8, February 24, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-0.

[52] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency, (IAEA): GOV/2004/11, p. 8, February 24, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-0.

[53] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/34, Annex p. 7, June 1, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-ira-11.

[54] Implementation of the NPT Safeguard Agreement and relevant provisions of Security Council resolutions in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2015/65, pp. 11, November 18, 2015, https://www.iaea.org/sites/default/files/gov-2015-65.pdf

[55] Verification and Monitoring in the Islamic Republic of Iran in light of United Nations Security Council Resolution 2231 (2015), International Atomic Energy Agency (IAEA): GOV/INF/2016/1, p. 4, January 16, 2015, https://www.iaea.org/sites/default/files/gov-inf-2016-1.pdf; David E. Sanger and Andrew E. Kramer, “Iran Hands Over Stockpile of Enriched Uranium to Russia,” New York Times, December 28, 2015, https://www.nytimes.com/2015/12/29/world/middleeast/iran-hands-over-stockpile-of-enriched-uranium-to-russia.html

[56] Implementation of the NPT Safeguards Agreement and relevant provisions of Security Council resolutions in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2014/10, p. 8, February 20, 2014, https://www.iaea.org/sites/default/files/gov2014-10.pdf

[57] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 10, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[58] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 10-11, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[59] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 10, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[60] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 10-11, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[61] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 2, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[62] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 11, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[63] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 11, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[64] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 11, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[65] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/34, Annex p. 7, June 1, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-ira-11.

[66] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/34, Annex p. 7, June 1, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-ira-11.

[67] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/34, Annex p. 8, June 1, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-ira-11.

[68] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 11, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[69] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 11, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[70] Communication dated 12 September 2005 from the Permanent Mission of the Islamic Republic of Iran to the Agency, International Atomic Energy Agency (IAEA): INFCIRC/657, p. 4, September 15, 2005, https://www.iaea.org/sites/default/files/publications/documents/infcircs/2005/infcirc657.pdf

[71] Technical Cooperation Project Schedules for 1991-1992, International Atomic Energy Agency (IAEA), p. C.168, October 29, 1990, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/project-schedules-1991-92.

[72] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 5, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[73] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 5, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[74] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 6, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[75] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic EnergyAgency (IAEA): GOV/2004/11, p. 5, February 24, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-0.

[76] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/34, Annex p. 2-3, June 1, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-ira-11.

[77] “Iran’s Nuclear Power Profile,” International Atomic Energy Agency (IAEA), 2002, p. 8, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/other-iaea-document/irans-nuclear-power-profile-iaea.

[78] Latest Developments in the Nuclear Program of Iran, In Particular on the Plutonium Way, Nuclear Suppliers Group: France, 2003, (via Iran Watch): /library/government/france/france-nsg-paper-latest-developments-nuclear-program-iran.

[79] Alireza Jafarzadeh, New Information on Top Secret Projects of the Iranian Regime’s Nuclear Program, National Council of Resistance of Iran, August 14, 2002, (via Iran Watch):: /library/ncri-new-information-top-secret-nuclear-projects-8-14-02.

[80] David Albright and Corey Hinderstein, “Iran Building Nuclear Fuel Cycle Facilities: International Transparency Needed,” Institute for Science and International Security, December 12, 2002, (via Iran Watch): /library/isis-iran-building-nuclear-fuel-cycle-facilities-12-12-02.

[81] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/40, p. 3, June 6, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-3.

[82] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/40, p. 6, June 6, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-3.

[83] Implementation of the NPT Safeguards Agreement and relevant provisions of Security Council resolutions in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2013/40, p. 8, August 28, 2013, https://www.iaea.org/sites/default/files/gov2013-40.pdf

[84] Verification and Monitoring in the Islamic Republic of Iran in light of United Nations Security Council Resolution 2231 (2015), International Atomic Energy Agency (IAEA): GOV/INF/2016/1, pp. 1-2, January 16, 2015, https://www.iaea.org/sites/default/files/gov-inf-2016-1.pdf

[85] Joint Comprehensive Plan of Action (JCPOA), July 14, 2015, (via Iran Watch): http://www.iranwatch.org/sites/default/files/iran_joint_comprehensive_plan_of_action.pdf

[86] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/11, p. 5, February 24, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-0.

[87] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/34, Annex p. 3, June 1, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-ira-11

[88] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/34, Annex p. 3, June 1, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-ira-11

[89] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/34, Annex p. 3, June 1, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-ira-11

[90] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/34, Annex p. 3, June 1, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-ira-11

[91] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2004/34, Annex p. 3, June 1, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-ira-11

[92] Intelligence Report Citing Russian Sources, Circulated at the International Atomic Energy Agency (IAEA), July 2004: (via Iran Watch): http://www.iranwatch.org/international/iaea/iaea-iran_report_d_t.pdf.

[93] Latest Developments in the Nuclear Program of Iran, In Particular on the Plutonium Way, Nuclear Suppliers Group: France, 2003, (via Iran Watch): /library/government/france/france-nsg-paper-latest-developments-nuclear-program-iran.

[94] Latest Developments in the Nuclear Program of Iran, In Particular on the Plutonium Way, Nuclear Suppliers Group: France, 2003, (via Iran Watch): /library/government/france/france-nsg-paper-latest-developments-nuclear-program-iran.

[95] Iran’s Suppliers, “Eddie Johansson”, (via Iran Watch): http://www.iranwatch.org/search/view_record.asp?sc=suppliers&id=95.

[96] Iran’s Suppliers, “Eva-Marie Hack”, (via Iran Watch): http://www.iranwatch.org/search/view_record.asp?sc=suppliers&id=94.

[97] Iran’s Suppliers, “Harold Hemming”, (via Iran Watch): http://www.iranwatch.org/search/view_record.asp?sc=suppliers&id=93.

[98] Note by the Secretariat, International Atomic Energy Agency (IAEA): 2004/Note 17, March 30, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/other-iaea-document/iaea-secretariats-response-comments-and-explanatory.

[99] Implementation of the NPT Safeguards Agreement and relevant provisions of Security Council resolutions in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2011/65, Annex, November 8, 2011, https://www.iaea.org/sites/default/files/gov2011-65.pdf

[100] Implementation of the NPT Safeguards Agreement and relevant provisions of Security Council resolutions in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2011/65, Annex, November 8, 2011, https://www.iaea.org/sites/default/files/gov2011-65.pdf

[101] Thomas Erdbrink and David E. Sanger, “Atomic Agency Defends How Iran Collected Evidence at Secret Base,” New York Times, September 21, 2015, https://www.nytimes.com/2015/09/22/world/middleeast/iran-gives-un-nuclear-inspectors-samples-from-secret-military-base.html

[102] Final Assessment of Past and Present Outstanding Issues regarding Iran’s Nuclear Program, International Atomic Energy Agency (IAEA): GOV/2015/68, December 2, 2015, https://www.iaea.org/sites/default/files/gov-2015-68.pdf

[103] Joint Comprehensive Plan of Action implementation and verification and monitoring in the Islamic Republic of Iran in light of United Nations Security Council Resolution 2231 (2015), International Atomic Energy Agency (IAEA): GOV/2015/72, December 15, 2015, http://www.iranwatch.org/sites/default/files/iaea-pmdresolution-121515.pdf

[104] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/40, p. 3, June 6, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-3.

[105] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/40, p. 4, June 6, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-3.

[106] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/40, p. 7, June 6, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-3.

[107] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/40, p. 2, June 6, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-3.

[108] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 9, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[109] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 5, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[110] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 2, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[111] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 3, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[112] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 2, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[113] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, p. 5-6, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[114] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 10, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[115] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 2, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[116] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 9-11, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[117] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 11, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[118] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 3, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[119] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic Energy Agency (IAEA): GOV/2003/75, Annex 1 p. 3, November 10, 2003, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-1.

[120] Implementation of the NPT Safeguard Agreement in the Islamic Republic of Iran, International Atomic EnergyAgency (IAEA): GOV/2004/11, p. 8, February 24, 2004, (via Iran Watch): /library/international-organization/international-atomic-energy-agency-iaea/iaea-report/implementation-npt-safeguards-agreement-islamic-republic-iran-0.

Canadian-Iranian Businessman Pleads Guilty in Conspiracy to Ship U.S. Electronics to Iran

Ali Reza Parsa, a businessman with dual Iranian and Canadian citizenship, pleaded guilty in federal court in January 2016 to conspiring to ship U.S.-origin electronic components from the United States to Iran, via Canada, without a license required by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).  He was sentenced to three years in prison on May 20, 2016.

Parsa admitted to one count of conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR).  Between 2009 and 2015, Parsa conspired to obtain electronic components from U.S. companies for shipment to Iran and other countries.  The components included cryogenic accelerometers, which can be used in liquid propellant rocket engines.

Parsa concealed the intended end-user of the components by placing orders through a Canadian company called Metal PM and using a United Arab Emirates-based freight forwarder.  He also provided the U.S. supplier companies with false information about the end-user.  These shipments were to be made on behalf of Tavan Payesh Mad, an Iranian procurement company.

Tavan Payesh Mad supplies equipment to companies in the chemical, mining, oil, heavy industry, and energy sectors. Its clients include Abadan Oil Refining Company, Arak Petrochemical Company, National Iranian Steel Company (NISCO), Esfahan Steel Company, Shomal Cement Company, Fars Cement Company, and Mazandaran Cement Company. Both Tavan Payesh Mad and Metal PM have been linked to Parsa.

While in custody, Parsa continued to conduct business for Metal PM and Tavan Payesh Mad.  He ordered components from Brazilian and German suppliers on behalf of Iranian end users and reportedly attempted to conceal the transactions by directing a relative to delete email evidence.


Sources:

[1] “Canadian-Iranian Citizen Sentenced in Manhattan Federal Court to Three Years in Prison for Conspiring to Violate Iran Sanctions,” Press Release, U.S. Department of Justice, May 23, 2016, available at https://www.justice.gov/usao-sdny/pr/canadian-iranian-citizen-sentenced-manhattan-federal-court-three-years-prison, accessed on July 21, 2016.

[2] “About Us,” Tavan Payesh Maad World Wide Web site, http://tavanpm.com/index.php?lang=en#about, accessed on July 25, 2016.

[3] “Resume,” Tavan Payesh Maad World Wide Web site, http://tavanpm.com/page.php?task=pages&ID=37&lang=en, accessed on July 25, 2016.

[4] “Canadian Sentenced in U.S. for Breaking Iran Export Sanctions,” Globe and Mail, May 23, 2016, available at http://www.theglobeandmail.com/news/national/canadian-sentenced-in-us-for-breaking-iran-export-sanctions/article30123222/, accessed on July 21, 2016.

The Iran Deal: Who Has the Leverage?

Panelists

Olli Heinonen
Kenneth Katzman (*)
David Kay
John Lauder
Michael Singh

Moderated by the Wisconsin Project on Nuclear Arms Control

This month marks the anniversary of the historic nuclear accord the United States and five other countries concluded with Iran a year ago.  As a result of the accord, Iran has restricted the most worrisome parts of its nuclear program for a period of time, in exchange for relief from international economic sanctions.  During the past year, the United States and its partners have amply fulfilled their obligations.  Nevertheless, Iran claims to be still unsatisfied.  It asserts that the economic benefits from the agreement have not been as great as it expected, and that an effort should be made to increase them.  Iran also objects to any application of sanctions triggered by activity independent of the agreement, such as its missile tests, support for terrorism, arms imports and exports, and human rights abuses.

In response to these complaints, the United States has urged non-U.S. banks to engage in what it terms “legitimate business” (i.e., non-sanctioned business) with Iran.  U.S. Secretary of State John Kerry promoted this message when meeting with the heads of some of Europe’s largest banks in May.  The United States also has been muted in its response to a series of Iranian missile tests and to ongoing Iranian missile-related procurement, and it has not issued any designations for human rights abuses since last July.

These actions seem to proceed from concern that Iran will judge the benefits from the agreement to be insufficient, and withdraw.  But is such concern well-founded?  How likely is it, in fact, that Iran will withdraw?  And how many additional benefits can be offered to Iran without undermining existing U.S. policies—those related to missile and arms proliferation, export controls, human rights, terrorism, and illicit finance?

These questions were examined by a roundtable of experts hosted by the Wisconsin Project on Nuclear Arms Control in Washington, D.C. on June 15, 2016.  The roundtable concluded that Iran would lose far more than it would gain by leaving the agreement now, that the United States has more leverage under the agreement than has Iran, and that instead of attempting to give Iran more benefits, the United States should use its superior leverage to create mechanisms that increase transparency and ensure that the terms of the agreement are enforced and its objectives achieved.

Valerie Lincy, Executive Director of the Wisconsin Project, hosted the roundtable.  The participants were Olli Heinonen, Senior Fellow at Harvard University’s Belfer Center for Science and International Affairs, Kenneth Katzman, Senior Analyst at the Congressional Research Service, David Kay, Senior Fellow at the Potomac Institute for Policy Studies, John Lauder, an independent consultant on nonproliferation and arms control, and Michael Singh, Managing Director of the Washington Institute for Near East Policy.

Following are the roundtable’s findings, which are a composite of the panelists’ individual views.  No finding should be attributed to any single panelist or be seen as a statement of the policy of any government.

Finding one:  Iran is unlikely to walk away from the agreement now.  The cost to Iran of so doing would far exceed any benefit.

The primary cost to Iran if it withdraws from the agreement would be economic and political.  A decision by Iran to withdraw would be particularly costly now, before it has fully reaped the economic benefit from the agreement.  The United States could re-impose immediately the sanctions that President Barack Obama suspended in January 2016, including restrictions on non-U.S. persons and companies engaged with Iran’s financial, energy, and shipping sectors.  Any future American president could carry those sanctions forward, via executive order, without congressional action.

The renewal of U.S. sanctions, though unilateral, would impose costs.  The panelists agreed that most banks or companies engaged in business with the United States would probably exit the Iranian market or forego the opportunity to enter it if U.S. nuclear-related sanctions were renewed.  Even in the current environment, large European banks and many companies have been reluctant to reenter Iran, in part because of remaining U.S. sanctions.  If forced to choose between trade with the United States or Iran, they would take the more lucrative path.  Their governments may not follow the United States in re-imposing sanctions, but could not protect the firms from having to make that choice.  And even if European Union countries and other foreign buyers were to continue purchasing oil from Iran, the re-imposition of nuclear-related sanctions would make it difficult for Iran to fully access the proceeds of those sales because of U.S. financial sanctions.  The result would be the loss of most of the economic benefit Iran has received as a result of the agreement.  Iran would also forgo prospective economic gains, first from its re-integration into the global economy and financial markets, and second from foreign investment.  The hope of realizing these gains was Iran’s main motive for entering the nuclear deal.  Losing them would be costly.

Iran would also surrender political benefits.  Iran’s support for terrorism, its ballistic missile development, its human rights abuses, and its lack of corporate and financial transparency have all enjoyed a more tolerant attitude from the United States and its allies since negotiations on the nuclear agreement commenced in 2013, and even more so since the agreement was reached last July.  Ending the agreement would reverse that tolerance overnight.  Strong international criticism and sanctions would surely follow.  In addition, Iran would sacrifice the domestic political benefit resulting from the promise of higher economic growth, lower unemployment, and greater social stability.

A secondary cost to Iran of withdrawing from the agreement would be the impact on the nuclear program.  The accord reached last July gave Iran’s nuclear effort its largest and longest-sought benefit: legitimacy.  At a single stroke, the accord ended Iran’s near-pariah nuclear status, opened the way eight to 10 years from now for Iran to be able to fuel a small nuclear arsenal quickly, and allowed Iran to gain this ability with the consent of the International Atomic Energy Agency and the United Nations.  The panelists agreed that the accord offers Iran the surest pathway to “threshold” nuclear weapon status.

The panelists also agreed that it would be a great loss to Iran if it were to give that legitimacy up by leaving the agreement.  As the agreement’s restrictions are lifted after 8, 10, and 15 years, Iran will be allowed to field a large, commercial-scale uranium enrichment capacity.  President Obama has admitted that such a capacity will reduce Iran’s “breakout time”—that needed to produce weapon-ready uranium—“almost down to zero.”  And Iran will be aided in its pursuit of this capacity by being able, for the first time, to import—legally—nuclear equipment, material, technical assistance, training, and investment through an official U.N. procurement channel.  While Iran has historically relied upon illicit procurement to acquire nuclear imports, and most certainly will continue to do so for very sensitive items, the new U.N. channel should allow Iran to make nuclear purchases more easily, and without the risk of condemnation.

In addition to those losses, Iran would give up a chance in the coming years to escape restraints on its missile and arms imports.  In as few as three years, according to the panel, Iran could receive the so-called “Broader Conclusion” from the IAEA, which would legitimate Iran’s nuclear program as peaceful.  This Broader Conclusion—a term of art defined by the IAEA—would be granted if Iran is fully cooperative with Agency inspectors, has resolved concerns about its past nuclear activities, and answers the IAEA’s questions about its ongoing nuclear program.

The IAEA’s Broader Conclusion would trigger a second round of sanctions relief for Iran sooner than the milestone dates established in the agreement.  The U.N. arms embargo (intended to be place for 5 years) and U.N. restrictions on ballistic missile technology and activity (8 years) would be lifted immediately.  U.N. oversight of nuclear-related imports through the procurement channel would remain in place for 10 years, though prior approval of nuclear and nuclear related dual-use items would no longer be required—the Security Council would only need to be informed of such transfers.  The second phase of E.U. and U.S. sanctions relief—including the E.U. arms embargo, E.U. restrictions on ballistic missiles, and remaining U.S. secondary sanctions—is slated to come in eight years but would also be triggered immediately by the Broader Conclusion.  And once this Broader Conclusion is received, Iran could argue that other nuclear restrictions should be lifted sooner than provided for by the agreement because the IAEA has certified the country’s nuclear program as peaceful.

Finding two:  The benefit to Iran of withdrawal from the agreement would be minimal.  It would serve mainly to reduce the time needed to make the fuel for one nuclear weapon.

The Obama administration’s stated objective in the nuclear talks with Iran was to impose sufficient constraints on Iran’s nuclear program so that for at least 10 years Iran would need one year to produce enough fuel for a nuclear weapon using its declared facilities and material in a “break out” scenario.  The underlying rationale for this objective was questionable—it is highly unlikely that Iran would break out in order to fuel only one weapon— and the agreement left some uncertainty in how far the Iranians had progressed in all aspects of its nuclear weapons program.  Still, the one-year benchmark proved to be the focus of public debate and the primary means of promoting the value of the agreement.

The panel estimated that if Iran withdrew and decided to boost its enrichment capacity as rapidly as possible, it could reduce its break out time to approximately six months by roughly doubling its existing capacity.  This assumes that Russia would not return the low-enriched uranium Iran exported to it under the agreement, and that Iran would begin enrichment with natural uranium, of which it has a large stockpile.  Iran would probably need between two and three months to reach such a doubling, which it could achieve by adding IR-1 centrifuges to the 5,060 now operating, or by adding the 1,000 more advanced IR-2m centrifuges now in storage at the Natanz plant.  Despite withdrawing from the agreement, Iran’s program would still be subject to inspections by the IAEA; the Agency would monitor and report on the expansion of enrichment.

After achieving this doubling, Iran could continue to add existing IR-1 centrifuges, of which it has some 12,000 in storage, or it could manufacture and install additional more advanced machines.  The panel found the latter to be a more likely option because the advanced machines would not be contaminated by past use, have been properly tested, and are an estimated four or five times more powerful than the IR-1.  As Iran adds centrifuges, the break out time would continue to fall.  For instance, by adding 2,000 IR2-m centrifuges (assuming that an additional 1,000 of these machines exist) the breakout time might be halved again, which would bring it down to about three months.  It is important to remember that a break out would be illegal—it would violate the Nuclear Nonproliferation Treaty—and probably be detected before succeeding.  In addition to offending world opinion, the violation would create pressure on the United States and other countries to react.  Iran would risk sanctions, other diplomatic and economic actions, and possibly military strikes in order to gain access to one bomb’s worth of enriched uranium.  Such a benefit would not be worth the cost.

Finding three:  Because Iran has much to lose and little to gain by withdrawing from the agreement, the balance of leverage now favors the United States.  Therefore, there is no reason to grant Iran additional benefits.

The panelists agreed that the United States has lived up to its commitment under the accord.  In January 2016, the Obama administration suspended the bulk of its secondary sanctions on Iran’s financial and energy sectors, including restrictions on most Iranian financial institutions, the shipping sector, and the insurance and transport of Iranian oil, gas, and petrochemicals.  Iran has since been able to sell oil on the international market without volume limits.  Iran has also been permitted access to the approximately $100 billion owed to it in foreign exchange reserves held overseas, although according to the Treasury Department roughly half of those funds were already obligated and thus are not available for repatriation or other uses.

The panel concluded that companies’ willingness to do business with Iran is affected not just by certain remaining sanctions but also by other challenges.  Accordingly, Iran’s present complaints are likely a negotiating tactic, aimed at gaining concessions beyond those already agreed.  An example has been the request by the governor of Iran’s Central Bank and other Iranian officials for the reinstitution of “U-turn” transactions involving Iran, transactions that originate and terminate offshore but are cleared though a U.S. bank.  Such a request might be explained by the possible overselling of the deal’s benefits to certain constituencies inside Iran.  In response, the Obama administration, and Secretary of State John Kerry in particular, have launched a public relations and messaging campaign with European banks.  Nevertheless, there have been no substantial concessions or changes in U.S. financial policy.  Treasury officials have refuted media reports that the United States would reauthorize U-turn transactions for Iran, which have been prohibited since 2008.

The panel noted a number of reasons—independent of the accord—that could explain why Iran may not have received the benefits it hoped for:

  • The reintegration of the Iranian economy into the international financial and commercial systems takes time.  European and Asian companies must navigate around legal hazards to re-enter the Iranian market.
  • Iran’s behavior, including its ballistic missile tests, raises questions about the long-term commercial risks of re-entering Iran.
  • Companies may wait for the U.S. Presidential election to see the fate of the Obama administration’s policies.
  • The lack of transparency in the Iranian market makes it difficult to do due diligence on potential counterparties who may be linked to entities still subject to U.S. sanctions, such as the Islamic Revolutionary Guard Corps (IRGC).
  • Iran remains a jurisdiction of concern for money-laundering and terrorism financing according to the Financial Action Task Force (FATF).  FATF continues to advise financial institutions “to apply enhanced due diligence to business relationships and transactions with natural and legal persons from Iran.”

Finding four:  Instead of reacting to Iran’s additional demands, the United States should use its superior leverage to ensure transparency, monitoring, verification, and enforcement of the nuclear agreement.  That is not now being done.

The United States has tried to counter Iran’s complaints about the accord by launching a publicity campaign in favor of increased trade.  At the same time, however, the United States has done virtually nothing to support and publicize the structures that will be needed to ensure Iran’s performance of the accord.  The panel concluded that the administration could be “soft-pedaling” the arms control aspects of the deal for a number of reasons.  It could fear that Iran might walk away; it could want to demonstrate its own good faith and reasonableness; it could want to escape blame if the deal fails; it may not want to fuel U.S. domestic opposition to the deal, which has persisted since the deal was made.

Although the panel recognized the basis for such reasoning, the panel judged that vigorous enforcement of the agreement would only serve to strengthen it.  If the Iranians saw the United States and its allies  prioritizing enforcement, and saw that they have a clear, unified approach to responding to Iranian violations, Iran would be more, not less, likely to comply with the agreement.  Nevertheless, the United States and its European partners have not taken any steps to clarify how they would handle Iranian non-performance.  They should make this clarification at once.  It is important to build a consensus on such a step before a breach occurs.  It cannot be done effectively in a crisis.

The panel agreed that the United States and other parties to the agreement must vigorously exercise the inspection and consultative mechanisms of the agreement and meet any ambiguity or inconsistency in Iran’s compliance with a quick and appropriate response.  Otherwise, leverage will begin to tilt back to Iran.  A lack of response would allow Iran to build up a “background noise” of minor and then ever more serious violations, so as to blur any redline that would trigger a strong response.  So far, the United States has shown that its response to a violation below the level that would trigger the snapback of sanctions will be either to do nothing, or to treat it as a problem to be corrected.  For example, in response to the inability of Iran to meet the required cap on its heavy water accumulation, the United States agreed to purchase the excess stock rather than address a possible Iranian failure to meet an obligation.

A lack of vigorous response also establishes the narrative that Iran is fully complying with the accord and that the accord is functioning as it should.  Such a narrative may not reflect the reality in the field.  IAEA Director General Yukiya Amano has already noted disagreements between the IAEA and Iran over the interpretation of the agreement.  There is also a problem with transparency.  While a selling point of the agreement in the United States was a promise of increased transparency and visibility into the Iranian nuclear program, the terms of the agreement have led to less detailed IAEA reports, including missing details on crucial aspects of the nuclear program.

The panel warned that less comprehensive IAEA reporting also raises questions about nuclear material accounting, which is a core task of the Agency.  For example, Iran’s excess stock of heavy water, which the United States has agreed to purchase, has been sent to a port in Oman managed jointly by Oman and Iran.  Therefore, the heavy water may still be under Iran’s control.  Such an arrangement creates a sanctuary for excess Iranian nuclear material and potentially a storage location for new purchases.  Iran’s export to Russia of some eight tons of low-enriched uranium raises a similar question: the material apparently has not been declared to the IAEA by Russia as an addition to its uranium inventory, so is it still technically under Iran’s control?  The panel concluded that these inconsistencies must be resolved.

A lack of transparency affects other parts of the agreement, including the operation of the Joint Commission and the procurement channel for approved nuclear sales to Iran.  It is not clear, at least to outside observers, whether the Joint Commission, composed of all parties to the agreement, including Iran, is functioning effectively.  This Commission oversees the various technical groups established by the agreement and is meant to handle disputes that arise related to implementation.

Regarding the procurement channel, little has been made public about how it will function, about the working group reviewing proposed sales, and about the group’s criteria for approving or denying a sale.  Nor does it appear that the group’s decisions will be made public.  As a result, those observing implementation of the agreement from “outside the fence line” have little sense of how this important element for controlling nuclear sales to Iran will function, and what specifically Iran will be permitted to purchase.  In addition, there is the question of how approved sales will be checked.  Under the agreement, the IAEA is responsible for checking the end-use for items used in Iran’s nuclear program; supplier countries are responsible for dual-use nuclear items sent to other sectors of Iran’s economy.

Related to the licit sales through this channel is the question of how smuggling outside the channel will be handled.  Iran has publicly stated its intent to seek missile and military technology from abroad—a violation of U.N. Security Council resolutions—and there have been reports of attempts by Iran to procure nuclear-related items without passing through the channel.

In sum, the panel expressed concern that the United States and its partners failed to invest in the “dotting of i’s and crossing of t’s” in advance of the agreement’s implementation.  Such work is necessary and expected in an agreement of this importance.

To support more vigorous enforcement, the United States should give the agreement prominence inside the government.  An implementation office should remain a high-level position in the State Department, within the Secretary of State’s office.  In addition, the United States should create an independent congressional commission, modeled on the United States-China Economic and Security Review Commission.  It would monitor and oversee implementation and report violations.  The panel observed that the Republican critics of the agreement declined to establish such a commission because doing so would be a tacit acceptance of the deal.  But the panel recommended that Congress accept the deal as a political reality and instead do everything in its power to achieve vigorous oversight and enforcement.

In addition, with the leverage that it enjoys today, the United States should not be deterred from taking a more aggressive stance on Iran’s behavior outside the agreement, such as the abuse of human rights, illicit finance, support for terrorism, and the development of ballistic missiles, especially those capable of carrying a nuclear warhead.  Such a stance would also help maintain U.S. leverage by reminding businesses interested in entering Iran of the risks in doing so while its malign behavior continues.

Finding five:  Although the balance of leverage now favors the United States, that leverage will shift over time to favor Iran.

During the next two to three years, as European and Asian firms and others increase their engagement in Iran, contracts will be made and implemented, banking and other financial relationships will be developed, and it would be increasingly costly for European and Asian countries to join a renewed sanctions regime against Iran.  At the same time, U.S. firms, through their foreign subsidiaries, may seek to follow their foreign competitors into what will be seen as a new market, to the extent permitted by the agreement and considering remaining U.S. sanctions.  Boeing is already seeking to sell aircraft to Iran.  As a U.S. stake in Iran grows, there may also be a domestic economic constraint on U.S. action.  The only counterweight would be the reluctance of some Iranian businesses to lose the economic benefits they had begun enjoying.  This might increase Iran’s reluctance to walk away from the agreement.

The stance on implementation and enforcement in the next few years will also affect future leverage.  The current trend appears to be for the United States and its partners to ignore ambiguities or potential violations of the agreement below the “snapback” threshold.  A pattern of non-action has set in that also applies to issues covered by the U.N. Security Council resolution implementing the agreement.  If this trend continues, it will be difficult for the next U.S. administration to adopt a more forceful posture.  A more forceful response could be seen as suddenly disproportionate.

In the later years of the deal, leverage will unquestionably shift in Iran’s favor.  Sometime between years 10 and 15, Iran could be weeks away from producing one bomb’s worth of nuclear fuel, could have developed advanced ballistic missiles capable of delivering nuclear warheads, and have a commercial scale uranium enrichment capacity legitimated by the international community and certified as peaceful by the IAEA.  By that time, Iran will also have received the benefits of the sunsetting restrictions on its nuclear and missile imports.  The drastically shortened breakout time will give Iran a much stronger hand diplomatically, whether it chooses to threaten breakout, or to ratchet up the most threatening aspects of its nuclear effort.  This will be true because the window of opportunity for the West to respond—whether diplomatically, economically, or militarily—will have become virtually closed.

*Mr. Katzman participated in this discussion in his personal capacity as an Iran expert, and not as a representative of the Congressional Research Service, the Library of Congress, or the United States Congress.