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Rhetoric rises as world powers gather in Baghdad

By Valerie Lincy
Updated May 2012

(Click here to access status report archive)

 

As the United States and other powers gather in Baghdad for a second round of nuclear talks with Iran, rhetoric on both sides has escalated -- in an effort to allay critics, and to influence the outcome.

The American ambassador to Israel warned that the United States was willing to use force to stop Iran from building a bomb, and even said that the military option was "ready," and that " the necessary planning has been done." The U.S. House of Representatives, not to be left silent, passed a resolution calling for Iran to suspend uranium enrichment and to cooperate fully with U.N. inspectors. In addition, the bill condemned any policy of containment of a nuclear weapons-capable Iran. For its part, on May 22 the Senate finally passed a bill that would strengthen U.S. sanctions by penalizing foreign entities that continue to trade with and invest in Iran. The move comes months after the House passed similar measures. The two chambers must now work to reconcile their different versions of the bill.

On the Iranian side, the New York Times quoted Hamidreza Taraghi, an adviser to Iran’s supreme leader Ayatollah Ali Khamenei, as claiming that Iran had already gained a lot by negotiating with the West. "Without violating any international laws or the nonproliferation treaty, we have managed to bypass the red lines the West created for us," he boasted. Mr. Taraghi said that Iran’s strategy had already forced the United States to accept that Iran could enrich uranium, although several resolutions by the U.N. Security Council have called for the enrichment to stop.

Iran also sent some conciliatory signals ahead of the Baghdad talks, including a vague agreement with the International Atomic Energy Agency on access to the Parchin military site, where nuclear weapon-related work is alleged to have taken place, and cooperation on resolving additional allegations of such work. The agreement was announced following a surprise visit to Tehran on May 21 by the Agency’s director. The parameters of the deal are still unclear and no access to Parchin has been granted yet. This argues against excessive optimism given the number of years Iran has stonewalled the Agency’s questions related to weapon allegations.

Still, Iran’s willingness to discuss weaponization with the IAEA, and its participation in a second round of nuclear talks suggest that the energy and financial sanctions put in place since the beginning of this year are having an impact. Media reports citing data from the Organization of the Petroleum Exporting Countries, or OPEC, indicate that Iran’s oil production fell by 12 percent in the first three months of the year and is likely to fall even more. Increasingly, Iran has also been forced to place crude oil in floating storage.

This decrease in production comes ahead of additional U.S. and European sanctions aimed at limiting Iran’s ability to export crude oil, which are slated to take effect in about one month. U.S. sanctions will target foreign banks that continue to conduct “significant” oil-related transactions with Iran beyond June 28, including transactions with Iran’s central bank. The sanctions would bar the foreign banks from the U.S. market – forcing them to choose between doing business with the United States or with Iran.

The Obama administration has already exempted a number of countries from sanctions because of their “significant reductions” in Iranian oil imports. They include Belgium, the Czech Republic, France, Germany, Greece, Italy, Japan, the Netherlands, Poland, Spain, and the United Kingdom. Other key markets for Iranian oil – such as China, India, South Africa, South Korea, and Turkey – also have reduced imports in recent months, but it is unclear whether they will also receive exemptions; the administration has not said what would constitute a significant reduction for these countries.

For its part, the European Union has taken steps to implement an oil embargo agreed to last January. A regulation adopted on March 23 bans the purchase, transport, financing, and insurance of Iranian oil and petroleum products, with limited exceptions, as of July 1. The regulation also bars E.U.-sanctioned Iranian banks from using financial messaging services, such as SWIFT, a private network based in Belgium that is used by most banks around the world to facilitate international bank transfers. This move, which took effect on March 17, is expected to make it more difficult for Iran to sell its oil.

Despite these new sanctions, Iran’s nuclear program continues to progress. Iran has begun to rapidly outfit a previously secret and heavily fortified uranium enrichment plant at a site called Fordow. In February, the International Atomic Energy Agency reported that Iran had already installed and begun to operate nearly 700 gas centrifuges at the plant by late January – and had accomplished this in just over two months’ time. At that rate of development, the Wisconsin Project estimates that the plant can be expected to contain almost 3,000 centrifuges by the end of 2012, putting Iran just a couple of months away from being able to fuel at least one and possibly two nuclear weapons. By the end of 2013, the plant could potentially put Iran only several months away from being able to fuel four or five weapons. This plant is also producing uranium enriched to nearly 20 percent, a level of great concern for proliferation.

This rapid progress raises the question whether sanctions and diplomacy – the alternative track to military action – are moving fast enough. More discussion of military strikes is likely if talks in Baghdad this month fail to yield at least a modest breakthrough.

Progress by the IAEA in its ongoing investigation of an alleged "military dimension" to Iran’s nuclear program would be one such breakthrough. The allegations published by the Agency last November described work by Iran for which the only plausible purpose was to make nuclear weapons. This included an undeclared program to produce nuclear material, and the procurement, manufacture, and testing of nuclear weapon components. Specifically, the IAEA described:

The Agency also reported allegations that Iran conducted preparatory work (without nuclear material) on the fabrication of natural and high-enriched uranium metal components, and that Iran has received at least one implosion bomb design.

Much of the information described by the Agency in its November report had been published before. But it was the degree of detail, and the Agency’s effort to describe the sources and credibility of its information, that was most striking. The Agency’s also said it was “increasingly concerned” about activities in Iran “related to the development of a nuclear payload for a missile.”

Another troubling revelation in the Agency’s November report has to do with a discrepancy in the amount of nuclear material – in this case natural uranium metal – on hand at the Jabr Ibn Hayan Research Laboratory (JHL). According to IAEA inspectors, about 20 kg of this material is unaccounted for. Such material would be useful in the nuclear weapon component testing experiments described above. This discrepancy remained as of the Agency’s February 24 report; Iran has not yet provided inspectors with access to the records and personnel necessary for their investigation.

Iran has also increased the number of centrifuges enriching uranium at its Natanz plant, from about 6,200 machines last November, to some 8,800 as of mid-February. This has increased Iran’s daily production rate of 3.5 percent enriched uranium hexafluoride to 5.2 kg. As of April 2012, Iran’s stockpile of this material stood at over 5,700 kg, a quantity which, if further enriched, is estimated by the Wisconsin Project to be sufficient to fuel five first-generation implosion bombs. (See Iran’s Nuclear Timetable.)

Iran has also continued to test more advanced centrifuges at its Natanz pilot plant. As of mid-February, about 220 machines (the IR-2m and IR-4) had been installed. And in early February, Iran informed the IAEA that three even newer centrifuge models (the IR-5, IR-6, and IR6s) would be installed as single machines. All of these centrifuges are more efficient than the thousands of IR-1 centrifuges Iran has installed at the commercial-scale plant at Natanz, and at the Fordow plant. Operating these advanced machines in cascades, as Iran is now doing, is a key step in deploying them on a larger scale.


The status of sanctions

To tighten the noose around Iran’s nuclear and missile developers, the United States has largely relied on Executive Order 13382. Under this authority, the United States has frozen the bank accounts and financial assets of hundreds of companies and individuals, and prohibited U.S. persons from doing business with them. The United States has also blacklisted almost all major Iranian banks, along with their affiliates and subsidiaries, as well as the Islamic Republic of Iran Shipping Lines (IRISL), and the Islamic Revolutionary Guard Corps (IRGC).

The United States has adopted even broader sanctions against Iran’s primary source of income – its energy sector. On December 31, 2011, President Obama signed a new law that bars foreign financial institutions that continue to do business with Iranian banks (including Iran’s Central Bank) from operating in the United States. The law will apply to oil-related transactions beginning in July 2012; it took effect for all other transactions on March 1, 2012. A waiver was built into the law allowing the President to delay sanctions or to exempt countries, under certain conditions.

Earlier, on July 1, 2010, President Obama signed the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA). This law penalizes firms that help Iran develop petroleum and natural gas, firms that sell Iran gasoline, and firms that help Iran buy gasoline by providing shipping, insurance or financing. Firms found to be engaging in sanctionable activity are barred from U.S. government contracts. The law also increases the menu of sanctions that the president “shall impose,” adding a prohibition on accessing foreign exchange in the United States, a prohibition on accessing the U.S. banking system, and a prohibition on property transactions in the United States. A least three of the now-nine sanctions must be imposed unless the President chooses to exercise his waiver authority.

In addition to the energy sector, CISADA targets financial institutions that do business with Iranian entities blacklisted by the United States, as well as firms that provide Iran with “sensitive technology,” including telecommunications and computer equipment. The law also authorizes state and local governments to divest from firms involved in Iran’s energy sector, and it seeks to disrupt Iran’s weapon-related procurement by allowing the President to designate a country as a destination of “diversion concern.” This designation would restrict U.S. exports to uncooperative countries.

For its part, the European Union has continued to adopt increasingly severe sanctions against Iran. In late January 2012, all 27 E.U. member countries agreed to a ban on imports of Iranian oil and petrochemical products, which will be fully implemented by July. Earlier, in July 2010, the European Union adopted sanctions that bar member countries from financing new projects in Iran’s oil and gas sector, and that prohibit the expansion of existing projects. Financial dealings were restricted as well: Transactions over €40 million with banks domiciled in Iran, or Iranian banks overseas, must be individually authorized. Iranian banks are also barred from opening new branches in Europe or establishing new joint ventures. And all E.U. member states are prohibited (with some exceptions) from providing new loans, grants or other financial assistance to the Iranian government and from insuring Iranian entities. The Europeans also imposed an asset freeze on IRISL, together with a ban on cargo flights operated by Iranian carriers or originating in Iran.

Like the United States Europe has also blacklisted hundreds of Iranian entities linked to missile and nuclear work, along with proliferation facilitators, like Iranian banks and shippers.

Non-E.U. member states in Europe have adopted sanctions that mirror those of the European Union, in order to prevent Iran from evading sanctions. And Australia, Canada, Japan, New Zealand, and South Korea have also joined the U.S. and the E.U. in adopting broad economic sanctions that target Iran’s energy, banking and transportation sectors, in addition to blacklisting a number of Iranian entities linked to proliferation.

Iran’s refusal to suspend enrichment, reprocessing and heavy water work has led the U.N. Security Council to vote four rounds of sanctions: Resolution 1929 of June 9, 2010, resolution 1803 of March 3, 2008, resolution 1747 of March 24, 2007, and resolution 1737 of December 23, 2006. These resolutions bar Iran from importing or exporting most conventional weapon systems, as well as items related to uranium enrichment, reprocessing, heavy water and nuclear weapon delivery systems, including dual-use nuclear and missile items; they also bar states from providing Iran with financial or technical assistance aimed at acquiring these items. Resolution 1929 bars Iranian nationals and entities incorporated in Iran from investing in nuclear and missile projects abroad, applies a travel ban on all 41 individuals designated by the Security Council so far, and calls upon countries to “exercise vigilance” in doing business with, and in providing financial services to Iranian entities, and in dealing with Iranian banks. Other elective penalties endorsed by the United Nations include a call for countries to inspect suspicious shipments into and out of Iran, including on the high seas, and to refuse services to Iranian ships suspected of carrying illicit cargo. Countries must also “exercise vigilance” in providing Iranian nationals with specialized nuclear and missile-related training and are called upon, but not required, to cut off “grants, financial assistance, and concessional loans” to the Iranian government. These conditions make it easy for countries to avoid taking action. Combined, the resolutions call for a freeze on the assets of some 117 Iranian entities linked to missile and nuclear work.

In order to oversee implementation, the Security Council has created a committee responsible for investigating alleged violations. The committee, which is now aided by a panel of experts, also has the power to expand the asset freeze and travel surveillance to additional persons or companies.

Nuclear progress

After years of delay, the light water power reactor at Bushehr, built by Russia, was connected to Iran's national grid on September 12, 2011. Commissioning for the reactor began in January 2012. Delivery of the Russian reactor fuel needed for start-up, some 82 tons, was completed in January 2008. The reactor is designed to supply 1,000 megawatts, and is expected to operate at this level by the end of 2011. Each year, the reactor will also generate spent fuel containing some 250 kg of plutonium – enough to fuel several dozen nuclear weapons after further processing. The spent fuel is scheduled to go back to Russia under a protocol signed in 2005.

Following an intermittent freeze on uranium enrichment that lasted several years, Iran resumed enrichment work in January 2006. Since early 2007, Iran has stepped up efforts at its underground commercial-scale enrichment plant at Natanz, with the installation of IR-1 (P-1) centrifuges in cascades. Iran has installed of three “units” at Natanz, with roughly 3,000 centrifuges each. As of the IAEA’s February 2012 report, 52 cascades of 164 machines (and in some cases 174 machines) were operating on February 19. All of these centrifuges had been fed with UF6. Two more cascades were installed at that time. According to an IAEA inventory, Iran has produced about 5,400 kg of low-enriched uranium hexafluoride at the plant from the beginning of operations in February 2007, through February 4, 2012.

Work at the Natanz pilot plant has shifted away from the first-generation IR-1 centrifuges. It has emhasized more advanced machines, including the IR-2, IR-3 and IR-4. All of these machines have been tested with UF6. The IR-2 is a sub-critical machine with a single carbon fiber rotor and no bellows, according to a report by the Institute for Science and International Security. According to the IAEA, Iran is also testing a modified version of the IR-2. This modified IR-2, or one of the other, more advanced centrifuge models, is likely made with higher strength metals, like maraging steel. Iran may rely on foreign suppliers for some of the machine’s key materials and parts. However, Iran is working to make centrifuge operations entirely indigenous; at its Kalaye Electric research and development laboratory, Iran is developing not only centrifuge components, but also measuring equipment and vacuum pumps. As of February 2012, Iran had installed 164 IR-2m centrifuges (all of which are under vacuum, and some of which had been fed with UF6), and 58 IR-4 centrifuges, none of which had been fed with UF6 by that date.

Iran's stockpile of uranium hexafluoride (UF6) – a gas that can be enriched to make fuel for reactors or bombs – at its Uranium Conversion Facility (UCF) in Isfahan has not increased for some time. From March 2004 through May 2011, Iran produced a total of 371 tons of this material.

Other parts of Iran’s nuclear program have also progressed. Despite calls by the U.N. Security Council, the IAEA and Europe to abandon the project, Iran has pushed forward with its heavy water production plant at Arak, and with its 40-megawatt heavy water reactor nearby. The heavy water plant was inaugurated in August 2006, and had produced 60 tons of heavy water by August 2011, according to Iran. Agency inspectors have not been permitted to visit the plant since August 2011. According to satellit imagery, the plant appears to be in operation. The IAEA board indefinitely blocked Iran’s request for technical assistance for this project at a meeting in November 2007, over concerns that the reactor could be used to produce plutonium for weapons. During a visit by to the reactor in November 2010, 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 August 2011, inspectors confirmed that the moderator heat exchangers had been installed, and in October 2011, they confirmed that the coolant heat exchangers had been installed. As of 2012, one heavy water concentration column had been installed. Iran estimates that the reactor will begin operation by the end of 2013.

At its Fuel Manufacturing Plant, Iran has progressed in making two types of fuel assemblies for use in the Tehran Research Reactor. According to the IAEA, Iran has made an assembly of plates containing uranium "yellowcake" enriched to to 20 percent U-235 and an assembly of fuel rods containing uranium dioxide enriched up to 3.34 percent U-235. Earlier, in May 2009, the Plant had produced natural uranium pellets to fuel the heavy water reactor at Arak.

Grounds for suspicion

Suspicions about Iran’s nuclear work have been fueled by its lack of cooperation with IAEA inspectors. In early February 2008, the IAEA presented 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 still refuses to allow the Agency to investigate their validity by providing access to individuals, records and sites. In particular, Iran has barred IAEA inspectors from interviewing Mohsen Fakhrizadeh, former head of the Physics Research Center. He was reportedly described by the IAEA as the Iranian military official in charge of Iran's nuclear effort.

The IAEA has also shown that a company in Iran involved in uranium conversion was in touch with a team designing the inner cone of a missile re-entry vehicle that could, according to the Agency, “quite likely accommodate” a nuclear warhead. The IAEA also wants Iran to explain documents and technical information that link Iran to the testing of high voltage detonator firing equipment, the development of exploding bridge wire detonators and an arrangement for underground, remote explosive testing. The Agency considers these activities to be “relevant to nuclear weapon R&D.”

In addition, the IAEA has questions about Iran’s efforts to procure such nuclear weapon-related items as spark gaps, shock wave software, neutron sources, corrosion resistant steel parts and radiation measurement equipment. These items might have been intended for use in interrelated studies on uranium conversion, high explosives testing, and the design of a missile re-entry vehicle.

In November 2007, Iran finally turned over a one-page document containing a 1987 offer from the network run by Pakistani scientist A.Q. Khan. According to Iran, this is the only remaining evidence of the offer, which included supplying a disassembled P-1 centrifuge, centrifuge manufacturing specifications, blueprints for a “complete plant,” and materials to make 2,000 centrifuges. The offer also included auxiliary vacuum and electrical drive equipment, mechanical, electrical and electronic support equipment for the centrifuge plant, and a document on how to reduce UF6 to metal, and how to cast and machine enriched, natural and depleted uranium into “hemispherical forms.” Iran insists that it only received components for two disassembled centrifuges along with supporting drawings and specifications.

Concerning its more advanced centrifuges, Iran is sticking to its unlikely story that after receiving a full set of drawings for Pakistan’s P-2 machine from the Khan network in 1996, it did no work at all on the P-2 until 2002, and that it never received P-2 components. Iran has also insisted that it procured only a small number of magnets for the P-2. The IAEA was unable to substantiate evidence that Iran received 900 magnets from a foreign supplier during the period between 1996 and 2002 when Iran says it undertook no work on the P-2. As a result, the Agency has concluded its findings about Iran’s P-2 activities match Iran’s statements. Yet, Iran’s current pursuit of the IR-2 (which is based on the P-2) makes uncertainties about the program’s development troubling.

Foreign assistance

Imports of nuclear-, chemical- and missile-related equipment have been indispensable to Iran’s weapon efforts. According to annual reports by the U.S. Director of National Intelligence, Iran has continued to seek foreign assistance from entities in Russia, China, and North Korea.

China has provided key assistance. Chinese entities have helped Iran prospect for uranium, have sold UF6 ready for enrichment and have provided Iran with blueprints, equipment test reports, and equipment design information for its uranium conversion plant at Isfahan.

Russia’s main contribution is the 1,000 MW light-water power reactor at Bushehr. As of December 2005, 700 Iranian experts had completed training at Russia's Novovoronezh training center, which is run by the Russian nuclear power agency Rosenergoatom. The training included a theory course, work on a nuclear power unit simulator, and work at Russian nuclear power plants similar to the Bushehr reactor. The Iranian experts will continue their training at the Bushehr reactor itself. In addition to the reactor, Russian entities are alleged to have supplied laser equipment for uranium enrichment, know-how for heavy water reactors, and help with heavy water and nuclear-grade graphite production.

The nuclear smuggling network run by Pakistani scientist A. Q. Khan is believed to have been the main supplier to Iran’s centrifuge enrichment program. Speculation as to exactly what equipment and material Iran received has been the subject of numerous media reports since Libya renounced its mass destruction weapons and the Khan network was revealed as Libya’s primary supplier. The IAEA has already confirmed that the enrichment programs in Iran and Libya relied on the same technology obtained from the same foreign sources. And Iran’s P-2 centrifuge design is the same as the one found by the Agency in Libya. The P-1 centrifuges Iran has installed at Natanz are of an early European design, similar to the machines that have been under the control of the Khan Research Laboratories (KRL) in Pakistan. If Iran indeed received the same package of nuclear goods as did Libya, then it is possible that Iran received the same Chinese-origin bomb design. Iran may also have received more sophisticated nuclear weapon designs from the Khan network. Such designs were found on computers seized from Swiss nationals Friedrich, Marco and Urs Tinner. The Tinners were a known part of the Khan smuggling network and the designs found on their computers would reportedly require only 15 kilograms of highly enriched uranium and would be small enough to fit atop Iran’s medium-range Shahab-3 missile.

China, Russia and North Korea have combined to supply Iran’s missiles. Iran’s 1,300 kilometer Shahab-3 missile is essentially an imported North Korean Nodong missile enhanced by Russian technology. It was distributed to Iran’s Revolutionary Guards in June 2003 and has since been tested several times. Russian defense minister Sergei Ivanov confirmed that Russia had delivered Tor-M1 air defense missile systems to Iran. Iran has already tested the missiles and will use them to defend key nuclear sites. North Korea, in addition to selling the Nodong missile, has furnished Iran a fleet of SCUD-B and SCUD-C short-range missiles, plus the factories to make them. Both the SCUD-B and SCUD-C have a diameter sufficient to accommodate a compact nuclear warhead.

According to classified U.S. diplomatic cables released by the non-profit organization WikiLeaks, Iran has sought to procure missile-useable technology such as gyroscopes and carbon fiber from Chinese firms. These cables also confirm an allegation first published several years ago that Iran imported Russian-origin, nuclear-capable missiles from North Korea. According to a February 24, 2010 cable, which describes a bilateral meeting between Russian and U.S. officials, North Korea transferred nineteen BM-25 missiles to Iran. Though neither Iran nor North Korea has tested this missile, the United States believes that BM-25 technology has been used by Iran to improve its Safir space launch vehicle, and that it will allow Iran to improve its missile engines through the use of more “energetic fuels.” The BM-25 is based on the SS-N-6, a submarine-launched ballistic missile developed by the Soviet Union that became operational in the late 1960s. The SS-N-6 is a single-stage, liquid-fueled missile with a range of up to 3,000 km.