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Iran tests missiles, but says it’s willing to talk

By Valerie Lincy
Updated July 10, 2008

(Click here to access status report archive)

 

Iran tested its medium-range Shahab-3 missile this week, during military exercises organized by its Revolutionary Guard Corps. The Shahab-3 is capable of carrying a nuclear warhead, and is of little use armed with anything else given the missile’s inaccuracy and the small number Iran is believed to have in its arsenal. The fact that Iran is testing this missile, and seeking to extend its range, offer further evidence of Iran’s nuclear weapon intentions.

According to Iranian state media, the Shahab-3 tested on July 9 has a range of 2,000 km and carried a one ton conventional warhead. Video footage of the test suggests that Iran tested an older version of the Shahab-3 and not the more advanced design it has already displayed and tested.

In addition to the liquid-fuel Shahab-3, Iran reportedly tested a number of other missiles during the recent exercises, including two solid-fuel missiles: the Zelzal and the Fateh. Iran also reportedly tested the Hoot (Hout) torpedo. According to the Air Force Commander of Iran’s Revolutionary Guard Corps, the tests “demonstrate our resolve and might against enemies who in recent weeks have threatened Iran with harsh language.”

The exercises come at a delicate moment in the diplomatic effort to slow Iran’s nuclear progress. On July 4, Iran officially responded to an incentives offer from the United States, Britain, France, Germany, Russia and China (P5+1). The offer promises Iran formal negotiations on nuclear energy, regional security, economics and civilian aviation assistance in exchange for a freeze on its uranium enrichment and heavy water reactor programs. Iran did not dismiss the offer – as it did in 2006 when an almost identical offer was made by the same group of countries. However, Iran did not directly address the issue of whether it would freeze further development of uranium enrichment, which would allow such negotiations to begin.

Until a freeze is in place, countries leading diplomacy with Iran are pursuing a two-track strategy: Penalties – such as U.N., E.U. and U.S. sanctions – are coupled with offers of incentives and engagement. The most recent penalties were imposed by the United States on July 9, when eleven Iranian entities linked to nuclear and missile work were targeted with financial sanctions. The action freezes the bank accounts and financial assets of these entities, and U.S. persons are prohibited from doing business with them. All but one of the entities had been designated previously by the U.N. Security Council; they include officials from Iran’s Ministry of Defense, Revolutionary Guard Corps and Atomic Energy Organization, as well as companies involved in nuclear and missile work.

In late June, the European Union imposed sanctions on 26 entities linked to Iran’s missile and nuclear work– including Iran’s Bank Melli and officials from Iran’s Revolutionary Guard Corps and Ministry of Defense. The move, which followed months of internal debate, requires all E.U. member states to freeze the assets of listed entities and to institute a travel ban on listed individuals.

Meanwhile, Iran is still refusing to answer questions about alleged military dimensions to its nuclear work, including the possibility that it acquired from the Khan network designs for a more sophisticated nuclear warhead, small enough to fit atop Iran’s medium-range Shahab-3 missile. A May 26 report by the International Atomic Energy Agency describes additional activities that, if true, would confirm that Iran, at least at some point, sought to develop nuclear weapons. These activities include:

The IAEA report lists eighteen documents supporting these allegations, which the Agency considers to be “detailed in content” and “generally consistent.” Iran has called the documents “forged” or “fabricated,” but has largely refused to help the Agency investigate their validity. Iran also appears to have reduced overall cooperation and transparency with inspectors, by blocking access to centrifuge component manufacturing sites and failing to provide timely information on the installation of new centrifuges.

Indeed, Iran has continued to expand centrifuge operations in defiance of repeated U.N. Security Council demands. As of late May, Iran was operating a 3,000 centrifuge unit at its commercial-scale enrichment plant at Natanz and installing four additional such units. And while Iran is still installing and operating its first-generation machines (the P-1 or IR-1) at the commercial plant, it is now testing two new centrifuges at the Natanz pilot plant. Both the IR-2 and the IR-3 are next-generation centrifuges that contain important design improvements over the P-1; both have been tested with uranium gas.

The world ratchets up pressure

Iran’s refusal to suspend enrichment, reprocessing and heavy water work has now led the U.N. Security Council to vote sanctions three times: 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 items related to uranium enrichment, reprocessing, heavy water and nuclear weapon delivery systems, and bar states from providing Iran with financial or technical assistance aimed at acquiring these items. Resolution 1803 also bars Iran from purchasing dual-use nuclear and missile items, requests that countries inspect suspect cargoes to and from Iran, reduce public financial support for business with Iran, and cut back on transactions involving Iranian banks, particularly Bank Saderat and Bank Melli. However, the resolution’s language leaves plenty of room for countries uninterested in enforcing such measures to opt out. Combined, the resolutions call for a freeze on the assets of some 75 Iranian entities linked to missile and nuclear work. Resolution 1747 also bars Iran from exporting conventional arms and related materials and asks states to “exercise vigilance and restraint” in transferring arms to Iran. States 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. In addition, countries must report whether a person sanctioned by the Council has entered into or transited through their territory. Resolution 1803 puts five additional individuals under an international travel ban.

In order to oversee implementation, the Security Council created a Committee composed of Council members, responsible for investigating alleged violations of the resolutions, for expanding the asset freeze and travel surveillance to additional entities, and for considering exemption requests. As of June 13, 2008, out of 192 countries, the Committee had received reports on the implementation of Resolution 1737 from only 89 countries, reports on the implementation of Resolution 1747 from 76 countries, and reports on the implementation of Resolution 1803 from 51 countries. In addition, since last March, the Committee has granted two exemption requests for financial transactions involving Iranian entities whose assets have been ordered frozen by the Security Council. The Committee also received three notifications related to the transfer of nuclear items to Iran for its Bushehr reactor. Resolution 1803 expands the Committee’s responsibilities, requiring countries to report within five days on the results of any cargo inspection authorized by the Resolution.

The United States has, for the most part, relied on Executive Order 13382 to implement U.N. Security Council resolutions on Iran and to further tighten the noose around Iran’s nuclear and missile developers. Of the 75 entities listed in Security Council Resolutions 1737, 1747 and 1803, the United States has designated 26 under this Executive Order, which bans U.S. firms from dealing with them and freezes all of their assets under U.S. jurisdiction.

Treasury’s most recent action under this authority was to sanction Bahrain’s Future Bank B.S.C for aiding Iran's nuclear and missile programs. According to Treasury, Future Bank was established in 2004 as a joint venture between a private Bahrain bank and Iran's Bank Melli and Bank Saderat, with which the Security Council recently advised countries to monitor transactions. Earlier, on October 25, 2007, the U.S. Departments of State and of the Treasury announced measures against 27 Iranian entities linked to proliferation and terrorism, notably two large Iranian banks and Iran’s Islamic Revolutionary Guard Corps (IRGC) and Ministry of Defense and Armed Forces Logistics (MODAFL), two of Iran’s leading military organizations. Of these 27 entities, five are key IRGC officials and three are officials at Iran’s Aerospace Industries Organization—all of whom have already been sanctioned by the Security Council. The United States also singled out nine companies affiliated with the IRGC and two Iranian banks that have conducted transactions on behalf of entities sanctioned by the Security Council. According to the U.S. government, Bank Melli has handled transactions in recent months for Bank Sepah, Defense Industries Organization and Shahid Hemmat Industrial Group—all of which are involved in Iran’s ballistic missile program. And Bank Mellat provides banking services for key Iranian nuclear entities like the Atomic Energy Organization of Iran and Novin Energy Company.

The United States has also invoked antiterrorism and banking laws to encourage major banks in Europe, the United States and the Middle East to limit or cut ties with Iran. On March 20, the Treasury Department’s Financial Crimes Enforcement Network warned U.S. banks that Iran is resorting to "an array of deceptive practices" in order to avoid sanctions. According to Treasury, Iran's central bank, also known as Bank Markazi, may be facilitating transactions for sanctioned Iranian banks. Bank Markazi and other Iranian banks have also requested that their names be removed from global transactions in order to mask the parties in the transaction. A number of banks have limited or ended business with Iran because of these risks, which has made it more costly and difficult for Iran to move hard currency around the world, and has raised the cost of doing business for the Iranian government and Iranian companies.

Nuclear progress

After an intermittent freeze on uranium enrichment that lasted several years, Iran resumed enrichment work in January 2006. From March 2004 through mid-May 2008, it had produced some 320 tons 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. Since early 2007, Iran has stepped up work at its underground commercial-scale enrichment plant at Natanz, with the installation of piping, wiring and control panels, and the installation and linkage of P-1 centrifuges in a cascade. Twenty cascades of 164 machines are now operating there. All these centrifuges have been fed with UF6, and the feed rate has increased in recent months. Since December 12, 2007, Iran has processed some 2,300 kg of UF6, as compared to 1,670 kg from February through December 2007. According to the IAEA, this work has yielded low-enriched uranium of up to four percent U-235.

Iran has also enriched uranium in cascades of 10, 12 and 164 P-1 centrifuges at its pilot plant at Natanz, though work there on the P-1 seems to be decreasing. Instead, Iran is using the pilot plant to develop its more advanced centrifuges, including the IR-2 and IR-3. 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. It is not clear whether Iran is able to manufacture, assemble and install the IR-2 in large quantities, as 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.

The 320 tons of UF6 Iran has produced so far, if enriched to weapon grade, would be sufficient to make several dozen nuclear weapons, assuming that between 15 and 25 kg of uranium enriched to 93 percent U-235 would be needed for each bomb. The key questions are how quickly Iran can manufacture and install more working P-1, IR-2 and IR-3 centrifuges, whether it can successfully operate multiple, linked cascades on a continual basis, and whether the feedstock material it has stockpiled, and that it continues to produce at the UCF, is of sufficiently high quality for successful enrichment. Iran’s enrichment work so far may have been critically dependent on the use of Chinese supplied uranium gas for its success.

Meanwhile, 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. On November 24, 2007, the head of Iran’s Atomic Energy Organization claimed that Iran had already produced fuel for the plant, which is still under construction. The heavy water plant was inaugurated in August 2006, and Iran claims that it is fully operational and able to produce heavy water with 99.8 percent purity. The IAEA board indefinitely blocked Iran’s request for technical assistance for this project at a meeting last November, over concerns that the reactor could be used to produce plutonium for weapons. IAEA inspectors were able to visit the reactor and conduct design verification on May 13. However, inspectors’ access to the heavy water production plant is blocked as long as Iran fails to implement the Agency’s Additional Protocol allowing for enhanced inspections. According to the IAEA, satellite imagery appears to confirm Iran’s claim that the plant is operating.

After years of delay, the light water power reactor at Bushehr, which is being built by Russia for over $1 billion, is nearing completion. Delivery of the reactor fuel needed for start-up, some 82 tons, was completed in January 2008. According to Russian officials, preparation for loading the fuel into the reactor will begin this summer, and the reactor will be launched no earlier than late 2008. The billion dollar reactor is expected to supply 1,000 megawatts of energy to the national power grid. Each year, the reactor will also generate spent fuel containing some 250 kg of weapon-useable plutonium—enough to fuel several dozen nuclear weapons after further processing. The spent fuel will be returned to Russia, in accordance with a protocol signed in February 2005.

Grounds for suspicion

Doubts about the peaceful nature of Iran’s nuclear work have grown in response to Iran’s decision to limit its cooperation with the IAEA. In response to Security Council Resolution 1747, a government spokesman announced that instead of notifying the Agency of new building and renovating plans as soon as they are decided, as it promised to do in February 2003, Iran would revert to providing such information 180 days before the introduction of nuclear material into such facilities. The change will further limit the IAEA’s ability to understand Iran’s nuclear status and its future plans—a task already limited by Iran’s February 2006 decision to end application of the Agency’s Additional Protocol. The IAEA contests Iran’s right to unilaterally alter agreements on verification—though this objection is unlikely to prompt a change in Iran’s position. Under the basic inspection agreement that is currently in place in Iran, the IAEA must still be allowed to observe any enrichment activity that takes place. However, Agency inspectors are no longer able to inspect Iran’s progress in manufacturing or assembling centrifuges and related equipment.

Since February 2003, the IAEA has published 20 reports on Iran’s secret nuclear work, the most recent of which appeared in May 2008. This report concluded that the Agency is able to “verify the non-diversion of declared nuclear material in Iran,” but that serious concerns remain as to possible military dimensions of Iran’s nuclear work.

In early February, the International Atomic Energy Agency presented member states, including Iran, with specific evidence that Iran had pursued work related to nuclear weapons. Iran rejected the allegations as baseless. But, it has barred IAEA inspectors from interviewing Mohsen Fakhrizadeh, former head of the Physics Research Center who was reportedly described during the IAEA briefing as the Iranian military official in charge of Iran's nuclear effort.

To buttress the grounds for its suspicion, the IAEA presented specific information showing that a company 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 wants Iran to explain documents and technical information that link Iran to the testing of high voltage detonator firing equipment, the development of exploding bridgewire detonators and an arrangement for underground, remote explosive testing. The Agency considers these activities to be “relevant to nuclear weapon R&D.”

The IAEA also wants clarification on Iran’s efforts to procure such potentially 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 nuclear-capable missile re-entry vehicle.

Meanwhile, the Agency has managed to resolve, at least partially, a host of questions related to Iran’s past nuclear work that had been set out in the IAEA’s August 21, 2007 “work plan.” Questions about Iran’s past experiments with plutonium have already been resolved through the plan, as have questions about polonium-210 experiments and work at the Gchine mine and mill. However, the IAEA is still in the process of reviewing Iran’s illicit import of centrifuge equipment—an issue that was supposed to be resolved by the end of November 2007. In early November, 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 some components for two disassembled centrifuges along with supporting drawings and specifications.

After reviewing what the Agency described as “the limited documentation provided by Iran,” the IAEA concluded that its findings matched Iran’s statements about the 1987 acquisition of P-1 centrifuge technology. However, several questions about Iran’s early research and development work following this offer remain open, including the genesis of a 1993 offer of P-1 enrichment technology from the Khan network and the conditions under which Iran received a document on how to make hemispheres of uranium metal—an activity uniquely useful for bomb making.

As for the development of its more advanced centrifuge program, Iran is sticking to its unlikely story that after receiving a full set of drawings for Pakistan’s P-2 from the Khan network in 1996, during a meeting in Dubai, it conducted 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 makes uncertainties about the program’s early development troubling. Even more troubling is the fact that the IAEA no longer receives information on centrifuge manufacturing, or access to workshops where components are made, thus forcing the Agency to rely on whatever information Iran chooses to share.

If all the issues set forth in the work plan are resolved, then the IAEA has agreed that nuclear inspections in Iran “will be conducted in a routine manner.” Dr. ElBaradei insists that the IAEA still requires that Iran once again allow the Agency to conduct enhanced inspections under the Additional Protocol, and that Iran suspend uranium enrichment and a heavy water project, as required by the Security Council—but nothing in the work plan requires Iran to do so.

Foreign assistance

Imports of nuclear-, chemical- and missile-related equipment have been indispensable to Iran’s weapon efforts. The latest report by the U.S. Director of Central Intelligence on transfers of mass destruction and advanced conventional weapon technology, which covers 2006, claims that Iran has continued to seek foreign assistance from entities in Russia, China, and North Korea. According to the report, China is Iran’s main conventional weapon supplier; Russia supplies Iran’s “civilian nuclear program”; and North Korean and Iran have “a longstanding relationship with respect to the purchase and development of ballistic missile technology.”

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 has also provided key assistance to Iran’s nuclear effort. 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 it has been building 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.

Iran has also sought dual-use nuclear technology from some members of the Nuclear Suppliers Group (NSG), an organization of 45 nuclear supplier countries.  According to the New York Times, seven NSG countries have denied Iran the purchase of nuclear-related materials at least 75 times, mostly since 2002. Iranian end users involved in these denied sales, according to the Times, include the government of Iran, the atomic energy organization, energy, engineering, aircraft and petrochemical companies, schools and universities, a plasma physics center, a helicopter support company and mineral research centers. Denied sales involved nickel powder, petrochemical plant components, compressors, furnaces, steel flanges and fittings, electron microscopes, radiometric ore-sorting machines, valves and tubing, lasers, a rotary drilling rig, a mass spectrometer and a nitrogen production plant.

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. And it is widely assumed that if Iran fields a Shahab-4 missile, it will be a copy of Russia’s SS-4 missile. Both the Nodong and the SS-4 can carry a nuclear warhead. In January 2007, 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.

From China, Iran has imported the 150 kilometer CSS-8 ballistic missile and a series of land-, sea-, and air-launched short-range cruise missiles. Many of these latter are anti-ship weapons.

In addition, Grigory Omelchenko, a member of Ukraine’s parliament, revealed in early February 2005 that a former officer in Ukraine’s secret police sold six unarmed Soviet-era cruise missiles to Iran between 1999 and 2001. The nuclear-capable missile, known as the KH-55 or the AS-15, has a range of up to 3,000 km and travels near the ground in order to avoid air defenses.