Distinguished representatives, ladies and gentlemen,

As mentioned by the DG in his introductory statement, under this sub-item, in addition to the report on Egypt - to which I have nothing to add - I will now briefly inform you of the progress made in our verification activities in the Islamic Republic of Iran and on the issue of Small Quantities Protocols.

Implementation of Safeguards in the Islamic Republic of Iran

In November 2004, the Secretariat provided a comprehensive report (GOV/2004/83) on the Agency's verification of Iran's compliance with its NPT safeguards agreement and its voluntary suspension of enrichment related and reprocessing activities. This oral update provides a summary of developments since then.

Verification Activities

Since the November 2004 meeting of the Board of Governors, Iran has facilitated in a timely manner Agency access to nuclear material and facilities under its Safeguards Agreement and Additional Protocol. During this period, the Agency has carried out inspections at facilities in Tehran, Natanz and Esfahan, as well as complementary access at three locations.

Centrifuge Programme

The Agency is expecting some progress with regard to the contamination issue: it has agreed with the Member State concerned on the modalities for sampling a number of old centrifuge components, which could provide information on the origin of the low enriched and high enriched uranium particle contamination found at various locations in Iran. In January 2005, an Agency team again visited locations in another Member State where, according to Iran, the centrifuge components had been stored prior to their shipment to Iran. Environmental samples were collected from these locations and will also be analysed.

Although there has been no new information on the outstanding questions related to the P-2 centrifuge programme, there have been developments in four other areas related to the Agency's verification of Iran's P-1 centrifuge enrichment programme, specifically in connection with: an early offer for centrifuge related technology and sample components; the genesis of the mid-1990s offer for P-1 centrifuge documentation and components for 500 centrifuges; shipping documents related to the delivery of those components and documentation; and technical discussions held between Iran and the intermediaries concerning centrifuge enrichment. I will briefly describe each of these developments.

During a meeting on 12 January 2005 in Tehran, Iran showed the Agency a handwritten one-page document reflecting an offer said to have been made to Iran in 1987 by a foreign intermediary. While it is not entirely clear from the document precisely what the offer entailed, Iran has stated that it related to centrifuge technology acquisition. This document suggests that the offer included the delivery of: a disassembled sample machine (including drawings, descriptions, and specifications for production); drawings, specifications and calculations for a "complete plant"; and materials for 2000 centrifuge machines. The document also reflects an offer to provide auxiliary vacuum and electric drive equipment and uranium re-conversion and casting capabilities. Iran stated that only some of these items had been delivered, and that all of those items had been declared to the IAEA. This information is still being assessed. The Agency has requested that all documentation relevant to the offer be made available for the Agency´s review.

In response to questions about the procurement history associated with shipments in the mid-1990s of P-1 centrifuge components and documentation, Iran informed the Agency in October 2004 that, around 1994, the Atomic Energy Organization of Iran (AEOI) had been advised that an intermediary had made an offer to an Iranian company unrelated to the AEOI to deliver P-1 centrifuge documentation and components for 500 centrifuges. Responding to Agency inquiries in that context, in a letter dated 9 January 2005, Iran stated that, following AEOI´s having been advised of the offer, "instruction [had been] given by high authority that no other entity or organisation other than AEOI was allowed to conduct centrifuge enrichment project and enter into negotiations". As a response to the Agency´s request, Iran has said that no written documentation relevant to the initial offer to the Iranian company was available.

As regards the deliveries in the mid-1990s of the 500 sets of P-1 components and additional bellows, the Agency has on a number of occasions requested copies of all relevant shipping documents. Under cover of a letter transmitted to the Agency on 17 January 2005, Iran provided copies of some shipping documents said to have been related to "2 consignments in 1994 and 1995", which are now being assessed, particularly with respect to the dates and contents of the shipments. The Agency has requested that Iran search for any additional information related to the procurement of centrifuge components and technology, in particular information related to shipments that took place around 1997.

In response to the Agency's request for documentation related to Iran´s technical discussions with intermediaries concerning centrifuge enrichment in the mid- to late 1990s, during the 12 January 2005 meeting in Tehran, Iran also provided the Agency with copies of a number of documents, which are now being assessed.

Other Matters

As regards plutonium separation, as mentioned in the last report to the Board, the Agency, in September 2004, took a second set of samples from the plutonium solution for analysis using different analytical techniques in different laboratories with a view to confirming the date of the separation. The measurement results have been received by the Agency and are being assessed.

The Agency has continued implementing the measures of the Additional Protocol. Complementary access at the Uranium Conversion Facility (UCF) site on 15 December 2004 revealed underground excavation activities which Iran had failed to report in a timely manner to the Agency as required under Code 3.1. of the Subsidiary Agreements to its Safeguards Agreement (i.e. at the time the decision was taken to authorize or carry out such construction). Through a letter received by the Agency on 13 December 2004, Iran submitted an updated Design Information Questionnaire (DIQ) for UCF providing preliminary design information for a tunnel that was being constructed at the UCF site. In the DIQ entry related to the purpose and nature of the tunnel, Iran indicated that, "in order to increase capacity, safety and security of nuclear material, a storage is considered and will be constructed". Iran also indicated that the modifications had been initiated in September 2004.

On 8 February 2005, the Agency conducted complementary access at the Gchine mine, in the South of Iran near Bandar Abbas, and its associated mill. To better understand the complex arrangements governing the current and past administration of the mine, the Agency has requested that the original contract between the AEOI and the engineering company that constructed the mill at Gchine be made available for the Agency's review, along with other related documentation.

In its resolution adopted on 18 September 2004 (GOV/2004/79), the Board of Governors called on Iran, "as a further confidence-building measure, voluntarily to reconsider its decision to start construction of a research reactor moderated by heavy water". No visit to the site of this reactor has taken place since the Board adopted that resolution. Iranian officials have indicated that the Heavy Water Research Reactor (IR-40) project is progressing.

Transparency Visits

As indicated in the Director General's November 2004 report, "in accordance with Agency practice in connection with its evaluation of other States' nuclear programmes, the Agency has discussed with Iranian authorities open source information relating to dual use equipment and materials which have applications in the conventional military area and in the civilian sphere as well as in the nuclear military area".

In this context, the Agency is continuing to assess information related to the Lavisan site. As reported at the November 2004 Board meeting, Iran had provided information to the Agency in October 2004 in response to Agency inquiries about efforts by the Physics Research Centre (PHRC), located at the Lavisan-Shian site between 1989 and 1998, to acquire dual use material and equipment that could be useful in uranium enrichment and conversion activities. The Agency has also requested to discuss this matter in detail with two officials who had been involved in the procurement activities of the PHRC. In response to the Agency's request for additional information and clarification from Iran in connection with this matter, in a Note Verbale dated 27 February 2005, Iran stated that:

"1. The PHRC of Lavisan was not involved in activities declarable under the NPT Safeguards. 2. The dual use items such as those in question could be used in conventional activities, which Iran is not obliged to declare under the Comprehensive Safeguards and the Additional Protocol".

In connection with Parchin, as indicated in the Director General's previous report, in October 2004, the Agency reiterated its previous requests to be permitted to visit the Parchin site. In response to security concerns expressed by Iran about such a visit, the Agency, in a note dated 25 October 2004 proposed specific modalities under which the visit could take place. In a meeting in Vienna on 7 January 2005, Iran agreed, in the interest of transparency, to permit the Agency to visit Parchin. Out of the four areas identified by the Agency to be of potential interest, the Agency was permitted to select one area. The Agency was requested to minimize the number of buildings to be visited in that area and selected five buildings. The Agency was given free access to those buildings and their surroundings, and permission to take environmental samples (which are currently being analysed). In the course of that visit, the Agency also reiterated its request to visit another area of particular interest on the Parchin site before the end of February. In a Note Verbale dated 27 February 2005 Iran indicated that "the expectation of the Safeguards Department in visiting specified zone and points in Parchin Complex are fulfilled and thus there is no justification for any additional visit".

As a result of its limited scope visit to Parchin, the Agency is able to inform the Board that it saw no relevant dual use equipment or materials in the location visited. The Agency is awaiting the results of environmental sampling analysis to ascertain whether any nuclear material had been used in the area visited.

Suspension

Pursuant to the Board's resolution on 29 November 2004 (GOV/2004/90), and previous resolutions, the Agency has continued its activities to verify all elements of Iran's voluntary suspension of all enrichment related and reprocessing activities.

Prior to 22 November 2004, the Agency had already established a baseline inventory of all UF6, essential centrifuge components, key raw materials and equipment, and the assembled centrifuge rotors at declared workshops said by Iran to have been involved in the manufacturing of centrifuge components, and had applied containment and surveillance measures to these items. The Agency has continued to monitor the suspension at the Natanz site, including the Pilot Fuel Enrichment Plant (PFEP) and the Fuel Enrichment Plant. A number of solenoid valves that had been removed from PFEP prior to 22 November 2004 have been cleaned of corrosive products and stored by Iran at the facility, and are being monitored by the Agency. The 20 sets of centrifuge components that Iran had initially intended to use for research and development purposes remained under surveillance at PFEP. The Agency has also monitored centrifuge component production capabilities at the declared workshops, selected randomly during Agency visits to Iran.

During visits to Faryand Technique in December 2004 and January 2005, the Agency noted that quality control activities were being carried out with regard to some centrifuge components (such as stator bellows, springs and casing supports) which were items declared to the IAEA, but had not been placed under IAEA seals. In response to the Agency's request for clarification concerning these activities, by letter of 13 February 2005, Iran informed the Agency that although these activities were not considered by Iran to be covered by the voluntary suspension of centrifuge enrichment related activities, Iran had decided to put them temporarily on hold until the matter could be discussed, inter alia, with the EU 3.

The Agency has also continued its verification of Iran's voluntary suspension of conversion activities at UCF. As reported previously, in August 2004, Iran introduced about 37 tons of uranium ore concentrate (UOC or yellowcake) into the process area of UCF as feed material for facility testing. As of 22 November 2004, all of the UOC had been dissolved and converted into intermediate products, principally ammonium uranyl carbonate (AUC) and UF4, and part of the intermediate UF4 had been converted into UF6. On 22 November 2004, the Agency installed seals and other tamper indicating devices to verify that no additional feed is introduced in the process and that there is no further production of UF6. Iran continued to convert the AUC into UF4, which took longer than initially planned. On 18 February 2005, Iran completed this conversion work, and is now planning to conduct clean out operations, which will take several weeks. The UF4 produced therefrom has been verified by the Agency and is now under Agency seal. The UF6 that was produced and removed from the process into cylinders has been verified and sealed and placed under Agency surveillance. To ensure that there is no undeclared withdrawal of the UF6 remaining in the UCF process lines, the Agency has sealed and installed cameras at the UF6 withdrawal stations. Physical inventory verification at UCF is scheduled to take place after the clean-out operations are completed in April 2005.

. . .