UK Reports Active Nuclear Procurement Involving Sanctioned Companies

May 5, 2015

Publication Type: 

  • Policy Briefs

Mentioned Suspect Entities & Suppliers: 


Simon Chin and Valerie Lincy

The British government informed the U.N. Panel of Experts in April of “an active Iranian nuclear procurement network” involving two blacklisted Iranian companies, according to a Reuters report published on April 30.  If confirmed, Iran’s continuing efforts to procure uranium enrichment technology would represent a violation of U.N. Security Council resolutions and once again raise the question of how illicit procurement will be handled in a comprehensive nuclear deal with Iran.

A draft of the U.N. Panel’s annual report, according to Reuters, disclosed: “The UK government informed the Panel on 20 April 2015 that it ‘is aware of an active Iranian nuclear procurement network which has been associated with Iran’s Centrifuge Technology Company (TESA) and Kalay Electric Company (KEC).’”  Kalaye Electric is under U.N. Security Council sanctions, while TESA has been sanctioned by the United States and European Union.  Both companies have been linked to Iran’s uranium enrichment program.  The report did not offer any additional details, and the Panel said the information had been received too recently to be independently verified.

Kalaye Electric, based in Tehran, has long been associated with Iran’s uranium enrichment program and was among the first entities sanctioned by the U.N. Security Council in 2006.  A state-owned company subordinate to the Atomic Energy Organization of Iran, Kalaye Electric was the primary site for the assembly and testing of IR-1 centrifuges between 1997 and 2002 until operations were moved to Natanz.  It supplied the Pilot Fuel Enrichment Plant at Natanz and was also responsible for the construction of the Fordow Fuel Enrichment Plant.  Kalaye Electric had operated in secret until it was discovered and declared to the International Atomic Energy Agency (IAEA) in 2003.  The facility lived on as a centrifuge research workshop and contributed to the development of the IR-2, IR-3, IR-4, and IR-5 centrifuge designs.  According to Wired reporter Kim Zetter’s 2014 book, Countdown to Zero Day, Kalaye Electric was targeted in a May 2010 attack by the Stuxnet computer worm, reportedly as a means of spreading Stuxnet to Natanz.

TESA manufactures centrifuge parts and, according to the U.S. Treasury Department, “plays a crucial role in Iran’s uranium enrichment nuclear program.”  The company is involved in the production of Iran’s IR-1 centrifuges, operates an assembly complex at Natanz, and carries out work for Kalaye Electric.  TESA was sanctioned by the European Union in 2010 and by the United States in 2011.  

The British government’s warning to the U.N. Panel of Experts is the latest sign of Iran’s continued defiance of U.N. Security Council resolutions, which prohibit Iran’s access to proliferation-sensitive items.  Just last month, the U.S. Justice Department indicted four companies and five individuals for participating in an illicit Iranian procurement network that conspired to circumvent export controls on dual-use goods.  TESA, in fact, was named as a client of one of the indicted companies.  The framework agreement for the nuclear deal with Iran reportedly includes a dedicated procurement channel for Iran’s nuclear program.  But how will the agreement deal with violations, if Iran continues to rely upon its existing procurement networks to supply its nuclear program?