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Russian Export Controls Fail to Stop Steel for Iranian Missile Program

April 1998

By Howard Diamond

Russia announced on April 7 that its Federal Security Service (FSB) had arrested three foreign citizens in connection with the attempted transfer of 22 tons of special alloy steel reportedly destined for Iran's ballistic missile development effort. Discrepancies in export documents accompanying the metal led Azerbaijani customs officials in the town of Astara (near the Iranian border) to impound the shipment on March 25. Employees of the Moscow warehouse where the shipment began claimed the steel "had been acquired from abroad," according to an April 8 FSB statement.

The incident again raises questions about Russia's ability to enforce its own export laws, including the "catch-all" export decree issued in January by former Prime Minister Viktor Chernomyrdin. According to a State Department official, the steel falls "just on the other side" of the material restrictions in the Missile Technology Control Regime's (MTCR) technical annex, but remains controlled under the January "catch-all" provision because of its intended end-use.

Azerbaijan gave a sample of the steel to the United States for analysis which confirmed the material to be a specialized corrosion-resistant alloy suitable for use in fuel tanks for liquid-fueled missiles such as Iran is reported to be developing. On April 28, State Department spokesman James Foley said in spite of "significant progress over the last few months" in ending Russian cooperation with Iran's missile program, "[W]e believe important work remains to be done. We don't believe the file is closed."

According to an April 25 report in The New York Times, U.S. intelligence officials passed information describing the impending steel transfer to Moscow several days before the truck carrying the shipment began its trip to Iran. However, Russian authorities maintain that the intelligence lacked enough specificity to enable them to intervene. The New York Times reported the individuals subsequently arrested by the FSB were from Tajikistan.

Russian entities are believed to be a key source of advanced technology for Tehran's 1,300-kilometer-range Shahab-3 and 2,000-kilometer-range Shahab-4 missile programs. CIA Director George Tenet testified in January that Russian missile-related transfers have reduced the completion time of Tehran's programs which already acquired significant technical assistance from the North Korean Nodong missile program to only two or three years. Since January 1997, Russian firms are alleged to have provided Iran with special materials, wind-tunnel testing equipment, missile engine and guidance technology, and various types of advanced aerospace training and expertise. The FSB has even been alleged to have arranged exchanges of Russian and Iranian missile experts.

The State Department confirmed on April 16, that in March it circulated to U.S. government program managers a list of 20 Russian companies and entities believed to be connected with Iran's missile development effort that must now receive special permission from the State Department in order to proceed with joint non-proliferation projects.

The United States currently has in place two programs the Initiatives for Proliferation Prevention through the Energy Department, and the International Science and Technology Centers (in Russia and Ukraine) organized by the State Department that arrange non-military cooperative projects to keep former Soviet weapons experts engaged in peaceful activites.

Under the new guidelines, program proposals involving any of the 20 firms will be reviewed by the State Department to "[ensure] that assistance is not provided to entities that may be engaged in activities of proliferation concern," said State Department spokesman James P. Rubin on April 16. Since March, three projects have been denied funding according to USA Today which first reported the list on April 16. The three canceled projects included the Baltic State Technical University in St. Petersburg, TsAGI (Russia's Central Aerodynamic Institute), and the Moscow Aviation Institute.

Senate Majority Leader Trent Lott (R-MS) has scheduled a vote in late May on a bill that would impose sanctions on any entity that assists Iran's missile program. The House passed the measure, which also contains the implementing legislation for U.S. obligations under the Chemical Weapons Convention, on a voice vote in November 1997. The Clinton administration, which believes the sanctions bill uses too low an evidentiary standard and would interfere with diplomatic efforts, has promised to veto the measure. In response to the news about the steel blocked in Azerbaijan, Lott told The New York Times the Senate would adopt the sanctions bill "if there's not major progress made in the next 30 days."