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Senior Fellow, Carnegie Endowment for International Peace
April 15, 2019
Sanctions Seen Slowing Iran Nuclear Work

Peter Crail

International sanctions are limiting Iran’s ability to acquire items for its nuclear and ballistic missile programs, a UN report evaluating sanctions against Iran said.

The report, a copy of which was obtained by Arms Control Today, adds that “sanctions are slowing Iran’s nuclear programme but not yet having an impact on the decision calculus of its leadership with respect to halting enrichment and heavy water-related activities.” Uranium enrichment and the use of heavy-water reactors are steps that can be used to produce material for nuclear weapons.

The report says that Iran also has continued to violate sanctions by illegally importing and exporting restricted goods, technology, and weapons.

The report was written by a panel of experts formed last November to assess the implementation of four rounds of UN Security Council sanctions against Iran. According to the report, it is difficult to assess the impact of the UN sanctions in isolation, given the imposition of “stronger and more comprehensive” sanctions in place by a number of individual countries and the European Union. The eight-person UN panel made 30 recommendations to the council for strengthening the implementation of the sanctions, including extending penalties to an additional three Iranian individuals and three Iranian entities involved in violating UN prohibitions.

Russia has blocked the public release of the report, issuing complaints about some of its conclusions and recommendations. “We believe that it is a loose and sloppy piece of work, and we believe that there are some recommendations which our experts do not agree with at all,” Russian Permanent Representative to the United Nations Vitaly Churkin told reporters May 13.

Iran’s nuclear and missile programs have been vulnerable to sanctions because they still rely on foreign suppliers for key goods Iran finds difficult to produce indigenously, according to the UN report.

Such goods include a list of 10 “choke point items” critical for Iran’s uranium-enrichment program, which lies at the center of concerns over its nuclear aspirations. The report notes, however, that some of these items do not fall under international controls. Some of the items are relevant to Iran’s development of more-advanced centrifuges, which would allow Iran to enrich uranium at far greater speeds than it currently can, once such machines are developed and installed. U.S. officials have said that Iran has faced difficulties importing some of these items, such as carbon fiber, for the new machines. (See ACT, April 2011.)

The sanctions also may be slowing Iran’s ability to acquire high-quality goods necessary for its ballistic missile program, the UN report said, particularly in the area of developing and manufacturing solid-fuel missile systems such as the 2,000 kilometer-range Sajjil-2.

According to the report, Iran can produce solid-fuel propellant indigenously, but still relies on foreign suppliers for key materials, such as aluminium powder. The report details a case in which a shipment of aluminium powder bound for Iran, enough for 100 metric tons of rocket propellant, was intercepted by Singaporean authorities last September.

Michael Elleman, a senior fellow with the International Institute for Strategic Studies and former missile expert with the UN Monitoring, Verification and Inspection Commission in Iraq, said in a May 24 e-mail that “forcing Iran to change suppliers frequently will stress their quality control system, and ultimately the reliability of its solid propellant rockets and missiles.”

Although “supplier disruptions will only modestly impact the production and reliability of their smaller rockets,” he said, “Iranian engineers will be greatly challenged attempting to continue development of the much larger Sajjil-2 because the bigger the solid rocket motor, the more susceptible it is to changes in the starting ingredients.”

Financial Sanctions

UN efforts to prevent Iran from acquiring such items are not limited to denying their export to Iran. According to the UN report, financial sanctions targeting Iranian personnel and firms involved in Iran’s nuclear and missile programs also limit Iran’s ability to purchase sensitive goods.

“Iranian individuals and entities find themselves increasingly cut-off from international financial markets, making it increasingly difficult to find ways to pay in U.S. dollars or euros for the equipment” needed for their prohibited programs, the report said.

The Security Council has imposed financial restrictions on a total of 41 Iranian individuals and 75 Iranian entities determined to be involved in Iran’s nuclear and missile programs. Other countries, including the United States and the 27 members of the European Union, have imposed financial sanctions on additional persons and firms inside and outside Iran.

The UN report notes that the impact that sanctions have had in slowing Iran’s illicit programs has been due in part to states taking greater steps to implement them by “strengthening [national] export controls” and “exercising vigilance through their financial and regulatory bodies, port and customs authorities.”

Because of these efforts, the report concludes, Iran has been compelled to seek items “that fall below controlled thresholds” in order to evade sanctions. These goods do not fall under international restrictions because they are not of sufficient quality or built to the parameters directly relevant for Iran’s nuclear and missile programs, but still can aid Iran in producing controlled items indigenously.

In addition to seeking such items, Iran has employed a number of methods to circumvent sanctions to obtain high-quality goods and technology from major suppliers, the report said. These methods include establishing front companies, concealing items during shipping, reflagging shipping vessels, and masking financial transactions. Several of the panel’s recommendations are aimed at strengthening controls over sensitive goods and technology and bolstering financial regulatory systems in order to combat Iran’s sanctions evasion techniques.

Continuing Arms Smuggling

In addition to evading sanctions against its procurement of goods for its nuclear and missile programs, Iran has been transferring arms abroad although a 2007 Security Council resolution bars Tehran from selling conventional arms and prohibits any country from importing arms from Iran.

The report cites nine incidents since 2007 reported by various countries involving the illicit transfer of conventional arms by Iran. Syria was the reported destination of illicit arms for six of those incidents. “Syria’s apparent role in illegal arms transfers by Iran is a serious violation of its Security Council obligations,” the report said.

Additional reported destinations included Afghanistan, Egypt, and Gambia. Investigation by the panel uncovered no evidence of payment by recipients for the arms shipments, leading to the panel’s conclusion that the arms transfers were not intended to generate revenue. Instead, the panel concludes that through its conventional arms trafficking, Iran’s aim appears to be “increasing its influence in developing regions such as Africa, Asia, and Latin America.”

Congress Eyes More Sanctions

As the UN weighs the impact of international sanctions against Iran, legislation was introduced in the U.S. Senate and House of Representatives in May to expand U.S. unilateral sanctions aimed at Iran’s energy partners.

The House bill, introduced May 16 and sponsored by Foreign Affairs Committee Chairman Ileana Ros-Lehtinen (R-Fla.), limits the presidential authority to waive certain sanctions and imposes additional penalties on firms and individuals doing business with Iran’s energy sector, using methods that include denying U.S. entry visas. Ros-Lehtinen said in a May 16 press statement that the new sanctions sought “to close loopholes in current sanctions legislation which have allowed the administration to avoid imposing the full range of available U.S. sanctions against the Iranian regime.”

A Senate bill introduced May 23 is aimed at forcing the administration to impose such energy-related sanctions as well, but it also targets foreign firms doing business with the Islamic Revolutionary Guard Corps, which increasingly has been engaged in all levels of the Iranian economy.

The 1996 Iran Sanctions Act first targeted firms investing in Iran’s energy sector, but successive administrations have argued that imposing sanctions on U.S. allies and other diplomatic partners would undermine international efforts to address Iran’s proliferation. Sanctions were imposed under the 1996 law for the first time last September, after the law was significantly expanded in June 2010 to include firms selling refined petroleum products to Iran. (See ACT, July/August 2010.)

The Obama administration on May 23 increased the number of firms penalized under the sanctions, targeting an additional seven firms in locations including Israel, Singapore, the United Arab Emirates, and Venezuela, all of which provided Iran with refined petroleum. Penalties against the seven firms varied.

The same day, the administration imposed nonproliferation-related sanctions on 14 firms and two individuals for contributing to Iran’s nuclear and missile programs.

Administration officials have pointed out that sanctions do not need to be levied against firms in order to be effective. According to the transcript of a May 24 background briefing by senior administration officials, since last June several major energy firms have stopped doing business with Iran, including providing Iran with refined petroleum and refueling Iran Air flights.

The EU significantly expanded its own sanctions against Iran on May 23, targeting 100 individuals and firms with links to Iran’s proscribed programs. The targeted entities include the European-Iranian Trade Bank, which a senior U.S. official described during the May 24 briefing as “a major Iranian bank that provided access to Iran to European financial markets.”