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Over the past four decades, the world has gotten several glimpses of the illicit procurement methods used to support nuclear programs: Iraq’s diversion in the 1980s of agricultural loan funds into its nuclear procurement program, the payment schemes of the Abdul Qadeer Khan network as part of its sale of uranium hexafluoride to Libya,1 and the fraudulent transactions through New York banks of shell companies linked to IRISL, Iran’s state-owned shipping company.
Over the past four decades, the world has gotten several glimpses of the illicit procurement methods used to support nuclear programs: Iraq’s diversion in the 1980s of agricultural loan funds into its nuclear procurement program, the payment schemes of the Abdul Qadeer Khan network as part of its sale of uranium hexafluoride to Libya, [1] and the fraudulent transactions through New York banks of shell companies linked to IRISL, Iran’s state-owned shipping company.
These transactions are a powerful reminder that proliferators rely on access to the global financial system for their illicit activities. The globalized nature of this trade is an important asset to proliferators and their support networks, but it also is a vulnerability that countries seeking to stop the spread of weapons of mass destruction (WMD) are increasingly exploiting.
The use of a country’s economic leverage to advance foreign policy objectives is certainly not new, nor is the imposition of trade, travel, diplomatic, and financial restrictions by the international community on states in violation of their nonproliferation obligations and other rules of international law. Nevertheless, sanctions have evolved from devices of economic statecraft into practical tools that aid intelligence services and law enforcement in the complex tasks of tracking, mapping, and dismantling the financial support nodes of proliferation networks; prosecuting the criminals involved in these operations; and, ultimately, denying proliferant states the ability to conduct clandestine purchases of weapons-usable matériel.
Financial transactions leave a trail of information that intelligence and law enforcement officials can follow to identify key actors and their support networks. U.S. Secretary of the Treasury Henry Paulson noted that “opening an account or initiating a funds transfer requires a name, an address, a phone number; identification information that does not lie. Unlike a phone call or conversation that essentially disappears if it’s not captured at the moment it occurs, the financial system produces records that tend to survive.” [2] This makes financial data a timely and reliable source of intelligence for nonproliferation investigations.
The United States employs a broad palette of financial and economic tools to prevent WMD proliferation. For decades, Washington has applied trade restrictions against foreign individuals found to be part of proliferation activities and has threatened various penalties for violations of its nuclear cooperation agreements with other countries. More recently, Congress has enacted into law severe penalties against foreign banks that maintain business relationships with certain Iranian institutions, and the U.S. Department of the Treasury has used authorities under the PATRIOT Act to designate the entire Iranian banking system as posing a money-laundering and proliferation-financing risk, with the aim of cutting off Iran from the global financial system.
Tools of Disruption
U.S. officials have emphasized the singular benefits of anti-proliferation financial controls, and some of these actions have been widely adopted by the international community. The UN Security Council, for instance, has mandated global asset freezes against individuals and firms involved in the nuclear and ballistic missile program activities of Iran and North Korea. At a U.S. congressional hearing in 2006, Robert Werner, director of the Treasury Department’s Office of Foreign Assets Control, explained that entities “designated” to be added to sanctions lists “represent a starting point as we seek to unravel the support networks that enable these entities to function…. The subsequent designation of any entity or individual serves as an additional basis for aggressive investigation…with the aim of designating additional parties.” [3] He concluded that the targeting of the broader support networks of proliferators has been the critical factor behind successful nonproliferation programs.
The investigation that led to the indictment last year of 11 shell companies and five individuals allegedly conducting transactions on behalf of IRISL, which was under U.S. sanctions, illustrates this point. The information uncovered by law enforcement and intelligence officials convinced a grand jury in Manhattan that the suspects had probably helped the shipping firm evade U.S. sanctions and that the district attorney should proceed with criminal charges against them. Additionally, the U.S. government added the companies and individuals to its sanctions list, forcing IRISL to move some of its operations to Panama and register shell companies there, which were in turn traced and placed under sanctions by the Treasury Department.
Another recent novelty in the arsenal for anti-proliferation financial “warfare” is the inclusion of individual IRISL-owned vessels, stemming from the sanctions that the United States and the European Union levied against the shipping firm. (The UN Security Council imposed financial restrictions on three IRISL affiliates in 2010.) IRISL had been added to U.S. sanctions lists for providing logistical support to Iran’s Ministry of Defense and Armed Forces Logistics. [4] According to U.S. officials at the time, IRISL vessels had transported a shipment of a precursor chemical, allegedly for use in Iran’s ballistic missile program, to Parchin Chemical Industries, which was under the sanctions imposed by UN Security Council Resolution 1747. Although in the past, persons, governments, and entities had been targeted by financial restrictions, the public identification of individual vessels expands the reach of sanctions to more effectively target another layer of proliferation activity: the logistics support networks of proliferators.
The designations of IRISL resulted in its loss of maritime insurance from its underwriter, Lloyd’s of London. The Iranian firm sought insurance coverage from a Bermuda-based company, which later also adopted the restrictions. IRISL was then forced to turn to Moallem Insurance, a company created by the Iranian government, to ensure it could remain in operation. Still, the EU has refused to validate this coverage and has shut IRISL vessels out of its ports. At the same time, because of the financial sanctions, the shipping firm has had trouble transmitting payments for mortgages on its vessels, its creditors have ordered the vessels arrested at ports in Europe and Asia, and the company has had to tap valuable foreign currency reserves to have the vessels released. This is a prime example of how financial controls can target proliferators and their broader support networks.
Private institutions that purposely or unwittingly violate sanctions face the real prospect of hefty fines. This is an additional dimension that adds potency to anti-proliferation financial tools and amplifies their effectiveness. For example, in 2010, ABN AMRO, now Royal Bank of Scotland, was fined an unprecedented $500 million as a result of sustained violations of U.S. sanctions by some of its foreign branches. From 1998 to 2005, some of ABN AMRO’s foreign branches altered the names of Iranian and Libyan entities in payment messages or removed references to the target countries altogether before forwarding letters of credit, wire transfers, and U.S. dollar-denominated checks to branches in the United States. This practice, known as “stripping,” had already cost the bank a $40 million administrative penalty from the U.S. government, but the Department of Justice pursued a criminal investigation that resulted in a deferred prosecution agreement for two charges and forfeiture of the value of the illegal transactions—$500 million. [5] ABN AMRO is not the only bank found to be involved in stripping. Credit Suisse was assessed a record-breaking $536 million fine in 2009, and Lloyd’s TSB agreed to pay $350 million as part of a settlement.
Although in recent times the United States has been enforcing its financial restrictions more aggressively, the Treasury Department has increasingly provided incentives, in the form of less-severe penalties, for financial institutions to self-disclose any violations and fully cooperate with investigators. This approach is particularly effective because it signals to private firms that violations will result in a financial loss while authorities gain access to a wealth of data that can lead them to identify more proliferators, understand how their networks operate, and disrupt their activities.
Global Enforcement
The Security Council resolutions against Iran and North Korea identify individuals and entities engaged in the proliferation activities of those two countries. All states must ensure that their financial institutions prevent access to their funds and block transactions with these individuals and entities. The same resolutions direct countries to prevent financial transactions related to the acquisition of components for the Iranian and North Korean nuclear and missile programs.
These two types of obligations are country specific, and as such, their impact might be limited. The breach of nonproliferation norms, however, is not limited to cases that have gained the attention of the Security Council, and rogue regimes are not the only ones interested in acquiring weapons of mass destruction. Last March at the nuclear security summit in Seoul, UN Secretary-General Ban Ki-moon spoke of the need to curb the financing of terrorism and proliferation as a means to prevent nuclear terrorism.
The international community had sought to confront this latter threat through UN Security Council Resolution 1540, which obliges all states to establish domestic controls on the financing of WMD matériel and means of delivery and transit. It also requires them to adopt and enforce legislation to prevent and penalize the financing of these and related activities. Much effort has gone into implementing the tighter controls on exports of sensitive goods, while other important areas, such as the financial restrictions, have received far less attention from the nonproliferation community. Consequently, nonproliferation specialists understand the flow of goods better than the financial flows.
At the 2005 Gleneagles summit in Scotland, the Group of Eight (G-8) industrialized countries—Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States—committed themselves to developing cooperative procedures to identify, track, and freeze proliferation-related financial transactions and assets. Shortly afterward, participants in the Proliferation Security Initiative formed a working group on proliferation financing. Another ad hoc group, the Global Initiative to Combat Nuclear Terrorism, turned its attention to nonproliferation financial tools and in 2010 conducted an exercise on nuclear terrorism counterfinancing. Ultimately, the members of the G-8 other than Russia decided that technical work on measures to implement anti-proliferation financing obligations under Resolution 1540 and other UN Security Council resolutions should be entrusted to the group of financial experts at the Paris-based Financial Action Task Force (FATF). [6]
Bringing in the Financial Experts
The FATF was first convened by the G-7 (as the G-8 was known before Russia joined) in 1989 in response to growing concern about the pervasiveness of money laundering and counterfeiting. The task force developed 40 countermeasures to address these threats to the international financial system. Initially, a handful of countries that are members of the Organization for Economic Cooperation and Development actively participated in this effort. An ever-larger group of countries accepted the recommendations, and the intergovernmental body itself expanded into its current composition of 34 member countries and two supranational institutions (the European Commission and the Gulf Cooperation Council). The task force encouraged the creation of regional bodies, such as the Council of Europe’s Moneyval and the Middle East and North Africa FATF, which adopted the policy standards. The FATF also established partnerships with more than 20 international and regional organizations that have a role to play in its anti-money laundering remit, including Interpol, the International Monetary Fund (IMF), the UN Office on Drugs and Crime, and various regional development banks.
In 2001, just weeks after the September 11 attacks, the FATF adopted eight countermeasures against the financing of terrorism (the so-called Special Recommendations), adding a ninth in 2005. Collectively, the “40+9 Recommendations,” embraced by 180 jurisdictions, are the global standard for the prevention of money laundering and terrorism financing. The speed with which the FATF adopted the new policies highlighted not only the urgency of the terrorism threat but also the virtues of the informal task force model.
In 2007 the FATF issued two sets of guidance on how countries could implement proliferation-related sanctions. One set dealt with sanctions based on designations [7] while the other covered so-called activity-based sanctions, beyond the list of individuals or entities but still targeting the procurement programs of specific countries. [8]
Nevertheless, FATF members recognized that the global community at large did not have a very good understanding of the dynamics of proliferation financing, and in 2008 the FATF conducted a comprehensive study of the techniques employed by proliferation networks to finance illicit trade in WMD matériel as well as possible measures to implement the broad anti-proliferation financing requirements under Resolution 1540. [9] In 2010 the task force produced a document with 23 policy proposals to improve the regulatory, investigative, and judicial components that are necessary for an effective, multilateral strategy to combat the financing of WMD proliferation. [10]
The formulators of the FATF policy document envisioned a comprehensive architecture that includes elements to harness the vigilance of financial institutions, aid law enforcement and intelligence agencies in their effort to track and disrupt proliferation networks and their operations, and facilitate the punishment of proliferators and their abettors. For instance, some policy options encourage countries to criminalize proliferation financing, ensure procedures to support extraterritorial investigations, and create channels for information sharing with financial institutions.
A New Tool of Enforcement
Last February, the FATF formally incorporated proliferation financing into its standards by adopting a consolidated set of recommendations, “International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation.” The recent additions include two standards that could aid in the targeting of proliferation financiers. One of them seeks to foster greater intelligence coordination among domestic export control, security, and law enforcement agencies to investigate proliferation financing. The other requires that financial institutions include identifying information for the ultimate beneficiary of wire transfers—a further data point that could aid in designations.
A third recommendation calls for the implementation of proliferation-related UN Security Council sanctions. All countries are already required to implement Security Council financial sanctions against designated targets and to prohibit proliferation-related transactions with target countries, but the FATF’s contribution in this area could significantly bolster the effectiveness of existing and future financial controls by producing public evaluations of individual countries’ implementation of sanctions.
The FATF is not a formal organization. Its mandate, which specifies its remit, must be renewed by its members. Its recommendations are nonbinding. Its resources are very limited; it has a budget of just more than three million euros and a very small technical secretariat. At first glance, this might not seem like the most appropriate instrument to enforce international norms against proliferation, but the FATF boasts some unique tools that could increase pressure on countries to comply with these obligations.
To ensure that its members implement the standards on money laundering and counterterrorism financing, the FATF established two compulsory processes. One is a self-assessment similar to the national reports countries submit to the UN committee of Security Council members overseeing the implementation of Resolution 1540 (the 1540 Committee). The other, which has no parallel in the nonproliferation regime, is a peer review of each member’s performance with regard to each of the recommendations. For FATF members, this review is conducted by a group of evaluators selected from the national financial experts. For members of the FATF associate bodies, the IMF or the World Bank typically works with the FATF Secretariat to conduct the assessments. [11]
A member may opt not to publish the full report of the FATF’s findings, but may not refuse the public release of a summary report on its performance, which the FATF publishes on its website. The summary includes a “grading rubric”—“compliant,” “largely compliant,” “partially compliant,” and “non-compliant”—along with comments and a brief description of any deficiencies. Countries and territories that are found to underperform significantly can be publicly identified if the FATF plenary decides to do so. FATF members are warned of the potential risks of doing business with those countries and, on occasion, are urged to apply countermeasures that include increased vigilance and scrutiny of transactions from listed countries.
Perhaps not surprisingly, given the potential loss of access to the global financial system that could come with these penalties, countries with deficiencies are keen to work with the FATF to address them. Even Iran, which is not a member of the task force, quickly enacted anti-money laundering legislation after a 2007 public warning by the FATF. The changes, however, did not assuage the FATF’s concerns. Tehran, facing the prospect of a second public rebuke, dispatched a high-level delegation of government and central bank officials to Paris to lobby the FATF. Although ultimately unsuccessful, Iran’s reaction to the decisions of an informal and seemingly powerless group of experts is remarkable given its defiance of the international community in more prominent forums.
Next year, when the FATF begins to evaluate compliance with the newly adopted standards, each country’s enforcement of Security Council proliferation sanctions will be evaluated. For the first time, the international community will be able to gauge the lacunae in the system; provide technical assistance where needed, just as the 1540 Committee does in support of the export control provisions of the resolution; and identify the willful abettors of noncompliance.
Last year, in Deauville, France, the G-8 resolved to promote “a more concrete approach” to curbing WMD proliferation through “effective implementation of multilateral instruments and strong national measures.” Notably, these concrete steps include the following:
To fight proliferation financing, we support the process launched at the Financial Action Task Force (FATF) that will strengthen the financial vigilance of G8 countries in a coordinated manner. To support UN proliferation sanctions, we will bolster the existing criminal provisions in national legislation and encourage States to identify as a specific offence the proliferation of WMDs, their means of delivery and related materials. Such provisions will also target financing and financial services…. Such actions will be taken to further implement Resolutions 1540 and 1887, as well as other UNSC resolutions. [12]
The new FATF guidelines clearly are a modest achievement in comparison with the comprehensive global system that was envisioned by the authors of the policy proposals and by the G-8. Nevertheless, the recognition by global leaders of the singular importance of financial vigilance in curbing the spread of weapons of mass destruction augurs well for the development of a much-needed coordinated strategy. This sustained effort will be critical to maximize the potential of financial tools in support of the global nonproliferation regime.
Javier Serrat is a research assistant and was a Scoville Peace Fellow at the James Martin Center for Nonproliferation Studies in Washington.
ENDNOTES
1. International Institute for Strategic Studies, “Nuclear Black Markets: Pakistan, A.Q. Khan and the Rise of Proliferation Networks,” 2007, p. 78.
2. Henry Paulson, “Targeted Financial Measures to Protect Our National Security,” Remarks to the Council on Foreign Relations, New York, June 14, 2007.
3. Robert W. Werner, Testimony before the House Financial Services Subcommittee on Oversight and Investigations, February 16, 2006.
4. The ministry was sanctioned by the United Nations under Security Council Resolution 1737. A November 2011 report by IAEA Director-General Yukiya Amano identified the ministry as the entity overseeing Iran’s clandestine nuclear program.
5. Under a deferred prosecution agreement, the Department of Justice files a “criminal information”—a criminal charge without a grand jury indictment—but agrees not to proceed with prosecution, provided that the defendant complies with the requirements outlined in the settlement.
6. The announcement was made by the finance ministers of the seven countries, following a meeting in February 2007. Russia, a member of the G-8 since 1997 and the Financial Action Task Force (FATF) since 2003, did not join the statement.
7. FATF, “Guidance Regarding the Implementation of Financial Provisions of United Nations Security Council Resolutions to Counter the Proliferation of Weapons of Mass Destruction,” June 21, 2007.
8. FATF, “Guidance Regarding the Implementation of Activity-Based Financial Provisions of UNSCR 1737,” October 12, 2007.
9. FATF, “Proliferation Financing Report,” June 18, 2008.
10. FATF, “Combating Proliferation Financing: A Status Report on Policy Development and Consultation,” April 23, 2010.
11. Some offshore financial centers are members of the FATF-associated Group of International Finance Centres Supervisors, and their compliance with FATF standards is independently assessed. For example, the performance of the Isle of Man, a British crown dependency whose foreign affairs and defense are the responsibility of the United Kingdom, does not factor into the United Kingdom’s ratings.
12. G-8, “Renewed Commitment for Freedom and Democracy,” Deauville, France, May 26-27, 2011.
Hossein Mousavian is a research scholar at Princeton University’s Woodrow Wilson School of Public and International Affairs. From 1997 to 2005, he was the head of the Foreign Relations Committee of Iran’s National Security Council; from 2003 to 2005, he served as spokesman for Iran in its nuclear negotiations with the European Union. He is author of The Iranian Nuclear Crisis: A Memoir (2012).
After a pause of more than a year, the seven countries that are holding talks on Iran’s nuclear program resumed their discussions in April, with subsequent meetings in May and June. As the countries—Iran and the P5+1 (China, France, Germany, Russia, the United Kingdom, and the United States)—prepare for their next meetings, efforts to find pathways to a resolution need to take into account the origins of Iran’s nuclear program and the sources of the ongoing dispute over it.
Western countries have major concerns about the nature of Iran’s nuclear program as they try to deduce whether it is a peaceful energy program or is designed to build nuclear weapons someday. This article addresses a different concern: whether pressure from the West has resulted in the Iranians accelerating and expanding their nuclear activity and capability.
The history of Iran’s nuclear program suggests that the West is inadvertently pushing Iran toward nuclear weapons. There were seven key steps in this process.
Nuclear aid to the shah. Iran owes its entrance into the nuclear field largely to the United States, which entered into negotiations with young Shah Mohammad Reza Pahlavi in 1957 as part of President Dwight Eisenhower’s Atoms for Peace program. In the 1970s, the shah had ambitious plans for expanding the nuclear program, envisioning 23 nuclear power plants by 1994, with support from the United States. The shah announced in 1974, “Get, as soon as possible, 23,000 megawatts [of electricity] from nuclear power stations.” [1] This was the main step toward nuclearizing Iran.
Withdrawal from agreements. After the 1979 Iranian Revolution, although Iran decided to cancel or shrink the ambitious nuclear and military projects of the shah, the West withdrew from all nuclear agreements and contracts and isolated Iran through sanctions and other means. In that period, Iran had no plans to have uranium-enrichment activities on its own soil. Iran had an agreement with the French-based consortium Eurodif, which was established in 1973, to enrich uranium in France and supply fuel to the Tehran Research Reactor and the Bushehr power plant, bypassing the need to have the facilities in Iran.
Following the revolution and under pressure from the United States, however, the French pulled out of the deal. This event forced Iran to proceed with efforts to reach self-sufficiency to complete billions of dollars’ worth of unfinished projects and to ensure that it would have adequate supplies of reactor fuel.
Support of Iraq. In 1980, Iraq’s Saddam Hussein invaded Iran to bring regime change and disintegrate the country. Unfortunately, the United States and the West supported this invasion, providing Hussein with the material and technology to make the chemical weapons that killed and injured thousands of Iranians. Although Iran remained committed to the nuclear Nonproliferation Treaty (NPT) and did not retaliate against the Iraqis with weapons of mass destruction, the event changed Iran’s security calculations, pushing Iran toward a nuclear capability to defend its existence and deter any future Arab-Western aggression.
Failure to negotiate seriously. In 2003, shortly after Iran mastered enrichment technology, its nuclear case came under the spotlight of the International Atomic Energy Agency (IAEA), and the IAEA Board of Governors issued its first resolution on Iran’s nuclear program. To find a solution to the Iranian nuclear issue, the EU countries of France, Germany, and the United Kingdom (the EU-3) began diplomatic negotiations with Iran. During those negotiations, which lasted until 2005, I served as the spokesperson for the Iranian nuclear negotiating team.
Iran submitted different proposals, which included a declaration to (1) cap enrichment at the 5 percent level; (2) export all low-enriched uranium (LEU) or fabricate it into fuel rods; (3) commit to an additional protocol to its IAEA safeguards agreement and to Code 3.1 of the subsidiary arrangements to the agreement, [2] which would provide the maximum level of transparency; and (4) allow the IAEA to make snap inspections of undeclared facilities. This offer was intended to address the West’s concerns regarding the nature of Iran’s nuclear program by ensuring that no enriched uranium would be diverted to a nuclear weapons program. It also would have facilitated the recognition of Iran’s right to enrichment under the NPT. [3] In exchange for these Iranian commitments, the Iranian nuclear file at the IAEA would be normalized, and Iran would have broader political, economic, and security cooperation with the European Union. Furthermore, Iran was interested in securing fuel for the research reactor in Tehran and was ready to ship its enriched uranium to another country for fabrication into fuel rods.
Iran’s overtures to its negotiating partners for a mutually acceptable deal failed, primarily because the United States was not on board and held the position that there should not be even one centrifuge within Iran. In a meeting I had at the time with French Ambassador to Iran François Nicoullaud, he told me, “For the U.S., the enrichment in Iran is a red line which the EU cannot cross.”
Denying Iran its right to enrichment and blocking efforts to have fuel rods provided for the Tehran reactor sent clear signals to Tehran that the West was not interested in solving the nuclear issue. Rather, the West wanted to compel Iran to forgo its enrichment program completely. This episode highlighted the inflexible position of the West and its lack of interest in reaching a compromise. This was particularly true of Washington, as the Bush administration’s position was that it would never tolerate enrichment in Iran. This left Iran with no option but to change its nuclear diplomacy and accelerate its enrichment program, as it sought self-sufficiency in nuclear fuel.
Punitive measures. Since 2003, the proposals exchanged between Iran and the EU-3, which later became the P5+1, have failed largely because the Western proposals did not meet the bottom lines of both sides: for Iran, recognition of its right under the NPT to enrich uranium and produce reliable civilian nuclear energy; for the United States and Europe, preventing Iran from ever developing nuclear weapons. Instead, the West has taken major punitive actions, such as sanctions and covert operations against Iran. This has made the nuclear endeavor Iran’s number one issue of national pride.
Reversal on the fuel swap. After the breakdown of talks between Iran and the P5+1 in the fall of 2009, Tehran decided to increase its enrichment capability from below 4 percent to around 20 percent, enabling it to produce fuel for the research reactor in Tehran. In February 2010, Ali Akbar Salehi, the head of the Atomic Energy Organization of Iran, proposed that Iran would keep its enrichment activities below 5 percent in return for the West providing fuel rods for the Tehran reactor. The West refused this offer.
In May 2010, Iran reached a deal with Brazil and Turkey to swap its stockpile of LEU for research reactor fuel. The deal was based on a proposal first drafted by the Obama administration with Brazilian and Turkish officials under the impression that they had the blessing of Washington to negotiate with Iran. Regrettably, the United States trampled on their success by rejecting the plan; the UN Security Council subsequently passed additional sanctions against Iran. Here again, Iran was not interested in enriching to 20 percent or continuing beyond that level; it sought only to have assurances that fuel would be guaranteed for the Tehran reactor and its rights under the NPT respected. The actions of the West pushed Iran to reach 20 percent enrichment so that it could make fuel rods for the Tehran reactor.
Rejection of other deals. There were still other opportunities to reach a compromise. They came in the form of the Russian step-by-step proposal in the summer of 2011, which addressed all the West’s concerns about Iran’s nuclear activities. The proposal required Iran to (1) allow full supervision by the IAEA; (2) implement the IAEA additional protocol and subsidiary arrangement Code 3.1; (3) stop production of highly enriched uranium and limit enrichment to 5 percent; (4) halt installation of new centrifuges; (5) limit the number of enrichment sites to one; (6) address IAEA concerns about the “possible military dimension” of the nuclear program and other technical ambiguities; and (7) suspend enrichment temporarily. In response, the P5+1 would recognize Iran’s legitimate rights to enrichment under the NPT and would gradually lift the sanctions.
The Iranians publicly showed their readiness to negotiate, but the West declined to discuss the proposal further. In September 2011, when Iran had completely mastered 20 percent enrichment and had a growing stockpile, it proposed stopping its 20 percent-enrichment activities and accepting Western-provided fuel rods for the Tehran reactor. Once again, the West declined and made it necessary for the Iranians to move toward producing their own fuel rods.
Recent Talks
In talks earlier this year in Istanbul and Baghdad, the West still sought to have Iran halt its enrichment and would not recognize Iran’s right to that activity. In return, it expected the Iranians to accept meager concessions, such as the removal of sanctions on oil shipping insurance and on spare parts for civilian planes. There was no talk of substantive sanctions being relaxed or upcoming EU sanctions on oil and the Iranian central bank being delayed. The hardened positions and lack of flexibility on the part of the West have made the Iranians dig in their heels. With each blockage and punitive Western action, Iran further advances its nuclear program.
At the June 18-19 talks in Moscow, the P5+1 once again was not in a position to offer anything on sanctions or Iran’s rights to enrichment while Iran signaled its readiness to accept many of the group’s major demands, such as stopping enrichment at the 20 percent level; building confidence, possibly by setting limits on production of 20 percent-enriched uranium; responding positively to the IAEA to provide the maximum level of cooperation and transparency; and extensively addressing the possible-military-dimension issues, which require Iran to implement the additional protocol and provide the IAEA with access beyond the level required by the protocol.
A comparison of the June 19 statement in Moscow by Catherine Ashton, the EU foreign policy chief and lead negotiator for the P5+1, with her April 14 Istanbul statement reveals a major difference. The P5+1 is now giving more emphasis to Iran’s compliance with its international obligations, namely, UN Security Council resolutions, rather than focusing on the country’s obligations under the NPT. This is a clear setback from the Istanbul position. It indicates a focus on suspension of Iran’s enrichment activities, a demand that has been a deal breaker since 2003.
At the time of these talks, Iran had not only mastered enrichment to the 20 percent level, it had achieved milestones few could have imagined: the domestic production of fuel rods for use in the Tehran reactor, about 10,000 centrifuges, more than 6,000 kilograms of LEU, and 150 kilograms of 20 percent enriched uranium. Yet, the West still is not ready to respect the right to enrichment to 20 percent or even 5 percent. Not only has the West pushed Iran to seek self-sufficiency, but at every juncture, it has tried to deprive Iran of its inalienable right to enrichment. This has simply propelled Iran to proceed full throttle toward mastering nuclear technology. The Iranians never intended to go this far and would have been content with the West or another country supplying their fuel. The irony is that the progress of Iran’s nuclear program is the product of Western efforts to pressure and isolate Iran while refusing to recognize Iran’s rights.
Any further opportunity to reach a deal will fail if the West does not recognize that the approach it has taken so far will yield only further progress in Iran’s nuclear program and that there is little left that the West can make subject to sanctions. If this trend continues, therefore, the prospects will be gloomy for all parties. Iran will be forced to choose between resisting Western pressures and abandoning its long-held goal of pursuing peaceful nuclear energy. It is unlikely to do the latter, even in the face of a military strike. The West is limiting its options, leaving only the option of military intervention. This cycle has brought the countries to the brink of war, due to the West’s mistaken belief that pressure, sanctions, isolation, and threats would bring Iran to its knees. On the contrary, these policies have led only to the advancement of Iran’s nuclear program.
A Way Out
The West now appears prepared to take an eighth counterproductive step by imposing devastating sanctions or launching a military strike. If that happened, Iran would be likely to withdraw from the NPT and pursue nuclear weapons.
All is not lost, however. Iran and the P5+1 could agree on a face-saving solution under which Iran would adhere to all international nuclear conventions and treaties at the maximum level of transparency defined by the IAEA. Furthermore, Iran would be flexible on 20 percent enrichment, its stockpile of material enriched to that level, and every other confidence-building measure to assure the international community that the country would remain a non-nuclear-weapon state forever. This would ensure the peaceful nature of Iran’s nuclear activity. In response, the United States and the other members of the P5+1 would agree to recognize Iran’s legitimate right to enrichment under the NPT and gradually lift the sanctions. This framework can be realized in forthcoming talks through a step-by-step plan based on the NPT, mutual confidence building, and appropriate reciprocity as agreed in the Istanbul talks in April.
To satisfy the concerns of the West regarding Iran’s 20 percent stockpile, a mutually acceptable solution for the long term would entail “a zero stockpile.” Under this approach, a joint committee of the P5+1 and Iran would quantify the domestic needs of Iran for use of 20 percent enriched uranium, and any quantity beyond that amount would be sold in the international market or immediately converted back to an enrichment level of 3.5 percent. This would ensure that Iran does not possess excess 20 percent enriched uranium forever, satisfying the international concerns that Iran is seeking nuclear weapons. It would be a face-saving solution for all parties as it would recognize Iran’s right to enrichment and would help to negate concerns that Iran is pursuing nuclear weapons.
Hossein Mousavian is a research scholar at Princeton University’s Woodrow Wilson School of Public and International Affairs. From 1997 to 2005, he was the head of the Foreign Relations Committee of Iran’s National Security Council; from 2003 to 2005, he served as spokesman for Iran in its nuclear negotiations with the European Union. He is author of The Iranian Nuclear Crisis: A Memoir (2012).
ENDNOTES
1. Greg Bruno, “Iran’s Nuclear Program,” Council on Foreign Relations, March 2010, www.cfr.org/iran/irans-nuclear-program/p16811.
2. Code 3.1 of the subsidiary arrangements to IAEA safeguards agreements specifies when a state is required to declare facilities to the agency. The IAEA originally said that states must declare nuclear facilities six months prior to introducing nuclear material, but modified the code in 1992 to require countries to inform the agency of facilities “as soon as the decision to construct or to authorize construction has been taken, whichever is earlier.”
3. Article IV of the NPT states, “Nothing in this Treaty shall be interpreted as affecting the inalienable right of all the Parties to the Treaty to develop research, production and use of nuclear energy for peaceful purposes without discrimination and in conformity with Articles I and II of this Treaty.”
Olli Heinonen has been a senior fellow at the Belfer Center for Science and International Affairs at Harvard University’s John F. Kennedy School of Government since 2010. Prior to that, he served for 27 years at the International Atomic Energy Agency in Vienna, including five years as deputy director general and head of the Department of Safeguards.
It soon will be a decade since the West—initially the EU-3 of France, Germany, and the United Kingdom, later joined by China, Russia, and the United States to form the P5+1—embarked on a diplomatic process in 2003 to find a negotiated solution to the Iranian nuclear crisis.
In spite of these efforts, Iran continues to raise its uranium enrichment to higher levels, increase its stockpile of fissile material, and remain opaque over the military-related aspects of its nuclear program. These issues will continue to be a fundamental part of the discussions.
Iran’s increasing enrichment capacity, together with its reported possession of a crude design of a nuclear weapon, shows that Iran is positioning itself as a virtual or latent nuclear-weapon state. Given the risks involved for a potential breakout from the nuclear Nonproliferation Treaty, a more intrusive and timely inspection system, as well as Iran’s agreement to implement an additional protocol to its safeguards agreement with the International Atomic Energy Agency (IAEA), would be required.
Recently, Iran’s monthly production of low-enriched (3.5 percent uranium-235) uranium hexafluoride (UF6) at the Natanz Fuel Enrichment Plant, with its newly installed centrifuges, has increased to 220 kilograms of UF6 today. By the end of this year, Iran could have a cumulative inventory of 7.5 metric tons of low-enriched UF6. With further enrichment, that would be enough for half a dozen nuclear weapons.
Meanwhile, Iran has also produced about 150 kilograms of UF6 enriched to 20 percent. The installation and commissioning of additional cascades at the Fordow enrichment plant indicates that, by the end of this year, the inventory of 20 percent-enriched UF6 could be as high as 300 kilograms—an amount sufficient, with additional enrichment, for more than one nuclear weapon. By further enriching the 20 percent-enriched uranium at Fordow, Iran could turn it into nuclear weapons components in a couple of months. This time could even be shorter depending on factors such as whether the Natanz plant also is used to produce highly enriched uranium (HEU).
The IAEA might be able to detect those changes at locations it inspects, but would the international community be able to react in time? In the international arena, a couple of months is extremely short, increasing the risk of military action, which in itself may slow down but not end the program.
An additional uncertainty stems from Iran’s past statements that it plans to build additional enrichment plants. Tehran’s history of concealment, alongside its actions to distribute its nuclear activities at different locations and harden its facilities, adds to already serious concerns. That is why Iran has been subjected to unprecedented sanctions in recent months. At first, the sanctions targeted Iran’s nuclear program directly, but they increasingly are focusing on other sectors to intensify the pressure. One example is the oil embargo that went into effect at the end of June.
Time does not favor any of the countries involved if they are seeking a negotiated solution. For Iran, it is internally more and more difficult to find an acceptable solution to the nuclear dilemma as it digs itself deeper into its own rhetoric that the price is never too high to achieve its nuclear ends. The P5+1 sees that, with the passage of time, Iran is closing the gap to a nuclear breakout capability.
Yet, a potential solution is in sight and still to be grasped. The involved parties already have charted the rough outlines of a long-term deal, comprising efforts by Iran to undertake practical steps to ensure that its nuclear program cannot be used for nuclear weapons and to give the international community confidence that this is the case. In return, Iran would receive cooperation with the West in a number of areas. These could include, as part of a comprehensive package, addressing Iran’s nuclear power needs, giving assurances of nuclear fuel supply, providing fuel for its Tehran Research Reactor to produce radioisotopes for medical and industrial purposes, replacing that reactor with a modern civilian reactor, and providing assistance in nuclear safety and security.
In this context, it is unhelpful and underhanded that Iran, in its recent statements amid ongoing diplomacy, has further clouded the broth by broadcasting its intention to build nuclear-powered submarines. Such submarines often use HEU, but there are also reactor designs with lower enrichments. It is unlikely that there will be any external takers to provide fuel for this apparent new need Iran has announced. Iran then probably will cite the lack of foreign fuel suppliers as further justification for continuing on its uranium-enrichment path.
The road of negotiations after Moscow will continue to be rocky, but it is crucial to keep diplomacy on track. This means focusing on the overall goal that would address the proliferation concern of preventing a nuclear-armed Iran, instead of becoming bogged down in the process itself. ACT
Olli Heinonen has been a senior fellow at the Belfer Center for Science and International Affairs at Harvard University’s John F. Kennedy School of Government since 2010. Prior to that, he served for 27 years at the International Atomic Energy Agency in Vienna, including five years as deputy director general and head of the Department of Safeguards.
Delegates gathering at the United Nations this month to negotiate a treaty regulating the international arms trade will have to resolve a number of issues concerning the pact’s objectives and scope that remain unsettled since the UN General Assembly decided in 2009 to convene the conference, representatives from a broad range of countries said in June interviews and earlier statements.
Delegates gathering at the United Nations this month to negotiate a treaty regulating the international arms trade will have to resolve a number of issues concerning the pact’s objectives and scope that remain unsettled since the UN General Assembly decided in 2009 to convene the conference, representatives from a broad range of countries said in June interviews and earlier statements.
The negotiations, which are scheduled to run July 2-27, are supposed to produce a global arms trade treaty (ATT) to set common standards for international transfers of conventional weapons and requirements for all states-parties to set up national control systems to regulate such transfers.
The countries will aim to reach consensus on a final treaty text largely on the basis of a working paper produced by Ambassador Roberto García Moritán of Argentina, the chair of the preparatory committee, after three years and four preparatory committee sessions involving states that supply and buy conventional arms. (See ACT, January/February 2012.)
Although García Moritán’s text from July 2011 “has no formal status,” it “does represent a range of issues” that have been raised since 2010, said Jo Adamson, British permanent representative to the Conference on Disarmament, in a June 20 e-mail to Arms Control Today. Therefore, “we aren’t starting from scratch,” said Adamson, who is the United Kingdom’s lead ATT negotiator. “We look forward to receiving a revised paper in due course to help to guide us through this next critical stage of the negotiations,” she said.
To succeed, the negotiators will need to balance a number of competing forces and political demands. Many weapons suppliers envision an ATT that will affirm trade in conventional weapons as “a legitimate commercial activity,” albeit “one that states have the obligation to regulate,” as Assistant Secretary of State for International Security and Nonproliferation Thomas Countryman put it in describing U.S. policy on the treaty in an April interview with Arms Control Today.
Many countries want to ensure the treaty augments their security and does not infringe on their ability to procure weapons for their defense. “The ATT should be an instrument which enhances the collective security of states, rather than detracting from it. In this respect, a mainstay of the ATT must be to uphold the right of states to acquire arms in order to defend themselves,” said an Israeli delegate Feb. 13 during the final preparatory committee.
Many other states, however, argue that an ATT must provide meaningful protections against illicit arms transfers that undermine human security (the security of individuals and communities) as well as human rights.
“It is often argued that national security interests need to be duly taken into account in the negotiation of the Treaty. However, from the Austrian perspective, human security is of equal importance and must appropriately resonate in the Treaty,” Alexander Kmentt, director for disarmament, arms control, and nonproliferation in the Austrian Federal Ministry for European and International Affairs, said in a June 21 e-mail to Arms Control Today.
An ATT, argued Kmentt, should prevent the illicit trade of arms, diversion of legal arms to the illicit market, and transfers “that contribute to serious violations of international human rights law and international humanitarian law, human suffering, armed conflict, transnational organized crime and terrorist acts.”
According to a report published in May by Oxfam, more than $2.2 billion worth of arms and ammunition have been imported since 2000 by countries operating under 26 UN, regional, or multilateral arms embargoes in force during this period.
Treaty Scope
To date, states have not reached agreement on a list of arms and activities that should be covered by an ATT. Most states agree that all of the weapons covered by the categories used in the UN Register of Conventional Arms should fall under the scope of the treaty. These include tanks, armored combat vehicles, artillery, combat aircraft and helicopters, warships, and missile systems. Most states, including the United States, are also in agreement that small arms and light weapons should be included in the treaty. The United States does not currently support the inclusion of ammunition within the scope, although many states do.
Some proponents of a more comprehensive treaty have pushed for clear definitions for the categories of weapons that most member states agree should be covered by the pact. Some also have suggested that specific weapons be listed in an ATT. Others point out that a detailed list of weapons would require that an ATT be regularly updated and refined to remain abreast of technological developments and that the time it would take to agree on specific definitions for that process could encumber the four-week-long negotiating conference.
“This is an arms trade regulation document, not a disarmament document, so there is no need for an extensive framework or extensive definitions to make it work,” Countryman said in an address at the Henry L. Stimson Center on April 16. “The outcome of the conference ought to be a good, short document that spells out principles of what states must do in implementing an effective [system of] arms export control.”
According to a tabulation by researchers with the nongovernmental organizations Control Arms Alliance and Reaching Critical Will, all but a handful of the more than 140 countries that have made statements on the issue support expanding the treaty’s scope beyond the UN register’s seven categories to include small arms and light weapons, such as revolvers, machine guns, portable anti-tank guns, portable anti-tank missile launchers and rocket systems, and mortars of calibers less than 75 millimeters.
“Many African countries have suffered from conflicts perpetuated by illicit trade and proliferation on small arms and light weapons,” Patrick Mugoya of Uganda said at the second preparatory committee session on March 1, 2011. “These conflicts result in loss of lives, cause untold suffering to the people, and negatively impact economic and social development.”
According to the UN Office for Disarmament Affairs, most present-day conflicts are fought predominantly with this category of weapons.
Only a few countries, including China, Egypt, and Iran, have voiced reservations over the so-called 7+1 proposal because they say that it would be difficult to monitor trade in small arms and light weapons. A number of other states, however, have said the absence of this category of arms from the final agreement is a deal breaker.
“Small arms and light weapons will have to be in the treaty. If not, there won’t be a treaty,” said a delegate from a Latin American country in a June 13 interview.
A 7+1+1 formula, which would include ammunition in the treaty’s scope, is also on the table for the negotiating conference. More than 100 countries strongly support the measure, according to the nongovernmental groups’ tabulation.
“It is the bullet and not the weapon that kills. Marking of ammunition is technically feasible and should not serve as an excuse for exempting ammunition on allegedly practical grounds,” argued Kmentt. “Given the robustness and longevity of certain types of these weapons, a continuation of unregulated trade in ammunition would further their use as the real ‘weapons of mass destruction’ in contradiction of the objectives of an Arms Trade Treaty.”
Nevertheless, major suppliers Russia and the United States have expressed doubt that ammunition can be adequately tracked following their sale. U.S. officials have said that they are open to suggestions on how to address this concern.
The United Kingdom, which for years has been a strong supporter of an ATT, has worked to forge a middle ground on this issue. “On ammunition, the UK favours its inclusion in the ATT as the weapons are useless without it,” said Adamson in the June 20 e-mail. “But we recognise that this is going to be a subject of negotiations. Monitoring ammunition is a difficult issue. Making ammunition subject to controls would be an important first step, without prejudice to whether it is covered in detail in Reporting under an ATT.”
In addition to the criteria that should be addressed in considering a transfer, the types of transfers to be regulated are also in question. UN General Assembly Resolution 64/48, which was adopted in December 2009 and mandated the ATT negotiation this month, calls for “a legally binding instrument on the highest possible common international standards for the transfer of conventional arms.” A key point of controversy in the run-up to the July meeting is what the term “transfer” encompasses.
Most delegations have argued that an ATT should cover arms brokering. The United Kingdom, for instance, says transit and transshipment, loans, and gifts as well as temporary imports and exports for demonstration and exhibition should be included under the treaty’s scope. Of the world’s 192 governments, only 52 have laws regulating arms brokers, and less than half of these have criminal or monetary penalties associated with illegal brokering, according to an October 2011 Oxfam briefing paper.
“These are the main types of activity where diversion into the illicit market can occur. Controlling these forms of entry into the illicit market ensures that the treaty regulates the entire arms trade process without leaving any gaps which can be exploited,” Adamson said.
In the run-up to the negotiating conference, China and Iran have expressed objections to this proposal.
Criteria for Transfers
A key question in the negotiations will be whether the treaty will require states to withhold a transfer if their export control review determines there is a substantial risk that it could lead to human rights violations or whether an ATT will simply require states to “take into account” such potential risks but still allow a transfer authorization to proceed if the supplier state determines that, on balance, larger economic or security concerns merit the transfer.
Some countries favor strong language that would require states not to authorize transfers that would lead to human rights or humanitarian law violations or could circumvent internationally recognized arms embargoes.
“The ATT should establish clear, objective and non-discriminatory norms to prevent the transfer of arms when there is a clear and reasonable ground to believe that such weapons will be used in violation of international human rights law or international humanitarian law,” said delegations from nine countries, including Argentina, Chile, and Colombia, in a joint statement on July 21, 2010. Some countries also want potential sales to be considered in light of their impact on a recipient country’s socioeconomic development and corruption.
Critics of this position argue that implementing such criteria is neither an objective nor straightforward process. “There are ranges of what people think are human rights,” Ann Ganzer, director of the U.S. Department of State’s Office of Conventional Arms Threat Reduction, said at the April 16 Stimson Center event. “I attended a meeting a day after someone was executed in Texas and had several Europeans accuse me of representing a country that was a human rights violator,” she recalled.
Deepening long-held suspicions about a sensitive aspect of German-Israeli military cooperation, Der Spiegel magazine reported in its June 4 issue that Israel has deployed nuclear-armed cruise missiles aboard submarines built and subsidized by Germany.
Deepening long-held suspicions about a sensitive aspect of German-Israeli military cooperation, Der Spiegel magazine reported in its June 4 issue that Israel has deployed nuclear-armed cruise missiles aboard submarines built and subsidized by Germany.
Israel, which does not officially admit it has any nuclear weapons, is widely believed to have produced up to 200 warheads and bombs. Israel has operated a nuclear reactor and an underground plutonium-separation plant in Dimona since the 1960s. In 1991, as the Persian Gulf War was getting under way, Germany approved the subsidized sale of two Dolphin-class diesel-powered submarines to Israel; a total of six has been ordered so far, three of which have been delivered.
There has been speculation that Israel would put nuclear-armed missiles onto the German submarines but little firm evidence.
The magazine article, drawing on sources in Germany, Israel, and the United States, says the new evidence “no longer leaves any room for doubt” that Israel has a sea-based nuclear deterrent. “From the beginning, the boats were primarily used for the purposes of nuclear capability,” one German ministry official told the magazine. In addition to revealing that the submarines are nuclear armed, the article also states that senior German leaders knew that the boats, built at a shipyard in Kiel, would be used for this purpose.
Sources told Der Spiegel that the Israeli defense technology company Rafael built the sea-launched cruise missiles (SLCMs) for the submarines, based on the Popeye cruise missile, which is estimated to have a range of around 1,500 kilometers with a warhead weighing up to 200 kilograms. The only public evidence of the nuclear version of the missile was a single test conducted off the coast of Sri Lanka, the article says. This missile test was first reported by London’s Sunday Times in June 2000.
According to the article, the newest Dolphin submarines are equipped with fuel cell propulsion, which allows for quieter operation and longer periods between refuelings. Earlier Dolphin submarines had to surface every few days to run the diesel engine to recharge its batteries. The new boats will be able to travel underwater at least 18 days at a time. The Persian Gulf coast of Iran is no longer out of the operating range of the Israeli fleet, the article says.
Israel is known to have nuclear-capable aircraft and land-based missiles. The addition of nuclear-armed submarines would mean that Israel now has a full triad of land-, air-, and sea-based nuclear delivery systems and that, for the first time, some of its nuclear forces would be invulnerable to a nuclear first strike by an adversary. No other state in the Middle East is known to have nuclear weapons, although Iran in particular is suspected of seeking them.
Iranian Sub Plans
Meanwhile, Iran said June 12 that it is planning to build a nuclear-powered submarine, which could theoretically give Tehran a non-weapons rationale to produce weapons-grade uranium. Iran’s semiofficial Fars news agency quoted Rear Adm. Abbas Zamini, the deputy commander of the Iranian navy for technical affairs, as saying, “Right now, we are in the initial phases of manufacturing atomic submarines.”
Iran, which says it is not pursuing nuclear weapons, states that it is enriching uranium to a level of about 5 percent to produce nuclear power and to 20 percent to run a research reactor in Tehran to make medical isotopes. Uranium enriched to a level below 20 percent is known as low-enriched uranium (LEU). Nuclear weapons typically require uranium enriched to about 90 percent, known as weapons-grade. The nuclear Nonproliferation Treaty bars enriching uranium for use in weapons, but it does not forbid enrichment for use in naval reactors.
According to Princeton University professor Frank von Hippel, U.S. and British naval reactors are currently fueled with 93 to 97 percent-enriched uranium, Russian naval reactors are fueled with 40 to 90 percent-enriched uranium, and French naval reactors are fueled with LEU. India’s prototype naval reactor is reportedly fueled with uranium enriched to the 40-percent range, Brazil’s prototype is to be fueled with LEU, and China’s naval reactor is reportedly fueled with LEU, von Hippel said.
Zamini did not indicate what level of enrichment Iran would use for its naval reactors.
Amid ongoing concerns about the fate of Syria’s chemical weapons stockpile, officials in the United States, Europe, and the Middle East are making plans to secure it once the government of Syrian President Bashar al-Assad falls.
Amid ongoing concerns about the fate of Syria’s chemical weapons stockpile, officials in the United States, Europe, and the Middle East are making plans to secure it once the government of Syrian President Bashar al-Assad falls.
The U.S. military has “finalized its assessment” and completed “initial planning” for operations in Syria, including securing the country’s chemical weapons, in the event of a regime collapse, according to a June 14 CNN article. The network also reported that the United States contacted a number of states for possible collaboration in this effort.
Earlier this year, a number of U.S. legislators called on the Obama administration to prepare to address “potential proliferation” if the country’s internal security dissolves. Popular uprisings in Syria, which began early last year, have been met with violent government retaliations. (See ACT, April 2012.)
Syria has not signed the Chemical Weapons Convention, and the size of its chemical weapons arsenal is not publicly known. In March testimony before the House Armed Services Committee, Secretary of Defense Leon Panetta described the situation in Syria as “100 times worse” than the challenge of securing weapons in Libya after the fall of Moammar Gaddafi’s regime last year.
As part of its Syria planning, the U.S. military decided on the number of troops, types of units, and funding required to perform specified tasks, the CNN report said. Officials told CNN that France, the United Kingdom, and the United States have been “discussing contingency scenarios, potential training and sharing of intelligence about what is happening in Syria with neighboring countries including Jordan, Turkey and Israel.”
On June 17, the European Union imposed sanctions on exports of luxury and dual-use goods to Syria. The list includes a number of chemicals that may be used as “precursors for toxic chemical agents” and “chemical manufacturing facilities, such as reaction vessels and storage tanks,” that could be used to create chemical weapons.
“In the current situation, the EU must keep up the pressure on the Syrian regime. EU sanctions target those responsible for the appalling repression and violence against the civilian population,” EU foreign policy chief Catherine Ashton said in announcing the sanctions June 15.
Last month, a number of Israeli defense officials spoke out about Syria’s chemical stocks. Deputy Chief of Staff Maj. Gen. Yair Naveh called Syria’s chemical stocks “the world’s largest” and warned that the Assad government would “treat us the same way they treat their own people,” according to a June 11 article in The Times of Israel. Maj. Gen. Yair Golan said Israel needed to continue to gather intelligence on Syria’s weapons stocks but also consider options for possible proliferation scenarios, including whether it would be “wise” or “nonsense” to attack “convoys carrying sophisticated and advanced Syrian weaponry if they are detected ahead of time,” according to a June 4 article in The Jerusalem Post.
Although Syrian resistance forces recognize the need to secure the country’s chemical weapons stockpiles once the Assad government falls, planning for that effort is only in the early stages, Brig. Gen. Akil Hashem, who retired from the Syrian army in 1989 after 27 years, said in a June 12 interview.
Rebel forces have begun to look into the issue, but have not fully developed a plan, said Hashem, who spent four months, ending March 1, as a military adviser for the Syrian National Council, a coalition of opposition groups. “Putting together a plan to secure chemical weapons is not simple. It needs a lot of discussion and work,” he said. “According to my understanding, the Syrian National Council didn’t address this so far.”
His account is at odds with a May 28 article in Haaretz that cited an anonymous former Syrian officer as saying the opposition leadership has plans “to take control of the Assad regime’s chemical weapons depots and secure them in the first hours after the regime collapses.”
Asked to respond to Hashem’s comments, Lt. Col. Wesley Miller, a U.S. Department of Defense spokesman, said in a June 14 e-mail to Arms Control Today that the United States was “closely monitoring Syria’s proliferation-sensitive materials and facilities.” The Defense Department believes Syria’s chemical weapons stockpiles remain secure, and it has seen “no credible reporting” that the Assad regime has used or transferred chemical weapons, he said.
Additional U.S. sanctions targeting Iran’s banking and oil sectors went into effect June 28, further restricting Iran’s ability to export oil and isolating the country from the international financial system.
Additional U.S. sanctions targeting Iran’s banking and oil sectors went into effect June 28, further restricting Iran’s ability to export oil and isolating the country from the international financial system.
The U.S. sanctions, which are intended to pressure Iran to address international concerns about its nuclear program, are part of the fiscal year 2012 National Defense Authorization Act, which was signed into law Dec. 31. (See ACT, January/February 2012.) The provisions of the law that went into effect June 28 prevent foreign banks from accessing existing accounts or opening new accounts in the United States if they process oil-related transactions with the Central Bank of Iran. The president can waive the sanctions on countries that continue to import Iranian oil after he has certified that they have “significantly reduced” their purchases from Iran. Waivers are granted for six-month periods, but can be renewed.
The day the sanctions went into effect, Secretary of State Hillary Rodham Clinton announced China and Singapore had met the significant-reduction standard and were eligible to continue importing oil from Iran without penalty.
The last-minute exemption for China did not come as a surprise. Clinton hinted on June 20 that a waiver could be in the works, saying that Beijing was “slowly but surely” taking actions to reduce its oil purchases from Tehran.
In response to the granting of the waiver, Sen. Robert Menendez (D-N.J.), one of the authors of the sanctions legislation, said in a June 28 statement that Clinton had assured him that China “met the significant reduction standard.” However, he said that China must also be “mindful” that under the terms of the law such a reduction is required every 180 days for renewal of the waiver and that this would be expected from all countries to “qualify for future exemptions.”
House Foreign Affairs Committee Chairman Ileana Ros-Lehtinen (R-Fla.), in a June 28 press release, described the Chinese waiver as “a free pass to Iran’s biggest enabler” and called on Congress to “strengthen sanctions” against Tehran.
With China and Singapore, the Obama administration certified that 20 countries would be exempt from the sanctions. Earlier in the month, Clinton announced that seven countries—India, Malaysia, South Africa, South Korea, Sri Lanka, Taiwan, and Turkey—had received waivers and can continue to import Iranian oil without penalty. The June 11 announcement was the second such determination. In March, Japan and 10 EU countries were granted waivers. The EU countries, however, will not be able to continue importing Iranian oil under the waiver after July 1, when an EU embargo on Iranian oil goes into effect. In a June 25 press release, the Council of the European Union reaffirmed that oil import contracts with Iran must be “terminated by July 1.”
In the June 28 statement, Clinton cited figures from the International Energy Agency, which found that Iran’s average daily oil exports dropped from 2.5 million barrels per day in 2011 to a current average of approximately 1.5 million barrels per day. This represents nearly $8 billion in lost revenues every quarter, and is a “clear demonstration” to Tehran of the “enormous economic cost” of continuing to violate “international nuclear obligations,” she said. She urged Iran to take “concrete steps” to resolve the nuclear issue or face “continuing pressure and isolation.”
Insurance Ban
In addition to banning imports of Iranian oil, the EU decision that will take effect July 1 prohibits companies in EU member countries from insuring tankers transporting Iranian crude oil to any country. Tankers are unable to transport crude oil without protection and indemnity insurance coverage. As a result, even if countries receive a waiver from the United States allowing them to purchase Iranian oil without financial sanctions, some may be prevented from continuing imports if they cannot obtain other insurance guarantees to cover the tankers.
Some countries are arranging alternative means to cover the loss of insurance after July 1. In June, Japan passed a law that allows the government to provide the necessary insurance guarantees for the oil tankers. India is allowing state-run oil refineries to import oil on Iranian tankers insured by state guarantees from Tehran, and China was reportedly looking into similar measures. The South Korean government, despite receiving a waiver from the United States to continue importing Iranian oil, said it will stop the imports on July 1 and is not pursuing sovereign guarantees. These four countries are among the top purchasers of Iranian oil.
French Foreign Minister Laurent Fabius indicated that the European Union could adopt further sanctions. In a statement following negotiations in Moscow between Iran and six world powers over Tehran’s disputed nuclear program (see page 27), he said that sanctions will “continue to be toughened” if Iran “refuses to negotiate seriously.”
New U.S. Sanctions Urged
With no agreement coming out of the Moscow talks, members of Congress have indicated that further sanctions designed to isolate Iran could be passed.
In a bipartisan effort, 44 senators called on the administration to take additional steps against Tehran if it failed to address certain concerns about its nuclear program. In the June 15 letter to President Barack Obama, the senators called for “significantly increasing the pressure” on Iran through sanctions if no “substantive agreement” was reached during the June 18-19 talks in Moscow.
The letter also stated that unless Iran complied with International Atomic Energy Agency inspections and UN Security Council resolutions, it should not be relieved of any current sanctions or those that went into effect June 28.
In a June 19 statement, Ros-Lehtinen called on the United States and other countries to take further measures, saying the countries need to impose “game-changing sanctions” that would “compel” Iran to “abandon its nuclear program now.”
Ros-Lehtinen has authored legislation that would strengthen existing sanctions against Iran’s energy and financial sectors. The legislation passed in the House in December, and a slightly different version passed the Senate in May.
Additional U.S. sanctions targeting Iran’s banking and oil sectors went into effect June 28, further restricting Iran’s ability to export oil and isolating the country from the international financial system.
Additional U.S. sanctions targeting Iran’s banking and oil sectors went into effect June 28, further restricting Iran’s ability to export oil and isolating the country from the international financial system.
The U.S. sanctions, which are intended to pressure Iran to address international concerns about its nuclear program, are part of the fiscal year 2012 National Defense Authorization Act, which was signed into law Dec. 31. (See ACT, January/February 2012.) The provisions of the law that went into effect June 28 prevent foreign banks from accessing existing accounts or opening new accounts in the United States if they process oil-related transactions with the Central Bank of Iran. The president can waive the sanctions on countries that continue to import Iranian oil after he has certified that they have “significantly reduced” their purchases from Iran. Waivers are granted for six-month periods, but can be renewed.
The day the sanctions went into effect, Secretary of State Hillary Rodham Clinton announced China and Singapore had met the significant-reduction standard and were eligible to continue importing oil from Iran without penalty.
The last-minute exemption for China did not come as a surprise. Clinton hinted on June 20 that a waiver could be in the works, saying that Beijing was “slowly but surely” taking actions to reduce its oil purchases from Tehran.
In response to the granting of the waiver, Sen. Robert Menendez (D-N.J.), one of the authors of the sanctions legislation, said in a June 28 statement that Clinton had assured him that China “met the significant reduction standard.” However, he said that China must also be “mindful” that under the terms of the law such a reduction is required every 180 days for renewal of the waiver and that this would be expected from all countries to “qualify for future exemptions.”
House Foreign Affairs Committee Chairman Ileana Ros-Lehtinen (R-Fla.), in a June 28 press release, described the Chinese waiver as “a free pass to Iran’s biggest enabler” and called on Congress to “strengthen sanctions” against Tehran.
With China and Singapore, the Obama administration certified that 20 countries would be exempt from the sanctions. Earlier in the month, Clinton announced that seven countries—India, Malaysia, South Africa, South Korea, Sri Lanka, Taiwan, and Turkey—had received waivers and can continue to import Iranian oil without penalty. The June 11 announcement was the second such determination. In March, Japan and 10 EU countries were granted waivers. The EU countries, however, will not be able to continue importing Iranian oil under the waiver after July 1, when an EU embargo on Iranian oil goes into effect. In a June 25 press release, the Council of the European Union reaffirmed that oil import contracts with Iran must be “terminated by July 1.”
In the June 28 statement, Clinton cited figures from the International Energy Agency, which found that Iran’s average daily oil exports dropped from 2.5 million barrels per day in 2011 to a current average of approximately 1.5 million barrels per day. This represents nearly $8 billion in lost revenues every quarter, and is a “clear demonstration” to Tehran of the “enormous economic cost” of continuing to violate “international nuclear obligations,” she said. She urged Iran to take “concrete steps” to resolve the nuclear issue or face “continuing pressure and isolation.”
Insurance Ban
In addition to banning imports of Iranian oil, the EU decision that will take effect July 1 prohibits companies in EU member countries from insuring tankers transporting Iranian crude oil to any country. Tankers are unable to transport crude oil without protection and indemnity insurance coverage. As a result, even if countries receive a waiver from the United States allowing them to purchase Iranian oil without financial sanctions, some may be prevented from continuing imports if they cannot obtain other insurance guarantees to cover the tankers.
Some countries are arranging alternative means to cover the loss of insurance after July 1. In June, Japan passed a law that allows the government to provide the necessary insurance guarantees for the oil tankers. India is allowing state-run oil refineries to import oil on Iranian tankers insured by state guarantees from Tehran, and China was reportedly looking into similar measures. The South Korean government, despite receiving a waiver from the United States to continue importing Iranian oil, said it will stop the imports on July 1 and is not pursuing sovereign guarantees. These four countries are among the top purchasers of Iranian oil.
French Foreign Minister Laurent Fabius indicated that the European Union could adopt further sanctions. In a statement following negotiations in Moscow between Iran and six world powers over Tehran’s disputed nuclear program (see page 27), he said that sanctions will “continue to be toughened” if Iran “refuses to negotiate seriously.”
New U.S. Sanctions Urged
With no agreement coming out of the Moscow talks, members of Congress have indicated that further sanctions designed to isolate Iran could be passed.
In a bipartisan effort, 44 senators called on the administration to take additional steps against Tehran if it failed to address certain concerns about its nuclear program. In the June 15 letter to President Barack Obama, the senators called for “significantly increasing the pressure” on Iran through sanctions if no “substantive agreement” was reached during the June 18-19 talks in Moscow.
The letter also stated that unless Iran complied with International Atomic Energy Agency inspections and UN Security Council resolutions, it should not be relieved of any current sanctions or those that went into effect June 28.
In a June 19 statement, Ros-Lehtinen called on the United States and other countries to take further measures, saying the countries need to impose “game-changing sanctions” that would “compel” Iran to “abandon its nuclear program now.”
Ros-Lehtinen has authored legislation that would strengthen existing sanctions against Iran’s energy and financial sectors. The legislation passed in the House in December, and a slightly different version passed the Senate in May.
Senior-level talks between Iran and six world powers over Tehran’s nuclear program are on hold, as the lead representatives from the two sides decided in Moscow on June 18-19 to wait to schedule a fourth round of negotiations until after a lower-level technical meeting is held on July 3.
Senior-level talks between Iran and six world powers over Tehran’s nuclear program are on hold, as the lead representatives from the two sides decided in Moscow on June 18-19 to wait to schedule a fourth round of negotiations until after a lower-level technical meeting is held on July 3.
The purpose of the July experts meeting in Istanbul is to “provide further clarification” on the proposal made by the six countries—China, France, Germany, Russia, the United Kingdom, and the United States—according to Catherine Ashton, the European Union’s foreign policy chief and the lead negotiator for the six powers. Speaking at a press conference at the end of the Moscow talks, she also said the technical talks will allow the six powers to “study the issues” Iran raised during the June meeting.
Iran and the six countries, known as the P5+1, have held three rounds of senior-level talks this year on international concerns relating to Iran’s nuclear program. Negotiations between the parties resumed in April after a 15-month hiatus. (See ACT, May 2012.)
A fourth round of negotiations is still possible, Ashton said at the press conference. After the technical-level meeting and “contact” between deputy negotiators, she and the lead Iranian negotiator, Saeed Jalili, would discuss “prospects for a future meeting at the political level,” she said.
Although Ashton said that “significant gaps” remained between the two parties, she stated that “critical issues” had been discussed and that Iran addressed “the substance” of the issues for the first time.
Jalili expressed optimism that the technical-level talks could narrow the differences between the two sides. In his remarks at the press conference, he said an experts-level meeting could bring the parties “closer together” and that it was an “important result” of the Moscow talks.
Views outside of Moscow, however, were mixed. U.S. State Department spokeswoman Victoria Nuland said on June 20 that the United States did not want “talks for talks’ sake” and that the technical-level meeting is an opportunity to “close some of the gaps in comprehension.” British Prime Minister David Cameron characterized the Moscow talks as a “missed opportunity,” saying there had been a “lack of progress.” He called on Iran to return to talks “willing to negotiate seriously.”
Moscow Proposals
Two proposals were discussed during the talks, one put forward by the P5+1 and the other by Iran. Ashton characterized the exchanges over the positions as “detailed, tough, and frank.”
The P5+1 proposal was the same one that the six powers put forward during the second round of talks in Baghdad in May, according to Nuland. It focuses on suspending the enrichment of uranium to the 20 percent level, shipping Iran’s stockpile of 20 percent-enriched uranium out of the country, halting enrichment activities at the Fordow enrichment facility, and cooperating with the International Atomic Energy Agency (IAEA). In return, Iran would receive fuel plates for its Tehran Research Reactor, assistance with nuclear safety, and spare parts for civilian aircraft.
Iran maintains that it needs to enrich uranium to 20 percent in order to fabricate fuel for the Tehran reactor, which produces medical isotopes. Uranium enriched to 20 percent, however, can be converted into weapons-grade material more quickly than uranium enriched to the levels required for power reactors, which Iran also produces. By suspending 20 percent enrichment, shipping the current stockpile of 20 percent-enriched uranium out of the country, and providing Iran with fuel fabricated elsewhere for the Tehran reactor, the P5+1 proposal would extend the time required if Iran decided to pursue nuclear weapons while still allowing Tehran to produce medical isotopes. Suspending the 20 percent enrichment at Fordow is of particular concern to the United States and other countries because the location of the nuclear facility, deep inside a mountain, would make a military strike against it difficult.
In her June 19 press briefing, Nuland described the P5+1 as “completely united” behind the proposal.
Further details on the Iranian five-point plan first presented in Baghdad emerged during the Moscow talks. A June 18 article in The Guardian outlined the five points of the Iranian plan as acknowledgment of Iran’s right to enrich uranium in tandem with the “operationalisation” of a fatwa issued by Supreme Leader Ayatollah Ali Khamenei that condemned the pursuit of nuclear weapons as forbidden in Islam; sanctions relief in return for cooperating with the IAEA; cooperation on nuclear energy and safety; confidence-building measures, including a possible limit on production of 20 percent-enriched uranium; and cooperation on regional and non-nuclear issues.
In his remarks at the Moscow press conference, Jalili’s description of the proposal was consistent with but more general than the Guardian account. He said Iran mentioned four nuclear-related points during the negotiations: “confidence building, cooperation in clarification, opposition to weapons of mass destruction, and normal nuclear cooperation.” Any future agreements would have to recognize Iran’s rights in these areas, “particularly 20 percent enrichment,” Jalili said.
Senators Call for End to Talks
Prior to the Moscow talks, a bipartisan group of 44 U.S. senators sent a letter to President Barack Obama, urging him to abandon the P5+1 talks with Iran if an agreement was not reached in Moscow. Specifically, the letter said that the “absolute minimum steps” for Iran to take include shutting down the Fordow enrichment facility, halting enrichment above 5 percent, and sending the stockpile of uranium enriched above 5 percent out of the country. If Tehran were to “verifiably implement” these actions, it would demonstrate Iran’s commitment to the negotiations and justify further talks, the letter said. The senators also called for further sanctions against Iran if a “substantive agreement” was not reached in Moscow (see next story).
In a statement made after the talks, Sen. Robert Menendez (D-N.J.), one of the organizers of the letter, said that negotiations were the “preferred forum” for an agreement, but in “their absence,” Congress will “pursue other mechanisms,” including further sanctions, to prevent Iran from obtaining nuclear weapons.
In a June 20 House Armed Services Committee hearing on Iran’s nuclear program, Rep. Buck McKeon (R-Calif.), the committee chairman, said the “intensive diplomatic and economic steps” taken to convince Iran to abandon “military nuclear ambitions” do not appear to have succeeded.
No Agreement With IAEA
Iran met with the IAEA on June 8 in Vienna, but the agency and Tehran failed to make progress on signing a framework agreement to resolve the IAEA’s outstanding concerns over Iran’s nuclear program.
Going into the Vienna meeting between IAEA Deputy Director-General Herman Nackaerts and Iran’s envoy to the agency, Ali Asghar Soltanieh, expectations were raised that a deal could be reached. In May, after a short-notice trip to Tehran, IAEA Director-General Yukiya Amano said the sides were “close” to agreement on a “structured approach” for addressing concerns over Iran’s alleged nuclear weapons program. (See ACT, June 2012.) Iran maintains that its nuclear program is solely for peaceful purposes.
The structured approach would create a framework for agency inspections and an Iranian response to concerns the IAEA had expressed, in a report last November, about the potential military dimensions of Iran’s nuclear program. (See ACT, December 2011.) Some experts had speculated that a framework agreement with the IAEA may have given Iran leverage at the Moscow talks to press for some sanctions relief or a delay in the implementation of a July 1 EU oil embargo.
Nackaerts characterized the June meeting as “disappointing,” saying that there had been “no progress.” According to his statement, Iran was presented with a revised document in Vienna that addressed Tehran’s “earlier stated concerns.” Iran, however, “raised issues we have already discussed and added new ones.”
Soltanieh said the issues surrounding the discussions were “complicated” and that he hoped a venue for new discussions would be determined soon so that the parties could “conclude” the structured approach. The two sides did not set a date for their next meeting.
Just two days before meeting with Nackaerts, Soltanieh addressed the IAEA Board of Governors during its quarterly meeting, saying that Iran intended to “engage and work intensively” with the agency “with expectation of prompt closure” of the concerns over the possible military dimensions of Tehran’s nuclear program.
