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"I actually have a pretty good collection of Arms Control Today, which I have read throughout my career. It's one of the few really serious publications on arms control issues."
– Gary Samore
Former White House Coordinator for Arms Control and WMD Terrorism
Kelsey Davenport

Future of Iran Talks in Question

Kelsey Davenport

The future of senior-level negotiations between Iran and six world powers remains unclear after several rounds of lower-level discussions in July and August appear not to have made decisive progress toward an agreement that addresses international concerns about Iran’s nuclear program.

The parties had agreed on the sequence for the July-August lower-level talks at the end of the last round of senior-level meetings, which took place June 18-19 in Moscow. (See ACT, July/August 2012.) At that time, EU foreign policy chief Catherine Ashton, who led the six-country delegation in its talks with Iran, said “significant gaps” existed between the positions of the two sides.

The six-country group is known as the P5+1 because it includes the five permanent members of the UN Security Council—China, France, Russia, the United Kingdom, and the United States—plus Germany.

Talks between Iran and the P5+1 resumed in Istanbul last April after a 15-month hiatus. They were followed by two other rounds of senior-level negotiations, a May session in Baghdad and the June talks in Moscow.

The first of the lower-level talks, a technical-level meeting, took place July 3 in Istanbul. The purpose of the meeting, according to the EU Foreign Office, was to provide further details on the technical aspects of the proposals made by Iran and the the P5+1 during the earlier senior-level talks. Russian Deputy Foreign Minister Sergey Ryabkov said that although the talks were not a failure, they did not produce a breakthrough or “decisive progress.”

The experts meeting was followed by a July 24 deputy-level meeting in Istanbul and an Aug. 3 phone conversation between Ashton and Saeed Jalili, Iran’s top nuclear negotiator.

Ashton released a statement after the call, saying she pressed for Iran “to address the issues” now in order to “build confidence” and that she and Jalili were planning to talk again at the end of August “after further reflection.” Jalili told Iranian news outlets that, during the conversation with Ashton, he requested a “clear and specific response” from the P5+1 to Tehran’s proposals. Neither side mentioned a resumption of the high-level political talks.

Nevertheless, White House Press Secretary Jay Carney said on Aug. 13 that there is “every reason to continue” the P5+1 negotiations “while time and space remains.” Carney’s comments came the day after Israeli Deputy Foreign Minister Danny Ayalon called on the P5+1 countries to say that the “talks have failed” during an interview on Israel Radio.

U.S. Sanctions Strengthened

In the absence of progress in the negotiations, Congress and the Obama administration instituted harsher sanctions against Tehran in July and August. Carney described the effort as the “stiffest, most severe sanctions ever imposed” on a country.

On July 31, the administration issued an executive order expanding existing sanctions against Iran’s petrochemical industry and authorizing sanctions against individuals or entities that provide support for the Central Bank of Iran, the National Iranian Oil Company, or the Naftiran Intertrade Company.

On the same day, the White House announced that it was sanctioning China’s Bank of Kunlun and Iraq’s Elaf Islamic Bank for violating the 2010 Comprehensive Iran Sanctions, Accountability, and Divestment Act. According to the administration’s July 31 press release, the two banks were sanctioned under the act’s provisions that prohibit providing financial services to Iranian banks that are “designated for their connection to Iran’s support for terrorism or proliferation.” David Cohen, the Treasury Department’s undersecretary for terrorism and financial intelligence, said the penalties “cut off Kunlun and Elaf from the U.S. financial system.”

The next day, Congress overwhelmingly approved legislation imposing additional sanctions after Sen. Tim Johnson (D-S.D.) and Rep. Ileana Ros-Lehtinen (R-Fla.) worked out a compromise reconciling versions of a bill that passed the House of Representatives in December 2011 and the Senate in May. The new bill passed unanimously in the Senate and by a vote of 421-6 in the House.

The legislation includes provisions that will sanction any entity or individual that works in or provides services to Iran’s energy sector, purchases Iranian debt, helps Iran evade sanctions, or helps transport Iranian oil.

The legislation also further restricts the administration’s ability to provide waivers under the fiscal year 2012 National Defense Authorization Act that allow foreign countries to continue purchasing oil from Tehran without penalty. (See ACT, June 2012.) Countries now must demonstrate that they are moving toward a complete cessation of Iranian oil imports to receive a renewal of its waiver, as opposed to reducing it “significantly.” Waivers are granted for 180-day periods.

Johnson said that the bill would send a “clear signal” to Iranian leaders that they will face “even greater economic and diplomatic pressure” if they do not “come clean on their nuclear program” and end support for terrorist activities.

President Barack Obama signed the bill into law on Aug. 10

U.S. Charges Pair With Export Violations

A federal grand jury in Washington indicted two men for allegedly seeking to purchase and illegally export U.S.-origin materials to Iran that could be used to “operate and maintain gas centrifuges,” according to a July 13 Justice Department press release.

The two men are accused of having placed orders in the United States between October 2008 and January 2011 for materials that Iran cannot legally purchase because of sanctions imposed by Washington and the UN Security Council. U.S. Attorney Ronald C. Machen said in the press release that the indictment “underscores” the commitment to “aggressively enforcing export laws.”

One of the materials that the men allegedly attempted to obtain is maraging steel, a special high-strength steel that can be used for developing advanced gas centrifuges and ballistic missiles. Posing as a toymaker, Zongcheng Yi attempted to purchase 20 tons of the material from a U.S. company, the Justice Department said. His Iranian partner, Parviz Khaki, intended to ship the material to Iran after it arrived in China, according to the department. The U.S.-based steel company that Yi allegedly contacted informed U.S. officials about the unusual request. Federal agents then began communicating with Yi and eventually Khaki; the agents claimed they could help the men buy and export the maraging steel, the Justice Department said.

In the following months, according to the press release, Khaki continued to contact the agents, requesting assistance with purchases of other nuclear-related materials, including radioactive sources and mass spectrometers. Khaki was arrested in the Philippines on May 24. Yi, believed to be in China, has not been detained.

The case “sheds light on the reach of Iran’s illegal procurement networks” that “continue to target U.S. and Western companies,” Assistant Attorney General for National Security Lisa Monaco said in the press release.

Separately, German officials on Aug. 15 announced the arrest of four men who allegedly “helped in the delivery of special valves” in 2010 and 2011 for construction of a heavy-water reactor in Iran. Although the statement from the prosecutor did not mention a specific site, Iran is constructing a heavy-water reactor at Arak. Tehran says it hopes the reactor will begin operations in 2013. The United States is concerned that it could be used to produce weapons-grade plutonium.—KELSEY DAVENPORT

International Response

Russia and China, however, have publicly criticized the U.S. government’s unilateral expansion of sanctions, indicating that the unity of the six powers behind the sanctions effort may be fracturing.

On Aug. 13, the Russian Foreign Ministry issued a statement saying the sanctions imposed by Washington “under the veil of concern about [the] Iranian nuclear program” are unacceptable and that Russia would “reject the methods” applied by the United States. Such an approach “cripples the chance for a settlement” and “compromises the process of negotiations,” the ministry said.

China reacted to the administration’s decision to sanction the Bank of Kunlun, which is affiliated with the country’s largest gasoline producer, the China National Petroleum Corporation. The Chinese Foreign Ministry said Aug. 1 that the sanctions “seriously violated norms governing international relations” and requested that the United States “correct” its actions and revoke the restrictions imposed on the bank. The statement said that China’s cooperation with Iran in the energy sector has “nothing to do” with Iran’s nuclear activities and does not violate UN Security Council resolutions.

Israeli officials have criticized sanctions efforts over the past several weeks, but for a different reason. In remarks delivered Aug. 1, Prime Minister Benjamin Netanyahu said the restrictive measures are hurting Iran’s economy, but “neither sanctions nor diplomacy” are having “any impact on Iran’s nuclear weapons program.”

A panel of experts, however, came to a different conclusion, reporting to the UN Security Council in June that sanctions are slowing Iran’s uranium-enrichment and ballistic missile efforts. The panel was authorized in June 2010 under UN Security Council Resolution 1929 to assess the effect of UN sanctions on Iran’s nuclear program. The Security Council first imposed international sanctions on Iran in December 2006, after Tehran failed to comply with an earlier resolution calling on the country to suspend all activities related to uranium enrichment.

The panel of experts concluded that although Iran’s nuclear activities are continuing, sanctions are slowing the procurement of “critical items required for its prohibited nuclear program” and hampering Tehran’s ability to “expand some aspects of its fuel cycle activities.” According to the report, the panel observed that countries demonstrated a “marked increase in awareness” of the need to implement sanctions.

The future of senior-level negotiations between Iran and six world powers remains unclear after several rounds of lower-level discussions in July and August appear not to have made decisive progress toward an agreement that addresses international concerns about Iran’s nuclear program.

SE Asian Nuclear Protocol Falters

Kelsey Davenport

The parties to the treaty establishing a nuclear-weapon-free zone in Southeast Asia decided on July 8 to delay the signing of the treaty’s protocol by China, France, Russia, the United Kingdom and the United States because of reservations submitted by at least three of those countries, according to the Cambodian Foreign Ministry.

The five countries, which are recognized as nuclear-weapon states by the nuclear Nonproliferation Treaty, had been expected to sign the protocol to the Treaty of Bangkok on July 12 during a meeting of the Association of Southeast Asian Nations (ASEAN) in Phnom Penh. When ratified, the treaty’s protocol would prohibit the five states from using or threatening to use nuclear weapons against treaty parties and from transporting nuclear weapons through the zone.

The treaty, which was signed in 1995 and entered into force in 1997, bans the acquisition, possession, testing, transport, and stationing of nuclear weapons within the territories of the 10 parties—Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. Those countries also are the members of ASEAN.

After the July 8 meeting of the treaty’s commission, which oversees ratification of the treaty and compliance with its terms, Cambodian Secretary of State Kao Kim Hourn announced that it had decided to delay the protocol signing because it wanted more time to review the reservations that France, Russia, and the United Kingdom had submitted to Cambodia, the ASEAN chair, and had indicated they would attach to the protocol when they ratified it.

The three countries’ reservations, in slightly different ways, center on the treaty’s negative security assurances and the inclusion of the parties’ continental shelves and exclusive economic zones in its coverage. Other nuclear-weapon-free-zone treaties define the covered area more narrowly.

The United States reportedly did not submit a letter outlining its reservations, but voiced support for those outlined by the other three countries. China’s concerns were addressed in a memorandum of understanding negotiated between Beijing and the ASEAN states, according to the chairman’s statement from the April 3-4 ASEAN summit, although the statement did not indicate what issues were covered.

Negotiations to resolve the nuclear-weapon states’ concerns resumed in August 2011 after a decade-long impasse. At the conclusion of the April ASEAN summit, the chairman’s statement said the treaty parties “welcomed the conclusion of negotiations” with the nuclear-weapon states and that the signing of the protocol would take place in July.

Kao said he hoped the signing would occur during ASEAN’s November summit in Phnom Penh.

The parties to the treaty establishing a nuclear-weapon-free zone in Southeast Asia decided on July 8 to delay the signing of the treaty’s protocol by China, France, Russia, the United Kingdom and the United States because of reservations submitted by at least three of those countries, according to the Cambodian Foreign Ministry.

Militants Attack Pakistani Base

Kelsey Davenport

An Aug. 16 attack on a Pakistani military base by militants has raised concerns about the security of the country’s nuclear weapons, although Pakistani officials denied that nuclear weapons are stored at the base.

Located northwest of Islamabad in Kamra, the Minhas air base includes facilities for manufacturing various weapons systems, including the assembly plant for the Mirage and JF-17 fighter jets. According to U.S. experts, the Mirage may be nuclear capable, and nuclear weapons might be stored at the facility.

A spokesperson for Pakistan’s Foreign Ministry said Aug. 16 that the country’s “strategic assets are safe” and that “all measures” are in place to ensure the “safety and security of our nuclear assets.” U.S. Defense Department Spokesman George Little said during a press conference the same day that there was no indication that the attack had “endangered the Pakistani nuclear stockpile.”

The Pakistani Taliban claimed to have been behind the attack, which lasted approximately two hours and resulted in the deaths of nine militants and one base official. According to base officials, the aircraft storage hangars were the primary target of the attack, and one aircraft was damaged by the militants. This is the fourth attack on the Minhas base since 2007. During the prior three attempts, however, the militants did not enter the facility.

A former brigadier general in the Pakistani army told The Washington Post on Aug. 16 that nuclear weapons are not being kept in the “known places, such as the air or naval bases.” Known nuclear facilities, however, are located near the Minhas base, including a uranium-enrichment plant and plutonium-production reactors.

In an Aug. 16 press briefing, U.S. State Department spokeswoman Victoria Nuland said that, “at this moment,” the U.S. government does not have “any information” that would “contradict” Pakistan’s statement saying that there are no nuclear weapons or materials at the base and that there was no reason for concern over the security of the arsenal.

The attack came two days after Defense Secretary Leon Panetta warned that Pakistan’s nuclear weapons could “fall into the wrong hands” if “terrorism is not controlled.” He described this threat as the “great danger we’ve always feared.”

Over the past several years, the United States has provided Islamabad with assistance in securing its nuclear arsenal. In April 2009, as the Taliban expanded its presence in western regions of the country, Pakistani government officials shared information on their nuclear program with the United States and other Western countries to allay concerns about the security of the nuclear arsenal. Pakistan is believed to possess approximately 90 to 110 nuclear warheads, deliverable by missiles and nuclear-capable aircraft.

The Minhas base attack is the third on a major Pakistani military base in the past three years.

In May 2011, Taliban militants attacked Mehran naval base near Karachi and destroyed two U.S. surveillance aircraft. They remained inside the base for approximately 18 hours. In 2009 a Pakistani army facility was attacked and hostages were held in a compound at the facility’s headquarters for 22 hours before a military raid ended the crisis.

An Aug. 16 attack on a Pakistani military base by militants has raised concerns about the security of the country’s nuclear weapons, although Pakistani officials denied that nuclear weapons are stored at the base.

Nuclear-Weapon States Meet in Washington

Kelsey Davenport

Officials from the five original nuclear-weapon states reaffirmed their “shared goal of nuclear disarmament” in a joint statement issued at the end of a June 27-29 meeting in Washington designed in part to review the progress on commitments made at the 2010 Nuclear Nonproliferation Treaty (NPT) Review Conference.

Representatives of the five states—China, France, Russia, the United Kingdom, and the United States—also exchanged ideas related to “transparency, mutual confidence, and verification, and considered proposals for a standard reporting form” on progress in those areas. This was the third such meeting of the group, sometimes known as the P5 because the countries are the five permanent members of the UN Security Council. The countries met previously in 2009 in London and 2011 in Paris.

According to their joint statement, the five states “agreed on the work plan for a P5 working group led by China, assigned to develop a glossary of definitions for key nuclear terms that will increase P5 mutual understanding and facilitate further P5 discussions on nuclear matters.”

The United States briefed the other four countries on activities being undertaken at the Nevada National Security Site, the former U.S. nuclear testing site, “with a view to demonstrate ideas for additional approaches to transparency.” A tour of the U.S. Nuclear Risk Reduction Center also was offered, to allow officials to observe the communications center that enables the United States to “simultaneously implement notification regimes,” such as the New Strategic Arms Reduction Treaty, according to the joint statement. The United Kingdom highlighted advances made in disarmament verification from a project it undertook jointly with Norway.

The five states “reiterated their commitment to promote and ensure the swift entry into force of the Comprehensive Nuclear-Test-Ban Treaty (CTBT) and its universalization” and discussed ways to achieve a global fissile material cutoff treaty and support the planned 2012 conference on a Middle Eastern zone free of weapons of mass destruction.

The five countries agreed to hold a fourth conference in the “context of the next NPT Preparatory Committee,” which is scheduled for April 22-May 3, 2013, and to continue to meet at “all appropriate levels on nuclear issues.”

Officials from the five original nuclear-weapon states reaffirmed their “shared goal of nuclear disarmament” in a joint statement issued at the end of a June 27-29 meeting in Washington designed in part to review the progress on commitments made at the 2010 Nuclear Nonproliferation Treaty (NPT) Review Conference.

Sanctions Seen Slowing N. Korea Progress

Kelsey Davenport

Although North Korea continues “actively to defy” UN Security Council resolutions, international sanctions “appeared to have slowed” the country’s activities in areas such as development of its nuclear and ballistic missile programs, according to a report to the UN Security Council on the implementation of the sanctions imposed by the resolutions.

The report was authored by a panel of experts authorized under UN Security Council Resolution 1874 in 2009. The mandate for the panel includes assessing the effect of the sanctions on North Korea’s nuclear and missile programs and providing recommendations to better implement restrictive measures on Pyongyang from Resolution 1874 and its 2006 predecessor, Resolution 1718. The resolutions impose embargoes prohibiting arms sales and transfers of nuclear and ballistic missile technology, a ban on luxury items, and sanctions on designated persons and entities that violate embargo provisions, among other measures.

The panel reports annually to the Security Council. In 2011 its report was not made public. This year’s report was submitted to the Security Council on May 11 and publicly released June 29. The panel relies on reporting from UN member states, information in the public domain, and first-hand accounts and observations collected by panel members to make its assessments.

According to the panel, since May 2011, member states did not report any violations involving transfers relating to nuclear weapons, other unconventional weapons, or ballistic missiles. States did report violations in other areas, including “illicit sales of arms and related materials.” North Korea’s ability to evade sanctions and acquire these goods indicates “elaborate techniques to evade” restrictions, the report said. The panel concluded, however, that the sanctions imposed by the Security Council made “illicit transactions significantly more difficult and expensive.”

The panel also assessed progress made by North Korea on its nuclear and ballistic missile programs. It concluded that the rocket North Korea attempted to launch on April 13 was “extremely similar” to the one Pyongyang test-fired in 2009. (See ACT, May 2012.)

The panel expressed concern over the new eight-axle transporter erector launcher observed in the April 15 parade celebrating the birth of North Korean founder Kim Il Sung. The report concludes that such a road-mobile missile launcher requires “advanced features” and that North Korea had not previously “demonstrated its capacity to build such a vehicle.” The panel said it would continue to examine this issue.

In relation to the ballistic missiles observed in the parade, the report noted the KN-08 “new road mobile missile” and the assessment of some nongovernmental analysts that the missiles displayed in the parade were mock-ups, but the panel did not express a view on the missiles’ operational status.

Uranium Enrichment

The panel of experts reported that it is focusing on “tracking” Pyongyang’s past procurement activities and attempting to “identify choke point items” necessary to sustain North Korea’s uranium-enrichment program. The panel reported that a number of “uncertainties” surrounding the progress made by North Korea in uranium enrichment still exist, including those relating to the number and operational status of centrifuges and existence of a stockpile of highly enriched uranium (HEU). The panel said it was not able to determine if North Korea could domestically produce the specialty items required to expand its centrifuge program, has developed “undetected” networks for importing such items, or was using stockpiles of materials imported before the sanctions began.

The panel noted separate analyses saying that North Korea would likely be able to produce a warhead for a medium-range ballistic missile based on access to designs provided by the Abdul Qadeer Khan network in a “relatively short time after it produced sufficient HEU.”

The panel’s report included 12 recommendations to improve the implementation of the sanctions imposed by the Security Council resolutions. It called on the Security Council committee established by Resolution 1718 to “explore possible solutions” to technical challenges that prevent countries from properly conducting inspections on goods in transport. The panel called on the committee to provide “clear guidelines” for the disposal of seized items. Countries should report inspections and violations to the committee more promptly, preferably within three months, the report recommended.

Six-Party Talks

Meanwhile, South Korea’s lead nuclear negotiator said multilateral diplomatic negotiations with North Korea over the dismantlement of its nuclear program and the subsequent repeal of the international sanctions are unlikely in the foreseeable future.

Speaking at the East-West Center’s International Media Conference in Seoul on June 24, Lim Sung-nam said he would be “hesitant” to say that current prospects for resuming the talks “look bright.”

In addition to South Korea, the six-party talks include China, Japan, North Korea, Russia, and the United States. China has chaired the meetings since the talks began in 2003. The most recent meeting took place in December 2008 in Beijing. (See ACT, January/February 2009.) In April 2009, after the UN Security Council issued a statement calling North Korea’s test firing of a rocket on April 5 a violation of Security Council resolutions banning such tests, North Korea announced that it would not participate in the talks. (See ACT, May 2009.)

Despite the three-year lull in the talks, Cheng Jingye, the Chinese ambassador to the International Atomic Energy Agency (IAEA), said that experience showed that the six-party format was an “effective mechanism in achieving denuclearization.” In a June 5 statement to the IAEA Board of Governors, he called for the six parties to “revitalize” the Feb. 29 agreement between the United States and North Korea that broke down after Pyongyang went ahead with the April 13 test firing of a rocket.

The United States said the launch violated the terms of the agreement, under which North Korea agreed not to conduct any nuclear or long-range missile tests and to suspend uranium enrichment in return for food aid from the United States. Although the deal was a bilateral agreement between Washington and Pyongyang, Cheng characterized it as a “hard-won and positive outcome” from the “framework of the six-party talks.”

Cheng also called on “all parties” to avoid actions that “may escalate the tension in the region.” Government and nongovernmental experts believe that North Korea may conduct a nuclear test explosion. It has carried out nuclear tests twice, in 2006 and 2009.

In the United States, Deputy Assistant Secretary of State for Japan and Korean Affairs Jim Zumwalt said in June 6 testimony to the House Foreign Affairs Subcommittee on Asia and the Pacific that the U.S. government will “engage constructively” with North Korea if Pyongyang understands that there will be “no rewards for provocations.”

Although North Korea continues “actively to defy” UN Security Council resolutions, international sanctions “appeared to have slowed” the country’s activities in areas such as development of its nuclear and ballistic missile programs, according to a report to the UN Security Council on the implementation of the sanctions imposed by the resolutions.

Sanctions Tighten on Iran

Kelsey Davenport

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.

Sanctions Tighten on Iran

By Kelsey Davenport

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.

Iran, P5+1 Move to Technical Talks

Kelsey Davenport

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.

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.

North Korea Urged Not to Test

Kelsey Davenport

China, Japan, and South Korea agreed not to “accept further nuclear tests or provocations from North Korea,” according to a May 13 statement by South Korean President Lee Myung-bak. Lee issued the statement from Beijing at the end of a trilateral meeting in May, which included a discussion of Pyongyang’s nuclear program.

North Korea is believed to be preparing for a nuclear test at its Punggye-ri test site, following a failed attempt to launch a satellite into orbit with a Unha-3 rocket in April. (See ACT, May 2012.) It has conducted two previous nuclear tests, in 2006 and 2009.

Although Chinese Premier Wen Jiabao did not directly mention North Korea in his statement at the end of the meeting, he said that all parties in the region needed to “display goodwill” to “ease confrontation and return to the right track of dialogue and negotiations.”

Despite the ambiguity of Wen’s statement, China is reportedly working behind the scenes to urge North Korea not to detonate a nuclear device and is considering retaliatory steps if Pyongyang moves forward with the test, according to a May 16 Reuters report. The news service quoted several sources as saying that China was concerned that a third test would give the United States greater cause to increase its military presence in the region and would cause environmental damage along the Chinese-North Korean border. The sources also said that Beijing would consider sanctioning North Korea in response to a nuclear test.

According to Pyongyang’s official Korean Central News Agency, “a military measure such as a nuclear test” was not planned around the failed launch, but the country would “bolster” its nuclear deterrence for self-defense against “hostile policy.”

Some analysts predict that North Korea will use highly enriched uranium in the anticipated test to demonstrate progress in its uranium-enrichment capabilities. The earlier tests used plutonium.

 

China, Japan, and South Korea agreed not to “accept further nuclear tests or provocations from North Korea,” according to a May 13 statement by South Korean President Lee Myung-bak. Lee issued the statement from Beijing at the end of a trilateral meeting in May, which included a discussion of Pyongyang’s nuclear program.

IAEA, Iran Close to Deal, Amano Says

Kelsey Davenport

A deal allowing the International Atomic Energy Agency (IAEA) to pursue its investigation into the possible military dimensions of Iran’s nuclear program could be signed “quite soon,” IAEA Director-General Yukiya Amano said May 22.

Amano flew to Tehran on May 21 to continue negotiations with Iranian officials on a framework agreement for resolving the outstanding concerns raised by the agency in a November 2011 report to the IAEA Board of Governors. An annex to the report listed the agency’s suspicions over Iran’s suspected warhead development program. (See ACT, December 2011.) The board requested that the IAEA and Iran “intensify their dialogue” to clarify the “unresolved issues.”

During the visit, Amano met with several high-ranking officials, including Saeed Jalili, Iran’s top nuclear negotiator. Jalili characterized his meeting with Amano as “very good” and said that Iran and the IAEA would have “good cooperation in the future.”

Although Amano conceded that “some differences” remained, he said there was an “important development on the structured approach document” that the two parties had been negotiating. Neither Amano nor Jalili elaborated on the differences that remained to be negotiated or when the agreement was expected to be completed, but in a May 25 IAEA report on the status of Iran’s nuclear program, Amano invited Iran to “expedite final agreement on the structured approach.”

U.S. Department of State spokeswoman Victoria Nuland said on May 22 that the United States supports Amano’s efforts to resolve the IAEA’s areas of concern, but said Washington would be looking for “implementation” and for steps by Iran to “truly follow through and provide access” to agency inspectors.

Amano’s announcement that the IAEA and Iran were close to reaching an agreement came the day before Iran resumed talks on May 23 in Baghdad with the so-called P5+1, which includes the five permanent members of the UN Security Council and Germany.

The IAEA and Iran have met on three previous occasions this year to discuss an agreement to allow further agency investigations into the possible military dimensions of Iran’s nuclear program. The most recent meeting was held May 14-15 in Vienna between Iran’s envoy to the IAEA, Ali Asghar Soltanieh, and IAEA Deputy Director-General Herman Nackaerts. Progress at the Vienna meeting is believed to have spurred Amano’s short-notice visit to Tehran. Before leaving Vienna, he said it was the “right time to reach agreement.” This was Amano’s first visit to the country since assuming the IAEA’s top position in 2009.

One of the areas of disagreement prior to Amano’s visit to Tehran was the IAEA’s request to inspect a building at the Parchin military complex where the agency was concerned that high-explosives tests may have been conducted. The IAEA asked to inspect the facility during visits to Iran in January and February of this year, but Iranian officials denied the requests. Tehran stated that a framework agreement must be in place before the IAEA conducts any visits to the site.

In the annex to the November 2011 report, the IAEA revealed that it obtained information that Iran had built a “large explosives containment vessel, or chamber” and installed it at Parchin in 2000. Such a chamber could be used for testing the explosives necessary to detonate a nuclear device. In the original work plan that the IAEA submitted to Iran on Feb. 20, Parchin topped the list of concerns that Tehran needed to address.

In the May 25 report, the IAEA indicated that it had obtained additional information on Parchin that “further corroborates” the evidence on explosive testing presented in the 2011 annex.

Tehran allowed the IAEA to visit Parchin twice in 2005, but the agency did not inspect the building that houses the chamber in question. Amano said that the agency’s interest in visiting Parchin was discussed in Tehran and would be addressed in the agreement, but he provided no specifics.

Although an agreement may be near, agency officials have expressed concern over the past several months that Tehran may be attempting to clean up evidence that could indicate the existence of a nuclear weapons program. Iranian officials dismissed the initial allegations that any such efforts were underway. In its May report, the IAEA formally documented its position. The agency said that, using satellite imagery, it had observed “extensive activities” around the areas to which it had requested access. The IAEA had not observed any such activities, which could interfere with “effective verification,” for a “number of years,” the report said.

A deal allowing the International Atomic Energy Agency (IAEA) to pursue its investigation into the possible military dimensions of Iran’s nuclear program could be signed “quite soon,” IAEA Director-General Yukiya Amano said May 22.

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