Turtle Bay

Hidden Report Reveals How Iran Dodges Nuclear Watchdogs

Iran continues to evade U.N. sanctions on its nuclear program by changing its supply routes, erecting new front companies, and shopping the world for lower grade parts not explicitly prohibited by the U.N. Security Council, but still capable of contributing to the assembly of a nuclear power reactor. That’s according to a "confidential" unpublished report ...

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Iran continues to evade U.N. sanctions on its nuclear program by changing its supply routes, erecting new front companies, and shopping the world for lower grade parts not explicitly prohibited by the U.N. Security Council, but still capable of contributing to the assembly of a nuclear power reactor. That’s according to a "confidential" unpublished report by a U.N. Security Council panel monitoring sanctions on Iran, exclusively published by Turtle Bay.

The 45-page report – which summarizes the U.N. panel’s work over the past year – documents several cases in Europe and the Middle East where Iranian agents have sought to procure a host of industrial products — including valves, carbon fiber, and bellows — that can be used in a nuclear facility. The equipment, however, is not explicitly prohibited from being sold to Tehran, making it easier to get similar items through customs.

"The panel continues to be told by many states that Iran is seeking items that fall below established control thresholds but could be used for prohibited activities," the report states. "All of the nuclear related cases investigated by the panel during its current mandate involve items that are not to be found among the [control] lists" that states are banned from supplying Tehran.

Iran reacted sharply to the report,  telling Turtle Bay that the panel’s findings are flat wrong. "The reports by the Panel of Experts are erroneous and lack credible authenticated information," Alireza Miryousefi, the spokesman for the Iranian mission to the United Nations, said in an emailed statement. "From our standpoint we should not give any value to those reports."

The Iranian official reiterated Tehran’s long-standing claim that Iran has no intention of developing a nuclear weapon and that the U.N. Security Council has no right to bar the country from excercising its rights under the 1970 Nuclear Non Proliferation Treaty to develop a civilian nuclear program. "Iran’s activities are purely for peaceful purposes," he said. "Iran’s nuclear issue was unjustifiably put on the agenda of the Security Council." Iran, he added, does not recognize U.N. Security Council resolutions prohibiting its right to enrich uranium "as fair and legitimate."

Western diplomats dismissed Iran’s denials as untrue and said the panel’s report – portions of which were previously mentioned by Reuters — underscores the need to expand the range of items that Iran should be prohibited from purchasing. Under the terms of June 2010 U.N. resolution expanding sanctions on Iran, states are empowered to bar the export to Iran of any items that "could contribute to enrichment-related, reprocessing or heavy water-related activities or to the development of nuclear weapon delivery systems." But governments have enforced that provision with vastly varying degrees of vigilance.

In all, the report, which has been approved by the U.N. Security Council sanctions committee but has not been made public, details eleven cases of Iranian sanctions violations. That includes an effort by an Iranian entity — the Modern Industries Technique Company, which is responsible for the design and construction of the Arak light water nuclear research reactor — to acquire from Gernmany 1,767  valves, which can be used for a variety of functions in nuclear facilities, including, for instance, by channeling coolants into a reactor.

When German authorities began scrutinizing the deals, the company’s Iranian agent, Pentane Chemistry Industries, commissioned a firm in another country to supply the valves. The panel recommended that Pentane be added to a list of companies subject to U.N. sanctions.

"This procurement involved the use of front companies in other third countries and false end-user documentation," according to the report. "The Panel concluded that Iran’s procurement of these values is an activity prohibited" by UN Security Council resolutions.

But in a separate case, the U.N. could not establish that a naturalized Swedish citizen of Iranian origin who sought to acquire lower-grade valves that could be used in a nuclear program had violated U.N. sanctions. The individual founded a company called Petroinstrument HB to handle the exports. But the company’s activities were brought to the attention of Swedish authorities in 2010 and 2011 by two Swedish banks. "The panel noted that the attempted exports were accompanied by multiple techniques to evade effective export controls, including obscuring the end use or end user of the valves by means of false end user certificates, and attempting the acquisition of technology that falls below established control thresholds."

Olli Heinonin, the former deputy director general for safeguards at the International Atomic Energy Agency, said that nuclear proliferators, from Pakistan to Iran, have long sought to avoid international scrutiny by purchasing equipment that was not covered by control lists. The down side, he said, is that it may take longer to enrich uranium. And there is a greater risk that equipment will break down, or require more frequent maintenance. But a patient proliferator can ultimately succeed in acquiring nuclear fuel.

"At the end of the day it’s a trade off," he told Turtle Bay. "In Iran the performance of centrifuges are much lower than [the father of the Pakistani nuclear weapons program] A.Q. Khan’s.The reason is they use lower quality materials. They know they have certain limitations and adjust their operational procedures to account for that, but they can still enrich uranium. It will be more expensive and take more time but you will still get there."

The report document several other cases involving the seizure of dual use items, including "process control equipment" that was "reportedly for use in the Iranian nuclear program." The equipment, which was shipped by parcel to an individual Tehran by an unnamed company, was not included in international control lists regulating the international trade. The recipient, according to the report, was a senior official at the Iranian Simatec Development project, which has been linked by "several states" to the Kalaye Electric Company, an Iranian entity that conduced research for Iran’s nuclear program.

Among other key highlights of the U.N. panel report

*The report also describes a split among the U.N. experts over the role of Iran in an arms smuggling operation that was thwarted by Yemeni officials. In January, Yemeni Coast Guard and U.S. Navy vessels seized an Iranian vessel, the Jihan, en route to Yemen. (The vessel has also been inspected by authorities from a third unidentified country). "Five members of the panel found that all available information placed Iran at the center of the operation," the report noted. But three experts from China, Russia and Nigeria dissented, arguing that there was inadequate evidence to prove Iran’s complicity, according to a U.N. based diplomat briefed on the matter.

*The report also addresses ongoing speculation about Iranian nuclear cooperation with North Korea. The panel’s conclusion? It has no idea. "Assessments of Iran-DPRK cooperation are contradictory," the report states ."Some experts continue to believe that DPRK provides scientific and material support to Iran.  Others have concluded that cooperation between the two states is limited to expertise.  The Panel has sought information from States and the DPRK Panel regarding such cooperation.  Although there are reports of Iranian officials present at launches of DPRK missiles, the Panel has seen no evidence of specific technical cooperation."

* The panel found that Iran had made some progress in developing an
indigenous ballistic missile program, it still remains reliant on foreign suppliers. Iran continues to violate U.N. resolutions by launching its ballistic missiles but that "no significant, new missile capabilities were demonstrated by Iran during the mandate period."

"Since November 2011, there has been no additional information reported by the IAEA regarding Iran’s alleged activities on integrating a nuclear payload onto a ballistic missile," the report added. "Although Iran’s nuclear fuel cycle capabilities are well established in many areas, Iran’s reliance on procurement abroad continues to provide the international community with opportunities to limit Iran’s ability to maintain and expand certain activities."

Read the full U.N. report:

Follow me on Twitter @columlynch

Colum Lynch is a senior staff writer at Foreign Policy. Twitter: @columlynch

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