Excerpts on Iran from Department of State report

[ excerpted version compiled by the Nuclear Control Institute]

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Adherence to and Compliance With Arms Control, Nonproliferation, and Disarmament Agreements and Commitments

Bureau of Verification and Compliance
Washington, DC
August 30, 2005

II. SCOPE OF THE REPORT

This Report provides an assessment of U.S. adherence to obligations undertaken in arms control, nonproliferation, and disarmament agreements as well as an assessment of the adherence of other nations to obligations undertaken in arms control, nonproliferation, and disarmament agreements or commitments, including the Missile Technology Control Regime, to which the United States is a participating state.

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Nuclear Non-Proliferation Treaty (NPT)

. . . . The United States has warned publicly for more than ten years that Iran was engaged in a covert effort to develop nuclear weapons, but it was only in 2002 that much information began to appear in public about the Iranian nuclear program. Since that time, the International Atomic Energy Agency (IAEA) has extensively documented much of the Iranian program, making detailed information available about Irans long history of undeclared activity and lies to the IAEA and the rest of the international community.

This Report marks the first time that U.S. noncompliance findings have specified violations of the NPT on an article-by-article basis. Such distinctions are particularly important in cases such as Irans, because of the potentially quite different implications of Article II and Article III noncompliance. A violation of Article III e.g., a countrys noncompliance with its IAEA Safeguards Agreement might occur for a variety of reasons, not all of which are sinister (e.g., simple error). An Article II violation, however that is, an effort to manufacture or otherwise acquire a nuclear weapon or other nuclear explosive device, or seeking or receiving any assistance in such manufacture necessarily represents a willful subversion of the NPTs core nonproliferation principles. For this reason, and in keeping with the United States emphatic commitment to rigor and clarity in all compliance assessments, this Report sets forth NPT noncompliance findings with greater specificity than in previous reports.

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Chemical Weapons Convention (CWC)

. . . . The CWC section of this Report addresses our concerns with China, Iran, Russia and Sudan, as well as the results of our interactions with Libya to assist it with declaring and eliminating its chemical weapons (CW) program.

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1. NONCOMPLIANCE CHALLENGES AND REQUIRED RESPONSES

. . . . There has been a serious failure by two NPT Parties to comply with the core nonproliferation undertakings of Articles II and III of the Treaty. The United States and other like-minded states have been struggling with one such case for more than a decade. North Korea has violated these Articles by its continued development of plutonium weapons and pursuit of uranium ones, and it has refused thus far to make the strategic decision to accept the complete, verifiable, and irreversible dismantlement of its nuclear program. Another case of Article II and III violations has thrust itself upon the attention of the international community as more and more of Irans secret nuclear weapons programs have been exposed to public view. Such cases illustrate the challenge of persuading committed violators to reverse their violations and enforcing full adherence to and compliance with the NPTs core nonproliferation obligations. Other international arms control and nonproliferation regimes or commitments face their own sets of compliance challenges.

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2. ENFORCING COMPLIANCE

Even if violations are detected early and are quickly understood as such, an arms control, nonproliferation or disarmament regime can still be in peril if its members are unable or unwilling to address them as compliance challenges. Detection is only part of what is needed: violations must have consequences. National governments play a critical role both in deterring and detecting violations, and in taking resolute action individually and collectively to enforce compliance and hold violators accountable for their actions. Verification only works when these elements act together to deter, detect, and remedy noncompliance

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VI. COMPLIANCE OF OTHER NATIONS (INCLUDING SUCCESSORS TO THE SOVIET UNION) WITH MULTILATERAL AGREEMENTS

A. THE 1972 BIOLOGICAL AND TOXIN WEAPONS CONVENTION (BWC)

. . . . IRAN

ISSUE. Despite being a long-standing State Party to the Biological Weapons Convention and submitting confidence-building measures under the provisions of the BWC, Irans capabilities and activities continue to raise concerns about the nature of its BW-related activities.

HISTORY OF COMPLIANCE EVALUATION. In the unclassified version of the June 2003 Report, the United States concluded that:

The United States judges, based on available evidence, that Iran has an offensive biological weapons program in violation of the BWC. Iran is technically capable of producing at least rudimentary biological warheads for a variety of delivery systems, including missiles.

DISCUSSION OF OBLIGATIONS. Iran is an original state party to the BWC; it ratified the treaty in 1973. Iran submitted CBM data in 1998, 1999, and 2002.

ACTIONS. Iran began its offensive BW program in the early 1980s during the Iran-Iraq war. Hashemi-Rafsanjani then Acting Commander in Chief of the Armed Forces, as well as Speaker of the Majlis was reported to have announced during an October 1988 speech: "We should fully equip ourselves both in the offensive and defensive use of chemical, bacteriological, and radiological weapons. From now on, you should make use of the opportunity and perform this task." The United States believes Iran has endeavored to follow through on Rafsanjanis direction in this regard.

Irans technical base in biotechnology has advanced since the mid-1980s, providing further expertise that could be and may well be employed in support of a BW program. Over the past decade, Iran has also improved its bioproduction capabilities across the board.

In spite of its growing indigenous manufacturing capability, Iran continues to aggressively seek foreign technology, training, and expertise to advance its biotechnology industry. Although these relationships are ostensibly for legitimate reasons, Iran could use them to support its BW program.

According to open press reporting, Iran is expanding its biotechnology and biomedical industries by building large, state-of-the-art research and pharmaceutical production facilities. These industries could easily hide pilot to industrial-scale production capabilities for a potential BW program, and could mask procurement of BW-related process equipment.

Iran is technically capable of producing at least rudimentary, bulk-fill biological warheads for a variety of delivery systems, including missiles.

COMPLIANCE-RELATED DIALOGUE AND ANALYSIS. The scope and nature of Iranian activities demonstrate an expanding legitimate biotechnology industry, which could house an offensive biological weapons program. Particularly in light of Irans approach towards compliance with its nuclear and chemical weapons-related nonproliferation obligations (see below), available information about Iranian activities indicates a maturing offensive program with a rapidly evolving capability that may soon include the ability to deliver these weapons by a variety of means.

The Iranian BW program has been embedded within Irans extensive biotechnology and pharmaceutical industries so as to obscure its activities. The Iranian military has used medical, education, and scientific research organizations for many aspects of BW-related agent procurement, research, and development. Iran has also failed to submit the data declarations called for in the BWC CBMs.

FINDING. The United States judges that, based on all available information, Iran has an offensive biological weapons program in violation of the BWC.

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D. THE CHEMICAL WEAPONS CONVENTION (CWC)

. . . . IRAN

ISSUE. The United States is concerned that Iran is retaining and modernizing key elements of its CW infrastructure, to include: offensive research and development; a possible undeclared stockpile; and an offensive production capability.

HISTORY OF COMPLIANCE EVALUATION. The United States assessed Iranian compliance as early as the CY1998 NCR. At that time, the United States was unable to certify Iran to be in compliance with the CWC because of concerns about its initial declaration and the need to assess Irans supplemental declaration. Because of continued U.S. concerns about Irans declaration, the October 2, 2000 Report made the same compliance judgment. The finding in the unclassified version of the June 2003 Report stated that:

The United States assesses that Iran has not submitted a complete and accurate declaration, and in fact is acting to retain and modernize key elements of its CW program. Some of these elements include an offensive R&D CW program, an undeclared stockpile and an offensive production capability. Such activities are inconsistent with the CWC.

DISCUSSION OF OBLIGATIONS. Iran became a State Party to the CWC on December 3, 1997. The United States received the first part of Irans initial declaration from the OPCW in December 1998. Irans declaration arrivedpiecemeal with another submission received by the United States in July 1999.

ACTIONS. In May 1998, during the Conference of the States Parties, Tehran, for the first time, acknowledged the existence of a past chemical weapons program. Iran admitted developing a chemical warfare program during the latter stages of the Iran-Iraq war, as a deterrent against Iraqs use of chemical agents. Moreover, Tehran claimed that after the 1988 cease-fire, it "terminated" its CW program. Despite this revelation, Iran has not acknowledged actually possessing chemical weapons. The United States believes Iran has manufactured and stockpiled blister, blood, and choking chemical agents, and weaponized some of these agents into artillery shells, mortars, rockets, and aerial bombs. We continue to believe that Iran has not acknowledged the full extent of its chemical weapons program, that it has indigenously produced several first-generation CW agents (blood, blister, and choking agents), and that it has the capability to produce traditional nerve agents. However, the size and composition of any Iranian stockpile is not known.

COMPLIANCE-RELATED DIALOGUE AND ANALYSIS. The United States, on the margins of the OPCW Executive Council meeting on June 27-28, 2001, delivered written questions to the Iranian delegation seeking to clarify gaps and inconsistencies in Irans CWC declaration. The Iranians accepted the U.S. questions with the understanding that they were asked in accordance with Article IX of the CWC.

In February 2002, Iran responded to U.S. questions. Iran also provided its A-2 form to the OPCW Technical Secretariat. This form, however, still did not declare the possession of chemical weapons.

FINDING. The United States judges that Iran is in violation of its CWC obligations because Iran is acting to retain and modernize key elements of its CW infrastructure to include an offensive CW R&D capability and dispersed mobilization facilities.

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E. THE NUCLEAR NON-PROLIFERATION TREATY (NPT)

This section of the Report updates developments relevant to other nations compliance with the 1968 Nuclear Non-Proliferation Treaty (NPT) and addresses, in particular, developments in China, Iran, Iraq, Libya, and North Korea (DPRK).

. . . . During the reporting period, four countries Iran, North Korea, Libya, and the former regime in Iraq did not comply with their obligations under Article II of the NPT not to "manufacture or otherwise acquire" nuclear weapons or "seek or receive any assistance" to this end. Of these four, only Libya voluntarily chose to renounce the pursuit of WMD, and is cooperating with the United States, the United Kingdom, and the international community to come into full NPT compliance. The illicit pursuit of nuclear weapons by Iran and the DPRK, however, remain fundamental challenges to the NPT regime, which have yet to be resolved.

. . . . [R]ecent U. S. public statements have stressed the importance of Article III safeguards compliance, noting the potential connection between Article III violations and Article II noncompliance. These statements have further indicated that nuclear cooperation, as called for in Article IV, may be jeopardized when a Partys Article III problems create concerns that such problems are indicators of a clandestine nuclear weapons program.

. . . . It may be . . . that . . . significant issues arise. For instance, information that calls into question the IAEAs ability to verify that nuclear material required to be safeguarded (including material that should have been declared but may not have been) has not been diverted can be information of great significance to the IAEA, to national governments, and to the broader international community. It is the technical objective of the safeguards system to ensure the timely detection of the diversion of significant quantities of material to nuclear weapons or other nuclear explosive devices or to purposes unknown. If the Board of Governors finds that the IAEA is unable to verify such non-diversion, this may be reported to the United Nations pursuant to Paragraph 19 of the IAEAs model for the structure for NPT safeguards agreements (INFCIRC/153). Indeed, the United States believes that such instances should be so reported if, for instance, the Agencys inability to verify non-diversion continues for any significant length of time, especially in circumstances that suggest any reason to be concerned about the possibility of access to fissile materials by criminals, terrorists, or others who might have an interest in the acquisition of nuclear materials for non-peaceful or unlawful purposes. (Even if the inability to verify occurred in the past and all materials have subsequently been accounted for, it may be appropriate to communicate with the UN to the extent that the episode reveals flaws in the safeguards system in that country or more generally flaws in the international safeguards system of which the UN should be aware.) If the IAEA determines that it is unable to verify a State Partys compliance with its Safeguards Agreement because that state refuses to allow timely access to a facility, then the IAEA should conclude that the states denial of access constitutes noncompliance. In other words, in certain circumstances, a states decision not to let the IAEA carry out its safeguards mission should be considered noncompliance.

. . . . It should also be noted that a state party that withdraws from the NPT after violating the Treatys provisions should not escape responsibility for those violations.

COUNTRY ASSESSMENTS

. . . . IRAN

ISSUE. The issue is whether Iran is in violation of its obligations as a non-nuclear weapon State Party to the NPT.

HISTORY OF COMPLIANCE EVALUATION. The United States assessed Irans compliance with the NPT as early as the January 14, 1993 Report. At that time, the United States concluded that Iran had demonstrated a continuing interest in nuclear weapons and related technology that caused the United States to assess that Iran was in the early stages of developing a nuclear weapons program, with an emphasis on developing centrifuge technology. The Report in 1993 stated that Irans "nuclear intentions are suspect despite its NPT adherence." The Noncompliance Reports from 1994 through 1998 said similarly that Irans "NPT nonproliferation credentials" were "highly questionable" or "questionable." In 1997, 1998, and 1999, the Unites States declared that Irans nuclear intentions were "suspect despite its status as an NPT State Party." In the June 2003 Noncompliance Report, the United States concluded that:

Based on the totality of the available information, the United States assesses that Iran is pursuing a program to develop nuclear weapons. Aspects of this activity are in violation of Irans NPT commitments.

DISCUSSION OF OBLIGATIONS. Iran signed the NPT in July 1968, and deposited its instrument of ratification in February 1970. Irans full-scope Safeguards Agreement with the IAEA entered into force in May 1974. The 1992 IAEA Board of Governors called upon all states with NPT type safeguards agreements to revise the timing for advance notification of planned nuclear facilities to provide for earlier notice to the IAEA. (Iran did not agree to this until February 2003 and was the last to do so.) In late 1995, Iran accepted part one of the IAEA Strengthened Safeguards System (developed under Program 93+2) which, among other things, allows the IAEA to conduct environmental sampling at declared facilities, other declared locations, and locations of special inspections. In the 2001 IAEAs Safeguards Implementation Report (SIR), Iran was singled out as the last State that refused to accept the key safeguards-strengthening measure to revise the timing for advance notification of planned nuclear facilities. During the February 21-22, 2003 visit of the IAEA Director General (DG) to Iran, Iran reportedly agreed to adhere to a subsidiary arrangement obligating it to provide the IAEA with design information in advance of construction of nuclear-related facilities. As part of a political agreement in the autumn of 2003, Iran agreed to permit IAEA access as if the AP were in force. In December 2003, Iran signed the Additional Protocol, but has not yet ratified it.

ACTIONS. Iran has continued the indigenous construction of nuclear-related facilities, such as Arak and Nantaz, and attempts to acquire equipment for such facilities from abroad. Iran has obtained considerable quantities of nuclear equipment including both P-1 designs, components and centrifuges, and more advanced P-2 centrifuge design drawings from foreign companies, including those associated with the AQ Khan illicit procurement network. As confirmed by the IAEA in 2003, Iran engaged in a secret effort for nearly two decades to acquire uranium enrichment and plutonium production and reprocessing technology.

Iran sought assistance during the reporting period of this Report in mining and ore concentration, as well as uranium recovery process technology from numerous states in central Asia and Europe. These activities reconfirmed that Iran is developing domestic sources of uranium, which could eventually be used in its nuclear weapon development program. Additionally, Iran renewed its efforts to acquire significant quantities of natural uranium from foreign sources. Although Iran claims an economic rationale for its nuclear programs Iranian use of nuclear power will free up oil for exports its pursuit of expensive uranium and recovery technology, given the insufficient size of Irans domestic uranium reserves, does not make economic sense, suggesting an ulterior motive for such expensive activities. Moreover, these activities are particularly suspicious in view of the contract Iran is negotiating with Russia to supply fuel for the Bushehr reactor for the lifetime of operation.

In 2000, Iran declared the existence of its uranium conversion facility (UCF) to IAEA officials and, in 2001, submitted to the IAEA a design information questionnaire for the UCF. The IAEA, in consultation with experts from the United States and other countries, began in 2002 to develop a robust safeguards approach for the UCF. As part of this effort, IAEA safeguards experts visited the UCF.

Iran has conducted research, in some cases extensively, in several enrichment technologies, including gas centrifuge, and laser isotope separation. In August 2002, an Iranian opposition group revealed the existence of two covert nuclear facilities under construction in Iran a heavy water production plant at Arak and a "fuel production" plant at Natanz.

As subsequently detailed by the IAEA acting on the basis of the August 2002 revelations, Iran had embarked years before upon a hugely ambitious production-scale centrifuge program. Iran confirmed to the IAEA DG in February 2003 that the Natanz site is intended to be an industrial-scale centrifuge enrichment facility, ostensibly to supply nuclear fuel for three 1,000-MWe nuclear power plants. The DG in February 2003 visited the plant and viewed a pilot-scale centrifuge plant under construction with a number of centrifuges spinning under vacuum and many more in various states of assembly. The IAEA was unable at that time to take samples that would provide specific evidence of the materials that had been introduced into the facility. Prior to the public revelations, Iran had failed to declare this and the Arak facilities to the IAEA, despite public statements by Iranian officials that all their nuclear activities were being undertaken with the supervision of the IAEA. Under Irans subsidiary arrangements then in effect with respect to its safeguards agreement, Iran was not required to declare nuclear facilities until six months before nuclear material was introduced. Under the revised subsidiary arrangements adopted in February 2003, Iran is required to provide design information on such facilities at a much earlier stage, during planning, construction and testing.

As outlined in IAEA reports, Iran also engaged in a systematic practice of denial and deception, not only concealing its enrichment work from the Agency for many years, but also responding to IAEA inquiries with a shifting pattern of false or misleading statements as details gradually emerged. Iran, for instance, had declared no uranium centrifuge program to the IAEA at all, but after the Natanz facility was publicly revealed, Iran admitted that it had indeed been developing such a program since 1997. After the IAEA began probing further into the development of this program, Iran changed its story again admitting that the program had in fact been underway since 1985. Iran first claimed that its centrifuge program had been designed only on the basis of simulations, but after IAEA experts questioned this closely and argued that Iran must have tested with UF6, Iran admitted that it had actually used foreign design information. This contradicted Irans previous claims that it had developed centrifuges entirely indigenously.

When confronted with the IAEAs discovery of highly-enriched uranium (HEU) particles in environmental samples taken at the Natanz facility and two other locations, Iran declared that it had used not only foreign design information, but also foreign centrifuge components, which it claimed were the source of the HEU. Iran for some time refused to provide the IAEA with any information about the source of either the foreign design information or the components. When the IAEA asked to see the original foreign designs, Iran also refused providing only "redrawn" versions for inspection by IAEA experts. It has subsequently become clear that the Iranian design information (as well as a quantity of centrifuge components) in fact came from the A.Q. Khan nuclear supply network the same network that provided such technology, as well as actual nuclear weapons designs, to Libya.

When suspicions were raised about possible enrichment activity at the Kalaye Electric Company facility in Tehran, Iran first denied it, claiming that the facility was a warehouse or watch factory. Iran subsequently admitted that it was a nuclear-related location, but identified Kalaye as merely a centrifuge component facility. Iran then changed its story again, as the IAEA probed more closely, conceding that it had tested centrifuges there for at least five years. Iran refused IAEA requests to conduct environmental sampling at Kalaye for many months, however, during which time it reportedly cleaned and refurbished the interior of the buildings at the facility activities clearly intended to thwart the IAEAs ability to obtain useful samples. At another facility suspected of conducting laser enrichment activities, Iran similarly denied permission for IAEA sampling and moved equipment out of the building. More recently, Iran has completely razed a building at Lavisan that had been publicly identified by an opposition group as being associated with WMD-related activity. The IAEAs success in obtaining information from environmental sampling appears to have led Tehran to assume that the only safe way to "sanitize" an illicit facility is to demolish it completely.

After years of concealing it from the IAEA, Iran has also admitted that it conducted laboratory-scale uranium conversion work and small-scale laser isotope separation during the 1990s, using uranium compounds not declared by Iran to the IAEA. The failure to report this material was a violation of Irans safeguards agreement. Iran also conducted undeclared plutonium separation experiments using uranium metal "targets" secretly irradiated in its research reactor, as well as the production of polonium-210 (Po-210), an isotope that is used in many nuclear weapons triggers.

Irans pursuit of the foregoing capabilities is suspicious for a number of reasons. These capabilities are well suited to the development of a nuclear weapons capability, but they are unnecessary and uneconomic for a civil nuclear program at Irans level of development. Iran failed to declare these activities and engaged in systematic deception in order to conceal them from the IAEA, and to that end delayed acceptance of strengthened measures including the Additional Protocol. It is suspicious, as well, because this nuclear program makes little sense in the context of Russias stated commitment to supply fuel for the lifetime of the Russian-supplied Bushehr reactor and Irans lack of any serious economic or energy policy justification for such an extensive nuclear fuel-cycle effort. Iran, for instance, wastes more energy in flaring off natural gas in its extensive refinery operations than it would be able to produce even were it able to complete its ambitious nuclear construction program. As noted, according to the Organization for Economic Cooperation and Developments statistics, Iran does not possess sufficient "known reserves" of uranium to supply a civil power program of the size it claims to be pursuing. During the reporting period, Iran continued efforts to develop all aspects of the nuclear fuel cycle and sought foreign assistance, to include training for its nuclear personnel. We believe this effort combines elements of not only the activities declared to the IAEA and ostensibly run by the civilian AEOI, but also undeclared fuel cycle activities that may be run solely by the military. The United States continues to work at all levels to prevent such transfers from occurring.

IAEA inspections throughout 2003 uncovered Irans covert construction of a large nuclear fuel cycle program and numerous "breaches" of, and "failures" to comply with, Irans safeguards agreement. The IAEA uncovered, or Iran was forced to admit, design work on a large heavy water research reactor, a uranium enrichment AVLIS facility, reprocessing experimentation, past polonium production, and research and development of a more advanced P-2 centrifuge design (in addition to the P-1 program discovered at Natanz). Moreover, IAEA investigations have uncovered previously undeclared enrichment experiments, plutonium production experiments, and numerous uranium conversion experiments.

At the November 2003 IAEA Board of Governors meeting, and in the wake of a French, British, and German diplomatic mission to Iran, the Board adopted a resolution strongly deploring Irans past failures and breaches of its obligation to comply with its Safeguards Agreement. While the Board did not report Irans noncompliance to the Security Council at that point as required by the IAEA Statute, it did formally resolve that "should any further serious Iranian failures come to light, the Board of Governors would meet immediately to consider, in the light of the circumstances and of advice from the Director General, all options at its disposal, in accordance with the IAEA Statute and Irans Safeguards Agreement." In connection with the diplomatic effort of the so-called EU-3, Iran made a detailed declaration to the IAEA and decided voluntarily to suspend all "uranium enrichment and reprocessing activities as defined by the IAEA." On October 29, the IAEA specified that the enrichment-related activities to be suspended should include assembly of centrifuges and manufacture or import of enrichment equipment, and that Iran should "consider suspending" production or import of feed material. Iran never fully ceased the production of centrifuge components and was discovered to having omitted the more advanced P-2 centrifuge information from its October 2003 declaration. In the summer of 2004, Iran repudiated its February 2004 addendum and its October 2003 suspension pledge and announced that it was resuming full-scale centrifuge production and uranium conversion. Iran re-committed itself to the EU-3 in the November 2004 Paris Agreement to voluntarily and temporarily suspend specified enrichment-related activities, including "all testing or production at any uranium-conversion installation," during the period of negotiations on a longer term arrangement. These developments will be detailed in the next NCR.

Iran also continued to pursue uranium mining and ore concentration activities throughout the period of this Report.

Additionally, Iran attempted to obtain laser and other dual-use equipment from Russia that can have applications in atomic vapor laser isotope separation (AVLIS), as an alternative means of uranium enrichment. In the fall of 2000, Russian President Putin indicated that Russia would suspend any AVLIS-related transactions with Iran, at least for the immediate future. MINATOM Minister Aleksandr Rumyantsev reaffirmed this to Under Secretary of State John Bolton in November 2002. Russian export authorities withheld authorization to export two critical AVLIS-related items to Iran, and by 2003 Russia appeared to have withdrawn from the AVLIS cooperation. It is now publicly known that Iran conducted AVLIS enrichment work in violation of its safeguards agreement. Iran declared its AVLIS program to the IAEA only in October 2003, and in May 2004 admitted, contrary to previous claims, that it had achieved enrichment levels in very small quantities as high as 15 percent.

In January 1995, Iran signed a contract to purchase from Russia a light water nuclear power reactor (model VVER-1000) to be constructed at Bushehr. In addition to Russias continuing construction activities at the site of the first reactor of the Bushehr complex, Russia and Iran have discussed provision of up to five additional reactors. Russian officials have noted publicly that construction of those reactors will not begin until the first unit is complete.

Although the Bushehr project is not a compliance issue, in and of itself, the secondary proliferation potential for Iran to exploit this facility and use it as a cover for weapons-related training and technology acquisition is an enduring NPT concern. Specifically, the United States is concerned that the Bushehr project can be a cover to acquire more sensitive nuclear technologies and provides an ostensibly legitimate reason for Iran to acquire and maintain skills and nuclear expertise applicable to weapons work. In previous years, several countries agreed to pull back from lucrative contracts relating to Bushehr. Even in the face of ongoing revelations of undeclared Iranian activities and deceptions upon the IAEA, however, Russia remains committed to the Bushehr project.

Iran has made persistent efforts to construct a large, heavy water moderated nuclear research reactor, which would be well suited for the production of weapons-grade plutonium. Irans ability to produce heavy water and nuclear-grade graphite would materially support its efforts to design and indigenously construct a reactor intended for producing weapons-grade plutonium. This activity is also entirely consistent with Irans past undeclared experiments with target irradiation and plutonium separation.

COMPLIANCE-RELATED DIALOGUE AND ANALYSIS. Iran is aware that many states view its nuclear intentions with suspicion despite its status as an NPT State Party, and that these suspicions have limited its ability to obtain foreign technology, equipment, and facilities. The Iranian announcements and admissions of the development of an indigenous nuclear fuel cycle, in late 2002 and early 2003, have occurred immediately after suspicious activity was revealed and were not undertaken in the spirit of providing the IAEA with the required safeguards information. As detailed above, Irans long series of progressive admissions to the IAEA followed this same pattern: previously secret activities have usually been admitted only after Iran has been presented with evidence thereof, or been confronted with internal contradictions in the accounts it has given. Admissions have been grudging and piecemeal, and cooperation with the IAEA has been reluctant and accompanied by protests, accusations, and threats. As the United States put it at the November 2003 IAEA Board of Governors meeting, the IAEAs own investigations have "confirmed Iran systematically and deliberately deceived the IAEA and the international community about these issues for year after year after year." The United States believes that the IAEA Director Generals reports make it "unequivocally clear that Iran chose as a matter of government policy sustained for well over a decade to violate its safeguards obligations in full knowledge that its actions and omissions were violations." Iran concealed its secret nuclear program, the United States has said, "behind a cloud of lies." Even the IAEA Director General has declared that Iran engaged in a longstanding "policy of concealment."

Irans safeguards agreement is based on the standard NPT safeguards model agreement found in IAEA Information Circular (INFCIRC) 153. Under this agreement, Iran is obligated to provide the IAEA with information about the nuclear compounds it imported so that safeguards could be applied. Irans safeguards agreement with the IAEA also allows that "nuclear material that would otherwise be subject to safeguards shall be exempted from safeguards at the request of the State" provided that nuclear material does not exceed a certain quantity. Iran should have reported the nuclear material it received in 1991 from a different country when it received that material. (Two of the compounds in question uranium hexafluoride (UF6) and uranium oxide (U02) meet the threshold for application of safeguards.) If Iran had done so, it could have sought to obtain an exemption from the application of these safeguards for any quantities that were below the threshold level. Iran, however, did neither; therefore, Irans actions with regard to the materials received in February 1991 violate Irans obligations under Article III, paragraph 1 of the NPT. So also do Irans undeclared experiments with uranium conversion, plutonium separation, and laser isotope separation.

In November 1996, Iranian authorities permitted the IAEA to conduct environmental sampling as provided for under part one of the IAEA Strengthened Safeguards System (SSS). In 2003, the IAEA extensively sampled newly disclosed Iranian facilities as part of its ongoing investigation into Irans nuclear program. Samples taken by the IAEA at Natanz after the public revelation of that facility in 2002, however along with samples taken at the Kalaye Electric compound and the Faryand Technique centrifuge workshop indicated the presence of enriched uranium (and in one instance, very highly enriched uranium). Iran has claimed that these samples resulted only from foreign contamination on centrifuge components acquired abroad. Through the end of the period of this Report, the IAEA continued to investigate the HEU particles found at Iranian centrifuge facilities.

Irans failure to ratify and fully abide by the IAEA Additional Protocol and its continuing efforts to stymie international inspectors through such means as remodeling the interior of the Kalaye Electric facility or razing the building at Lavisan before they could be inspected by the IAEA underline Irans lack of good faith in complying with its safeguards agreement and its NPT obligations.

In June 2001, Iranian President Mohammed Khatami was reelected in a landslide election victory. Despite short-lived signs of possible moderation within the Iranian regime, there is no evidence that Irans nuclear ambitions have changed. More recently, victories by clerically-supported conservatives in the Iranian national legislature not to mention explicit declarations by some legislators that they will not ratify the Additional Protocol casts further doubt upon the prospect of Iranian compliance and on Irans continued commitment to its IAEA and NPT obligations. The United States assesses that Iran has an ongoing program aimed at developing nuclear weapons, and it continues its efforts to expand its nuclear infrastructure to support nuclear weapons development and manufacture.

Because of the U.S. assessment that Iran is intent on developing a nuclear weapons capability, the United States has long had a policy of not engaging in any nuclear cooperation with Iran. We continue to urge other countries to forego any nuclear cooperation with Iran. Moreover, until early in 2000, when trade sanctions were lifted on Iranian pistachio nuts and carpets, the United States had maintained a virtually complete trade and investment embargo against Iran since 1995. In 1996, the Iran and Libya Sanctions Act (ILSA), which provides for the imposition of sanctions against persons making certain investments in the petroleum sectors of Iran and Libya, became law. It provides for sanctions designed in part to deny Iran the ability to fund the acquisition of weapons of mass destruction and missile delivery systems. The United States urges other governments to act rapidly and effectively to apply such pressures on Iran in order to emphasize to its leaders that continued pursuit of nuclear weapons is in the interest neither of the Iranian people nor of Iranian national security.

Irans nuclear procurement activities and public revelations, including the evidence reported by IAEA DG ElBaradei in his multiple reports to the IAEA Board of Governors, confirm our assessment that Iran has been vigorously pursuing a nuclear weapons capability. This conclusion is based on Irans documented 18-year record of secret nuclear procurement and development, its systematic deceptions of the IAEA, and the economic implausibility of its expensive and technically over ambitious nuclear fuel cycle program. Iran is attempting to obtain a broad range of foreign nuclear and nuclear-related technology and equipment, most elements of which appear more suited for a weapons program than to meeting Irans legitimate energy needs. For example, Iran continues to build a heavy water production plant and to pursue heavy water reactor design, intending to build and operate a heavy water reactor, which is ideally suited for producing weapons-usable plutonium. Iran claims its uranium mining activities are to fuel power reactors, but Iran does not have enough domestic uranium deposits to fuel even one reactor for its lifetime, although those deposits are sufficient for a nuclear weapons program. Iran has acknowledged undertaking experiments involving uranium metal, which has uses in its AVLIS program and is a necessary component to nuclear weapons design. Iran has also acknowledged pursuing uranium enrichment via centrifuges and its AVLIS program. Iran has admitted to conducting undeclared plutonium separation experiments, giving Iran important knowledge in support of weapons intentions. Although Iran pledged in October 2003 to provide full cooperation and transparency to the IAEA, we do not believe Iran has made a strategic decision to abandon its longstanding nuclear weapons ambitions and has not admitted the full scope of its nuclear activity to international authorities.

FINDING. Article II prohibits NNWS from seeking or receiving assistance in the manufacture of nuclear weapons. It also prohibits NNWS from the receipt, manufacture or other acquisition of such weapons. The United States has previously found that Iran is pursuing a nuclear weapons capability. The breadth of Irans nuclear development efforts, the secrecy and deceptions with which they have been conducted for nearly 20 years, its redundant and surreptitious procurement channels, Irans persistent failure to comply with its obligations to report to the IAEA and to apply safeguards to such activities, and the lack of a reasonable economic justification for this program leads us to conclude that Iran is pursuing an effort to manufacture nuclear weapons, and has sought and received assistance in this effort in violation of Article II of the NPT. This weapons program combines elements of not only the activities declared to the IAEA and ostensibly run by the civilian Atomic Energy Organization of Iran (AEOI), but also any still undeclared fuel cycle and other activities that may exist, including those that may be run solely be the military.

In addition, Irans past failure to declare the import of UF₆, failure to provide design information to the IAEA on the existing centrifuge facility prior to the introduction of nuclear material, and its conduct of undeclared laser isotope separation, uranium conversion experiments, and plutonium separation work further reinforce this assessment and also make clear that Iran has violated Article III of the NPT and its IAEA safeguards agreement.

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VII. COMPLIANCE OF OTHER NATIONS (INCLUDING SUCCESSORS TO THE SOVIET UNION) WITH THEIR INTERNATIONAL COMMITMENTS

A. MISSILE NONPROLIFERATION COMMITMENTS

. . . . Some nations that are significant proliferators of ballistic missile technology, such as North Korea and increasingly Iran, are not members of the MTCR or HCOC and have not made separate political nonproliferation commitments to the United States to halt their proliferation activities. Through our participation in multilateral regimes and in bilateral discussions with our allies and other like-minded states, the United States has attempted with little success to dissuade these states from their missile-proliferation activities. In response to continuing proliferation activities, in 2002 the United States imposed sanctions for missile-related transfers on entities in North Korea and Moldova for their missile-related transfers. In 2003, the United States imposed sanctions for missile-related transfers on entities in China, Iran, North Korea, Moldova and Macedonia. In addition, missile proliferation sanctions were waived against an Yemeni entity in August 2002 for national security reasons.

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