Iran: Arms and Weapons of Mass Destruction Suppliers

Order Code RL30551

Report for Congress

Received through the CRS Web

Iran: Arms and Weapons of

Mass Destruction Suppliers

Updated January 3, 2003

name redacted

Specialist in Middle Eastern Affairs

Foreign Affairs, Defense, and Trade Division

Congressional Research Service ˜ The Library of Congress

Iran: Arms and Weapons of Mass Destruction Suppliers

Summary

Successive U.S. administrations since Iran’s 1979 Islamic revolution have

viewed Iran as a potential threat to U.S. allies and forces in the Persian Gulf and in

the broader Middle East and have sought to limit its strategic capabilities. The

greater visibility of moderate elements inside Iran since 1997 led the United States

to seek to engage Iran in a formal governmental dialogue, but the Clinton and George

W. Bush Administration did not reduce U.S. efforts to deny Iran advanced

conventional arms and weapons of mass destruction (WMD) technology. Iran’s

moderates appear to see regional threats to Iran as do Iran’s hardliners and have made

no apparent effort to curb Iran’s efforts to acquire WMD. Even if moderate leaders

had sought to do so, they have been largely outmaneuvered on defense and other

issues by hardliners who still control the armed forces, internal security services, the

judiciary, and key decision-making bodies.

In the past, Iran has generally lacked the indigenous skills to manufacture

sophisticated conventional arms or independently develop weapons of mass

destruction (WMD), and one of Iran’s objectives over the past decade has been to

obtain the technology and skills to become self-sufficient. Iran has come a long way

toward that objective in certain areas, including ballistic missiles and chemical

weapons, but in the aggregate, Iran remains reliant on foreign suppliers. This

dependence has given the United States some opportunity to work with potential

suppliers to contain Iran’s WMD capabilities. European allies of the United States

have agreed not to sell conventional weaponry to Iran, and the United States has

persuaded its European allies not to sell any technology that could have military

applications (“dual use items”) to Iranian military or security entities.

To try to thwart U.S. efforts, Iran has cultivated close relationships with foreign

suppliers that are not allied to the United States, especially Russia, China, and North

Korea. Curtailing arms and technology supplies to Iran has formed an important part

of the U.S. agenda with all three of these countries, but more pressing U.S. objectives

with each of them have sometimes hampered the U.S. ability to dissuade them from

assisting Iran. Iran apparently continues to receive critical technology from all three,

but U.S. efforts appear to be limiting their supply relationships with Iran.

Congress and successive Administrations have enacted several laws and

executive orders, many of which are similar to each other, that impose sanctions on

countries and firms that sell WMD technology to Iran. The most recent measure

enacted is the Iran Nonproliferation Act (P.L. 106-178), signed in March 2000. The

Clinton Administration generally preferred diplomacy and engagement with supplier

states, and it used the threat of sanctions to obtain supplier cooperation. The Bush

Administration has taken much the same approach, although it has appeared more

willing than its predecessor to sanction entities in some supplier states.

This report will be updated as events warrant.

Contents

Capabilities and Intentions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Seeking Foreign Help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Internal Debate in Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Background to Iran-Russia Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Advanced Conventional Weaponry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Russian Pledge to the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Ballistic Missiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Nuclear Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Chemical and Biological Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Overview of China-Iran Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Anti-Ship Cruise Missiles And Other Advanced Conventional Weapons . 15

Ballistic Missiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Nuclear Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Chemical and Biological Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

North Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Overview of North Korea-Iran Relations . . . . . . . . . . . . . . . . . . . . . . . 19

Ballistic Missiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Anti-Ship Missiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Other Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Iran: Arms and Weapons of Mass

Destruction Suppliers

Iran’s experiences during its war with Iraq (1980-1988) apparently convinced

the Iranian leadership to enhance Iran’s ability to develop and deliver weapons of

mass destruction (WMD). Iran attributed its loss in that war partly to Iraq’s superior

WMD capabilities. Iran fired North Korean-supplied Scud missiles on Baghdad

during the Iran-Iraq war, but Iraq’s retaliation demonstrated that Baghdad’s missile

technology capabilities far exceeded those of Iran during that war. Iraq, with some

foreign assistance, was able to extend the range of Soviet-supplied missiles to reach

Tehran, some 400 miles from the Iraq-Iran border. Iraq used chemical weapons to

a far greater extent, and to greater effect, against Iran than Iran used chemical

weapons in retaliation. After the 1991 Persian Gulf war, when U.N. inspections of

Iraq’s WMD programs began, Iran learned along with the rest of the world that Iraq

might have been within two years of achieving a nuclear weapons capability.

Capabilities and Intentions. Perhaps fearing the dangers on its borders and

judging that WMD might be the best means of ensuring its security, Iran has

advanced virtually all of its WMD programs in recent years, according to official

U.S. proliferation reports. Iran’s nuclear program was, and to a large extent still is,

rudimentary by comparison with Iraq’s pre-Gulf war program. However, Iran is not

subject to the comprehensive international embargo and the intrusive U.N. weapons

inspections regime that applies to Iraq, and Iran is therefore able to procure civilian

nuclear infrastructure that could be used in a weapons program. There is substantial

uncertainty about Iran’s nuclear capabilities, but the consensus among U.S. experts

appears to be that Iran is still about eight to ten years away from a nuclear weapons

capability, although foreign help or Iranian procurement abroad of fissionable

materials could shorten that timetable. The uncertainty increased in December 2002

when commercial imagery, assessed by U.S. experts, revealed Iran is building two

previously unknown nuclear sites – at Arak and Natanz – that could be useful for a

nuclear weapons program. The Natanz site might include a uranium enrichment

facility, and the Arak site appears to contain a heavy water plant that could be part

of a plutonium production effort.1 Iran developed these sites by itself, without

outside help, according to what is known from press reports.

Iran’s missile capabilities have made significant strides since the first,

unsuccessful, test of its Shahab (Meteor) - 3 missile (900 mile range) in July 1998.

A July 2000 test appears to have succeeded, but a September 2000 test did not. Iran

conducted an apparently successful test in late May 2002, and the Defense

Department now assesses the missile as operational. Iran might have produced 10 20 of them, according to press reports. Iran is also trying to make a 1,200-mile range

1

“Iran Says All Its Nuclear Plants Are Open to Inspection.” Dow Jones Newswire,

December 13, 2002.

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Shahab-4, but U.S. officials told journalists in late October 2002 that an Iranian test

of an extended-range Shahab had failed. In March 2002, an intelligence community

official upgraded the missile threat from Iran, testifying that the United States would

“most likely” face an intercontinental ballistic missile threat from Iran by 2015.

In 1998, Iran admitted that it had developed chemical weapons in the later stages

of the 1980-1988 Iran-Iraq war but claimed that it unilaterally terminated the

chemical weapons program after that war. U.S. proliferation reports state that Iran

is seeking to acquire a self-sufficient chemical weapons infrastructure, that it may

have some capability for biological weapons deployment, and that it has stockpiled

chemical weapons, including blister, blood, and choking agents. This record raises

questions about Iran’s compliance with its obligations under the Chemical Weapons

Convention (CWC), which Iran signed on January 13, 1993, and ratified on June 8,

1997. However, the Organization for the Prohibition of Chemical Weapons

(OPCW), charged with monitoring the convention, has indicated general satisfaction

with Iran’s compliance thus far. OPCW toured Iran’s declared chemical sites in

February 1999, and Iran has made required declarations. Iran is a party to the 1972

Biological and Toxin Weapons Convention.

Seeking Foreign Help. According to U.S. statements and proliferation

reports, Iran intensified its drive to acquire WMD after the war with Iraq. Iran has

tried to build up its indigenous WMD technology expertise in order to eventually

become self-sufficient. However, Iran has tried to compensate for its technological

deficiencies through a sustained and broad effort to obtain outside assistance for its

WMD efforts. Most U.S. allies have refused to supply Iran with technology that can

be used for WMD, although since August 2000, U.S. government nonproliferation

reports have noted that Iran increasingly is seeking to procure WMD-capable

technology from entities in Western Europe.2 Iran has primarily approached

countries, and entities within those countries, that are willing or able to resist or

evade U.S. pressure to curb their dealings with Iran. The main arms and WMDrelated technology suppliers to Iran remain Russia, China, and North Korea. The

sections below discuss the evolution and scope of the arms and technology supply

relationships between Iran and these countries. A separate section discusses other

countries that have supplied arms or WMD technology to Iran, although generally on

a much smaller scale than Russia, China, or North Korea.

Internal Debate in Iran. One point of debate among experts is whether

political evolution in Iran will affect its WMD efforts in the future. Iran’s military

establishment remains under the control of revolutionary purists linked to Iran’s

Supreme Leader, Ali Khamene’i, who constitutionally holds the position of

Commander-in-Chief of the Armed Forces. The May 1997 landslide popular election

of a relative moderate, Mohammad Khatemi, as Iran’s President, led some observers

to believe that Khatemi would extend his reformist agenda into military affairs.

However, it is not certain that Khatemi wants to curb Iran’s WMD programs, even

if he were to acquire additional national security decision-making authority. There

2

CIA Nonproliferation Center. Unclassified Report to Congress on the Acquisition of

Technology Relating to Weapons of Mass Destruction and Advanced Conventional

Munitions, 1 July Through 31 December 1999. August 2000.

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has been no suggestion that he disagrees with other leaders on Iran’s threat

perceptions or fundamental security needs. U.S. officials have said since 2000 that

there has been no observable slowdown of Iran’s WMD programs since Khatemi

took office. Moreover, his political position, and that of his reformist allies, has

weakened significantly over the past year, according to observers.

On the other hand, Khatemi’s thus far successful efforts to end Iran’s

international isolation depend on at least the appearance of cooperation with

international nonproliferation regimes. Some Iranian officials, particularly those in

the foreign ministry, assert that Iran’s security is better protected through cooperation

with international nonproliferation regimes and diplomatic efforts to dampen regional

arms races than through WMD development. Whatever Iran’s motivations, the

International Atomic Energy Agency (IAEA) has said on several occasions that Iran

is substantially in compliance with its obligations under the Nuclear Nonproliferation

Treaty. The Organization for the Prohibition of Chemical Weapons, (OPCW) has

said Iran has largely complied with that convention as well. Nonetheless, Iran’s

cooperation with these regimes has not diminished U.S. suspicions that Iran is

covertly circumventing, or could quickly circumvent, the restrictions imposed by

these conventions.

Russia

Iran has sought Russian assistance partly because of the limited alternatives and

not necessarily because of strategic or ideological affinity between the two countries.

Iran’s relationship with Russia is tempered by a lingering fear of Russian power and

intentions.

Background to Iran-Russia Relations

In 1907, Russia concluded a treaty with Britain dividing Iran into spheres of

control. Russian troops occupied northern Iran during World War I. Soviet troops

invaded again in 1941, in concert with Britain, when Iran appeared to become

sympathetic to Nazi Germany. After World War II, the Soviet Union refused to

withdraw completely from Iran and it set up two autonomous zones in northern Iran,

which lasted until 1946, when U.S. pressure forced the Soviets to withdraw

completely. Iran’s Islamic revolution, which triumphed in February 1979, considered

anathema Soviet ideology and its suppression of Islam and other religious

expression. The December 1979 Soviet invasion of Afghanistan revived Iranian

fears that Moscow might have territorial designs on Iran. The Soviet Union also

backed Iraq with arms sales, financial credits, diplomatic support, and military

advice, throughout the Iran-Iraq war (1980-1988).

The Iran-Iraq war, which ended in August 1988, left Iran’s conventional arsenal

devastated, and the need for rearmament provided Iran and the Soviet Union an

opportunity to pursue mutual interests. A U.S. military buildup in the Gulf during

the Iran-Iraq war – designed to protect the free flow of oil in the Gulf – had created

concern in Moscow that the United States was attempting to establish hegemony in

that strategic body. Iran, partly because of U.S. efforts during the Iran-Iraq war to

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shut off worldwide arms sales to Iran, lacked a wide choice of willing suppliers, and

the Soviet Union saw arms sales to Iran as one way to broaden its influence in the

Gulf. A February 1989 visit to Tehran by then Soviet Foreign Minister Edouard

Shevardnadze, and his meeting with the ailing Ayatollah Khomeini, signaled the

beginning of a thaw in Iran’s relations with the Soviet Union.

Iran established an arms and technology relationship with the Soviet Union

during a visit to Moscow by then parliament speaker Ali Akbar Hashemi-Rafsanjani

in June 1989, two weeks after the death of Ayatollah Khomeini. A joint

communique at the conclusion of the visit said that the two countries would

collaborate in the “peaceful use of nuclear energy,” and that the Soviet Union

“agreed to bolster the military capacity of the Islamic Republic.”3

The subsequent breakup of the Soviet Union in late 1991 raised Iran’s

importance in the strategic calculations of Russia, the successor to the Soviet Union

in international affairs. Russia perceived an arms and technology relationship with

Iran as a key part of an effort to moderate Iranian behavior on Russia’s southern

flank. After the dissolution of the Soviet Union in 1991, Russia and the former

Communist leaders left in charge in the six Muslim states of the former Soviet Union

(Azerbaijan, Turkmenistan, Tajikistan, Uzbekistan, Kyrgyzstan, and Kazakhstan)

were concerned that Iran might try to spread revolutionary Islam into these new

states. According to observers, Russia tacitly linked arms and technology sales to

Iran’s refraining from political meddling in these states.

An additional factor in Russian planning was the aftereffects of the 1990-1991

Persian Gulf crisis, which left the United States pre-eminent in the Gulf and

demonstrated the effectiveness of U.S. military technology. The war cemented the

U.S. position as the primary arms supplier to the Persian Gulf monarchy states. U.N.

sanctions imposed on Iraq after its August 1990 invasion of Kuwait included a

worldwide arms embargo, removing one of the key Soviet arms clients from the

international market. Russian officials viewed Iran as a key source of needed new

sales to compensate for the closure of these and other arms markets.

Attempting to curb Russia’s arms and technology relationships with Iran, U.S.

officials have consistently impressed upon their Russian counterparts the possibility

that Iran’s historic resentment of past Russian actions in Iran might some day make

Russia itself a target of Iranian WMD. Iran and Russia are also wary of each others’

ambitions and claims on Caspian Sea energy resources, even though their positions

on the division of resources in the sea have differed little to date. (The two countries,

along with Kazakhstan, Azerbaijan, and Turkmenistan, border the sea.) These

arguments have not dissuaded Russia from selling arms and technology to Iran, and

the Clinton Administration and Congress tried to use the threat of sanctions in efforts

to achieve nonproliferation goals.

In a few cases, the Clinton Administration took the step of imposing sanctions

on Russian entities dealing with Iran, although it was reluctant to sanction the

3

Islamic Republic of Iran News Agency [IRNA] on Communique. Foreign Broadcast

Information Service, FBIS-NES-89-121, June 26, 1989. P. 31-33.

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Russian government, maintaining that the United States has broad objectives in

Russia. Those objectives included promoting economic and political reform, mutual

arms control and reduction, safeguarding nuclear material, and limiting the effects

of the war in Chechnya. During 1999 and 2000, the Clinton Administration worked

constructively with Russia to try to contain the Islamist threat posed by the Taliban

regime of Afghanistan and its protected “guest,” Saudi-born terrorist financier

Osama bin Laden. These objectives, according to some observers, sometimes

overrode calls within and outside the Administration to closely link U.S. relations

with Russia to the abandonment of its arms and technology relationship with Iran.

Like its predecessor, the Bush Administration has been reluctant to risk broader

relations with Russia over the Iran issue and has been reluctant to sanction the

Russian government. Some Russian entities have been sanctioned for sales of

weapons related technology to other state sponsors of terrorism: Libya, Sudan, and

Syria. The Bush Administration’s reluctance to strongly criticize Russia on

proliferation issues has been particularly evident since the September 11, 2001

attacks. Russia has been helpful to the United States in the response to the attacks,

especially its acquiescence to the U.S. use of bases in Central Asia for the war effort

in Afghanistan.

Advanced Conventional Weaponry

In 1991, Soviet arms ordered by Iran in 1989 began flowing to the Islamic

Republic. Possibly because of fluctuations in Iranian oil revenues and its large debt

burden, it appears that Russia delivered fewer arms than Iran had originally ordered,

and deliveries tapered off by the mid 1990s. Total deliveries to Iran by Russia

include about 30 MiG-29 and 30 Su-24 combat aircraft,4 about 300 T-72 tanks,5 SA-5

and SA-7 surface-to-air missile systems, and three Kilo-class diesel submarines, the

last of which arrived in January 1997. The submarine purchases represented the first

deployment of the vessels by a country in the Gulf and raised concerns among U.S.

naval officials of a heightened threat to U.S. naval and international commercial

shipping in the strategic waterway.

The purchases and their strategic implications drew considerable attention in

early 1992, when then CIA Director Robert Gates testified before the House Armed

Services Committee that Iran was planning to spend $2 billion per year to rebuild its

conventional arsenal and try to become the pre-eminent Persian Gulf power.6 In

response to these assessments and to reports of Iran’s attempts to acquire WMD and

4

Figures provided by the International Institute of Strategic Studies, The Military Balance,

2000-2001. Aircraft figures include small numbers of Russian-made aircraft flown to Iran

by Iraq at the start of the 1991 Persian Gulf war. Iraq has asked that its aircraft be returned.

5

The Military Balance 2000-2001 assesses Iran’s arsenal of T-72 tanks at 480, of which 100

were provided by Poland, according to press reports. Iran might have also received small

numbers of T-72’s from other Eastern European sources, but it is widely believed that the

large majority of Iran’s T-72’s, as well as its 75 T-62 tanks and 400 older model T-54’s and

T-55’s, were provided by Russia.

6

“Gates Warns of Iranian Arms Drive.” Washington Post, March 28, 1992. P. A1.

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delivery means, Congress passed the Iran-Iraq Arms Nonproliferation Act of 1992

(Title XVI of the National Defense Authorization Act for FY1993, P.L. 102-484).

That law requires sanctions against foreign firms (a ban on U.S. government

procurement from and technology export licenses to the entity) and foreign countries

(a suspension of U.S. economic assistance, and of U.S. technical exchanges and

assistance) that “contribute knowingly and materially to the efforts by Iran or Iraq

... to acquire chemical, biological, and nuclear weapons7 or to acquire destabilizing

numbers and types of advanced conventional weapons.” As discussed below (see

section on China), the law did not precisely define “destabilizing numbers and types”

of advanced conventional weapons, thereby giving the President discretion to

interpret the Act’s requirements and to decide whether or not to impose sanctions

under the Act.

Russian Pledge to the United States. Clinton Administration officials

argued that the threat of imposing sanctions under the Act helped the United States

extract a formal pledge from Russia in June 1995 not to enter any new arms contracts

with Iran. That pledge was required for the United States to accede to Russia’s

membership in a multilateral export control regime known as the Waasenaar

Arrangement, a successor to the Cold War era Coordinating Committee for

Multilateral Export Controls (COCOM). The pledge was obtained after numerous

U.S.-Russian discussions on the issue, including at the Clinton-Yeltsin summits in

Vancouver, Canada (April 1993), Washington (September 1994), and Moscow (May

1995). Delivering a summary of the achievements of the 1995 Moscow summit, an

Administration briefer stated that “The two Presidents have resolved some

outstanding issues associated with arms sales to Iran, and as soon as those are

recorded and in agreement, it’ll be possible to welcome Russia’s participation as a

founding member of the new post-COCOM regime.”8 Remaining issues were

resolved to the Administration’s satisfaction in June 1995, and Russia subsequently

provided the Administration with a list of military items delivered, or yet to be

delivered, under existing contracts with Iran.9

The New York Times reported on October 13, 2000 that, under the

understanding reached with Russia, all deliveries to Iran were to end by December

31, 1999, and that Russia did not honor that element of the arrangement.10 A partial

text of a classified “Aide Memoire” setting out some elements of the U.S.-Russian

understandings reached in 1995 regarding Russia’s arms sales to Iran was printed in

7

The language on chemical, biological, and nuclear weapons was added in 1996 by Section

1408 of P.L. 104-106, the National Defense Authorization Act of 1996.

8

White House Briefing. Reuters, May 10, 1995.

9

National Security Adviser Samuel Berger speaking on NBC’s “Meet the Press” program

on October 15, 2000, said that, although disappointed that Russia did not honor the

[December 31, 1999] date for completion of deliveries, sanctions could not be imposed on

Russia for arms transfer agreements concluded with Iran prior to the enactment of the IranIraq Arms Nonproliferation Act. Further, Mr. Berger stated that the list of items Russia

planned to deliver to Iran, based on prior contracts, was “ reviewed at the time by the

Pentagon which said that it would not upset the balance of power or balance of forces in the

region.” Transcript. Meet the Press. October 15, 2000.

10

New York Times, October 13, 2000, p. A24.

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the Washington Times on October17, 2000.11 The printed Aide Memoire notes that

“Russia’s obligation not to conclude new contracts and other agreements on transfers

of arms and associated items to Iran will enter into force upon Russia’s invitation to

participate in the development of the new regime.” The reference to the “new

regime” seems a clear reference to the soon to be established Wassenaar

Arrangement.12 Another point in the Aide Memoire of 1995 states that the Russians

were precluded from “the renegotiation or modification of existing contracts so as to

increase the type or quantity of arms-related transfers for which Russia is currently

obligated.” The Aide Memoire makes reference to an Annex (not published), which

is part of the overall understanding, that sets out “planned Russian transfers to Iran”

and is to represent “the totality of the existing obligations that Russia reserves the

right to fulfill pursuant to its undertakings.” The Russians, according to the Aide

Memoire, are to “terminate all arms-related transfers to Iran not later than 31

December 1999.”13 The New York Times, in a October 13, 2000 story, reported that

a “classified annex” specified weapons Russia “was committed to supply to Iran: one

Kilo-class diesel-powered submarine, 160 T-72 tanks, 600 armored personnel

carriers, numerous anti-ship mines, cluster bombs and a variety of long-range guided

torpedoes and other munitions for the submarine and the tanks.” This story also noted

that “Russia had already provided Iran with fighter aircraft, surface-to-air missiles,

and other armored vehicles.”14

The 1995 Aide Memoire also states that in view of the undertakings contained

in the “Joint Statement15 and this Aide Memoire, the United States is prepared to take

appropriate steps to avoid any penalties to Russia that might otherwise arise under

domestic law with respect to the completion of the transfers disclosed in the Annex

for so long as the Russian Federation acts in accordance with these commitments.”

The Aide Memoire also adds that, “This assurance is premised on the assumption

that the Russian disclosures in the Annex are complete and fully accurate.” The

11

Washington Times, October 17, 2000, p. A11.The portion of this “Secret” Aide Memoire

printed in the paper is not dated, but the newspaper’s caption states that it was a 1995

agreement between Vice President Al Gore and Russian Prime Minister Victor

Chernomyrdin. The first sentence of the printed item states that the document represents

“additional understandings with respect to the Moscow Joint Statement of May 10, 1995”

between the United States and the Russian Federation, thus indicating that it was not dated

before that time. The New York Times, reporting on the same document in an October 13,

2000 article states that it was signed on June 30, 1995, and consisted of “12 paragraphs.”The

New York Times did not print the text, but its report was based in part on a “copy of the aidememoire and related classified documents” provided to it by a “government official.” New

York Times, October 13, 2000, p.A24.

12

Russia and 32 other states met in Vienna in July 11-12, 1996 and approved the “Initial

Elements” to govern the Wassenaar Arrangement. It thus appears that Russia was “invited”

to join the “new regime” sometime prior to that date. Under this formulation, the triggering

date for Russia’s obligations under the Aide Memoire of 1995 would appear to be no later

than the July 11-12, 1996 Vienna meeting of the Wassenaar Arrangement states.

13

Washington Times, October 17, 2000, p. A11.

14

New York Times, October 13, 2000, p. A24.

15

It is not immediately clear what “Joint Statement” is referred to, as it is not published in

the Washington Times with the Aide Memoire on October 17, 2000.

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United States added that it wished “to make clear that while noting Russia’s interest

in fulfilling its preexisting obligations, it in no way endorses such transfers.”16

In early November 2000, following the spate of U.S. press articles about the

Aide Memoire, Russia informed the United States that, as of December 1, 2000,

Russia would no longer consider itself bound by the pledge not to enter into new

arms deals with Iran. In response to U.S. criticism of Russia’s shift, Russia assured

the United States it would sell only “defensive” weapons to Iran, a characterization

that was unsatisfactory to the Clinton Administration. A late December 2000 visit

to Iran by Russia’s Defense Minister resulted in an agreement for Russia to train

Iranian military personnel. New sales of Russian arms reportedly were discussed but

none were announced. On October 2, 2001, Iran and Russia signed an agreement

that provides Iranian arms purchases over the next 5 years, reportedly to include new

MiG-29 and Sukhoi combat aircraft and anti-ship missiles, as well as the S-300 air

defense system (the Russian counterpart of the U.S. “Patriot”). According to U.S.

government data, in 2001 Iran signed arms purchase agreements valued at about $700

million17, which appears to coincide with or include the announced agreement with

Russia.

The Bush Administration could choose to impose sanctions on Russia for the

new sales to Iran under legislation passed by Congress in 1996; the legislation

attempts to punish suppliers of conventional arms to Iran and other countries on the

U.S. “terrorism list.” The Anti-Terrorism and Effective Death Penalty Act of 1996

(P.L. 104-132) built on the Iran-Iraq Arms Nonproliferation Act by requiring a cutoff

of U.S. aid to countries that aid or sell arms to countries on the terrorism list, of

which Iran is one. This law, which added a section 620H to the Foreign Assistance

Act, imposes sanctions for any arms sales, not only those considered “destabilizing

in number and type.” The sanctions apply only to “lethal military equipment

provided under a contract entered into after the date of enactment” (April 24, 1996).

The Clinton Administration considered Russian arms sales to Iran as part of a

contract signed before the April 1996 law was enacted, and no penalties for sales to

Iran were imposed. Nor did the Clinton Administration issue a waiver to the

provision in order to avoid sanctioning Russia for the Iran sales. The Bush

Administration might be taking a similar position; no sanctions against the Russian

government or Russian entities have been imposed for the new arms agreements with

Iran, although the Administration position will likely become clearer if and when

actual deliveries begin.

Both the Clinton and George W. Bush Administrations have sanctioned Russian

entities under this provision for arms sales to other state sponsors of terrorism. In

April 1999, the Clinton Administration sanctioned three Russian entities under this

provision for arms sales to Syria, but the Russian government was not sanctioned.

In September 2002, the Bush Administration imposed sanctions under this provision

on three Russian entities for sales to Libya, Sudan, and Syria, while electing not to

sanction the Russian government. The three entities sanctioned in September 2002

16

17

Washington Times, October 17, 2000, p. A11.

See CRS Report RL31529, Conventional Arms Transfers to Developing Nations, 19942001. August 6, 2002, by (name redacted).

CRS-9

are the Tula Design Bureau of Instrument Building; the State Scientific Product

Enterprise, Bazalt; and Rostov Air Frame Plant 168.

Ballistic Missiles

Since late 1996, U.S. officials and published reports have cited Russia, which

has been a formal member of the MTCR since August 8, 1995, as a primary supplier

of Iran’s ballistic missile programs. Press reports and U.S. official statements and

reports since 1997 have indicated that Russian entities have provided Iran’s missile

programs with training, testing equipment, and components including specialty steels

and alloys, tungsten coated graphite, gyroscopes and other guidance technology,

rocket engine and fuel technology, laser equipment, machine tools, and maintenance

manuals.

The Russian technology assistance to Iran frustrated Clinton Administration

and Congress. Through a combination of engagement and selected imposition of

sanctions, the Clinton Administration and Congress sought to enlist greater Russian

government cooperation in halting the technology flow, with mixed success. Critics

in Congress took a different view, arguing for broad and sustained application of

sanctions on Russia and its entities on the grounds that the Russian government has

been insincere in its pledges to crack down on technology exports to Iran by its

entities.

In the 105th Congress, H.R. 2709, the Iran Missile Proliferation Sanctions Act,

passed both chambers by large margins. The bill required sanctions, including

suspension of U.S. government assistance, on foreign entities (including

governmental entities operating as businesses) that assist Iran’s ballistic missile

programs. However, the Administration vetoed the bill on June 23, 1998 on the

grounds that doing so would likely make Russia more recalcitrant rather than

promote cooperation to stop the transfers. As justification for the veto, the

Administration cited a January 1998 Russian decree tightening technology export

controls and a May 1998 implementing directive as evidence of improved Russian

government cooperation. In an effort to at least appear cooperative, Russia also

began an investigation of eight entities for criminal violations of Russian controls on

exports to Iran.

Administration policy on the issue appeared to suffer a setback in July 1998 –

only one month after vetoing H.R. 2709 – when Iran first tested its Shahab-3 missile.

On July 28, 1998, one week after that test, the Clinton Administration took steps to

forestall congressional action to override the veto of H.R. 2709 by issuing Executive

Order 13094. The order expanded a previous executive order (12938 of November

14, 1994) to enable the President to ban U.S. trade with, aid to, and procurement

from foreign entities assisting WMD programs in Iran or elsewhere. The sanctions

contained in the executive orders were similar to those provided in the Iran-Iraq

Arms Nonproliferation Act (see above), although the executive orders focused on

sanctioning supplier entities, not governments. Pursuant to the amended executive

CRS-10

order, the Clinton Administration sanctioned seven Russian entities18 believed to be

assisting Iran’s Shahab program. On January 12, 1999, the Administration

sanctioned three additional Russian entities19 believed helping Iran’s missile and

nuclear programs.

At the same time, the Clinton Administration tried to provide incentives for

Russian cooperation and to prevent this issue from derailing progress on broader

U.S.-Russian issues. Claiming that Russia had made progress on export controls, in

July 1999 the Clinton Administration increased the quota of Russian launches of U.S.

commercial satellites from 16 to 20 launches, with additional launches linked to

further export control progress. The Administration praised Russia in April 2000 for

reprimanding the rector of Baltic State Technical University (BSTU) – one of the

entities sanctioned by the United States – and cancelling the training of Iranian

technical students there. That step was taken after the election of Vladimir Putin as

President of Russia, and appeared to signal a U.S. hope and expectation that Putin

would be more cooperative with the United States on this issue than was his

predecessor, Boris Yeltsin. On April 24, 2000, the United States extended its

sanctions on BSTU to the rector, Yuri Savelyev, and simultaneously dropped the

sanctions on two other missile-related entities – the INOR Scientific Center and the

Polyus Scientific Production Associates (guidance technology). Sanctions on the

latter entities were dropped on the grounds that, according to the Clinton

Administration, they had ended their technology relationships with Iran. In

December 2000, although noting that individual Russian experts continued to sell

their expertise to Iran, the Clinton Administration allowed the quota on U.S.

commercial use of Russian space launches to expire at the end of 2000. U.S. officials

justified the move on the grounds that Russia, in their view, had established better

controls over exports by its aerospace firms. 20

Although progress with Russia has ebbed and flowed, Congress sought stronger

steps to end the missile assistance to Iran. H.R. 2709, the bill vetoed in 1998, was

revived in May 1999 with the introduction of H.R. 1883, the Iran Nonproliferation

Act. In contrast to its predecessor and to the Iran-Iraq Arms Nonproliferation Act,

H.R. 1883 authorized, rather than mandated, the President to impose sanctions on

Russian entities that assisted Iran’s missile as well as other WMD programs. The bill

passed both chambers unanimously, and was signed into law on March 14, 2000

(P.L. 106-178). The sanctions authorized by the new law include:

18

The entities sanctioned were INOR Scientific Center, Grafit, Polyus Scientific Production

Associates, Glavkosmos, the MOSO company, Baltic State Technical University, and

Europalace 2000.

19

The three entities sanctioned were NIKIET (Scientific Research and Design Institute of

Power Technology), the D. Mendeleyev University of Chemical Technology, and the

Moscow Aviation Institute.

20

U.S. to End Quotas on Satellite Launches by Russia, Helping Lockheed’s Business. Wall

Street Journal, December 1, 2000.

CRS-11

!

a ban on U.S. government procurement from or contracts with the

entity;

!

a ban on U.S. assistance to the entity;21

!

a prohibition of U.S. sales to the entity of any defense articles or

services; and

!

denial of U.S. licenses for exports to the entity of items that can have

military applications (“dual use items”).

The bill also included a provision, not contained in the earlier version, that

banned U.S. extraordinary payments to the Russian Aviation and Space Agency in

connection with the international space station unless the President can certify that

the agency or entities under the Agency’s control had not transferred any WMD or

missile-related technology to Iran within the year prior. The provision contains

certain exceptions to ensure the safety of astronauts who will use the space station

and for certain space station hardware. In his statement upon signing the bill into

law, the President noted that Russia “continues to be a valued partner in the

International Space Station.” On October 16, 2000, the National Aeronautics and

Space Administration (NASA) testified before a House International Relations

Committee oversight hearing on implementation of the Iran Nonproliferation Act.

The U.S. space agency indicated that it has continued extraordinary payments to

Russian entities for work on the space station under an exemption in the Act allowing

for payments to ensure space crew safety (Section 6F).

Available evidence suggests that some Russian assistance to Iran’s ballistic

missile programs continues. In its report for Congress in January 2002, the CIA said

“Russian entities during the period (first half of 2001) continued to supply a variety

of ballistic missile related goods and know how to countries such as Iran, Libya,

India, and China.” The Bush Administration has not added any Russian entities to

those already sanctioned for WMD technology sales to Iran.

Nuclear Issues

Since January 1995, when Iran signed an $800 million contract with Russia for

the completion of the 1,000 megawatt nuclear power reactor at Bushehr, the U.S.

Administration and Congress have been concerned about the potential for Iran to use

the project to advance a nuclear weapons program. Although the work on Bushehr

is far behind its original schedule, Russia asserts that the project will be operational

by 2005. Iranian technicians have begun nuclear plant operations training in Russia.

In July 2002, Russia raised U.S. concerns by floating a plan to build five more

reactors in Iran over the next ten years; U.S. pressure contributed to Russia’s

backtracking on the plan and its subsequent statements that the expanded project

might not go forward.

21

As specified in the legislation, the first two bullets are subsections b and c of section 4 of

Executive Order 12938, as amended by Executive Order 13094 of July 28, 1998.

CRS-12

When the Bushehr contract was first signed, some in Congress said that

sanctions should have been imposed on Russia under the Iran-Iraq Arms

Nonproliferation Act. However, the Clinton Administration asserted that the law did

not specifically require sanctions for transfers of civilian nuclear technology

permitted to be transferred under the NPT. In taking this position, the Clinton

Administration signaled that it preferred to work with Russia to end, or at least limit,

the scope of the project. The Clinton Administration also sought to separate the issue

from broader U.S. - Russian relations by waiving – when possible – provisions of

recent foreign aid laws making one half (or more) of U.S. aid to the Russian

government contingent on ending assistance to Iran’s nuclear and missile programs.

The Clinton Administration limited the types of aid subject to cuts so that aid could

still flow to local Russian governments and for humanitarian and nuclear

dismantlement programs.22 On the other hand, as noted above, the Administration

did impose sanctions on two Russian entities – the Scientific Research and Design

Institute of Power Technology (NKIET) and the D. Mendeleyev University of

Chemical Technology – when there was firm evidence that these entities were

continuing to help Iran in the nuclear field.

The Clinton Administration’s decision to rely primarily on engagement rather

than punishment of Russia, a policy continued by the Bush Administration, has

yielded some benefits. The Clinton Administration obtained Russian pledges not to

supply Iran with any technology that could contribute to a nuclear weapons program,

including uranium enrichment equipment. In September 2000, the Clinton

Administration successfully persuaded Russia to block a sale to Iran by one of its

research centers of a laser device that the United States believed Iran would only use

for a nuclear weapons program. In regional diplomacy, the Clinton Administration

dealt the Bushehr project a setback in March 1998 when visiting Secretary of State

Albright initialed an agreement with Ukraine under which it pledged to drop the sale

of the turbines for the reactor. In mid-2002, in a further nod to U.S. concerns, Russia

finalized agreement with Iran for Russia to reprocess spent nuclear fuel from the

Bushehr project.

Some in Congress believe that the United States is indirectly helping the

Bushehr project – a project the United States strongly opposes – and that such aid

should cease. About $1.5 million of the budget of the International Atomic Energy

Agency (IAEA), an organization to which the United States contributes, has gone

toward technical assistance (primarily training in nuclear safety) to the Bushehr

project during 1995-1999. Section 307 of the Foreign Assistance Act of 1961

exempts the IAEA (and UNICEF) from a ban on U.S. contributions to programs in

22

The Clinton Administration formally waived (P.D. 96-24 of May 9, 1996, and P.D. 97-01

of November 8, 1996) the provisions of FY1996 and FY1997 foreign aid appropriations

(P.L. 104-107 and P.L. 104-208) — which cut aid to Russia if it proceeds with the Bushehr

deal — on the grounds that it was more important to support reformers in Russia.

Provisions mandating the cutting of half the U.S. aid to the Russian government for

assistance to Iran’s nuclear or missile programs were included in the FY1998, FY1999, and

FY2000 foreign aid appropriations laws (P.L. 105-118, P.L. 105-277, and P.L. 106-113,

respectively). The FY2000 law cut U.S. aid to the Russian Federation government only, not

to local governments within Russia. The FY2001 foreign aid appropriation (P.L. 106-429)

contained a similar measure but increased the aid cut to 60%

CRS-13

countries named in that section. Ending this IAEA exemption was the subject of

bills (H.R. 1477 and S. 834) in the 106th Congress, which were not adopted. In the

107th Congress, the measure passed as Subtitle B of an FY2002 foreign relations

authorization bill (H.R. 1646, P.L. 107-228). On the other hand, some maintain that

funding IAEA assistance to Bushehr ensures that the United States can obtain

information on the Bushehr project. The IAEA also is helping ensure the plant will

be operated safely when it becomes operational.

Chemical and Biological Programs

Recent U.S. proliferation reports say that Iran has sought chemical weapons

technology and chemical precursors from Russia (and China) in order to create a

more advanced and self-sufficient chemical warfare infrastructure. According to

those same U.S. reports, Iran has expanded its efforts to acquire “biotechnical”

materials and expertise from entities in Russia and elsewhere. Press reports indicate

Iran has recruited Russian scientists to work on its biological program.23

U.S. official statements on efforts to dissuade Russian WMD-related technology

sales generally omit discussion of chemical or biological technology. U.S. statements

note that outside assistance to Iran’s chemical and biological program is “difficult to

prevent, given the dual-use nature of the materials, the equipment being sought, and

the many legitimate end uses for these items.” The relative absence of public

discussion could, alternately, suggest that the provision of Russian chemical or

biological technology to Iran has not reached the level at which intense U.S.

diplomatic pressure has been deemed warranted.

China24

Overview of China-Iran Relations

Iran and China have not been close ideologically or politically, but Iran was

never occupied or invaded by China’s troops and Iran does not fear China’s longterm ambitions as Iran might fear those of Russia. Under the Pahlavi dynasty, Iran

cut diplomatic relations with China after the People’s Republic of China (PRC) was

established in 1949. As PRC-Soviet relations worsened in the late 1960s and the

1970s, relations thawed as China saw a strong Iran – even though it was governed by

the pro-U.S., anti-Communist Shah Mohammad Reza Pahlavi – as an obstacle to

Soviet aims to expand its influence in the Persian Gulf, according to articles in

China’s press during that period. After the fall of the Shah at the hands of the Islamic

revolution in February 1979, Iran-China relations warmed further. In January 1980,

23

Miller, Judith, and Broad, William. Iranians, Bioweapons in Mind, Lure Needy Ex-Soviet

Scientists. New York Times, December 8, 1998.

24

For further information on China’s technology transfers to Iran, see CRS Report

RL31555, China and Proliferation of Weapons of Mass Destruction and Missiles: Policy

Issues by Shirley Kan.

CRS-14

China abstained on a U.N. Security Council vote to sanction Iran for the November

4, 1979 seizure of the U.S. Embassy in Tehran.

In an effort to bolster Iran against Iraq, which was backed by the Soviet Union,

China established itself as a key arms supplier to Iran soon after the Iran-Iraq war

broke out in September 1980. In June 1985, at the height of the Iran-Iraq war, then

parliament speaker Ali Akbar Hashemi-Rafsanjani visited Beijing and reportedly

signed missile technology agreements with China.25 That visit apparently opened

Iran to the supply of Chinese-made Silkworm surface-to-surface anti-ship missiles

(55 mile range). During the latter stages of the Iran-Iraq war, which ended in August

1988, Iran fired Silkworms at U.S. Navy-escorted oil tankers in the Persian Gulf and

at Kuwaiti oil terminals. During 1987-88, China reportedly built Iran’s infrastructure

to design, build, and test ballistic missiles and to extend their ranges.

In May 1989, then President (now Supreme Leader) Ali Khamene’i visited

China to cement China-Iran defense and political relations. Iran’s strategic rationale

for buying arms and technology from China is, in part, to counter U.S. pressure on

Iran by building alliances with other big powers. China sees arms sales to Iran as a

means to perhaps divert some U.S. military forces from areas near Taiwan and

possibly as retribution for continued U.S. arms sales to Taiwan. Others note that

China has not cultivated Iran exclusively, but has sought to expand its influence

broadly within the Middle East. Those who hold this view point out that China

maintains good relations with moderate Arab states including Saudi Arabia and

Egypt. Some experts perceive China’s interests in Iran as more narrow: China wants

to guarantee itself supplies of oil to feed its growing economy, and to earn revenues

from sales of weapons and technology to Iran.

As in the Russia case, the United States has a broad agenda with the PRC.

Aside from nonproliferation issues, the high priority issues on the U.S.-China agenda

include: encouraging a peaceful resolution of the dispute between the PRC and

Taiwan, U.S.-PRC trade relations, and China’s human rights record. The Clinton

Administration maintained that it needed to keep the broader issues in mind when

faced with a decision whether or not to impose sanctions on China for its relations

with Iran. Some, particularly those who believe the United States should do more to

contain the PRC’s growing strategic power, argued that the Clinton Administration

was too willing to accept China’s nonproliferation pledges at face value. Some in

Congress have taken this latter view and want to ensure that China is sanctioned if

it provides WMD-related technology to Iran. The Clinton Administration efforts

slowed China’s cooperation with Iranian WMD programs in some areas. However,

a visit to China by President Khatemi in June 2000 raised U.S. fears that new WMD

or weapons cooperation would be agreed between Iran and China, but both countries

strongly denied that the visit involved or resulted in new military cooperation

agreements.

The Bush Administration has sanctioned a relatively large number of China’s

entities for proliferation activities with Iran, even as the Bush Administration has

25

Carus, Seth and Joseph Bermudez. “Iran’s Growing Missile Forces.” Jane’s Defence

Weekly, July 23, 1988.

CRS-15

cultivated China as a partner in the overall war on terrorism spawned by the

September 11, 2001 attacks. This, combined with U.S. government reports over the

past few years, suggests that China continues to provide advanced conventional arms

and WMD-related technology to Iran. Then leader of China Jiang Zemin visited Iran

in April 2002 and signed agreements covering, according to official Iranian and

Chinese statements, oil, gas, trade, transportation, educational and cultural exchange,

and information technology. It is not known from open sources whether or not

WMD or arms related technology transfers were discussed.

Anti-Ship Cruise Missiles And Other Advanced Conventional

Weapons

Over the past five years, China has supplied Iran with artillery pieces , tanks, the

Chinese version of the SA-2 surface-to-air missile, and 24 F-7 combat aircraft, but

it is China’s past sales to Iran of anti-ship cruise missiles that have caused the most

significant U.S. concern. The anti-ship missiles improve Iran’s ability to strike at

U.S. forces and installations or commercial shipping in the Gulf. China has delivered

to Iran 15 Hudong fast attack craft, as well as ten other French-made patrol boats.

Of the 15 Hudongs, five were delivered to Iran’s Revolutionary Guard, which is a

bastion of Iran’s hardline political elements, and ten went to its regular Navy. The

ships are outfitted with about 150 C-802 anti-ship cruise missile (75 mile range), also

supplied by China. (The C-802 is not covered under the Missile Technology Control

Regime because its range and payload are under the regime’s threshold.) Iran tested

the Chinese-supplied air-launched C-801K missile (25 mile range) on one of its U.S.made F-4 Phantom aircraft26 in June 1997, prompting Secretary of Defense Cohen

to assert that Iran posed a “360 degree threat” to U.S. forces. In October 2000, Iran’s

Revolutionary Guard Navy reportedly tested a “modified” version of a Chinese-made

anti-ship missile, possibly indicating Iran had increased its range.27

Congressional debate about the Chinese anti-ship missile transfers centered on

whether the transfers, which occurred in the early 1990s, should have triggered U.S.

sanctions under the Iran-Iraq Arms Nonproliferation Act of 1992.28 In mid-1996,

some in Congress pressed the Clinton Administration to impose sanctions on China

for the C-802 transfers, and the Clinton Administration said it considered that step.

In April 1997, electing to negotiate the issue with China rather than impose

sanctions, the Administration determined that the C-802 and C-801 transfers to Iran

were “not of a destabilizing number and type” to warrant U.S. sanctions. Some in

Congress disagreed with the determination, and the disagreement sharpened after

26

The United States was a major arms supplier Iran when the Shah was in power, and Iran

has been able to keep some of its U.S.-supplied equipment operational even though the

United States cut off supplies of spare parts and technical assistance to Iran’s military after

the Islamic revolution.

27

“Iran to Test Modified Chinese Missiles Next Week.” Dow Jones Newswire, October 23,

2000.

28

This law was amended by Section 1408 the FY1996 defense authorization law (P.L. 104106) to also sanction the provision to Iran or Iraq of equipment for chemical, biological, or

nuclear weapons.

CRS-16

Secretary Cohen’s June 1997 statement that the C-801K posed a new threat to U.S.

forces in the Gulf.

The issue of sanctions for the C-802 and C-801 sales quieted when China

pledged to Secretary of State Albright in September 1997, and again to Secretary of

Defense Cohen in January 1998, that it would halt further sales of C-802’s and C801’s to Iran. U.S. officials say that China is upholding this pledge.

Other reported sales by China to Iran appear to violate the spirit, if perhaps not

the letter, of China’s pledges. The Washington Times reported on August 19, 1999,

that China had agreed to modify Iran’s FL-10 anti-ship cruise missiles (20-30 mile

range) to enable them to be fired from helicopters or fast attack naval craft. U.S.

officials said the reported deal would not technically violate China’s pledges because

those assurances applied only to the C-802 and C-801.29 In May 2002, the

Washington Times reported that China had sold Iran additional patrol boats designed

to carry up to eight C-701 anti-ship missiles. That missile has a range of about 10

miles, and China reportedly shipped some of those missiles to Iran early in 2002.30

Ballistic Missiles

Recent U.S. CIA and DoD proliferation reports have said that entities in China

continue to supply ballistic missile-related technology and advice to Iran’s Shahab

missile program. In the mid-1990s, there were numerous press reports, such as a

November 21, 1996 Washington Times report quoting U.S. intelligence sources, that

China had sold Iran guidance technology (gyroscopes and accelerometers), special

steel suited to missile fabrication, and missiles equipment, possibly for use in the

Shahab program. There have been no confirmed deliveries of entire M-9 or M-11

ballistic missiles to Iran, both of which are considered to have range/payload

combinations that are covered by MTCR guidelines.

The Clinton Administration tried to limit China’s missile assistance to Iran

primarily through diplomatic engagement. On November 22, 1996, and again on

September 10, 1997, the State Department said the United States had not determined

that China had violated its March 1992 commitment to adhere to the terms of the

MTCR. In March 1998, the Clinton Administration reportedly offered China

expanded cooperation on commercial space ventures in return for an end to all

Chinese assistance to Iran’s ballistic missile programs and its joining the MTCR. In

November 2000, the Clinton Administration negotiated an agreement with China

under which China issued (November 21, 2000) a public statement that it would not

assist other countries’ efforts to develop ballistic missiles and that it would adopt a

control regime for exports of technology that could be used for ballistic missiles. The

U.S. insistence that China join the MTCR was dropped, and the Clinton

Administration said it would not sanction China for past missile assistance to Iran or

Pakistan and that U.S.-China commercial space cooperation would resume.

29

Gertz, Bill. “ China Agrees to Deal With Iran on Missiles.” Washington Times, August

19, 1999.

30

Gertz, Bill and Rowan Scarborough. “ Inside the Ring.” Washington Times, May 17,

2002.

CRS-17

Simultaneously, recipient entities in Pakistan and Iran (the Ministry of Defense and

Armed Forces Logistics, the Armed Forces Logistics Command, and the Defense

Industries Organization) were sanctioned, although the sanctions (a ban on U.S. trade

with and exports to the sanctioned entities) were already in force under broader U.S.

sanctions laws and regulations on Iran.

Some subsequent press reports seemed to support critics who urged the United

States not to rely too heavily on bilateral anti-proliferation agreements with China.

On January 26, 2001, the Washington Times quoted unnamed U.S. officials as saying

that the Chinese firm Norinco (China North Industries Corporation) had recently

shipped specialty metals and chemicals used in missile production to Iran’s Shahid

(Martyr Bakeri Industrial Group, a defense firm involved in Iran’s missile program.31

The Bush Administration has sanctioned several entities of China that appear

to have been involved in missile proliferation activities, although Administration

pronouncements and reports generally list a number of entities without specifically

identifying the type of equipment transferred or Iranian program assisted. The

sanctions were imposed on January 16, 2002, May 9, 2002, and July 9, 2002, under

authorities including the Iran-Iraq Arms Nonproliferation Act and the Iran

Nonproliferation Act. Many of the names of the entities sanctioned appear to

duplicate each other, which could reflect imprecise information on the exact name

of the entity alleged to be transferring technology to Iran. In other cases, entities

sanctioned are repeated in successive designations, suggesting that these entities

could be involved in several of Iran’s WMD programs. For the list of sanctioned

entities, see Federal Register: January 24, 2002; May 16, 2002; and July 25, 2002,

where these sanctions are announced.

Nuclear Issues

In the nuclear field, the Clinton Administration extracted significant pledges

from China to limit its relationship with Iran. In February 1993, China contracted to

construct in Iran two 300 megawatt nuclear reactors and to provide related

technology and training.32 In mid-1997, Administration officials said they had

blocked a deal between Iran and a Chinese government-owned firm for the sale to

Iran of a “uranium conversion facility,” although China reportedly gave Iran

blueprints for the facility.33 In advance of the October 1997 U.S.-China summit, the

Administration said it received a firm written assurance that China would end its

nuclear relations with Iran (not build the reactors contracted in 1993), although two

small ongoing projects would be completed. One project is to supply Iran’s civilian

nuclear program with a zirconium production facility, for which IAEA safeguards are

31

Gertz, Bill. Beijing Using Front Companies to Grab U.S. Arms Technology. Washington

Times, January 26, 2001.

32

During 1985-87, China supplied Iran with a small research nuclear reactor and an

electromagnetic isotope separator (calutron).

33

Pomfret, John. “U.S. May Certify China on Curbing Nuclear Exports.” Washington Post,

September 18, 1997. P.A28.

CRS-18

not required, and the other is to build a small research reactor, which the United

States judged does not pose a significant proliferation concern.

The Administration apparently extracted the PRC pledge by promising, in

exchange, to certify to Congress that China is cooperating to end nuclear

proliferation. This certification, required by P.L. 99-183 and issued in January 1998,

opened China to nuclear cooperation with the United States under a 1985 bilateral

agreement. Congress did not formally disapprove within the thirty legislative day

period, and the certification took effect on March 18, 1998. Published reports by

U.S. intelligence agencies in 2000 and 2001 said that China was living up to that

pledge, but the more recent reports by U.S. intelligence, and public statements in

June 2002 by senior State Dept. official John Wolf, have refrained from that positive

assessment. Specific allegations of any nuclear transfers from China have not been

made public.

Chemical and Biological Programs

Since the early 1990s, U.S. officials have identified firms in China as suppliers

of Iran’s chemical weapons program, although some U.S. officials attributed the

assistance to Iran to a lack of export controls by China’s government. On May 22,

1997, Secretary of State Albright imposed U.S. sanctions, under the Chemical and

Biological Warfare Elimination Act of 1991 (P.L. 102- 182), on two PRC firms

(Nanjing Chemical Industries Group and Jiangsu Yongli Chemical Engineering and

Technology Import/Export Corp.), five PRC citizens, and one Hong Kong firm

(Cheong Lee Ltd.) for knowingly and materially aiding Iran’s chemical weapons

programs. The Clinton Administration said there was no evidence the PRC

government was aware of the transfers. On June 10, 1997, the State Department

announced suspension of an Exim Bank loan for a U.S. firm’s exports to the Nanjing

firm above. In June 1998, China appeared to address U.S. concerns by expanding

chemical export controls to include ten chemicals not banned for export under the

Chemical Weapons Convention but included in the more restrictive “Australia

Group” chemical export control list. The sanctions on the entities remain in effect.

The Bush Administration clearly believes that entities in China are assisting

Iran’s chemical weapons program. In four separate determinations, the Bush

Administration has imposed sanctions on several chemical firms based in China –

June 14, 2001; January 16, 2002; May 9, 2002; and July 9, 2002. In the first three

cases, the sanctions were imposed pursuant to the Iran Nonproliferation Act of 2000.

In the latest case, sanctions were imposed pursuant to the Iran-Iraq Arms

Nonproliferation Act and the nonproliferation provisions of the Arms Export Control

Act and the Export Administration Act. One firm sanctioned by the Bush

Administration is the Jiangsu Yongli Chemicals and Technology Import-Export

Corporation, the same firm sanctioned by the previous administration. Other

sanctioned entities with names that clearly indicate their involvement in the chemical

industry include: Liyang Chemical Equipment Company, and the Zibo Chemical

Equipment Plant.

CRS-19

North Korea

Overview of North Korea-Iran Relations. North Korea has tended to align

itself with countries in the Middle East, such as Iran, Libya, and Syria, that have

opposed U.S. policy in the region or have hosted terrorist organizations.

Pyongyang’s motive, according to many observers, has been to serve its own interests

by building alliances with countries that oppose U.S. global influence. North Korea

supported the 1979 Islamic revolution in Iran, which overthrew a key U.S. ally, the

Shah, and it provided missile technology to Iran to help it in its 1980-88 war with

Iraq. The United States backed Iraq in that war. In their statements and cooperation,

Iran and North Korea appear to try to reinforce each other’s criticism of the United

States as a global hegemon bent on dominating developing nations. Iran uses that

argument to criticize the U.S. military presence in the Persian Gulf monarchy states,

and North Korea likewise derides the U.S. military presence in South Korea. North

Korea also has sought to earn hard currency from sales of arms and technology to

Middle Eastern countries.

Over the past decade, North Korea and Iran have been further drawn together

by U.S. references to both of them as “rogue states” and as targets of U.S. economic

sanctions. As noted above, both of them, along with Iraq, were designated by

President Bush as part of “an axis of evil” in his January 29, 2002 State of the Union

message. At the same time, North Korea has deflected some scrutiny by

emphasizing that it is not a Muslim nation and asserting that it has no connections

to Islamic terrorist groups such as Al Qaeda or those backed by Iran. Iran, by

contrast, has been identified by the United States for over a decade as the most active

state sponsor of terrorism because of its backing for Islamic terrorist organizations

such as Lebanese Hizballah and Hamas, a Palestinian organization.

Even though President Bush described North Korea as part of an axis of evil in

early 2002, later in the year the Administration appeared to move more toward the

engagement policy with North Korea that was followed during by the Clinton

Administration. That policy is discussed in greater detail below, in the context of the

Clinton Administration’s efforts to broaden its October 1994 framework agreement

on nuclear issues to halting North Korea’s missile testing and missile exports (to Iran

and other countries) as well. At the end of 2002, however, a sense of crisis

developed as North Korea admitted to working on a uranium enrichment route to a

nuclear weapon, and later unfroze its plutonium program that had been suspended

under the October 1994 framework agreement. North Korea expelled IAEA

inspectors monitoring that agreement in December 2002.

The sense of crisis developed at the same time as there were revelations of two

previously unknown nuclear sites in Iran, as note above. Although the separate Iran

and North Korea revelations coincided in time, there was nothing to indicate that

Iran and North Korea are working together on nuclear weapons technology.

CRS-20

Ballistic Missiles

North Korea’s defense relationship with Iran appears mostly limited to ballistic

missiles, building on a long-standing missile relationship with Iran.34 During Iran’s

war with Iraq, North Korea provided Iran with about 100 Scud-B ballistic missiles,

as well as facilities in which Iran could produce the Scud-B indigenously.35 North

Korea also reportedly sold Iran conventional weapons, including mini-submarines

and mines, and provided training to Iran’s Revolutionary Guard. Some reports

indicate that North Korea helped Revolutionary Guard naval units track and target

U.S. ships during their skirmishes with U.S. forces in the Gulf in 1987-88). In 1991,

North Korea reportedly began to supply Scud-C missiles to Iran and, in 1992, the

State Department sanctioned Iran’s Ministry of Defense and Armed Forces Logistics,

along with two North Korean firms, for alleged missile proliferation activities. In

March 1992, U.S. Navy ships tracked – but did not attempt to intercept – a North

Korean ship, believed to be carrying Scud-C missiles, that docked in Iran. In August

2000, North Korean leader Kim Jong-Il publicly admitted that North Korea had sold

complete missiles to Iran and Syria. Iran refuted Kim’s assertion.

In the early 1990s, Iran reportedly discussed with North Korea the purchase of

North Korean-made Nodong 1 missiles (1,000 mile range). Iranian officials attended

test launches of the Nodong 1 during its development in North Korea, according to

a number of press reports. U.S. scrutiny of the Iran-North Korea relationship, U.S.

sanctions on North Korean entities, and U.S.-North Korea talks on missile exports36

apparently contributed to Iran’s decision to build the Shahab missile indigenously,

based on the Nodong design. In May 1996, one month after the first U.S.-North

Korea talks on missile exports to Iran (and other Middle Eastern countries), the

Administration issued another determination37 that entities in Iran and North Korea

had engaged in missile proliferation activities. On August 6, 1997, following another

round of U.S.-North Korea missile talks, the United States imposed trade sanctions

on two North Korean firms for missile-related activities believed to involve Iran and

Pakistan.

The Clinton Administration’s engagement of North Korea began gradually in

1994 with a U.S. effort to halt North Korea’s nuclear program and, later, its

development of missiles capable of hitting the United States. The Clinton

Administration attempted to extend agreements in these areas to the additional goal

of curbing North Korea’s ballistic missile technology relationship with Iran and other

countries. In May 1999, a U.S. envoy to North Korea, former Defense Secretary

34

The core of Iran’s current missile force consists of 200-300 North Korean-supplied ScudB and Scud-C missiles, with ranges of 320 km and 500 km respectively. North Korea has

also reportedly supplied ten to fifteen mobile launchers.

35

Bermudez, Joseph. “Ballistic Missiles in the Third World - Iran’s Medium Range

Missiles.” Jane’s Intelligence Review, April 1992.

36

These talks are a by-product of the October 1994 “Agreed Framework” on limiting North

Korea’s nuclear program.

37

See Federal Register, June 12, 1996. P. 29785. Bureau of Political-Military Affairs,

Department of State. Public Notice 2404.

CRS-21

William Perry, reportedly offered a lifting of U.S. sanctions on North Korea in

exchange for a halt to its testing of missiles and an end to its exports of missile

technology to the Middle East and Pakistan. In July 2000, U.S.-North Korea talks

on missile exports faltered when the United States refused North Korea’s demand

that it receive $1 billion annually for three years to compensate for the halting of

exports. The Clinton Administration appeared to be on the verge of a broad

nonproliferation agreement with North Korea before President Clinton left office, but

no agreement was finalized. Because some of the nonproliferation issues were not

resolved by the end of his term, President Clinton did not go forward with a late-term

visit to North Korea.

In the course of engaging North Korea, the Clinton Administration continued

to sanction North Korean entities that were known to be assisting Iran. In February

2000, U.S. intelligence officials indirectly confirmed press reports that North Korea

had delivered to Iran 12 engines that would be critical to Iran’s efforts to build

extended-range Shahab missiles.38 Two months later, on April 6, 2000, the

Department of State imposed sanctions on one North Korean and four Iranian

entities for engaging in missile technology proliferation activities. The sanctions

were imposed pursuant to the Arms Export Control Act and the Export

Administration Act, as carried out under Executive Order 12924 of August 19, 1994.

The North Korean entity sanctioned was the Changgwang Sinyong Corporation; the

four Iranian entities sanctioned were: the Ministry of Defense and Armed Forces

Logistics; the Aerospace Industries Organization; the Shahid Hemmat Industrial

Group, and the Sannam Industrial Group. In practice, the sanctions (no U.S. licenses

for exports to these entities, no U.S. government contracts with the entities, and no

imports to the United States of products from these entities) will have little or no

effect. The United States does not export to or contract with these entities, and no

Iranian or North Korean products permitted to be imported to the United States are

produced by these organizations.

Despite U.S. efforts to halt North Korean exports of technology to the Middle

East, by all accounts North Korean assistance to Iranian weapons programs is

continuing. The CIA proliferation report of January 2002 said that entities in North

Korea continue to supply crucial ballistic missile-related equipment, technology, and

expertise to Iran. The Clinton Administration again sanctioned the Changgwang

entity for missile proliferation to Iran on January 2, 2001, and the Bush

Administration sanctioned Changgwang for similar activity yet again on June 14,

2001. Both latter sanctions were imposed pursuant to the Iran Nonproliferation Act.

Anti-Ship Missiles

Some reports have appeared recently to suggest that Iran and North Korea have

begun to cooperate on anti-ship missiles. According to press reports in early 2000,

Iran sent to North Korea a few of the C-802 anti-ship missiles Iran bought from

38

Gertz, Bill. “‘Critical’ N. Korea Missile Parts Seen Aiding Iran’s Program.” Washington

Times, February 10, 2000.

CRS-22

China.39 Iran reportedly has asked North Korea to help upgrade the accuracy of the

missiles. Iran might also be seeking to persuade North Korean to manufacture the

missile – or provide Iran the technology to produce the missile itself – to compensate

for China’s cutoff of additional supplies of the C-802.

Other Suppliers

Information on Iranian efforts to acquire weapons and technology from other

suppliers appears sketchy, and suggests that Iran is willing to deal with a number of

suppliers and middlemen to acquire needed technology. Most suppliers to Iran

possess former Soviet bloc equipment and technology that can replace, complement,

or supplement the technology Iran is acquiring from Russia. However, Iran does not

limit its buying to former Soviet bloc states; it continues to attempt, according to the

most recent CIA reports to Congress, to approach entities in Western Europe for

WMD and missile technology. Major examples of suppliers to Iran, other than its

three key supplier countries, include the following:

39

!

Poland sold Iran 100 T-72 tanks in 1994, and subsequently pledged

to the United States not to sell Iran any additional tanks.

!

In 1997, the U.S. Department of Defense purchased 21 Russianmade MiG-29’s from Moldova after reportedly receiving

information that Iran was seeking to buy the aircraft.

!

As noted above, in 1998 the U.S. Administration successfully

dissuaded Ukraine from supplying key turbines for the Bushehr

nuclear reactor project.

!

In 1999, a Czech firm, ZVVZ Milevesko, signed a contract to supply

air conditioning technology for the Bushehr reactor. The

Administration asked the Czech government to ban that sale, and the

Czech government subsequently drafted legislation preventing

Czech firms from supplying the plant. In April 2000, the lower

house of the Czech parliament rebuffed objections from the upper

Senate in passing the law, which is expected to be signed by

President Vaclav Havel.

!

Some past CIA nonproliferation reports have said that Indian firms

had supplied Iran’s chemical weapons program, although the 2000,

2001, and 2002 nonproliferation reports do not mention India

specifically as a supplier to Iran. However, the July 9, 2002

sanctions determination against nine entities of China for alleged

missile and chemical proliferation to Iran, referenced above, also

included an individual apparently of Indian origin - Hans Raj Shiv.

The determination said Shiv was “previously residing in India, and

“NK, Iran Jointly Developing Missile: Newspaper.” Kyodo News International, February

16, 2000.

CRS-23

last believed to be in the Middle East.” The determination did

indicate any connection between Shiv and the government of India

or impose sanctions on that government.

!

The May 9, 2002 determination discussed above imposed sanctions

not only on entities from China, but also on two entities from

Moldova (one firm, Cuanta, S.A. and one individual, Mikhail

Pavlovich Vladov); and two entities from Armenia (one firm, Lizen

Open Joint Stock Company, and one individual, Armen Sargsian).

That determination was issued in response to reports of chemical and

missile proliferation to Iran. The governments of Moldova and

Armenia were not sanctioned, and the determination did not indicate

knowledge of the sanctioned activity on the part of those

governments.

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