```

[Senate Hearing 106-883]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 106-883

                 A REVIEW OF GORE-CHERNOMYRDIN DIPLOMACY

=======================================================================

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON EUROPEAN AFFAIRS

                                AND THE

                    SUBCOMMITTEE ON NEAR EASTERN AND
                          SOUTH ASIAN AFFAIRS

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                            OCTOBER 25, 2000

                               __________

       Printed for the use of the Committee on Foreign Relations

 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate

                   U.S. GOVERNMENT PRINTING OFFICE
69-753                     WASHINGTON : 2001

                     COMMITTEE ON FOREIGN RELATIONS

                 JESSE HELMS, North Carolina, Chairman
RICHARD G. LUGAR, Indiana            JOSEPH R. BIDEN, Jr., Delaware
CHUCK HAGEL, Nebraska                PAUL S. SARBANES, Maryland
GORDON H. SMITH, Oregon              CHRISTOPHER J. DODD, Connecticut
ROD GRAMS, Minnesota                 JOHN F. KERRY, Massachusetts
SAM BROWNBACK, Kansas                RUSSELL D. FEINGOLD, Wisconsin
CRAIG THOMAS, Wyoming                PAUL D. WELLSTONE, Minnesota
JOHN ASHCROFT, Missouri              BARBARA BOXER, California
BILL FRIST, Tennessee                ROBERT G. TORRICELLI, New Jersey
LINCOLN D. CHAFEE, Rhode Island
                   Stephen E. Biegun, Staff Director
                 Edwin K. Hall, Minority Staff Director

                                 ------                                

                    SUBCOMMITTEE ON EUROPEAN AFFAIRS

                   GORDON H. SMITH, Oregon, Chairman
RICHARD G. LUGAR, Indiana            JOSEPH R. BIDEN, Jr., Delaware
JOHN ASHCROFT, Missouri              PAUL S. SARBANES, Maryland
CHUCK HAGEL, Nebraska                CHRISTOPHER J. DODD, Connecticut
LINCOLN D. CHAFEE, Rhode Island      PAUL D. WELLSTONE, Minnesota

                                 ------                                

          SUBCOMMITTEE ON NEAR EASTERN AND SOUTH ASIAN AFFAIRS

                    SAM BROWNBACK, Kansas, Chairman
JOHN ASHCROFT, Missouri              PAUL D. WELLSTONE, Minnesota
GORDON H. SMITH, Oregon              ROBERT G. TORRICELLI, New Jersey
ROD GRAMS, Minnesota                 PAUL S. SARBANES, Maryland
CRAIG THOMAS, Wyoming                CHRISTOPHER J. DODD, Connecticut

                                  (ii)

                            C O N T E N T S

                              ----------                              
                                                                   Page

Barker, John P., Deputy Assistant Secretary of State for 
  Nonproliferation Controls and Joseph M. DeThomas, Deputy 
  Assistant Secretary of State for Regional Nonproliferation, 
  Department of State; accompanied by: Newell L. Highsmith, 
  Attorney Adviser, Office of Legal Adviser for Political 
  Military Affairs, and Robert D. Dalton, Assistant Legal Adviser 
  for Treaty Affairs, Office of Legal Adviser, Department of 
  State, Washington, DC..........................................    17
    Prepared statement...........................................    24
Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware, prepared 
  statement......................................................     7
``Iranian Arms Transfers: The Facts,'' a study by Anthony H. 
  Cordesman, Center for Strategic and International Studies, 
  Washington, DC.................................................    33
News release by the Senate Foreign Relations Committee entitled 
  ``Former Officials `Deeply Disturbed' by Gore Deal With 
  Russians,'' October 24, 2000...................................    14

                                 (iii)

  

 
                A REVIEW OF GORE-CHERNOMYRDIN DIPLOMACY

                              ----------                              

                      WEDNESDAY, OCTOBER 25, 2000

                       U.S. Senate,        
  Subcommittee on European Affairs, and    
               Subcommittee on Near Eastern
                           and South Asian Affairs,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittees met, pursuant to notice, at 10:39 a.m. in 
room SD-419, Hon. Gordon Smith (chairman of the Subcommittee on 
Near Eastern and South Asian Affairs) and Hon. Sam Brownback 
(chairman of the Subcommittee on European Affairs) presiding.
    Members Present: Senators Smith, Brownback, Hagel, and 
Biden.
    Other Senator Present: Orrin Hatch.
    Senator Smith. I will call this subcommittee hearing of the 
Senate Foreign Relations Committee to order. I welcome Senator 
Biden, the ranking member of the full committee. Senator 
Brownback will be with us shortly. We welcome Senator Hatch, 
who has had an interest in this issue as it relates to a 
statute. I invited him to be here. The majority leader 
encouraged him to be here because of the interest of his 
committee.
    We will proceed with opening statements. In U.S. foreign 
policy there is no greater imperative for the President than 
ensuring that his initiatives are consistent with America's 
interests and laws. If a political consensus is unobtainable, 
in limited circumstances the President can impose a policy as 
long as it is consistent with U.S. law. But he must be 
forthright with the American people and their elected 
representatives, the U.S. Congress.
    Just over a week ago the New York Times revealed that in 
1995 Vice President Al Gore and then-Russian Premier Victor 
Chernomyrdin signed a secret agreement that appears to violate 
each of these important principles. In this agreement the 
United States reportedly dropped its objections to Russia's 
transfer of sophisticated weapons to Iran and promised not to 
impose sanctions mandated by U.S. law as a response to those 
transfers. In return, Russia committed not to sell Iran more 
weapons after December 31, 1999. As we now know, Russia 
continues to provide Iran not only powerful conventional 
weaponry, but also provides technology and know-how that 
benefits Iran's missile and nuclear weapons programs.
    That the Gore-Chernomyrdin agreement was not shared with 
Congress raises disquieting questions about the 
administration's commitment to forging a foreign policy. Such 
bipartisanship cannot be achieved when the President develops 
and implements an initiative in secret and keeps hidden crucial 
details from the American people and their representatives in 
Congress. When Congressmen and Senators have to turn to 
newspapers, as opposed to the White House, to be fully informed 
on U.S. foreign policy, this is not right.
    What we do know about the Gore-Chernomyrdin agreement and 
its implications for our interests abroad is disturbing. This 
agreement reportedly may have limited our response to Russia's 
arms sales to Iran, a country which is a significant sponsor of 
international terrorism directed against the West and its 
allies.
    Since the signing of the Gore-Chernomyrdin agreement, 
Russia delivered to Iran one advanced Kilo submarine for a 
total of three, long-range torpedoes, and also anti-ship mines 
and other weapons. Simply put, these are dangerous weapons in a 
dangerous part of the world.
    Press reports also indicate that in the Gore-Chernomyrdin 
document the United States agreed to ensure that U.S. customers 
in the Middle East would not transfer American-made weapons to 
countries along Russia's periphery. This sort of deal-making 
must re-awaken fears among the newly free States of Central 
Europe, the Caucasus, and Central Asia that they may become 
once again the objects of secret agreements between great 
powers. It is hardly likely to increase their confidence in the 
United States.
    Every American should know that our request of Russia that 
it not export high-caliber conventional and nuclear weapons to 
terrorist states bent on killing Americans is not made without 
consideration. Last year alone, we sent 180 million tax dollars 
to Russia to aid that country's transition to Western 
democracy, not to subsidize Russian arms manufacturing and 
sales.
    Finally, there remain grave questions concerning whether 
the administration's handling of the Gore-Chernomyrdin 
agreement conforms to United States statutory and 
constitutional law. It is difficult for me to understand how 
this agreement is consistent with the Iran-Iraq Arms 
Nonproliferation Act of 1992, a bill that the Vice President 
himself introduced during his years in the Senate. This law, 
also known as the Gore-McCain Act, requires the imposition of 
sanctions against countries that transfer ``destabilizing 
numbers and types of advanced conventional weapons to Iran.'' 
How could the executive branch not see a Kilo-class submarine 
as such a weapon? It was designed to destroy U.S. Navy ships.
    Congress passed the bill overwhelmingly and on a bipartisan 
basis, in large part due to concern about Tehran's acquisition 
of Russian Kilo-class submarines. It is an understatement to 
say that the secrecy with which the administration has handled 
the Gore-Chernomyrdin agreement and the legalisms employed to 
justify it over the last week, indeed over the last 5 years, 
has fostered a measure of distrust between the executive and 
legislative branches of government.
    I hope that this hearing will yield consultation between 
the administration and Congress that has been so acutely 
lacking in the Gore-Chernomyrdin agreement thus far. It is 
imperative that we emerge from this dialog fully cognizant of 
how the agreement has affected the full range of U.S. national 
security interests abroad. It is imperative that we work 
together to ensure that the administration's policy initiatives 
are fully consistent with U.S. law.
    Allow me to close by noting that President Woodrow Wilson 
once called for ``open covenants, openly arrived at.'' Only in 
the rarest of circumstances should secrecy impinge upon 
Wilson's sage advice, and when done so consultation between the 
President and Congress should follow respectfully and 
naturally, not from the reporting of the New York Times. Only 
when this principle is fully respected by the President and his 
administration can the American people be confident that U.S. 
foreign policy is consistent with our Constitution and the 
values and interests it embodies.
    Senator Biden.
    Senator Biden. Thank you very much, Mr. Chairman. Let me 
begin by saying thank you for calling this hearing and, as much 
as I love my friend from Utah, I assume he is not going to be 
asking questions in this hearing. It is very important that 
this be viewed not as a political event. I am sure the majority 
leader did ask for the distinguished chairman of the Judiciary 
Committee to be here, but, with all due respect, I welcome him 
being here, but I hope this is not going to turn into something 
that is more political than substantive.
    My friend from Utah is an extremely substantive person, 
but, as we both know, it is highly unusual to have another 
member of a committee here to question on a subject that is so 
politically charged. But I guess we will get to that when you 
decide we will get to that.
    Mr. Chairman, I am pleased, notwithstanding what I just 
said, that we are having this hearing today. It is all too easy 
for press leaks and innuendo to crowd out rational discussion 
on the many foreign policy challenges that face our country. 
Today we have a chance to actually learn some facts and also to 
set the record straight.
    We should let the American people know the truth about the 
Gore-Chernomyrdin agreement of 1995: One, that it was a good, 
sensible agreement that did not give Russia any relief from 
U.S. law; and two, that it kept the lid on Russian arms flows 
from Iran, in fact, Russia's actual arms deals with Iran during 
the Clinton administration were only one-tenth of what they 
were during the Bush administration; that there were no legal 
requirements to give Congress formal notice of the Gore-
Chernomyrdin deal, but at least one, at least one, of the House 
committees was briefed. Although I cannot find the data, I am 
told that the offer was made to brief this committee in 1995. 
But the House committee was briefed in 1995 on this agreement, 
which I think should lay rest to the notion that this was an 
attempt on the part of the administration to pull the wool over 
Congress' eyes.
    But let us review a few points. First, what was this deal? 
This deal--quote, unquote, ``deal''--was a followup to the 
Clinton-Yeltsin summit of September 1994 and May 1995 where 
President Yeltsin promised not to enter into any new arms 
contracts with Iran, emphasis on ``new''. That is a pretty good 
idea.
    Vice President Gore's job in June 1995 was to nail down the 
details of that Clinton-Yeltsin agreement so that Russia could 
not readily get out from under President Yeltsin's promise. He 
got Chernomyrdin to agree in writing that Yeltsin's promise 
covered not only weapons themselves, but also arms-related 
technologies. In other words, Russia would not be able to sell 
Iran technology to manufacture the weapons that it was agreeing 
not to sell.
    According to the fact sheet provided to this committee 
after the Gore-Chernomyrdin talks, Russia also agreed that arms 
delivery under the old contract with Iran ``will be ended 
within a few years and will not provide Iran with new weapons 
capabilities or alter the military balance in the region.'' 
Vice President Gore added that Russia had provided details on 
those existing contracts.
    OK, so far so good. So why all the excitement now, 5 years 
later? Well, it seems that somebody gave the press a copy of 
the text that Gore and Chernomyrdin signed and alleged that the 
United States had promised to let Russia violate U.S. law. Then 
some people began wondering whether this text was what we call 
an executive agreement. If it were, then it would have to 
notify the Congress.
    For example, it explains how the White House could say that 
Russia will not give Iran new weapons capabilities. Apparently 
there was an attached annex that ``represents the totality of 
the existing obligations that Russia reserves the right to 
fulfil pursuant to its undertakings.'' That means that we not 
only got details from Chernomyrdin, we also got agreement that 
there could be no other details. We got the list and, like 
Regis Philbin, when he asked, ``is this your final answer,'' 
Chernomyrdin said: ``Yes, this is my final answer.'' He 
attached it.
    In addition, point two of the document says: ``This 
undertaking also precludes 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.'' That plugs another loophole.
    Now, what did the United States give in return? We agreed 
to invite Russia to help develop a new arms export control 
regime, what was later called--how do you pronounce it--
Wassenaar; I do not want to mispronounce it: Wassenaar 
agreement. Actually, Presidents Clinton and Yeltsin had already 
agreed on it at the summit of 1994.
    It makes sense, too. We cannot control arms sales to areas 
of concern if we do not include Russia in that regime. After 
all, Russia has lots of weapons to sell and they need the 
money. We apparently also told Russia what arms we had sold to 
Saudi Arabia since 1992 and what arms we were planning to sell. 
I do not see any promise to limit those arms, so we are not 
giving away anything. We just told them what in fact we sold or 
planned on selling. Maybe we were reassuring Russia that we 
were not giving the Saudis fancy warheads for long-range 
missiles that they had bought from China. We had objected 
loudly to the missile sale once it was discovered, so these 
reassurances would be perfectly consistent with our publicly 
declared nonproliferation policy.
    Finally, we said: ``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. This assurance is premised upon the assumption 
that Russia's disclosures in the annex are complete and fully 
accurate.''
    Now let us look at that statement: ``The United States is 
prepared to take--'' We did not say ``the United States is 
committed.'' Indeed, we called this only an ``assurance,'' not 
a ``promise.'' We also say that it only holds if the Russian 
annex is ``complete and fully accurate.'' That sounds like a 
pretty good job of protecting our position to me.
    So what actions is the United States prepared to take? We 
give assurance of ``appropriate steps'' to avoid penalizing 
Russia under domestic laws. What are those ``appropriate 
steps''? I can guarantee you one thing: They are steps within 
the law. This document does not simply say you get a ``Get Out 
of Jail Free'' card, Russia. Russia gets out of jail only if 
the steps that are taken are appropriate under American law.
    What penalties might otherwise arise under domestic law 
with respect to the completion of transfers disclosed in the 
annex? One relevant law was the Iran-Iraq Nonproliferation Act 
of 1992, the so-called McCain-Gore act. That law requires 
sanctions against governments that transfer ``destabilizing 
numbers and types'' of ``advanced conventional weapons'' to 
Iran or Iraq.
    Thus, you must find both the sale of advanced conventional 
weapons to Iran and that these are of a number and type so as 
to tip the balance of power in the region. Now, what is 
``advanced conventional weapons''? Section 1608(1) of the law 
defines them to include such weapons as ``long-range precision-
guided munitions, fuel-air explosives, cruise missiles, low 
observability aircraft, military satellites, laser weapons, and 
electronic warfare systems.'' Russia has not sold any of that 
to Iran since the Gore-Chernomyrdin agreement.
    The determination also includes ``such other items or 
systems as the Pentagon may determine necessary.'' But the law 
leaves it to the President to determine--let me read it again. 
The definition also includes the following phrase: ``such other 
items or systems as the President may determine necessary.'' 
The law leaves it to the President to determine.
    Only one specified weapon type might apply here, and that 
is advanced military aircraft. Note there is no mention of 
submarines in this law, despite some people's posturing on this 
issue, and nobody says that some MiG's and a few Su-27 aircraft 
were enough to be ``destabilizing.'' According to Sandy Berger, 
the Pentagon analyzed the Russian arms sales at the time and 
concluded that they were not ``destabilizing.''
    But we do not have to trust the government on this. Anthony 
Cordesman, who holds the Arleigh Burke Chair at the Center for 
Strategic and International Studies, wrote recently: ``Iran has 
not received destabilizing transfers of advanced conventional 
weapons.'' And guess what, folks. For those of you who do not 
know Tony Cordesman, back in 1992 he was John McCain's national 
security assistant, working on the McCain-Gore bill. If anybody 
knows what they meant by the law, he does. He says, and let me 
quote again: ``Iran has not received destabilizing transfers of 
advanced conventional weapons.''
    Like his former boss, Tony tells it like it is, and here is 
his general comment on the current excitement: ``Political 
campaigns are a poor time to debate complex military issues, 
particularly when the debate is based upon press reports that 
are skewed to stress the importance of a story at the expense 
of objective perspectives and the facts.'' That is not my 
quote, that is not the administration's quote; that is Gore's 
former national security--excuse me, McCain's former national 
security adviser's quote, who now heads a prestigious institute 
that deals with this issue.
    Another law dealt with countries, like Russia, that 
transfer weapons to states that support international terrorism 
like Iran. But that law applies only to ``lethal military 
equipment provided under contract entered into after the date 
of this act.'' There was no such contract, so there was nothing 
to trigger a ban on assistance to Russia under this provision.
    Now to me, the laws are pretty clear. So is the fact, in my 
view, that they did not require any sanctioning of Russia for 
its conventional arms shipments to Iran after the Gore-
Chernomyrdin agreement went into effect. But there is a second 
leak: a secret State Department cable containing the text of a 
letter from Secretary Albright to Russian Foreign Minister 
Ivanov, that some people point to as a sign of something awful.
    What does the letter say? As with the memorandum I 
referenced earlier, I have not seen the letter. But let us look 
at the more cited paragraph that was leaked from the letter, so 
I am not confirming anything except laying out what was already 
in the press: ``Without aide memoire, Russia's conventional 
arms sales to Iran would have been subject to sanctions based 
upon various provisions of our laws. This possibility still 
exists in the event of continued Russian transfers after 
December 31, 1999, termination date.''
    Now, I see two ways to interpret the paragraph. One is that 
Secretary Albright is saying, if you had not obeyed the aide 
memoire you would have gotten in trouble. And that is true. If 
Russia had signed new deals to sell ``lethal military 
equipment'' to Iran or if it had sold lots of ``advanced 
conventional weapons'' to Iran, it would have forced us to 
invoke sanctions under our law.
    But they basically did obey the aide memoire and stayed out 
of trouble in this regard. We know that Russia failed to meet 
the December 31, 1999, deadline for completing its arms 
deliveries and I suspect that the Secretary was trying to keep 
Russia on the reservation.
    The other responsibility interpretation is that the 
Secretary was overstating her case in order to use U.S. law as 
a ``club'' with which to beat the Russians. I know that we are 
all dedicated to the truth, but is there some rule that the 
United States cannot try to frighten the Russians? Does anybody 
here think that the Boy Scout's Oath applies to secret 
diplomatic notes?
    Of course, partisans have said that Secretary Albright's 
letter proves that Russia had already broken the law. But we 
already saw that there is no independent factual basis for that 
assertion.
    OK, so we all know that the Gore-Chernomyrdin arrangement 
was perfectly legal. Was it, however, something that had to be 
reported to the Congress? The answer to that is no. Now, why do 
I say that? The Case-Zablocki act of 1972 requires any 
``international agreement'' other than a treaty must be 
submitted to the Congress within 60 days after it enters into 
force. Section (d) of the act states: ``'The Secretary of State 
shall determine for and within the executive branch whether an 
agreement constitutes an international agreement within the 
meaning of this section.''
    So what is an ``international agreement''? That term 
signifies a legally binding agreement, one that can be enforced 
under international law. The question of whether an agreement 
is binding or is a nonbinding political agreement was codified 
in the 1981 State Department regulation. According to the 
Reagan-era regulation, the key question is the intent of the 
parties: Do the two sides intend to legally bind one another by 
agreement and does this document reflect that statement?
    Let us go back to that picture in the paper of the leaked 
document. Judging from that text, Russia's obligation was 
fairly clear. But remember what we found regarding the United 
States. All we gave was an ``assurance'' that ``the United 
States is prepared''--I am quoting--``The United States is 
prepared to take appropriate steps.'' Does that sound to you 
like a legally binding commitment? It certainly does not to me. 
I might add parenthetically, there is a question of whether or 
not--and I will end with this--there is a question whether or 
not the Case-Zablocki act is even constitutional and whether or 
not it violates the separation of powers doctrine. But that is 
a separate issue I will not take up.
    I would like to ask unanimous consent the remainder of my 
statement be placed in the record, with this final closing 
comment, if I may.
    Senator Smith. Without objection.
    [The prepared statement of Senator Biden follows:]

           Prepared Statement of Senator Joseph R. Biden, Jr.

    Thank you, Mr. Chairman. I am very pleased that this hearing was 
called. It's all too easy for press leaks and innuendo to crowd out 
rational discussion of the many foreign policy challenges that our 
country faces. Today we have a chance to actually learn some facts--and 
also to set the record straight.
    We should let the American people know the truth about the Gore-
Chernomyrdin agreement of 1995:

   that it was a good, sensible arrangement that did not give 
        Russia any relief from U.S. law;

   that it kept the lid on Russian arms flows to Iran--in fact, 
        Russia's annual arms deals with Iran during the Clinton 
        administration were only a tenth of what they were during the 
        Bush administration; and

   that there was no legal requirement to give Congress formal 
        notice of the Gore-Chernomyrdin deal, but at least one House 
        committee was briefed.

    Let's review those points. First, what was this deal? It was a 
follow-up to the Clinton-Yeltsin summits of September 1994 and May 
1995, where President Yeltsin promised not to enter into any new arms 
contracts with Iran. That was a pretty good deal.
    Vice President Gore's job, in June 1995, was to nail down the 
details, so that Russia could not readily get out from under President 
Yeltsin's promise. He got Chernomyrdin to agree in writing that 
Yeltsin's promise covered not only weapons themselves, but also arms-
related technologies. In other words, Russia would not be able to sell 
Iran the technology to manufacture the weapons that it was agreeing not 
to sell.
    That's a famous loophole that the Chinese love to exploit. ``Oh, 
we're not selling them weapons, we're only selling them the technology 
to make weapons.'' Al Gore plugged that loophole regarding Russian 
conventional arms for Iran, right at the start.
    According to a fact sheet provided to this committee after the 
Gore-Chernomyrdin talks, Russia also agreed that arms deliveries under 
its old contracts with Iran ``will be ended within a few years and will 
not provide Iran with new weapon capabilities or alter the military 
balance in the region.'' Vice President Gore added that Russia had 
provided details on those existing contracts.
    OK, so far so good. So why all the excitement now, five years 
later? Well, it seems that somebody gave the press a copy of the text 
that Gore and Chernomyrdin signed, and alleged that the United States 
had promised to let Russia violate U.S. law.
    Then some people began wondering whether this text was what we call 
an ``executive agreement.'' If it were, then it would have to be 
notified to Congress.
    As I will explain in a moment, these concerns are a bunch of what 
President Dwight Eisenhower used to call ``poppycock.'' Let me make 
clear, however, that I don't expect the press to be experts on the 
legal implications of an aide memoire signed by a Vice President and a 
Prime Minister. They don't see those every day.
    What I do recommend is that the Senate take a deep breath and count 
to 10 before giving credence to every accusation that accompanies such 
a leak. Let's look carefully at this document, and at the allegations.
    Now, I haven't seen the document that was leaked, but one newspaper 
printed a picture of much of it. The picture shows a page marked 
``SECRET,'' so I don't expect the White House to say, ``that's our 
memo.''
    But somehow I suspect that if it were a fake, we would have heard 
by now. So let's assume that the leaked document is genuine.
    What does it tell us? Mainly, it confirms all those things that the 
White House told us back in 1995. For example, it explains how the 
White House could say that Russia will not give Iran ``new weapon 
capabilities.'' Apparently there was an ``attached Annex'' that 
``represents the totality of the existing obligations that Russia 
reserves the right to fulfill pursuant to its undertakings.''
    That means that we not only got details from Chernomyrdin, we also 
got agreement that there could be no other details. We got a list and, 
like Regis Philbin, we asked, ``Is that your final answer?'' 
Chernomyrdin said, ``yes, that's my final answer.''
    In addition, point 2 of the document says: ``This undertaking also 
precludes 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.'' That's plugging another loophole.
    Point 4 of the document says: ``Russia will terminate all arms-
related transfers to Iran not later than 31 December 1999.'' OK, the 
White House said the Russian contracts ``will be ended within a few 
years,'' but actually we got a specific date. That's even better.
    Now, how strong are all these assurances from Russia? Well, for 
what it's worth, point one calls them ``Russia's obligation'' and point 
six calls them ``commitments.'' Not bad; those are good words.
    What did the United States give in return? We agreed to invite 
Russia to help develop a new arms export control regime--what was later 
called the Wassenaar Arrangement. Actually, Presidents Clinton and 
Yeltsin had already agreed on that at a summit in September 1994. It 
made sense, too; you can't control arms sales to areas of concern if 
you don't include Russia in the regime. After all, Russia has lots of 
weapons to sell, and they need the money.
    We apparently also told Russia what arms we had sold to Saudi 
Arabia since 1992, and what arms we were planning to sell. I don't see 
any promise to limit those arms, so we weren't giving anything away. 
Maybe we were reassuring Russia that we were not giving the Saudis 
fancy warheads for the long-range missiles that they had bought from 
China. We had objected loudly to that missile sale once we discovered 
it, so those reassurances would be perfectly consistent with our 
publicly declared non-proliferation policy.
    Finally, we said: ``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. This assurance is premised 
on the assumption that the Russian disclosures in the Annex are 
complete and fully accurate.''
    Let's look at that statement. ``The United States is prepared to 
take . . .'' We didn't say ``the United States is committed.'' Indeed, 
we call this only an ``assurance,'' not even ``a promise.'' We also say 
that it only holds if that Russian Annex is ``complete and fully 
accurate.'' That sounds like a good job of protecting our position.
    So, what action is the United States ``prepared to take?'' We give 
assurance of ``appropriate steps'' to avoid penalizing Russia under 
domestic law. What are ``appropriate steps?'' I can guarantee you one 
thing: they are steps within the law. This document does not simply 
say, ``get out of jail free.'' Russia gets out of jail only if that 
``step'' is ``appropriate.''
    What ``penalties . . . might otherwise arise under domestic law 
with respect to the completion of the transfers disclosed in the 
Annex?'' One relevant law was the Iran-Iraq Arms Non-Proliferation Act 
of 1992, the so-called ``McCain-Gore Act.''
    That law requires sanctions against governments that transfer 
``destabilizing numbers and types'' of ``advanced conventional 
weapons'' to Iran or Iraq. Thus, you must find both the sale of 
advanced conventional weapons to Iran, and that these are of a number 
and type so as to tip the balance of power in the region.
    Now, what are ``advanced conventional weapons?'' Section 1608(1) of 
the law defines them to include such weapons as ``long-range precision-
guided munitions, fuel air explosives, cruise missiles, low 
observability aircraft, . . . military satellites, laser weapons, . . . 
electronic warfare systems.'' Russia hasn't sold any of that to Iran 
since the Gore-Chernomyrdin arrangement.
    The definition also includes ``such other items or systems as the 
President may . . . determine necessary.'' But the law leaves that to 
the President to determine.
    Only one specified weapons type might apply here, ``advanced 
military aircraft.'' Note that there is no mention of submarines in 
this law, despite some people's posturing on that issue. And nobody 
says that some MiG's and a few Su-27 aircraft were enough to be 
``destabilizing.'' According to Sandy Berger, the Pentagon analyzed the 
Russian arms sales at the time and concluded that they would not be 
``destabilizing.''
    But we don't have to trust the Government on this. Anthony 
Cordesman, who holds the Arleigh Burke chair at the Center for 
Strategic and International Studies, wrote recently: ``Iran . . . has 
not . . . received destabilizing transfers of advanced conventional 
weapons.''
    And guess what, folks? For those of you who don't know Tony 
Cordesman, back in 1992, he was John McCain's national security 
assistant, working on the McCain-Gore bill. If anybody knows that law, 
he does.
    Like his former boss, Tony tells it like it is. Here is his general 
comment on the current excitement:

          Political campaigns are a poor time to debate complex 
        military issues, particularly when the debate is based on press 
        reports that are skewed to stress the importance of the story 
        at the expense of objective perspective and the facts.

    Another law dealt with countries (like Russia) that transfer 
weapons to states that support international terrorism (like Iran). But 
that law applies only to ``lethal military equipment provided under a 
contract entered into after the date of enactment of this Act.'' There 
was no such contract, so there was nothing to trigger a ban on 
assistance to Russia under this provision.
    Now to me, the laws are pretty clear. So is the fact that they did 
not require any sanctioning of Russia for its conventional arms 
shipments to Iran after the Gore-Chernomyrdin arrangement went into 
effect. But there was a second leak--of a ``Secret'' State Department 
cable containing the text of a letter from Secretary of State Albright 
to Russian Foreign Minister Igor Ivanov--that some people point to as a 
sign of something awful.
    What does the letter say? As with the Aide Memoire, I haven't seen 
it. But let's look at the more cited paragraph in that leaked letter:

          Without the Aide Memoire, Russia's conventional arms sales to 
        Iran would have been subject to sanctions based on various 
        provisions of our laws. This possibility still exists in the 
        event of continued Russian transfers after the December 31 
        [1999] termination date.

    Now, I see two ways to interpret this paragraph. One is that 
Secretary Albright is saying, ``if you hadn't obeyed the Aide Memoire, 
you would have gotten in trouble.'' And that's true. If Russia had 
signed new deals to sell ``lethal military equipment'' to Iran, or if 
it had sold lots of ``advanced conventional weapons'' to Iran, it would 
have forced us to invoke sanctions under our law.
    But they basically did obey the Aide Memoire, and stayed out of 
trouble in this regard. We know that Russia failed to meet the December 
31, 1999, deadline for completing its arms deliveries, and I suspect 
that the Secretary was trying to keep Russia on the reservation.
    The other reasonable interpretation is that the Secretary was 
overstating her case, in order to use U.S. law as a ``club'' with which 
to beat the Russians. I know that we are all dedicated to the truth, 
but is there some rule that the United States can't try to frighten the 
Russians? Does anybody here think the Boy Scout's Oath applies to 
secret diplomatic notes?
    Of course, partisans have said that Secretary Albright's letter 
proves that Russia had already broken the law. But we already saw that 
there is no independent factual basis for that assertion.
    OK, so we all know that the Gore-Chernomyrdin arrangement was 
perfectly legal. Was it, however, something that had to be reported to 
Congress? No. Now, why do I say that?
    The ``Case-Zablocki Act'' of 1972 requires that any ``international 
agreement'' other than a treaty must be submitted to Congress within 60 
days after it enters into force. Subsection (d) of the Act states: 
``The Secretary of State shall determine for and within the executive 
branch whether an arrangement constitutes an international agreement 
within the meaning of this section.''
    So what is an ``international agreement?'' That term signifies a 
legally binding agreement, one that can be enforced under international 
law. The question of whether an agreement is binding (or is a non-
binding political agreement) was codified in a 1981 State Department 
Regulation. According to that Reagan-era regulation, the key question 
is the intent of the parties. Do the two sides intend to be legally 
bound by the agreement? Does the document reflect that?
    Let's go back to that picture in the paper of the leaked document. 
Judging from that text, Russia's obligations are fairly clear.
    But remember what we found regarding the United States. All we gave 
was an ``assurance'' that ``the United States is prepared to take 
appropriate steps.'' Does that sound to you like a legally binding 
commitment? It certainly doesn't to me.
    Now, there was a political commitment, on both sides. Such an 
agreement is not uncommon. For example, President Ford signed the 
Helsinki Final Act, an important and famous multilateral agreement, but 
it was not an ``executive agreement'' under the law.
    In the case of the Gore-Chernomyrdin arrangement, the executive 
branch did brief the staff and members of the House International 
Relations Committee. There was no oral briefing on the Senate side, but 
I am sure we could have gotten one if we had asked. And remember, the 
broad outlines of what we got were already known.
    In short, then, both the deal and the handling of the deal were 
perfectly legal. If anybody pretends otherwise, remind them of that 
lovely Dwight Eisenhower word: ``poppycock.''
    That leaves us with the real question: was this a good deal? It 
certainly looks like a good deal. Russia commits to stop its arms 
transfers to Iran once its current deals are done, they give us a 
definitive list of the current deals, they agree that they won't modify 
those deals, and they give us a time certain for the end of deliveries. 
All we give them is an ``assurance'' that the deals on that list aren't 
enough to trigger sanctions under U.S. law.
    But what actually happened? Did this deal work? Let's see what Tony 
Cordesman has to say. He writes:

          Iran has made major cuts in its new arms agreements with 
        Russia since 1996, and has increasing[ly] had to rely on lower 
        quality suppliers like China. . . .

          The drop in new arms agreements with Russia reflected both 
        Iran's financial problems and the result of U.S. pressures that 
        had led President Yeltsin not to make major new arms sales to 
        Iran.'' [Emphasis added.]

    I ask you, folks, is that a deal, or is that a deal? The Gore-
Chernomyrdin arrangement was not only a good deal on paper, it was a 
good deal in practice as well.
    How good was that deal? Let's look at the data from Tony 
Cordesman's analysis. Here's a chart of new arms sale agreements with 
the Middle East since the Gore-Chernomyrdin deal. Russia's agreements 
are just the tip of that little Iran column at the lower left, worth 
$200 million.
    Cordesman calls those deals ``minor, . . . [with] little military 
meaning, and . . . more technical than substantive.'' By comparison, in 
an earlier study, he reported that from 1987 through 1990, Russia and 
Iran signed $2.5 billion in arms sale agreements.
    What about those arms deliveries under the old contracts? On this 
second chart, those are the middle part of the little Iran column at 
the lower left, worth $700 million. By comparison, the United States 
alone delivered to Saudi Arabia 22 times what Russia delivered to Iran.
    This third chart shows the trends in arms deliveries over time. 
With the end of the Cold War, and after the Gulf War, deliveries to 
Iraq and Yemen go to ground. World-wide deliveries to Iran go down more 
gradually. By 1997, even Kuwait and the United Arab Emirates are 
getting more arms than Iran--and Saudi Arabia is getting 10 or 20 times 
what Iran is getting.
    How does Mr. Cordesman evaluate Iran's use of these new arms? He 
writes:

          Iran's procurements to date cannot compensate for the steady 
        decay of Iran's older equipment. . . .

          Iran is too weak to seek a direct conflict that involves the 
        U.S., or to risk another war with [Iraq]. It will also be years 
        before Iranian arms imports and military production efforts can 
        give it enough capability to deliberately initiate a conflict 
        or reveal whether it has aggressive intentions.

    So now we have the substantive data, as well as the legal 
explanations, and--surprise!--the Gore-Chernomyrdin deal was legal, it 
was a good deal, and it worked.
    That leaves us one final question. Why are we here? My answer is 
that we are here to see, largely or wholly in closed session, whether 
the case is as clear-cut in favor of the Gore-Chernomyrdin deal as I 
believe it is. For that I truly thank our chairmen. Given the swirl of 
accusations over the last couple of weeks, we need this hearing.
    Mr. Chairman, I ask that the text of Tony Cordesman's study, 
Iranian Arms Transfers: The Facts, be made a part of the record of this 
hearing. I have some copies for my colleagues and for the press, and I 
urge our audience to download it from the CSIS website at www.csis.org. 
Thank you, Mr. Chairman.

    Senator Biden. It certainly looks like to me this is a 
pretty good deal. Russia commits to stop arms transfers to Iran 
once its current deals are done, they give us a definitive list 
of the current deals, they agree that they will not modify 
those deals, and they give us time certain for the end of the 
deliveries. All we gave them was an assurance that the deals on 
that list are not enough to trigger sanctions under U.S. law.
    But what actually happened? Did the deal work? Let us see 
again what Tony Cordesman says. He writes: ``Iran has made 
major cuts in its new arms agreements with the Russians since 
1996 and has increasingly had to rely on lower quality 
suppliers like China.'' Cordesman goes on: ``The drop in new 
arms agreements with Russia reflected both Iran's financial 
problems and the result of U.S. pressure that had led President 
Yeltsin not to make major new arms sales to Iran.''
    I ask you, folks: Is that a deal or is that a deal? The 
Gore-Chernomyrdin agreement was not only a good deal on paper, 
it was a good deal in practice as well. That leaves us one 
final question: Why are we here? My answer is that we are here 
to see, largely or wholly in closed session, whether the case 
is as clear-cut in favor of the Gore-Chernomyrdin deal as I 
believe it is. What I truly think is that it was.
    I want to thank our chairman. Given the swirl of 
accusations over the last couple of weeks, we need this 
hearing.
    Mr. Chairman, I ask the text of Tony Cordesman's study, 
``Iran Arms Transfers: The Facts,'' be made part of the record 
of this hearing, and I have some copies for my colleagues and 
for the press, and I urge our audience to download it from the 
CSIS Web site at www.csis.org.
    Thank you, Mr. Chairman.
    Senator Smith. Thank you, Senator Biden. Without objection, 
we will include that.
    [The study referred to begins on page 33.]
    Senator Smith. Senator Brownback.
    Senator Brownback. Thank you very much, Mr. Chairman. I 
appreciate your holding this hearing.
    Before I proceed with my statement, I think a couple things 
ought to be set straight here. I know that if Chairman Helms 
were here, he would want me to set some of the facts straight. 
I have a statement here from him that ``in 1995 neither 
Chairman Helms nor Senator Pell,'' who was ranking member, 
``nor any of their staff were briefed on the existence of a 
legally binding international agreement with the Russians.''
    ``Make no mistake about it.'' This is further from Senator 
Helms: ``This agreement is intended to serve as a legally 
binding document. The administration admitted last week that 
this was their intent going into the negotiations and last week 
a senior Russian official from the embassy told the Foreign 
Relations Committee staff that Russia regarded the document as 
legally binding.
    ``This agreement is chockful of specific commitments by the 
United States and Russia: The U.S. will do this, Russia will do 
this. As such, it is either a secret treaty or an agreement 
covered by Case-Zablocki. In either case, it was not submitted 
as the law requires. It was instead concealed from Congress. In 
various briefings, this deal on armaments to Iran that was 
negotiated with the Russians was attributed to President 
Clinton and President Yeltsin.
    ``Al Gore, the administration claimed, merely clarified in 
1995 with Victor Chernomyrdin what Yeltsin had already pledged 
to do. It turns out that this was not true. Al Gore did far 
more than pursue clarification of an understanding with the 
Russians. No mention was ever made that the Vice President has 
signed a secret agreement that included far-ranging 
obligations. Certainly no mention was made that the Vice 
President had pledged to avoid various U.S. laws. Finally, no 
mention was made that the administration had decided to 
withhold from Congress a document that it legally was required 
to submit.''
    Now, none of us can definitively speak about what the House 
was told, but I understand that they were similarly misled. 
Certainly the Senate was never appraised of the true facts 
surrounding this matter.
    With that clarification, that is a statement from Chairman 
Helms.
    I want to also answer the question, too--well, let me do 
that in a little bit.
    I think it is good that we are here to finally clear the 
air over the Gore-Chernomyrdin agreement which allowed Russia 
to continue to sell conventional weapons to Iran and at the 
same time to continue to receive many millions of dollars of 
United States assistance. I certainly hope that the 
administration witnesses here today have come, not only to 
explain the agreement, but to provide us with the copies of the 
aide memoire, the annexes, the exchanges of letters, and other 
documents which the Foreign Relations Committee has formally 
requested. If you had provided that previously, we might not be 
here today.
    Let me state at the outset why we are meeting here today, 
at this late date in the final days of the 106th Congress. We 
are here today because exactly 13 days ago the New York Times 
revealed that Vice President Gore had signed a secret agreement 
with Russian Prime Minister Victor Chernomyrdin in which the 
Vice President made commitments to the Russian Government that 
the Clinton-Gore administration would ignore U.S. 
nonproliferation laws.
    Frankly, I would prefer not to be holding this hearing 
today. I would have preferred that the Congress had been 
provided with a copy of the Gore-Chernomyrdin agreement 5 years 
ago. I would have preferred that the Congress had had a chance 
back then to thoroughly review the legality of Vice President 
Gore's commitment to Mr. Chernomyrdin, as well as his promise 
in writing to--and I am quoting from the document from the 
press--``avoid any penalties to Russia that might otherwise 
arise under domestic law'' for their weapons transfers to Iran.
    Unfortunately, until the New York Times broke the story 13 
days ago, Congress had not seen this written, signed agreement 
between the Vice President and the Russian Prime Minister. I 
hope that we will hear why the administration failed to 
disclose its existence and why the Vice President felt he had 
the legal authority to make a commitment on behalf of the 
United States not to implement U.S. sanctions law.
    This Gore-Chernomyrdin deal has broad foreign policy 
ramifications. The decision to allow Russia to escape the 
consequences of providing Iran with conventional weapons is one 
which affects not only the security of American military 
personnel in the gulf, but also the security of our allies in 
the region. This is not the type of agreement which should have 
been kept from the American people, and it is certainly not 
something that Members of Congress should have learned about 
from the press.
    Now, there are assertions here that, well, so what, it was 
a good deal. I think that is certainly up for question. I have 
a letter here that I want to submit for the record, signed by 
former Secretary of State Henry Kissinger, Dr. Brzezinski, 
former National Security Adviser, Mr. Woolsey, former Director 
of the CIA, where they question highly whether this was a good 
deal or not. They state this:
    ``The President's most important job is safeguarding our 
Nation's security and our ability to protect our interests, our 
citizens, and our allies and friends. The military balance in 
regions of vital interest to America and our allies, including 
the Persian Gulf, which is a critical source of the world's 
energy supplies, is the essential underpinning for a strong 
foreign policy. This is why we are deeply disturbed by the 
agreement made by Vice President Gore and then-Russian Premier 
Chernomyrdin, in which America acquiesced in the sale by Russia 
to Iran of highly threatening military equipment, such as 
modern submarines, fighter planes, and wake-homing torpedoes. 
``We also find it incomprehensible that this agreement was not 
fully disclosed even to those committees of Congress charged 
with receiving highly classified briefings, apparently at the 
request of the Russian Premier. But agreement to this request 
is even more disturbing since the Russian sales could have 
brought about sanctions against Russia in accordance with the 
1992 U.S. law sponsored by Senator John McCain and then-Senator 
Al Gore.''
    Mr. Chairman, I ask that this statement be included in the 
record.
    Senator Smith. Without objection.
    [The material referred to follows:]

For Immediate Release--October 24, 2000--Committee on Foreign Relations

     Former Officials ``Deeply Disturbed'' by Gore Deal With Russia

  Bipartisan Group, Supporters of Both Bush and Gore, Say Failure to 
             Disclose Deal to Congress ``Incomprehensible''

    Washington, DC.--A bi-partisan group of former secretaries of 
state, secretaries of defense, national security advisors and CIA 
directors have issued a statement declaring they are ``deeply disturbed 
by the agreement made between Vice President Gore and then Russian 
Premier Chernomyrdin in which America acquiesced in the sale by Russia 
to Iran of highly threatening military equipment . . .''
    The statement--signed by supporters of both Gov. Bush and Vice 
President Gore--also called the Administration's failure to disclose 
the agreement to Congress ``incomprehensible.''
    The statement was signed by: George Shultz, James Baker, Zbigniew 
Brzezinski, Frank Carlucci, Lawrence Eagleburger, Henry Kissinger, 
Donald Rumsfeld, James Schlesinger, Brent Scowcroft, Caspar Weinberger 
and James Woolsey.
    ``We . . . find it incomprehensible that this agreement was not 
fully disclosed even to those committees of Congress charged with 
receiving highly classified briefings--apparently at the request of the 
Russian Premier,'' the statement declares.
    A copy of the full statement follows.

   2statement by former secretaries of state, defense, directors of 
  central intelligence and national security advisors on the sale of 
                        russian weapons to iran

                            October 24, 2000

    The following individuals, who include supporters of both Governor 
George W. Bush and Vice President Al Gore, believe strongly that:

          ``The President's most important job is safeguarding our 
        nation's security and our ability to protect our interests, our 
        citizens and our allies and friends. The military balance in 
        regions of vital interest to America and her allies--including 
        the Persian Gulf, which is a critical source of the world's 
        energy supplies--is the essential underpinning for a strong 
        foreign policy.

          ``This is why we are deeply disturbed by the agreement made 
        between Vice President Gore and then Russian Premier 
        Chernomyrdin in which America acquiesced in the sale by Russia 
        to Iran of highly threatening military equipment such as modern 
        submarines, fighter planes, and wake-homing torpedoes.

          ``We also find incomprehensible that this agreement was not 
        fully disclosed even to those committees of Congress charged 
        with receiving highly classified briefings--apparently at the 
        request of the Russian Premier. But agreement to his request is 
        even more disturbing since the Russian sales could have brought 
        about sanctions against Russia in accordance with a 1992 U.S. 
        law sponsored by Senator John McCain and then Senator Al 
        Gore.''

George P. Shultz, former Secretary of State.

James A. Baker, III, former Secretary of State.

Zbigniew Brzezinski, former Assistant to the President for National 
        Security Affairs.

Frank C. Carlucci, former Secretary of Defense and former Assistant to 
        the President for National Security Affairs.

Lawrence S. Eagleburger, former Secretary of State.

Henry A. Kissinger, former Secretary of State and former Assistant to 
        the President for National Security Affairs.

Donald H. Rumsfeld, former Secretary of Defense.

James R. Schlesinger, former Secretary of Defense and former Director 
        of Central Intelligence.

Brent Scowcroft, former Assistant to the President for National 
        Security Affairs.

Caspar W. Weinberger, former Secretary of Defense.

R. James Woolsey, Attorney and former Director of Central Intelligence.

    Senator Brownback. I note again, signed by former National 
Security Adviser Dr. Brzezinski, Secretary of State Henry 
Kissinger, and Mr. Woolsey, amongst others that find this a 
highly questionable deal.
    Senator Smith. Without objection.
    Senator Brownback. I hope we will hear from the 
administration how this agreement is not a violation of the 
1992 Gore-McCain act and how having a world leader in state-
sponsored terrorism armed with Kilo-class submarines, advanced 
mines, and torpedoes, and other such weapons is not 
destabilizing.
    The Vice President and senior administration officials have 
vigorously denied that Mr. Gore made a secret commitment to 
Russia to ignore any U.S. sanctions laws. A Gore spokesman told 
the New York Times that: ``None of the weapons included in the 
agreement met the standard for triggering sanctions under the 
Gore-McCain law.'' This assertion is explicitly contradicted by 
another secret document, a letter sent January 13 by Secretary 
of State Madeleine Albright to Russian Foreign Minister Igor 
Ivanov and revealed last week by the Washington Times, another 
press source. We have that posted over here to my right. I hope 
our witnesses have brought us a copy of this letter so that we 
can have the benefit of the entire text and context.
    In the meantime, I want to quote from that letter at some 
length. In it Secretary Albright declares: ``We have also 
upheld our commitment not to impose sanctions for these 
transfers disclosed in the annex to the aide memoire.'' 
Skipping on down: ``Without the aide memoire, Russia's 
conventional arms sales to Iran would have been subject to 
sanctions based on various provisions of our laws.'' Still 
further: ``This possibility still exists in the event of 
continued Russian transfers after the December 31 termination 
date.''
    In her letter, at least those parts of it that I have seen, 
courtesy of the Washington Times publication of it, Secretary 
Albright is crystal-clear. She declares that Russia's arms 
sales to Iran were in fact subject under U.S. law to sanctions, 
but that those sanctions were never imposed because of Vice 
President Gore's agreement with Mr. Chernomyrdin.
    I see no other way to read Secretary Albright's letter 
except as a blatant admission that this administration 
concluded a secret agreement with Russia in which it promised 
to ignore U.S. nonproliferation laws. I would be very 
interested in learning if the administration can explain to the 
American people this morning before we go into closed session 
why they should not reach precisely that same conclusion.
    There are other concerns as well related to this matter. 
Withholding information from Congress may itself be a violation 
of the law. As previously stated by Senator Biden, the Case-
Zablocki act states that ``any international agreement must be 
transmitted to Congress within 60 days of its negotiation.'' 
Now, this law was specifically enacted in order to protect 
American democracy by holding the President and his people 
accountable for their international agreements. But that law 
appears to have been broken.
    The administration argues that this does not fall under 
Case-Zablocki because they say that the Gore-Chernomyrdin deal 
is a ``understanding'' and not a ``agreement.'' Now, this kind 
of legal hair-splitting causes the American people to question 
the honesty and integrity of their elected officials. Once the 
administration has provided us with all the relevant documents, 
perhaps we can understand their side of this agreement.
    As you can see, there is a broad range of issues to cover 
at this hearing this morning. I look forward to hearing our 
witnesses exploring not only the legality of the Gore-
Chernomyrdin agreement, but also the ramifications of this 
agreement and whether it and the secrecy in which it is 
shrouded was in fact in the best interests of our Nation.
    Thank you, Mr. Chairman.
    Senator Smith. Thank you, Senator Brownback.
    Senator Hagel, welcome, sir.
    Senator Hagel. Mr. Chairman, thank you. I have no 
statement. I am interested in hearing our witnesses.
    Senator Smith. Thank you.
    Senator Biden, do you have another comment?
    Senator Biden. No. I really hope we focus on the facts 
raised, the issues raised by you and Senator Brownback. I just 
hope we focus on it, because what may happen is, for example, 
if the Democrats chaired this committee I hope they would not 
be holding a hearing on ``Europeans Say Bush Pledge to Pull Out 
of Balkans Could Split NATO.'' I mean, this is a political 
season and we should be very careful here.
    Senator Smith. I agree with that.
    We want to thank our witnesses from the State Department. I 
want to publicly thank Assistant Secretary Strobe Talbott for 
the cooperation that he has given to this committee since he 
and I began visiting late last week. We have, at his direction: 
Mr. John P. Barker, Deputy Assistant Secretary of State for 
Nonproliferation Controls; Mr. Joseph M. DeThomas, Deputy 
Assistant Secretary of State for Regional Nonproliferation; Mr. 
Newell L. Highsmith, Attorney Adviser, the Office of Legal 
Adviser for Political Military Affairs, the Department of 
State; Mr. Robert E. Dalton, Assistant Legal Adviser for the 
Treaty Affairs, Office of the Legal Adviser, Department of 
State.
    My agreement with Secretary Talbott is that there would be 
opening statements by Senators, opening statements by State 
Department witnesses if they choose to make them, and no other 
testimony from other witnesses either for or against the 
position that they are going to present to us. These 
understandings I reached with Secretary Talbott and also with 
Senator Brownback, Senator Biden, in order to as much as is 
possible, in a hyperpolitical season in an always political 
town, to try and de-politicize what is a very serious 
substantive issue.
    In that spirit, we welcome our witnesses and we turn to 
you, Mr. Barker, for your statement.

  STATEMENT OF JOHN P. BARKER, DEPUTY ASSISTANT SECRETARY OF 
 STATE FOR NONPROLIFERATION CONTROLS, AND JOSEPH M. DE THOMAS, 
       DEPUTY ASSISTANT SECRETARY OF STATE FOR REGIONAL 
 NONPROLIFERATION, DEPARTMENT OF STATE; ACCOMPANIED BY: NEWELL 
  L. HIGHSMITH, ATTORNEY ADVISER, OFFICE OF LEGAL ADVISER FOR 
  POLITICAL MILITARY AFFAIRS, AND ROBERT E. DALTON, ASSISTANT 
  LEGAL ADVISER FOR TREATY AFFAIRS, OFFICE OF LEGAL ADVISER, 
              DEPARTMENT OF STATE, WASHINGTON, DC

    Mr. Barker. Thank you very much, Mr. Chairman, and thank 
you, Senators.
    We are here today under very difficult and very unhappy 
circumstances. Serious accusations have been leveled, 
classified documents are appearing in the press as photo 
inserts, and our negotiating strategy with Russia on sensitive 
national security matters is being compromised by discussing 
these matters in public.
    Senator Smith. Could you pull that microphone up a little 
closer. It is not carrying very well.
    Mr. Barker. Is that a little better, sir?
    Senator Smith. Yes; thank you.
    Mr. Barker. This will put the next administration----
    Senator Biden. Now you have got to turn it.
    Senator Brownback. Low tech equipment.
    Senator Biden. As Senator Thurmond says, ``these machines 
are not very good.''
    Mr. Barker. Let me repeat the last sentence to make sure 
that all of you got that. Our negotiating strategy with Russia 
on sensitive national security matters is being compromised by 
discussing these matters in public. This will put the next 
administration, no matter who wins the election, in a very 
difficult position for future diplomacy.
    We are here to review what the administration has done over 
the last 7 years to address what we all agree is a serious 
national security problem, Iran's quest to acquire advanced 
conventional and nuclear weapons, as well as the means to 
deliver them. I will first review the matters involving 
conventional arms and my colleague Joe DeThomas will discuss 
briefly nuclear matters.
    We also want to address directly the allegations we have 
heard about violations of laws and agreements purportedly kept 
secret from Congress. We will address what we can in this 
statement, but we are sure you understand that unauthorized 
disclosure of classified information does not mean it has been 
declassified. That is why we appreciate the fact that we will 
be able to go into executive session after this to discuss this 
in more detail.
    I did not participate personally in the negotiations of the 
understanding for Russia to close out its arms sales to Iran. I 
will provide you with answers to the best of my knowledge and 
ability based on a review of the records, the negotiating 
history, and speaking with some of the participants who were 
directly involved in the negotiations.
    But based on that review, I am convinced that Congress was 
properly informed, that the broad outlines of the 
understandings were discussed in public and in testimony before 
the Senate, that the U.S. effectively used the nonproliferation 
sanctions laws as leverage to gain advantage for U.S. national 
security, and that diplomacy, including by the Secretary of 
State, was reinforced in a manner that was fully consistent 
with U.S. national law and U.S. national security.
    Let us turn now to the facts. In 1991 Russia concluded a 
large, multi-year conventional arms contract with Iran. In 1992 
it concluded a nuclear cooperation agreement with Iran. It is 
these two agreements, which pre-date the Clinton 
administration, that the administration had to contain and 
reverse. Our prepared statement, which we ask be included for 
the record, reviews our overall strategy and what we achieved.
    Russia promised that it would not conclude contracts for 
conventional weapons to Iran and it agreed not to provide to 
Iran most of the nuclear technology, including all the most 
dangerous types of technology, that it was proposing to sell. 
Frankly, one measure of the success in restraining Russian arms 
exports might be the many complaints we have received from 
Russia directly and in the Russian press that Russia has lost 
billions of dollars of conventional arms sales to Iran and 
hundreds of millions of dollars of sensitive nuclear technology 
sales, this all specifically due to our efforts. We know these 
understandings were a good deal for the United States in part 
because of the Russian media commentators and politicians who 
argued that they were not in Russia's interests.
    Let me address the issues on conventional armaments as best 
I can in this session. First, we kept both the public and the 
Congress fully informed. During the 1994 summit, Presidents 
Clinton and Yeltsin reached an understanding that Russia would 
not undertake new contracts or other agreements to transfer 
conventional arms to Iran, but that existing contracts would be 
fulfilled. This was announced publicly.
    This matter was again on the agenda for the May 1995 summit 
and the subject of public discussion even before the summit by 
Secretary Christopher and Secretary Perry. At the May 1995 
summit, the actions were discussed publicly in even greater 
detail, as was the fact that Vice President Gore and Russian 
Prime Minister Chernomyrdin would resolve the details and 
record the understanding.
    That understanding between the Vice President and Russian 
Prime Minister Chernomyrdin on conventional arms was announced 
publicly in a fact sheet, that was also widely distributed--
indeed, I believe Mr. Biden noted that it was distributed to 
this committee--and immediately after the commission meeting in 
1995. These matters were also briefed to Congress.
    We referred to this understanding frequently, often in open 
testimony, often before this committee. Indeed, I personally 
referred to this understanding by Russia and other countries in 
open Senate testimony before the Senate Banking Committee just 
last year.
    Of course, certain sensitive documents were classified and 
were closely held in the executive branch, that is before they 
were published in the newspaper. This is a common practice for 
all administrations on very sensitive diplomatic negotiations, 
but the thrust of these documents was widely telegraphed to 
both the Congress and the American people.
    We also used the law to buttress our nonproliferation 
policy. There was no promise to evade the law. We agreed to 
provide assurances that we would take ``appropriate steps'' to 
avoid penalties on arms transfers in the pipeline, but only 
after a careful review to ensure that they did not in fact 
trigger mandatory sanctions under the Iran-Iraq Act or other 
potentially applicable sanctions laws. We made no promises that 
we would not impose the law, and indeed we have provided 
information to Congress on sanctions determinations involving 
Russia and Iran that we have made.
    State Department lawyers reviewed these matters thoroughly 
at the time, including applicable statutes that govern 
transfers of lethal military equipment to Iran, and were 
satisfied that these statutes did not apply to the arms 
transfers identified in the understanding. The conclusion of 
non-sanctionability was reached only after careful review by 
the State Department, the intelligence community, the Defense 
Department, and the Joint Staff.
    Some have cited a sentence in a recently leaked classified 
letter of the Secretary of State as being inconsistent with 
this statement. The fact is that Secretary Albright's letter 
was intended to deliver a stern warning that failure to abide 
by the restrictions embodied in the aide memoire regarding arms 
sales to Iran could have serious consequences, including the 
possibility of sanctions. Her letter did not go into the 
nuances of U.S. sanctions law, but it is entirely consistent 
with the purposes of the aide memoire and the Iran-Iraq act.
    In that letter we were seeking clarifications from the 
Russians regarding their compliance with the aide memoire. At 
the time of the letter those clarifications had not been 
received. Because it was essential that the United States 
obtain this information, we felt it appropriate to stress the 
maximum consequences they might face depending on further 
disclosures about Russian export activities.
    We had available to us at the time a variety of 
discretionary sanctions under various other provisions of our 
law other than the Iran-Iraq act and lethal military equipment 
laws, for example the cutting off of licenses under the Arms 
Export Control Act. We felt this approach would be most 
effective in persuading the Russians to provide the needed 
information, and indeed this approach succeeded in obtaining a 
reaffirmation of the Russian commitment to limit the scope of 
the conventional weapons transfers to those items covered by 
the aide memoire. We would have been criticized, frankly, if we 
did not take this to senior levels, to address our concerns 
about Russia fulfilling these commitments.
    It has always been the case that the transfers subject to 
the aide memoire do not trigger U.S. sanctions laws. There were 
no sanctions to impose. So in fact we have never taken any 
steps to avoid penalties against the Russians for transfers in 
the pipeline. That was our conclusion in 1995. It still stands 
today.
    A key part of the process to resolve the issues addressed 
in the joint statement and the aide memoire: We insisted on the 
exchange of information on these pre-existing contracts. The 
impact of all the arms transferred or to be transferred, 
including the Kilo submarine that had not yet been delivered, 
was reviewed by senior military and Defense officials. It was 
their judgment, along with ours, that transfers under those 
pre-existing contracts would not provide Iran with new military 
capabilities, alter the regional balance, nor compromise the 
ability of the United States and our allies to protect our 
mutual security interests. They judged that the declared 
pipeline contained no destabilizing types of advanced 
conventional weapons as defined under the applicable statute.
    Much has been written about the three Kilo-class 
submarines. Let us be clear on the facts. From open sources, we 
know that the contract for these submarines was signed in 1988. 
We know that the first submarine was launched in 1991. We know 
that it was delivered in 1992. The only one that was left to be 
dealt with at the time of the signing of the understanding in 
1995 was the third submarine, the process for which building it 
was well under way before negotiations even commenced.
    Our military judged that, while one additional submarine 
represented an added threat to U.S. forces in the gulf, it was 
a manageable threat. As Dr. Perry noted publicly at the time in 
summing up the Department of Defense position on this, the 
Department of Defense did not see cause for concern on the 
level and the nature of conventional arms being transferred, 
and that it was far better to obtain the commitment from Russia 
to forego future sales of advanced conventional weapons or 
destabilizing quantities of other types of military equipment.
    Again, these submarines were not within the definition of 
advanced conventional weapons covered by the Iran-Iraq Arms 
Nonproliferation Act. I assume that the past administration 
must have reached the same conclusion since the first submarine 
was delivered in 1992.
    Both the Senate Foreign Relations Committee and the House 
International Relations Committee were informed about the 
understanding with Russia in 1995, and we have made no secret 
of this. Indeed, we brought this to the attention of the 
committee in public hearing. For example, my current boss, 
then-Deputy Assistant Secretary Robert Einhorn, noted in open 
testimony in June 1997 before this committee that Russia 
informed us that ``one Kilo-class submarine was expected to be 
delivered to Iran and that tanks were also to be delivered 
under pre-existing contracts.'' He also noted that ``prior to 
concluding the 1995 agreement we made certain that the 
contracts in the pipeline did not involve any new weapons 
systems and would not alter the regional balance nor compromise 
the ability of the United States and our allies to protect our 
mutual interests.''
    We told the Congress and the American people that the 
transfer had occurred. We outlined to them why we did not 
believe it was sanctionable, and it is only now that these 
issues are being brought to our attention.
    Let me address one new comment that has also been 
circulating, that Russia transferred advanced fighter aircraft 
to Iran as part of the understanding. I believe a statement was 
read by a number of former Secretaries of State, Defense, and 
the Director of Central Intelligence earlier today that had 
those facts in it. Let me first say that actually--several of 
those people on that list are my personal heroes that I have 
spent a lot of time reading about and I look up to them quite 
dramatically. So I do not really want to talk about their 
conclusions.
    But I would like to talk about some of the facts that are 
outlined in the beginning of the statement. It noted, for 
example, that there was a transfer of fighter planes that was 
undertaken under this aide memoire. We believe that Iran's 
Russian aircraft were supplied before 1995.
    It noted that modern submarines were transferred. That is 
true, there was one that was transferred after this 
understanding was reached. There was also one that was 
transferred during the time that some of the people were in 
office.
    In addition, it notes that there was a request from the 
Russian Premier to keep these briefings classified. In all of 
your opening statements you have not mentioned any of that and 
that is actually the first I have heard of that.
    Mr. Chairman, it is important to recognize that Russia 
would have sold arms to Iran no matter what the United States 
did. We had little direct leverage. We were essentially asking 
Russia to forego billions of dollars in arms sales in exchange 
for membership in a multilateral group that would only further 
constrain those arms sales. But we worked with the leverage 
that we had and, through the dogged determination of senior 
officials, Russia agreed to close out its existing contracts 
within a few years and agreed not to sign new contracts for the 
sale of arms to Iran.
    Frankly, in looking back over the record of the decisions 
that were made, these were very tough calls. But we made an 
informed decision, with the best advice available, with the 
involvement of our senior military and with the concurrence of 
the Secretary of Defense. We judged that we could best protect 
our security interests by constraining future sales of Russian 
advanced conventional weapons rather than not entering into the 
agreement and watching Russia proceed with sales of the most 
threatening weapons.
    Had not the United States secured this commitment, Russia 
would have been free to provide Iran with advanced conventional 
weapons and greater overall quantities of advanced conventional 
weapons. It would have been able to sell Iran items such as 
surface-to-air missiles, items that we know the Iranians still 
are interested in acquiring. Instead, we were able to get 
Russia to commit not to sign any new arms contracts with Iran, 
thus precluding the sales of weapons that could create a 
serious threat to U.S. forces, to our allies in the region, and 
to stability worldwide.
    Mr. Chairman, confidentiality is crucial to many diplomatic 
negotiations. As a result of breaches of confidentiality, these 
understandings are now at risk. Playing this out in public can 
only have a chilling effect on the ability of any 
administration, this administration and any future 
administrations, to continue this process, and could seriously 
undermine U.S. national security.
    Of course we would have preferred to stop the sale of all 
conventional arms to Iran. But this deal precluded the most 
advanced conventional weapons from reaching Iran after 1995, 
the very weapons that would have provided the greatest risk to 
our security.
    If the United States had failed to respond to this 
leadership challenge and had stood by while Russia pursued 
sales to Iran of the most destabilizing conventional weapons, 
the Middle East would be even more explosive than it is now. 
Seven years of patient and high level diplomacy have resulted 
in Iran obtaining fewer weapons. Of course we wish we could 
have stopped more, but it is only as a result of our efforts 
that there has been any downturn in Iranian acquisitions.
    The approach outlined by this aide memoire and the overall 
administration approach advance U.S. security interests and 
those of our friends and our allies by constraining future 
Russian behavior. Without these commitments, the world would 
have been more dangerous.
    Thank you, and I would now like to turn to Mr. DeThomas.
    Senator Smith. Mr. DeThomas.
    Mr. DeThomas. Thank you, Mr. Chairman. Let us do a sound 
check at the start. Am I audible?
    I will speak very briefly and far less eloquently than 
anybody today. I want to discuss a little bit one of the 
ancillary press moments that we have had at the same time as 
the leaks have come out about the aide memoire, and that 
involves arrangements that we have with Russia on nuclear 
technology. We want to get this all out on the table now. We do 
not want to have a dribbling set of controversies.
    First, the executive branch's policy on blocking nuclear 
technology to Iran is essentially unchanged since 1985. We have 
opposed the transfer of nuclear technology to Iran, even under 
international safeguards, because of our concerns about its 
nuclear weapons ambitions. Iran lacks the technical wherewithal 
to go it alone on producing nuclear weapons. Since 1992 the key 
to constraining Iran's nuclear ambition is to deny it for 
technology, and that technology's principal source since 1992, 
our principal area of concern, is Russia.
    The collapse of the Soviet Union deprived Russia and its 
massive nuclear industry of its entire foreign market and a 
significant fraction of its previous domestic market. Economic 
imperatives drove Russia to market its nuclear technology in 
places where it did not face Western competition. As a result, 
Iran became one of the areas that the Russian nuclear industry 
became interested in.
    It concluded a nuclear cooperation agreement with Iran in 
1992. In 1994 the Russians and Iranians announced their 
intention to finish a power reactor that had initially been 
started by the Germans in Iran. It is called the Bushehr 
reactor because of its location. We were and are opposed to 
that reactor; we were opposed to it at the time. It is not 
because we thought the reactor itself under safeguards was a 
proliferation threat, but because the Bushehr project could be 
used by Iran as a cover for engaging in more sensitive forms of 
cooperation with more direct links to nuclear weapons.
    This agreement between Russia and Iran contained other 
provisions for additional power reactors and other technology 
far more significant for Iran's nuclear weapons ambition. We 
know that elements of the Russian Government were considering 
the transfer of centrifuge uranium enrichment technology that 
would permit the production of highly enriched uranium, and 
they were interested in providing a powerful research reactor 
sufficient to produce plutonium for nuclear weapons. We knew 
there were plans for other key technologies.
    This package put together would have greatly advanced 
Iran's ability to go for the full nuclear fuel cycle. The 
Clinton administration embarked at the beginning of 1995 and in 
1994 on a high-level diplomatic campaign to halt this project. 
Following a series of exchanges between the President and 
President Yeltsin, the Russians agreed to scale back their 
cooperation with Iran very significantly in 1995.
    President Yeltsin first agreed not to supply a powerful 
natural uranium-fueled research reactor. He subsequently agreed 
not to supply Iran with any technology that would put at risk 
the international nonproliferation regime. This included the 
supply of uranium enrichment technology or the supply of 
reactors suited for the production of plutonium.
    The culmination of this difficult diplomatic campaign was 
the letter from Prime Minister Chernomyrdin to Vice President 
Gore which was cited recently in the press. Much of the 
substance of the arrangements made were announced in the May 
summit in Moscow in 1995. This culmination did not give us 
everything we wanted, but it did eliminate those aspects of 
cooperation with Iran that presented a clear and present danger 
to our national security.
    Without those limits, the Russian Government could have 
supplied to Iran hundreds of millions of dollars of sensitive 
nuclear technology and Iran would be well on the way today to 
mastering the nuclear fuel cycle.
    Mr. Chairman, I will leave for the written testimony in the 
record the remainder of my oral statement, except to sum up the 
testimony of Mr. Barker and myself. Russia is key to achieving 
our objectives both in the conventional and nuclear fields in 
Iran. We have no alternative but to continue an active strategy 
of seeking to thwart Iranian efforts to procure the material 
and technologies they need for their programs.
    This is a step by step incremental process. There is no 
silver bullet. It is going to have to be worked at many levels 
and worked continuously. We think our policies have been 
effective. Since the signing of the aide memoire, Russia has 
not concluded new agreements to export arms to Iran. It has not 
exported advanced conventional arms to Iran. And in fact, even 
today it has not completed the original shipments from 1991. 
Iran's efforts to acquire the types and quantities of arms that 
would threaten regional stability have been thwarted.
    We see a similar story in the nuclear field. We have 
succeeded in slowing and complicating Iran's programs and 
driving up their costs. We have closed off many of the world's 
best sources of advanced technology to Iranian procurement 
efforts and forced Iran to rely on technologies less 
sophisticated and reliable than would otherwise be the case. 
Critically, we have bought time. We have bought time for our 
process.
    I want to conclude my remarks today on a personal note. I 
have served as a nonproliferation expert for Secretaries of 
State in administrations of both parties for nearly 20 years. 
The arrangements discussed here today are manifestly in the 
interests of the United States and of the effort to halt 
proliferation. But they have powerful opponents in Moscow. A 
partisan brawl that drags legitimately classified material into 
the newspapers as photo insets can only benefit Iran and those 
forces in Moscow most hostile to our objectives.
    If these arrangements are not in place, Iran will be in 
position to acquire new weapons and a wide array of sensitive 
nuclear technology. That will not be in the interest of future 
administrations of either party or of the American people.
    I thank you very much, Mr. Chairman.
    [The prepared statement of Messrs. Barker and DeThomas 
follows:]

  Prepared Statement of John P. Barker, Deputy Assistant Secretary of 
                  State for Nonproliferation Controls

                                  and

 Joseph M. DeThomas, Deputy Assistant Secretary of State for Regional 
                            Nonproliferation

    Mr. Chairman, we are here today under difficult and unhappy 
circumstances. Serious accusations have been leveled. Classified 
documents are appearing in the press as photo insets, and our 
negotiating strategy with Russia on sensitive national security matters 
is being compromised by discussing these matters in public. Anthony 
Cordesman, a respected and very independent authority on national 
security matters, and the Near East in particular, has recently 
summarized the issues we will address today:

        Political campaigns are a poor time to debate complex military 
        issues, particularly when the debate is based on press reports 
        that are skewed to stress the importance of the story at the 
        expense of objective perspective and the facts. Iran does 
        represent a potential threat to U.S. interests, but it has not 
        had a major conventional arms build-up or received 
        destabilizing transfers of advanced conventional weapons. The 
        violations of U.S. and Russian agreements have been minor, have 
        had little military meaning, and been more technical than 
        substantive.\1\
---------------------------------------------------------------------------
    \1\ Anthony H. Cordesman, Iranian Arms Transfers: The Facts, Center 
for Strategic and International Studies, Washington, DC, revised 
October 15, 2000, p.2.

    We are appearing today to say what the Administration has done over 
the past seven years to address what we agree is a serious national 
security problem: Iran's quest to acquire advanced conventional and 
nuclear weapons as well as the means to deliver them. But, we also want 
to address directly the allegations we have heard about violations of 
laws and agreements purportedly kept secret from Congress. We will 
address what we can in this statement, but we are sure you understand 
that unauthorized disclosure of classified information does not mean it 
has been declassified. We still have an obligation to protect 
classified national security information. We are prepared to address 
detailed questions in closed session.
    Preventing Iran from acquiring nuclear weapons, the means to 
deliver them, as well as advanced conventional weapons, has been a top 
foreign policy and national security objective throughout this and 
previous administrations. Most Western nuclear and arms exporters were 
by early 1995 in broad agreement on these matters, but Russia was 
clearly central to success. How to keep the collapse of the Soviet 
Union from opening up a huge opportunity for Iran to acquire these 
items by purchase or theft was one of the most complex and challenging 
problems the Administration confronted as it took office.
    We needed to address three separate challenges. First, we had to 
ensure that political and economic collapse did not open the gates to 
the loss of control of Russia's expertise, equipment and technology. 
Second, we had to ensure Russia had the legal and enforcement tools to 
control its capabilities. But most of all we needed to convince the 
Russian government that serious and firm constraints on what it 
exported, and to whom, were critical to Russia's own national and 
security interests.
    The Soviet Union had been a primary exporter of conventional arms 
and nuclear technology, but the end of the Cold War deprived it of its 
foreign markets, and domestic military requirements were shrinking at 
the same time. In 1991 and 1992, Russia began to pursue the Iranian 
conventional arms and nuclear market in earnest. In 1991 Russia 
concluded a large, multi-year conventional arms contract. In 1992 it 
concluded a nuclear cooperation agreement with Iran. It is these two 
agreements--which predate the Clinton Administration--that the 
Administration had to contain and reverse. At the same time, Iran began 
to try to exploit the economic chaos and a lack of effective regulation 
to end-run the Russian government even when it did want to block 
particular transactions.
    To achieve these three critical objectives, the Administration has 
pursued a complex and long-term strategy. We put innovative assistance 
programs in place to control technology and prevent the ``brain drain'' 
of Russian scientists and their expertise to other states. We used 
diplomacy to build consensus on the importance of restraint in exports 
and effective controls to implement policy. We provided training and 
advice on sound export controls. Most important of all, we engaged all 
levels of the Russian government repeatedly and relentlessly to 
persuade them to walk back from arrangements with Tehran that were 
threatening not only to our security, but in the end to Russia's own 
interests. Where necessary, we used the threat of sanctions, and on 
occasion we imposed sanctions. This is not a strategy of immediate 
gratification.
    It has been a long and difficult effort, but it has produced 
significant successes.
    We have substantially constrained the types and quantities of 
conventional military equipment Iran is able to obtain. And we have 
slowed Iran's acquisition of WMD and delivery systems. Let me give you 
a one sentence summary of what we achieved: Russia promised that it 
would not conclude new contracts for conventional weapons to Iran and 
it agreed not to provide to Iran most of the nuclear technology--
including all the most dangerous types of that technology--that it was 
proposing to sell. One measure of our success in restraining Russian 
export behavior might be the many complaints from Russians directly, 
and in the Russian press, that Russia has lost billions of dollars of 
conventional arms sales to Iran, and hundreds of millions of dollars of 
sensitive nuclear technology sales, due specifically to our efforts. We 
know that these understandings were a good deal for the U.S., in part 
because of the Russian media commentators and politicians who argue 
that they are not in Russia's interests.
    We will discuss in detail the efforts we made on the conventional 
and nuclear front, but first we want to address headon the accusations 
that have been circulating. The first accusation is that we kept these 
actions secret from you and the public. That is incorrect. Our actions 
both in the conventional field and the nuclear field in 1995 were 
discussed publicly at the May Moscow summit in extensive detail, as was 
the fact that the Vice President and Russian Prime Minister 
Chernomyrdin would resolve the details. That understanding between the 
Vice President and Russian Prime Minister Chernomyrdin on conventional 
arms was announced publicly in a fact sheet, also widely distributed, 
immediately after the June 1995 Gore-Chernomyrdin Commission meeting. 
The understandings the Vice President reached in 1995 on both nuclear 
and conventional matters were briefed to Congress. Of course, certain 
sensitive documents were classified, and were closely held in the 
Executive Branch. This is the common practice for all Administrations 
on very sensitive diplomatic negotiations, but the thrust of those 
documents has been conveyed to both Congress and the American people.
    The second accusation is that we reached a deal with Moscow to 
evade our own law. This is not true. We agreed to provide assurances 
that we would take ``appropriate steps'' to avoid penalties on 
transfers in the pipeline, but only after careful review to ensure that 
they did not in fact trigger mandatory sanctions under the Iran-Iraq 
Arms Nonproliferation Act or other potentially applicable laws. We will 
be prepared to discuss this in considerable detail, but it is important 
to state in this open session that the conclusion of non-
sanctionability was reached only after careful review and detailed 
analysis by the State Department, the intelligence community, the 
Defense Department, and senior levels of the Joint Staff.
    Some have cited a sentence in a recently leaked classified letter 
of the Secretary of State as being inconsistent with this statement. 
The fact is that Secretary Albright's letter was intended to deliver a 
stern warning that failure to abide by the restrictions embodied in the 
Aide Memoire regarding arms sales to Iran could have serious 
consequences, including the possibility of sanctions. Her letter did 
not go into the nuances of U.S. sanctions law. We can address this 
issue in detail in closed session.
    The third accusation is that understandings we reached with the 
Russians should have been formally submitted to Congress under the Case 
Act because, it is alleged, they are legally binding. We did discuss 
with Russia whether to negotiate an agreement that would be binding 
under international law, and after consulting agreed instead to address 
these matters in an understanding, a political promise by Russia 
documented first in a public joint statement. This understanding was 
elaborated in more detail in the Aide Memoire. Under this 
understanding, Russia has not concluded new contracts for new weapons. 
It has not even delivered all the weapons it said it would. It has 
certainly foregone billions in sales.
    While important elements of our diplomatic efforts have required 
confidentiality, key to our success has been the fact that we have 
engaged Russia's leadership at the most senior levels to make 
authoritative and public statements. Key commitments were made in joint 
statements or press conferences after Summits between Presidents 
Clinton and Yeltsin in 1994 and 1995. Additional Russian commitments 
were articulated in public at the conclusion of meetings between Vice 
President Gore and Prime Minister Chernomyrdin.
    While the substance of these understandings has been public since 
1995, some details were kept confidential. Confidentiality is crucial 
to many diplomatic negotiations. The diplomatic process on conventional 
arms transfers has fortunately not come to a halt because of recent 
leaks. But playing this out in the press can only have a chilling 
effect on our ability to continue the process, and could seriously 
undermine the U.S. national security interests that are at stake in 
these discussions.

                          CONVENTIONAL WEAPONS

    The understanding that the U.S. reached with Russia in 1995 to 
limit the sale of conventional weapons to Iran was an important gain 
for U.S. security, as well as for our friends and allies. The collapse 
of the Soviet Union in 1991 led to the rapid opening of new markets for 
conventional arms. Russia was quick to sign a contract with Iran for 
the sale of a broad range of conventional arms. This Administration 
inherited the situation of an expanding arms relationship between 
Russia and Iran. The question was how to constrain it.
    The 1992 Iran-Iraq Arms Nonproliferation Act urged the President to 
``urgently seek the agreement of other nations'' to constrain arms 
sales to Iran and Iraq. We did just that, securing important 
commitments from all countries that joined the Wassenaar Arrangement. 
They agreed not to supply arms and related technologies to ``countries 
of concern,'' understood to include Iran, Iraq, Libya and North Korea.
    Our ability to hold these other major supplier states to these 
commitments has always depended on maintaining a united front. If one 
key supplier were to resume sales to Iran, it could be difficult to 
persuade others to continue foregoing these highly lucrative sales. It 
was with this in mind that we sought the commitment of Russia to 
curtail arms sales to Iran.
    During their September 1994 Summit, Presidents Yeltsin and Clinton 
reached an understanding that Russia would not undertake new contracts 
or other agreements to transfer conventional arms to Iran, but that 
existing contracts could be fulfilled. President Yeltsin announced this 
understanding publicly. This matter was again on the agenda for the May 
1995 Summit, and the subject of public discussion even before the 
Summit. In a pre-Summit press briefing, Secretary of State Christopher 
expressed hope that Russia would join the new multilateral regime to 
control exports of conventional weapons and related dual-use 
technologies, stating that ``the only thing that stands between Russia 
joining . . . is working out the arrangements with respect to their 
sales to Iran, those negotiations are going forward.'' Secretary of 
Defense Perry, when asked about whether Russia's arms sales to Iran 
were a reason for alarm, spoke first of the submarines, noting that two 
had been delivered and one remained to be delivered, and then spoke to 
the more general issue:

        We do not see cause for concern on the level and the nature of 
        conventional arms being transferred. We would prefer they not 
        be transferred, but we're--quite satisfied with the agreement 
        not to continue transfer. The Russians have a very, very 
        substantial capability in conventional arms and conventional 
        arms technology. And it would give us a very substantial 
        problem if they were to make a free transfer of those to the 
        Iranians. So I'd like to focus on the positive side of that, 
        which is their agreement to cut that off after those present 
        contracts.

    The May 1995 Summit resolved the outstanding issues, and a Joint 
Statement dated May 10, 1995 reaffirmed that Russia would ``undertake 
no new contracts or other agreements to transfer arms to Iran. This 
commitment is comprehensive and covers both arms and associated 
items.'' The Joint Statement also reaffirmed U.S. support for Russia's 
participation as a founding member in a new international export 
control regime for the control of arms and sensitive dual-use goods and 
technologies. It was also announced that same day that the Presidents 
had asked Vice President Gore and Prime Minister Chernomyrdin ``to 
record the details in an agreement no later than their meeting in 
June.'' The Aide Memoire recording those understandings was signed the 
following month.
    The U.S. had little direct leverage; we were essentially asking 
Russia to forego billions of dollars in arms sales in exchange for 
membership in a multilateral group that would only further constrain 
their arms sales. But we worked with the leverage that we did have, and 
through the dogged determination of our senior officials, Russia agreed 
to close out its existing contracts within a few years and agreed not 
to sign new contracts for the sale of arms to Iran. Had not the U.S. 
secured this commitment, Russia would have been free to provide Iran 
with advanced conventional arms, and greater overall quantities of 
conventional arms. It would have been able to sell Iran items such as 
surface-to-air missiles, items we know that the Iranians sought to 
acquire. Instead we were able to get Russia to commit not to sign any 
new arms contracts with Iran, thus precluding the sale of weapons that 
could provide great threats to U.S. forces, to our allies including 
Israel, and to stability in the region.
    Of course we would have preferred to have stopped the sale of all 
conventional arms to Iran. But this deal precluded the most advanced 
conventional weapons from reaching Iran--the very weapons that would 
have provided the greatest risks to U.S. interests and those of our 
friends and allies (and the very weapons targeted by the Iran-Iraq Arms 
Nonproliferation Act).
    Much has been made in the press recently about whether the arms 
covered under the contract signed in 1991 would adversely affect U.S. 
security. There have also been accusations that the 1995 understanding 
was not consistent with, or even violated, U.S. sanctions laws, and in 
particular, that a commitment was made to ignore U.S. sanctions law. A 
further accusation is that the understandings reached are legally 
binding obligations, and that all this was kept from Congress. Let me 
address each of these allegations in turn.
Was U.S. Security or Regional Stability Jeopardized?
    As a key part of the process to resolve the issues addressed in the 
Joint Statement and the Aide Memoire, we insisted on an exchange of 
information on these pre-existing contracts. The impact of all of the 
arms transferred or to be transferred, including the Kilo submarine, 
was reviewed by senior military and defense officials, including senior 
levels of the Joint Staff. It was their judgment that transfers under 
those pre-existing contracts would not provide Iran with new military 
capabilities, alter the regional military balance, or compromise the 
ability of the U.S. and our allies to protect our mutual security 
interests. They judged that the declared pipeline contained no 
destabilizing types of advanced conventional weapons. This judgment 
extended to the third Kilo-class submarine that Russia delivered in 
1996. Our military judged that while the submarine represented an added 
threat to U.S. forces in the Gulf, it was judged to be manageable. As 
Dr. Perry noted publicly at the time, it was far better to obtain the 
commitment from Russia to forego future sales of advanced conventional 
weapons or destabilizing quantities of other types of military 
equipment.
    Both the Senate Foreign Relations Committee and the House 
International Relations Committee were informed about the understanding 
in 1995. Then Deputy Assistant Secretary Robert Einhorn revisited this 
issue in open testimony June 5, 1997 before this Committee, noting that 
``Russia informed us that one Kilo-class submarine was expected to be 
delivered to Iran'' and that tanks were also to be delivered under the 
pre-existing contracts. ``Prior to concluding the 1995 agreement we 
made certain that the contracts in the pipeline . . . did not involve 
any new weapons systems and would not alter the regional balance or 
compromise the ability of the U.S. and our allies to protect our mutual 
interests.''
    Frankly, these were hard calls--but we made an informed decision 
with the best advice available, and with the involvement of our senior 
military. We judged that we could best protect our security interests 
by constraining future sales of Russian advanced conventional weapons, 
rather than not entering into the agreement and watching Russia proceed 
with sales of the most threatening weapons.
Were Sanctions Laws Ignored?
    The 1995 understanding was fully consistent with U.S. law. The 
transfers covered under the Aide Memoire were not sanctionable.
    The applicability of U.S. sanctions laws was explicitly addressed 
within the Executive Branch before we completed the 1995 understanding. 
After a review of the facts, and with specific input from and 
concurrence of the Defense Department and the Joint Chiefs of Staff, we 
concluded that sanctions under the Iran-Iraq act would not be triggered 
because the items did not meet the definition of ``advanced 
conventional weapons'' under the Act, as explained above, nor would the 
types and quantities of arms to be transferred be destabilizing to the 
region. These conclusions are supported by the terms of the Act and its 
legislative history.
    In addition, before we concluded the Aide Memoire, State legal 
counsel reviewed other applicable statutes that govern transfers of 
lethal military equipment to Iran, and determined that these statutes 
did not apply to the arms transfers identified under the agreement 
because the contracts had been entered into before the effective date 
specified in the legislation.
    Some have alleged that the U.S. has not applied the sanctions laws 
to Russian transfers of conventional arms to Iran. That is not true, 
and indeed the Committee has been previously informed of this in 
writing. We can review this for you in detail in a classified setting.
    Furthermore, the Aide Memoire does not commit the U.S. not to 
enforce the sanctions laws, as has been erroneously suggested. The Aide 
Memoire notes that 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 phrase ``appropriate steps'' in a non-legally binding document 
clearly would not compel the Executive Branch to ignore domestic law. 
It was drafted this way specifically to allow us to enforce the law, 
bearing in mind the Executive Branch in fact had legal means available 
to ``avoid penalties''--the waiver provisions in both of the 
potentially applicable statutes. As noted above, we have never had to 
take any steps pursuant to this pledge, for after reviewing the list of 
transfers that would be grand-fathered, we determined (before signing 
the Aide Memoire) that then existing sanctions laws would not be 
triggered by the transfers.
    Secretary Albright's January letter to Foreign Minister Ivanov is 
entirely consistent with the purposes of the Aide Memoire and the Iran-
Iraq Act. Secretary Albright delivered a stern warning that failure to 
abide by the restrictions embodied in the Aide Memoire regarding arms 
sales to Iran could have serious consequences, including the 
possibility of sanctions. In that letter, we were still seeking 
clarifications from the Russians regarding the numbers and types of 
transfers that they wished to continue beyond the December 31, 1999 
deadline. At the time of the letter, those clarifications had not yet 
been received. Because it was essential that the U.S. obtain this 
information, we felt that it was appropriate to stress the maximum 
consequences they might face, depending on further disclosures about 
Russian export activity. A variety of discretionary sanctions were 
available to us under legal authorities other than the Iran-Iraq Arms 
Nonproliferation Act and the lethal military equipment laws, (e.g., 
cutting off licenses under the Arms Export Control Act).
    We felt this approach would be most effective in persuading the 
Russians to provide the needed information. And, indeed, this approach 
succeeded in obtaining a reaffirmation of the Russian commitment to 
limit the scope of the conventional weapons transfers to those items 
covered by the Aide Memoire.
    It has always been the case that the transfers subject to the Aide 
Memoire do not trigger U.S. sanctions laws. That was our conclusion in 
1995, and it has never changed.
    Any transfers that are outside of the scope of the Aide Memoire 
could of course trigger the sanctions laws, including the Iran-Iraq 
Arms Nonproliferation Act and the lethal military equipment laws. We 
continue to monitor this closely, and we will apply the law to Russia, 
as we have in the past, if Russia completes transactions that trigger 
sanctions.
Did We Make Legally-Binding Commitments?
    As indicated in public statements from that period, we were 
prepared in 1994 to enter into a formal agreement providing legally 
binding commitments. After consulting with Russia on how to reflect our 
discussions, we instead chose to proceed with political statements and 
understandings. Insisting on a formal legal approach would not have 
furthered our purpose to stop Russia from signing new arms contracts 
with Iran, nor would it have prevented Russia from making sales that 
were significant threats to U.S. interests and U.S. security.
    The 1995 Summit statements were clearly political undertakings made 
by each side. The 1995 Aide Memoire recorded details of those political 
undertakings.
    Contrary to speculation in the press, a document is not legally 
binding solely because it deals with an important matter and there are 
commitments made by both sides. The two sides must intend for the 
document to be legally binding. That was not the case here--as amply 
demonstrated in the text and the negotiating record.
Was Congress Informed of These Understandings?
    At no time did we attempt to keep the substance or existence of 
these understandings hidden from Congress. They were the subject of 
White House press conferences both before and after the 1995 Summit, 
and the subject of a Joint Statement from the Summit.
    We also briefed Congress on these understandings and 
accomplishments. The House International Relations Committee staff was 
briefed in July, 1995. Certain interested House Members, including 
Chairman Gilman, were briefed in August, 1995. As the Senate Foreign 
Relations Committee has noted, it was briefed in mid-1995. And the 
understandings were recounted in open public testimony before Senate 
committees several times, including twice in 1997.

                   NUCLEAR TECHNOLOGY AND COOPERATION

    The Executive Branch's policy on blocking nuclear cooperation with 
Iran is essentially unchanged since 1985. We have opposed the transfer 
of nuclear technology to Iran even under international safeguards, 
because of our concerns about its nuclear weapon ambitions. Iran has 
lacked the technical wherewithal to succeed in producing nuclear 
weapons. Key to constraining Iran's nuclear ambition is to deny it 
foreign technology. Since 1992, the greatest challenge to that policy 
has been from Russia.
    The collapse of the Soviet Union deprived Russia's massive nuclear 
industry of its entire foreign market and a significant fraction of its 
previous domestic market. Economic imperatives drove Russia to market 
its nuclear technology in places where it did not face Western 
competition. As a result of the successful informal international 
embargo on nuclear transfers to Iran that we had crafted, Iran was such 
a market.
    Based on an agreement concluded in 1992, the Russians and Iranians 
announced in 1994 and early 1995 their intentions to finish a power 
reactor originally started by the Germans in Bushehr. We were and still 
are opposed to this reactor, not because we believe such a light-water 
power reactor under International Atomic Energy Agency Safeguards 
itself poses a serious proliferation threat, but because of our concern 
that the Bushehr project would be used by Iran as a cover for 
maintaining wide-ranging contacts with Russian nuclear entities and for 
engaging in more sensitive forms of cooperation with more direct 
applicability to a nuclear weapons program.
    This agreement between Russia and Iran also contained provisions 
for additional power reactors, as well as other technology far more 
significant for Iran's nuclear weapons ambitions. We know that elements 
of the Russian govermnent were considering the transfer of centrifuge 
enrichment technology that would permit production of highly-enriched 
uranium, and a research reactor of sufficient power to produce 
plutonium for nuclear weapons. We knew there were plans to supply other 
key nuclear technologies. Altogether, this package of items would have 
greatly advanced Iran's ability to produce nuclear weapons usable 
material.
    The Clinton Administration embarked on a high-level diplomatic 
campaign to halt this project. Following a series of exchanges between 
the President and President Yeltsin, the Russians agreed to scale back 
their cooperation with Iran very significantly in 1995. The results of 
that effort were reported in The Nonproliferation Primer--A Majority 
Report of the Subcommittee on International Security, Proliferation, 
and Federal Services of the Senate Committee on Governmental Affairs:

        Although Moscow was unwilling to cancel the Bushehr project, in 
        1995 the Administration did persuade President Yeltsin to limit 
        the scope of Russian nuclear assistance. Yeltsin approved the 
        sale of nuclear reactors, but ordered Russia's Ministry of 
        Atomic Energy to drop plans to provide equipment and advice to 
        Iran's effort to mine uranium ore and process it to use as 
        reactor fuel--assistance that would have given Iran an 
        independent source of fissile material for nuclear weapons. (p. 
        18)

    In fact, President Yeltsin agreed not to supply Iran with any 
technology that would put at risk the international nonproliferation 
regime. This included the supply of uranium enrichment technology or 
the supply of reactors suited for the production of plutonium. The 
culmination of this difficult diplomatic campaign was the letter from 
Prime Minister Chernomyrdin to Vice President Gore. That letter 
codified the limits Russia would impose on itself in cooperating with 
Iran. Much of the substance was briefed to the press before and 
especially after the May 1995 Moscow Summit. That substance has been 
described to Congress through open testimony and a series of classified 
briefings.
    It did not give us everything we wanted, but it did eliminate those 
aspects of cooperation with Iran that presented a clear and present 
danger to our national security. Without the limits the Russian 
government did impose, Iran today would have received hundreds of 
millions of dollars worth of sensitive nuclear technology and would be 
well on the way to mastering the nuclear fuel cycle.
    That is what the Chernomyrdin letter is. Now, let me say what it is 
not.
    It is not a secret agreement hidden from Congress. The text of the 
letter was and is classified, just as have been many other confidential 
exchanges undertaken by this and past Administrations. This was a 
highly sensitive diplomatic negotiation and publicity could well have 
brought it down. The letter is still classified. We cannot discuss its 
contents in detail in an open session.
    We want to be clear on a critical point. Confidentiality is crucial 
to many diplomatic negotiations. The diplomatic process on these 
matters fortunately has not come to a halt because of recent leaks. But 
playing this out in the press can only have a chilling effect on our 
ability to continue the process, and could seriously undermine the U.S. 
national security interests that are at stake in these discussions.
    There is in fact a sentence in a letter--quoted in the press--that 
indicates the Russians did not want us to brief Congress. That sentence 
had no effect. We informed the Russians before the letter was sent that 
we would brief Congress, and we informed the Russians immediately upon 
its receipt that we would brief the matter to Congress. The Russians 
accepted this. We agreed that we would do this in a confidential manner 
as we do for many sensitive negotiations. Briefings were offered to key 
Senate and House Members in the spring of 1996. Representatives of the 
National Security Council, the Office of the Vice President and the 
Department of State did the briefings. Subsequently, we have updated 
this Committee and others on the state-of-play of our efforts, both in 
open testimony and in classified briefings.
    The Administration did not give up its opposition to the Bushehr 
reactor. We still oppose it. Our actions in persuading other countries 
not to participate in the project have slowed it down. But only a 
decision by the Russian government could stop it. The Russian 
government has not been prepared to give up the reactor project, at 
least in part because of its big price tag.
    The Administration has not turned a blind eye to Russian 
activities. Recently Russian entities--some of them associated with the 
Ministry of Atomic Energy--have pursued cooperation with Iran that is 
not consistent with the Chernomyrdin assurances. We sanctioned two 
Russian entities in January of 1999 as a result. We have also been 
unstinting in our day-to-day diplomacy with the Russians to block any 
transfers. The Administration has made a major effort over the past few 
months to bring Russian behavior back into line with the assurance. We 
cannot report complete success, but last month the Russians did suspend 
the activities of an institute in St. Petersburg that planned to 
transfer equipment related to a sophisticated means of uranium 
enrichment.
    I do not want to downplay the current problems we are facing on the 
nuclear front, but they are considerably less than what we would be 
facing today without the Chernomyrdin assurance. Faced with the choice 
of pursuing this at times frustrating diplomatic effort and the 
alternative of unconstrained Russian assistance to Iran, we would 
choose the former.
    I want to conclude my remarks on a personal note. I have served as 
a nonproliferation expert for Secretaries of State and Administrations 
of both parties for nearly twenty years. The arrangements discussed 
here today are manifestly in the interests of the United States and of 
the effort to halt nuclear proliferation. But, they have powerful 
opponents in Moscow. A partisan brawl that drags legitimately 
classified material into the newspapers as photo insets can only 
benefit Iran. If these arrangements are not in place, Iran will be in 
position to acquire new reactors and a wide array of sensitive nuclear 
technology. That will not be in the interest of future Administrations 
of either party or of the American people.

                             IN CONCLUSION

    Impeding Iran's WMD and missile delivery systems will remain at the 
top of the U.S. national security agenda. Ensuring that Iran does not 
acquire destabilizing types and quantities of advanced conventional 
weapons is also critical.
    Russia is key to both those objectives. We have no alternative but 
to continue an active strategy of seeking to thwart Iranian efforts to 
procure the material and technologies they need for their non-
conventional programs. That means engaging Russia directly and 
actively; working with them to strengthen resolve; assisting them in 
strengthening export control laws and regulations; and helping to make 
the implementation of those policies, laws, and regulations more 
effective. This is a step-by-step, incremental process. There is no 
silver bullet, it is a problem that must be worked at many levels, from 
many directions, and worked continuously.
    By any reasonable standard, our policies have been effective. Since 
the signing of the Aide Memoire, Russia has not concluded new 
agreements to export arms to Iran, it has not exported advanced 
conventional arms to Iran, and in fact it has not even to date 
completed shipments under the original 1991 agreement. Iran's efforts 
to acquire the types and quantities of arms that would threaten 
regional stability have been thwarted.
    On the nuclear and missile programs, we see a similar story. We 
have succeeded in slowing and complicating Iran's programs and driving 
up their costs. We have closed off many of the world's best sources of 
advanced technology to Iranian procurement efforts, and forced Iran to 
rely on technologies less sophisticated and reliable than would 
otherwise be the case. And critically, we have bought additional time. 
As Assistant Secretary for Nonproliferation Robert Einhorn testified 
before this Committee just last month: despite the gains Iran has made, 
we do not consider it inevitable that Iran will acquire nuclear weapons 
deliverable by long-range missiles.
    But avoiding that highly destabilizing outcome, or the threat of 
advanced conventional weapons in the region, will require continued 
leadership by the United States and the concerted efforts of the 
international community, including the active commitment and 
cooperation of Russia. We have made important steps. This will continue 
to be a key national security priority for this Administration, and we 
will leave a vastly different situation than would have been the case 
had we failed to limit Russia's nuclear and conventional arms exports 
to Iran.

    Senator Smith. Thank you both.
    Per my understanding with Secretary Talbott, this now 
concludes the open portion of this hearing, so we will----
    Senator Biden. Mr. Chairman, before you go into closed 
session, I am not going to ask a question. I would like to ask 
us a question, if I may. If I understand it correctly, the two 
questions that we are attempting to answer, get an answer to, 
are: One, whether or not this administration made a legally 
binding agreement with the Russians that under American law 
would require the administration to have fully informed the 
Congress of the nature and the detailed agreement. That is one 
question, correct?
    Senator Smith. I believe that is the first question, and I 
think their answer was----
    Senator Biden. No, I am not even looking for their answer. 
I just want to make sure that I understand what we are trying 
to seek.
    Senator Brownback. Well, no, I want to make sure that we 
are laying out as well--we are having this hearing to get what 
is the deal.
    Senator Biden. Right.
    Senator Brownback. So that we can understand what that was, 
what it was in writing. There is a question about whether this 
should have been submitted under Case-Zablocki----
    Senator Biden. Right.
    Senator Brownback [continuing]. That we have had 
previously. And there is also question about was this an 
international agreement that sidestepped required sanctions to 
be put.
    Senator Biden. I got that. So we are in agreement on the 
first score. The first score is that, did the administration 
violate U.S. law that requires any administration to submit to 
the U.S. Congress the details of any legally binding agreement 
that would amount to an executive agreement or amount to a 
binding legal agreement. That is the first question.
    The second question is whether or not--whatever the answer 
to that is, the second question is were there transfers made to 
Iran that would have violated--that did violate U.S. law 
sanction policy, requiring the administration to sanction 
Russia for having made the transfers. That is the second 
question, correct?
    So I just want to make sure as we go in we understand what 
we are asking here, because this can get very confusing for 
folks.
    Senator Brownback. Well, if I could too, I want to submit 
here, I want to see the agreement.
    Senator Biden. I got that, I got that. But if the agreement 
is not a legally binding agreement under the terms of Case-
Zablocki, then there is no requirement to submit it to us, No. 
1. Even though we may want to know it, there is no requirement 
to submit it to us.
    No. 2, if the transfers that were made within the timeframe 
we are talking about here did not violate sanctions law of the 
U.S. Congress, then no assertion, whatever it was, was of any 
relevance here made by the administration. You either violate 
the law or you are not violating the law in the transfer.
    So they are the two questions that we should be looking at 
here. I just want to make sure we do not--then if we want to 
look at other things that do not relate to any violation--I 
assume this is so urgent to have this hearing 13 or 12 or 10 
days or 9 days before the election is because there is the 
assertion that there was a violation of U.S. law, not whether 
the judgment was right or judgment was wrong about whether we 
should have done what we have done: Was there a violation of 
U.S. law, because if there was not then we should be holding 
hearings on judgments about what each of the candidates say 
about foreign policy. That is a different deal. I just want to 
make sure we know what we are looking at here.
    Senator Smith. Senator Biden, what I have heard today are a 
number of assertions that they are certainly free to make, but 
which are not supported by the intelligence information I have 
seen. If they have other information that they can show us that 
will substantiate what has been asserted, then that is what I 
am after.
    And yes, I do think we need to know if laws have been 
violated. These are assertions not made by Republicans, but by 
the New York Times.
    Senator Biden. I am not suggesting anything about who made 
the assertions. I just want to make sure we know what we are 
looking at, because this will be used as precedent. I do not 
want--if there were no assertions of a violation of U.S. law, 
then it would not be a very good precedent to set to hold 12 
days before an election, or however many days it is, a debate 
in this committee on American foreign policy and what is a good 
idea and a bad idea.
    Senator Smith. I just want to say that they have used the 
words that they ``telegraphed'' to Congress what it is we are 
supposed to know. I hope there is a precedent that comes out of 
this that telegraphing through the media is not enough to 
comply with U.S. law, that there are other ways in which this 
is supposed to happen. Those are the words they use.
    Senator Biden. No, I understand. I will cease with this. I 
used to, a hundred years ago, practice law and I was one of 
those people that, they are not very much in vogue these days, 
a trial lawyer. I actually tried cases. I learned from a guy 
named Sid Bailick and he used to always say to the jury before 
it began, heard the opening statement and-or began its 
deliberations, at either end, he would say: Keep your eye on 
the ball, keep your eye on the ball. The question is did my 
client kill Cock Robin, not is he a nice guy, not would you 
want to take him home for dinner, not would you want your 
daughter dating him; did he kill Cock Robin?
    The question here is did the administration violate the law 
either in that it signed an agreement requiring under the law 
submission to the U.S. Congress or, did it violate the law in 
not imposing sanctions that should have been imposed under U.S. 
law? That is keeping your eye on the ball.
    Senator Brownback. I want to make sure we get from--in the 
closed session, if that is what we are trying to outline here, 
that we will need to know and to have the documents, the 
annexes, and what was conveyed from Russia to Iran to be able 
to make the sort of judgments of the charges that have been put 
forward here, so that I hope that we can get that all covered 
and disclosed to us in a private session so we will know those 
matters to be able to make the judgment on.
    Senator Smith. With that, ladies and gentlemen, the public 
hearing is now adjourned and we shall reconvene in 5 minutes in 
closed session.
    [Whereupon, at 11:48 a.m., the subcommittee was adjourned.]
                              ----------                              

                   IRANIAN ARMS TRANSFERS: THE FACTS*
---------------------------------------------------------------------------

    * Copyright Anthony H. Cordesman, all rights reserved.
---------------------------------------------------------------------------

                          Anthony H. Cordesman

     arleigh a. burke chair in strategy, center for strategic and 
                         international studies

                        Revised October 15, 2000

    Political campaigns are a poor time to debate complex military 
issues, particularly when the debate is based on press reports that are 
skewed to stress the importance of the story at the expense of 
objective perspective and the facts. Iran does represent a potential 
threat to US interests, but it has not had a major conventional arms 
build-up or received destabilizing transfers of advanced conventional 
weapons. The violations of US and Russian agreements have been minor, 
have had little military meaning, and been more technical than 
substantive.
    In fact, Iran faces major military problems because of its lack of 
conventional modernization. The real threat it poses is one driven by 
its efforts to proliferate, rather than conventional arms transfers.

                     IRANIAN MILITARY EXPENDITURES

    Iran has cut its military expenditures since the Iran-Iraq War, and 
it has done so in spite of the fact it lost some 40-60% of its holdings 
of major land weapons during the climatic battles of the war in 1988, 
and much of its military inventory is becoming obsolete. US government 
estimates indicate that Iran's real defense spending is now less than 
one-half of the level it reached during the Iran-Iraq war, but that 
Iranian military expenditures still average over $4.0 billion a year.
    Measured in constant 1997, dollars, Iran's military expenditures 
peaked in 1986, at a cost of well $15 billion. They dropped from $8.3 
billion to $6.8 billion immediately after the cease-fire in the Iran-
Iraq War, when Iran clearly made a decision not to try to pay to recoup 
its losses during that war. They then dropped from $7.2 billion in 1990 
to $4.2 billion in 1992 after Iran assessed the degree to which the UN 
Coalition destroyed much of Iraq's military capability in the Gulf War. 
They were $5.0 billion in 1993, $4.8 billion in 1994, $3.6 billion in 
1995, $3.9 billion in 1996, and $4.7 billion in 1998. Ironically, they 
rose after the US imposed sanctions in an effort to cut them.\1\
    To put such spending levels in context, Egypt's total spending 
during 1990-1995 averaged around $1.7 to $2.7 billion. Iraq's 
expenditures averaged around $10 billion during 1988-1991, but no firm 
recent figures are available. Kuwait's spending reached peaks of $15 
billion a year during 1990-1992, but dropped to $3.2 to $3.6 billion 
from 1993-1995. Turkey has recently spent between $6 billion and $7 
billion. The UAE spends around $1.8 to $2.2 billion annually, and Saudi 
Arabia spends $17.2 to $20 billion.\2\
    There are differences of opinion within the US government over the 
size of these Iranian military expenditures. For example, US 
intelligence experts felt in 1994 that Iran had spent up to $8 billion 
on military forces in 1993, while ACDA estimated only $4.9 billion. The 
CIA issued revised estimates in 1995 that stated it could not make 
accurate conversions of expenditures in Iranian Rials to dollars, but 
indicated that Iran had reported it had spent 1,785 billion Rials on 
defense in 1992, including $808 million in hard currency, and 2,507 
billion Rials in 1993, including $850 million in hard currency.\3\
    The International Institute of Strategic Studies (IISS) has also 
produced different figures. It estimates that Iran's economic problems 
and defeat in 1988 reduced Iran's defense spending from $9.9 billion in 
1987/88, to $5.8 billion in 1989/90, $3.2 billion in 1990, $5.8 billion 
in 1991, $1.8-2.3 billion in 1992, $4.86 billion in 1993, $2.3 billion 
in 1994, $2.5 billion in 1995, $3.6 billion in 1996, $4.7 billion in 
1997, $5.8 billion in 1998, and $5.7 billion in 1999.\4\ The IISS 
estimates that Iran spent only $1.3 billion on procurement in both 1995 
and 1996.\5\
    There is little debate, however, that the average level of Iranian 
defense spending dropped sharply after the end of the Iran-Iraq War and 
remains relatively low. At some point in the mid-1980s, Iran chose to 
make major cuts in its total military spending in spite of the fact 
that it was still fighting the Iran-Iraq War. The most likely 
explanation is that it no longer felt that Iraq could succeed in 
winning the war, but it may also have been unable to sustain the peak 
level of spending it reached in 1986.

                         IRANIAN ARMS TRANSFERS

    These trends in total military spending inevitably affect Iran's 
arms imports and military modernization efforts. They help explain why 
Iran faces major problems in modernizing and expanding its forces, and 
continues to have problems with interoperability, standardization, and 
quality. At the same time, declassified US intelligence data on Iranian 
arms transfers reveal patterns that follow indicate the reasons for 
Iran's actions are more complex than the economics of Iranian military 
spending.

   Chart One compares Iranian and Iraqi arms deliveries and 
        shows that Iran faced a far less serious threat after the arms 
        embargo the UN placed on Iraq in mid-1990.

   Chart Two shows that Iran seems to have made a strategic 
        decision after its defeat in the Iran-Iraq War not to engage in 
        a major conventional arms build-up and to concentrate on 
        economic development. It then made much more serious cuts in 
        its arms buys after the UN's shattering defeat of Iraq in 1991, 
        and could sustain these cuts because Iraq has remained under an 
        arms embargo ever since. Ironically, the US efforts to sanction 
        Iran coincided with the first real rise in Iranian arms 
        deliveries since the end of the Iran-Iraq War.

   Chart Three shows that Iran has made major cuts in its new 
        arms agreements with Russia since 1996, and has increasing had 
        to rely on lower quality suppliers like China.

   Chart Four--and Charts Five through Ten at the end of this 
        analysis--show the trends in Iranian conventional arms 
        transfers relative to those of the rest of the Gulf states. 
        They make it clear that Iran's arms transfers have been very 
        limited by the standards set by the Southern Gulf states.

    The more detailed patterns in Iranian arms transfers over time 
reinforce the points made in these charts. These trends in total 
military spending inevitably affect Iran's arms imports and military 
modernization efforts. They help explain why Iran faces major problems 
in modernizing and expanding its forces, and continues to have problems 
with interoperability, standardization, and quality. At the same time, 
declassified US intelligence data on Iranian arms transfers reveal 
patterns that follow indicate the reasons for Iran's actions are more 
complex than the economics of Iranian military spending.

   Figure V-2 compares Iranian and Iraqi arms deliveries and 
        shows that Iran faced a far less serious threat after the arms 
        embargo the UN placed on Iraq in mid-1990.

   Figure V-3 shows that Iran seems to have made a strategic 
        decision after its defeat in the Iran-Iraq War not to engage in 
        a major conventional arms build-up and to concentrate on 
        economic development. It then made much more serious cuts in 
        its arms buys after the UN's shattering defeat of Iraq in 1991, 
        and could sustain these cuts because Iraq has remained under an 
        arms embargo ever since. Ironically, the US efforts to sanction 
        Iran coincided with the first real rise in Iranian arms 
        deliveries since the end of the Iran-Iraq War.

   Figure V-4 shows that Iran has shows that Iran has made 
        major cuts in its new arms agreements with Russia since 1996, 
        and has increasing had to rely on lower quality suppliers like 
        China.

   Table V-1 shows the trends in Iranian conventional arms 
        transfers relative to those of the rest of the Gulf states. 
        They make it clear that Iran's arms transfers have been very 
        limited by the standards set by the Southern Gulf states. 
        (Graphic comparisons are shown in Chapter V.)

    The more detailed patterns in Iranian arms transfers over time 
reinforce the points made in Figures V-2 to V-3 and Table V-1. During 
the mid-period in the Iran-Iraq War, Iran was unable to obtain arms 
from the US, Russia, or the major West European powers--its former 
major suppliers. It signed only $10 million worth of agreements with 
the FSU, only made covert arms purchases from the US as part of the 
Iran-Contra deal, and bought $865 million worth of relatively 
unsophisticated weapons from the major West European powers. It did, 
however, buy $3,835 million from other European powers, most in Eastern 
Europe. It bought $1,845 million from China, and $2,385 million from 
other states. These included large buys of arms from North Korea, and 
buys of parts and surplus US equipment from Vietnam.\6\
    Iran made a major effort to acquire most sophisticated arms from 
the FSU in the years that followed. It signed $10.2 billion worth of 
new arms agreements during the four year period between 1987-1990--the 
time between the final years of the Iran-Iraq War and the Gulf War. It 
signed $2.5 billion worth of agreements with Russia, $3.4 billion with 
China, $200 million with Western Europe, $2.1 billion with other 
European states (mostly Eastern Europe), and $2.1 billion with other 
countries (mostly North Korea). It is also clear that Iran began to 
concentrate its limited resources on higher quality arms following the 
end of the Iran-Iraq War, and cut back on the purchases of large 
amounts of towed artillery, munitions, and low quality weapons it had 
needed for a war of attrition with Iraq.\7\
    Iran's new arms agreements dropped sharply, however, during the 
four year period following the Gulf War. They totaled only $4.8 billion 
during 1991-1994.\8\ Despite some reports of massive Iranian military 
build-ups, new agreements during 1991-1994 totaled only a quarter of 
the value of the agreements that Iran had signed during the previous 
four years. It signed $1.2 billion in new agreements with Russia, but 
only $400 million with China, $100 million from other European states 
(mostly Eastern Europe), and $900 million from other countries (mostly 
North Korea). Iran got no new orders from the US and only $100 million 
from Western Europe.\9\
    It is difficult to discuss trends precisely because the US 
government only declassifies data for blocks of several years, and 
these blocks are not always comparable. However, the US estimates that 
Iran signed only $1.3 billion worth of new arms agreements during 1993-
1996--a period heavily influenced by an economic crisis inside Iran, 
low oil revenues, and problems in repaying foreign debt. Iran ordered 
$200 million from Russia, $300 million from China, $100 million with 
other European states (mostly Eastern Europe), and $600 million from 
other countries (mostly North Korea).\10\ The drop in agreements with 
Russia reflected both Iran's financial problems and the result of US 
pressure that had led President Yeltsin not to make major new arms 
sales to Russia. Iran's new agreements with China and North Korea 
heavily emphasized missiles and missile production technology.
    If one looks at deliveries over the period from 1992-1995, Iran 
took delivery on a total of $3 billion worth of arms, versus only $1.1 
billion worth of new orders. The difference is explained by Iran's 
large backlog of orders that can take one to five years to deliver. It 
obtained $1.7 billion worth of arms from Russia, $700 million from 
China, $100 million from major West European states, $200 million from 
other European states, and $300 million from other powers.\11\
    Iran signed $1.1 billion worth of new arms agreements during 1996-
1999--a period still heavily influenced by an economic crisis inside 
Iran, low oil revenues, and problems in repaying foreign debt. Iran 
ordered only $200 million worth of new arms agreements from Russia, 
$800 million from China, and $100 million from other countries.\12\ The 
drop in new arms agreements with Russia reflected both Iran's financial 
problems and the result of US pressures that had led President Yeltsin 
not to make major new arms sales to Iran. Iran's new agreements with 
China and North Korea heavily emphasized missiles and missile 
production technology.
    Arms deliveries followed a different pattern, again reflecting the 
delay between orders and deliveries. The US State Department reports 
that Iran took delivery on $1.6 billion worth of arms in 1991, $859 
million in 1992, $1.4 billion in 1993, $390 million in 1994, $330 
million in 1995, $350 million in 1996, and $850 million in 1997, as 
measured in current dollars.\13\ Once again, it is interesting to note 
that Iranian arms import efforts actually increased after the US 
imposed sanctions.
    If one looks at the source of recent deliveries during this period, 
Russia delivered $700 million worth of arms between 1996 and 1999. This 
largely reflected the backlog of orders from the period before the US 
and Russia reached an agreement that Russia would not provide 
destablizing transfers of conventional weapons. Iran also took delivery 
on $700 million worth of arms from China and $300 million from other 
sources.\14\ However, declassified US estimates of new Iranian arms 
purchases during 1998-1999 do indicate that Iran signed a total of $500 
million worth of new arms agreements with Russia between 1998 and 1999. 
Unfortunately, the US data do not explain what it bought.\15\
    If one looks at the entire period between 1992 and 1999, Iran 
signed only $2.2 billion worth of new arms agreements, but took 
delivery on $$4,700 worth. Iran ordered a total of $400 million in new 
arms agreements from Russia, $1000 million from China, $500 million 
with other European states (mostly Eastern Europe), and $300 million 
from other countries (mostly North Korea).\16\
    In short, the overall patterns in Iranian arms transfers reflect 
what seem to be clear strategic decisions by Iran that it did not have 
to cripple its economy to buy new arms after its defeat by Iraq in 
1988, and that it could then afford to make further cuts in arms buys 
after Iraq's conventional forces were shattered in the Gulf War in 
1991. At the same time, Iran was driven to cut its arms buys by severe 
internal economic problems, and by the fact the US had considerable 
success in limiting Iran's access to advanced arms from Europe and 
Russia between 1995 and 1998.
    These patterns do not mean that Iran's military efforts were 
crippled, or that it did not make some important arms buys. Its 
carefully focused arms purchases as discussed by service in the 
sections that follow and more broadly in Chapter VII. It is also clear 
that the effectiveness of the US-Russian agreement to limit arms 
transfers that was signed in 1995 may be eroding. Most important, such 
figures on conventional arms transfers do not include the costs of 
Iran's efforts to proliferate, which are discussed in detail in Chapter 
IX. Iran seems to have made a strategic decision to emphasize weapons 
of mass destruction over conventional arms. It is also one of the 
ironies of US efforts to sanction Iran that Iran increases its 
expenditures on both proliferation and conventional arms after the 
Clinton Administration signed Executive Orders sanctioning Iran and the 
US Congress passed ILSA.
    Finally, while Iran has not yet mass produced any major modern 
weapons systems, it is also important to note that it has made major 
efforts to reduce its dependence on imports, and has demonstrated a 
number of key weapons prototypes:

   Showed prototype of a main battle tank called the Zulfiqar 
        (Zolfaqar) in 1994. Tank has undergone field trials ever since 
        the Velayat military exercises of May 1996. Its drive train and 
        suspension seems to be modeled on the US-designed M-48A5 and M-
        60A1 series of tanks and to have either a 105mm or 125mm rifled 
        gun. Reports differ as to the Zulfiqar's production status. One 
        report indicates that Iran announced on July 8, 1997, that 
        President Rafsanjani opened the ``first phase'' of a plant to 
        produce the tank in Dorud, some 300 kilometers southwest of 
        Tehran. Another report indicates that it will be produced at 
        the Shahdid Industrial Complex.
   Claims ready to produce light tank for ``unconventional 
        warfare'' called the Towan (Wild Horse) with 90mm gun.
   Developed Iranian-made modification of the Chinese Type WZ 
        501/503 armored infantry fighting vehicle which Iran calls the 
        Boragh. The WZ 501/503 is itself a Chinese copy of the Russian 
        BMP, and is 30 year old technology.
   Displayed APC called the Cobra or BMT-2, which seems to be 
        an indigenous design armed with a 30mm gun or the ZU-23-2 anti-
        aircraft gun-- a light automatic weapons system that Iran has 
        been manufacturing for some years. Like the Zulfiqar, the Cobra 
        has been undergoing field trials in Iranian military exercises 
        since May, 1996.
   Iran now makes a copy of the Russian AT-3 9M14M (Sagger or 
        Ra'ad) anti-tank guided missile.
   Claimed in May 1996, to have produced a self-propelled 
        version of a Russian 122mm gun that it called the Thunder-1, 
        with a firing range of 15,200 meters and a road speed of 65 
        kilometers per hour.\17\
   Makes military radios and low-technology RPVs like the 
        22006, Baz, and Shahin.
   Claims to have built its first Iranian-designed helicopter, 
        and to have tested a locally-built fighter plane. Brigadier 
        General Arasteh, a deputy head of the General Staff of the 
        Armed Forces (serving under Major General Ali Shahbazi, the 
        joint chief of staff) stated in April, 1997 that the 
        ``production line of this aircraft will begin work in the near 
        future.''
   Defense Industries Organization has claimed that Iran was 
        soon going to start producing two trainers, a jet-powered Dorna 
        (Lark) and propeller-driven Partsu (Swallow).
   Iranian military has claimed that Iran has begun mass 
        production of a jet strike aircraft, the Azarakhsh (Lightning), 
        which reportedly resembles the F-4 Phantom (JDW 4 November 
        1998: 20). Iran has reportedly developed a TV-guided missile 
        for carriage on F-4 Phantoms.
   Iran claims to have deployed an air-to-air adapted variant 
        of the SMI Standard missile for its fleet of F-4D/E Phantom II 
        fighter bombers. (JDW 29 April 1998: 17).
   President Rafsanjani announced on October 11, 1997, that 
        Iran had test-launched a major new surface-to-air missile 
        system with a range of 250 kilometers, although he gave no 
        further details. The description of the missile sounded vaguely 
        like the Russian SA-5, which is deployed in Iran. Reports has 
        acquired four HQ-23/2B (CSA-1) launchers and 45-48 missiles, 
        plus 25 SA-6, and 10-15 SA-5 launchers.
   Claims to produce advanced electronic warfare systems.
   Claims will soon start producing 6 multi-purpose destroyers, 
        with initial production run of three.
   Iran claims to be developing non-magnetic, acoustic, free-
        floating and remote controlled mines. It may have also acquired 
        non-magnetic mines, influence mines and mines with 
        sophisticated timing devices.
   Iran is developing FL-10 anti-ship cruise missile which is 
        copy of Chinese FL-2 or FL-7.
   Reportedly assembled domestic variants the YJ-1 (C-801) 
        solid-propellant anti-ship missile under the local name of 
        Karus, and the YJ-2 (C-802) turbojet-powered anti-ship missile 
        under the local name of Tondar (JDW 9 December 1998).
        
        

                                                    Chart Four--Gulf Arms Buys by Supplier:1987-1999
                                                      (New Arms Agreements in Current US $millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Supplier Country
                                                              ------------------------------------------------------------------------------------------
                        Buyer Country                                                                  Major West     Other
                                                                   U.S.        Russia       China       European     European    All Others     Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Iran
  1987-90....................................................            0        3,500        2,300          200        1,200        1,600        8,800
  1991-94....................................................            0          200          200          100          100        1,200
  1995-98....................................................            0          200          800            0          300          100        1,400
  1996-99....................................................            0          200          800            0          100            0        1,100
Iraq
  1987-90....................................................            0          300          700          500          500        1,000        3,000
  1991-94....................................................            0            0            0            0            0            0            0
  1995-98....................................................            0            0            0            0            0            0            0
  1996-99....................................................            0            0            0            0            0            0            0
Bahrain
  1987-90....................................................          300            0            0            0            0            0          300
  1991-94....................................................          200            0            0            0            0            0          200
  1995-98....................................................          500            0            0            0            0            0          500
  1996-99....................................................          500            0            0            0            0            0          500
Kuwait
  1987-90....................................................        2,500          200            0          200          200          200        3,300
  1991-94....................................................        3,500          800            0        1,800            0          100        6,200
  1995-98....................................................          900            0          200          700          100            0        1,900
  1996-98....................................................          800            0          200          100            0            0        1,100
Oman
  1987-90....................................................          100            0            0          600            0            0          700
  1991-94....................................................            0            0            0          500            0          100          600
  1995-98....................................................            0            0            0          300          100          100          500
  1996-99....................................................            0            0            0          300          100            0          400
Qatar
  1987-90....................................................            0            0            0            0            0            0            0
  1991-94....................................................            0            0            0        2,000            0            0        2,000
  1995-98....................................................            0            0            0          900            0            0          900
  1996-99....................................................            0            0            0          800            0            0          800
Saudi Arabia
  1987-90....................................................       18,800          200          300       23,000        2,300          200       44,800
  1991-94....................................................       15,600            0            0        6,600          100            0       22,300
  1995-98....................................................        5,100            0            0        1,700          800          300        7,900
  1996-99....................................................        5,500            0            0          400          900          300        7,100
UAE
  1987-90....................................................          300            0            0          300            0          400        1,000
  1991-94....................................................          300          500            0        3,900          100            0        4,800
  1995-98....................................................          100          400            0        6,000          800          100        7,400
  1996-99....................................................          300          400            0        6,000          800          200        7,700
--------------------------------------------------------------------------------------------------------------------------------------------------------
0 = less than $50 million or nil, and all data rounded to the nearest $100 million.
Source: Richard F. Grimmett, ``Conventional Arms Transfers to the Develoing Nations,'' Congressional Research Service, various editions.

                 FOCUSED POVERTY AND ASYMMETRIC THREATS

    Iran's low expenditures on arms do not mean that it has not 
increased some aspects of its military capabilities. Iran is clearly 
aware of the threat posed by US technology and war fighting methods, 
and of the need to modernize its forces. While it has never published 
detailed force plans, Iranian military literature reflects a keen 
interest in major force modernization plans and in the advanced weapons 
and technologies that support the ``revolution in military affairs.''
    At various times, Iran has sought to procure a wide variety of 
advanced weapons, and been able to take advantage of some aspects of 
technology diffusion. On the other hand, Iran's revolutionary economy 
has remained weak, and Iran's mismanagement of its budget, development, 
and foreign debt has reduced Iran's access to military technology and 
arms. ``Sanctions'' on arms purchases in the form of diplomacy and 
supplier regimes have been far for effective than economic sanctions. 
The US and its allies have blocked many transfers of advanced arms to 
Iran, particularly from Europe and Russia, although such efforts have 
scarcely been leakproof.
    Iran's has attempted to deal with these problems by focusing on 
acquiring weapons of mass destruction, enough advanced armored and air 
weapons to give its some defensive or deterrent capability, and on 
making larger purchases of systems that can threaten tanker traffic and 
the Southern Gulf. Iran has bought enough arms to rebuild its army to 
the point where it can defend effectively against a weakened Iraq. It 
has begun to rebuild its air force and land-based air defenses, and can 
put up a far more effective defense than in 1988.
    It has restructured its regular forces and the Iranian 
Revolutionary Guards Corps to improve the defense of its Southern Gulf 
coast and develop a far more effective ability to attack naval forces, 
tanker traffic, offshore facilities, and targets along the Southern 
Gulf coast. It is this ``focused poverty'' that makes Iran potentially 
dangerous in spite of its relatively low level of arms imports and the 
obsolescence or low quality of much of its order of battle.

            RECENT IRANIAN PURCHASES AND PURCHASING EFFORTS

    Iran's key purchases and procurement efforts reflect these 
priorities. Although Iran's imports have been severely limited relative 
to Iran's overall needs, they do include the following arms imports and 
Iranian development and military production efforts:

Land
   Russian, and Polish T-72 Exports. Reports indicate Iran has 
        procured about 380 T-72Ss from Russia, and 100 T-72M1s from 
        Poland since 1990. Inventory of about 480 T-72s.
   Claims to be producing the Iranian-made Zolfaqar MBT, an M-
        481M-60-like tank.
   Has upgraded to T-54/T-54 called ``Safir-74.'' Claims to 
        have upgraded Iraqi T-54s captured in Iran-Iraq War. Has 400 T-
        54/55 in inventory. Number of upgrades unknown.
   Purchased Russian BMPs. Inventory of 300 BMP-1s and 1400 
        BMP-2s 2000.
   Russia may be licensing Iranian production of T-72 and BMP-
        2.
   Claims domestic production of a Chinese version of the BMP 
        called the Boragh.
   Claims domestic production of an APC called the BMT-2 or 
        Cobra.
   Possible purchase of 100 M-46 and 300 D-30 artillery weapons 
        from Russia.
   Testing prototype of 122mm self-propelled gun called 
        Thunder.
   Has shown a modified heavy equipment transporter called the 
        ``Babr 400.''
   Russian and Asian AT-2s, AT-3s, and AT-4s. Does not seems to 
        include 100 Chinese Red Arrows.
   Chinese and 15+ North Korean 146mm self-propelled weapons.
   Has 60 Russian 2S1 122mm self-propelled howitzers in 
        inventory.
   Growing numbers of BM-24 240mm, BM-21 122mm and Chinese Type 
        63 107mm MRLs.
   Iranian Hadid 122mm--40 round MRL.
   Manufacturing Iranian Arash and Noor rockets (variants of 
        Chinese and Russian 122mm rockets).
   Manufacturing Iranian Haseb rockets (variants of Chinese 
        107mm rocket).
   Manufacturing Iranian Shahin 1 and 2, Oghab, Nazeat 5 and 10 
        (may be additional versions), and Fajr battlefield rockets.
Air/Air Defense
   Keeping up to 115 combat aircraft that Iraq sent to Iran 
        during Gulf War. Seem to include 24 Su-4s and four MiG-29s.
   Has 30 MiG-29s with refueling in inventory, may be receiving 
        15-20 more from Russia.
   Has 30 Su-24s in inventory (probably Su-24D version), may be 
        receiving 6 to 9 more from Russia.
   May be negotiating purchase of AS-10, AS-11, AS-12, AS-14/
        16s from Russia.
   Has Su-25s (formerly Iraqi), although has not deployed.
   May be trying to purchase more Su-25s, as well as MiG-31s, 
        Su-27s and Tu-22Ms.
   Considering imports of Chinese F-8 fighter and Jian Hong 
        bomber.
   Has 25 Chinese F-7M fighters with PL-2, PL2A, and PL-7 AAMs.
   Has purchased 25 Brazilian Tucano trainers and 25 Pakistani 
        MiG-17 trainers. Uncertain report has bought 12 MiG-29UB 
        trainers from Russia.
   Has bought 12 Italian AB-212, 20 German BK-117A-3, and 12 
        Russian Mi-17 support and utility helicopters.
   Iran claims to have fitted F-14s with I-Hawk missiles 
        adapted to the air-to-air role.
   Claims to produce advanced electronic warfare systems.
   IRGC claims to be ready to mass produce gliders.
Land-Based Air Defense
   May be negotiating purchase of S-300 and more SA-14/16s from 
        Russia.
   Has acquired four HQ-23/2B (CSA-1) launchers and 45-48 
        missiles, plus 25 SA-6, and 10 SA-5 launchers.
   Has acquired Chinese FM-8O launchers and a few RBS-70s.
   More SA-7s and HN-5s man-portable missiles; may have 
        acquired 100-200 Strelas.
   Reports is seeking to modernize Rapier and 10-15 Tigercat 
        fire units.
   May be modifying and/or producing ZSU-23-4 radar-guided 
        anti-aircraft guns.
   Claims to produce advanced electronic warfare systems.
Sea
   Claims will soon start producing 6 multi-purpose destroyers.
   Has taken delivery on three Russian Type 877EKM Kilo-class 
        submarines, possibly with 1,000 modern magnetic, acoustic, and 
        pressure sensitive mines.
   Reports has North Korean midget submarines have never been 
        confirmed.
   Has obtained 10 Hudong-class Chinese missile patrol boats 
        with CS-802.
   US Mark 65 and Russian AND 500, AMAG-1, KRAB anti-ship 
        mines.
   Reports that Iran is negotiating to buy Chinese EM-52 
        rocket-propelled mine.
   Iran claims to be developing non-magnetic, acoustic, free-
        floating and remote controlled mines. It may have also acquired 
        non-magnetic mines, influence mines and mines with 
        sophisticated timing devices.
   Wake-homing and wire-guided Russian torpedoes.
   Seersucker (HY-2) sites with 50-60 missiles--Iran working to 
        extend range to 400 km.
   Has 60-100 Chinese CS-801 (Ying Jai-1 SY-2) and CS-8O2 (YF-
        6) SSMs.
   Iran is developing FL-10 anti-ship cruise missile which is 
        copy of Chinese FL-2 or FL-7.
   Boghammer fast interceptor craft.
Missiles
   Obtained up to 250-300 Scud Bs with 8-15 launchers.
   Up to 150 Chinese CSS-8 surface-to-surface missiles with 25-
        30 launchers.
   Reports that China is giving Iran technology to produce 
        long-range solid fuel missile.
   Iran-130 missile (?).
   Has bought North Korean Scud Cs with 5-14 launchers.
   South Korea reports Iran has bought total of 100 Scud Bs and 
        100 Scud Cs from North Korea.
   May be developing the Zelzal-3 missile with a range of 900 
        kilometers with Chinese and North Korean support.
   Iran may be planning to purchase North Korean No-Dong 1/2s.
   Iran also interested in North Korea's developmental Tapeo 
        Dong 1 or Tapeo Dong 2.
   Claims will launch its first experimental satellite by 2000 
        with Russian aid.
   Reports of tunnels for hardened deployment of Scuds and 
        SAMs.
CBW
   Chemical weapons (sulfur mustard gas, hydrogen cyanide, 
        phosgene and/or chlorine; possibly Sarin and Tabun).
   Biological weapons (possibly Anthrax, hoof and mouth 
        disease, and other biotoxins).
   Nuclear weapons development (Russian and Chinese reactors).

                   IRAN'S PROBLEMS WITH OBSOLESCENCE

    At the same time, neither Iran's arms imports or production efforts 
have come close to offsetting the impact of its underspending on 
military modernization, and its relative ``poverty'' in arms imports. 
Iran still has a force structure filled with obsolete and obsolescent 
military equipment. Iran's procurements to date cannot compensate for 
the steady decay of Iran's older equipment. Its Western equipment is 
now at least two decades old and received hard use during the Iran-Iraq 
War. Most of the arms that Iran bought during the Iran-Iraq War 
consisted of relatively low grade North Korean and Chinese equipment 
and few of its indigenous production efforts have yet gone beyond the 
prototype stage.
    Iran's holdings of aging and obsolete equipment include:

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Land Forces
  Chieftain tank................................         140   Worn, under-armored, underarmed, and
                                                                underpowered. Fire control and sighting system
                                                                now obsolete. Cooling problems.
  M-47/M-48.....................................         150   Worn, under-armored, underarmed, and
                                                                underpowered. Fire control and sighting system
                                                                now obsolete.
  M-6OA1........................................     150-160   Worn, under-armored, underarmed, and
                                                                underpowered. Fire control and sighting system
                                                                now obsolete.
  Scorpion AFV..................................       70-80   Worn, light armor, underarmed, and underpowered.
  M-114s........................................       70-80   Worn, light armor, and underarmed, and
                                                                underpowered.
  M-109 155mm SP................................     150-160   Worn, fire control system now obsolete. Growing
                                                                reliability problems due to lack of updates and
                                                                parts.
  M-1O7 175mm SP................................       20-30   Worn, fire control system now obsolete. Growing
                                                                reliability problems due to lack of parts.
  M-110 203mm SP................................       25-30   Worn, fire control system now obsolete. Growing
                                                                reliability problems due to lack of parts.
  AH-1J Attack helicopter.......................         100   Worn, avionics and weapons suite now obsolete.
                                                                Growing reliability problems due to lack of
                                                                updates and parts.
  CH-47 Transport helicopter....................       35-40   Worn, avionics now obsolete. Growing reliability
                                                                problems due to lack of updates and parts.
  Bell, Hughes, Boeing, Agusta, Sikorsky,            350-445   Worn, growing reliability problems due to lack of
   helicopters.                                                 updates and parts.

Air Force
  F-4D/E FGA....................................       35-50   Worn, avionics now obsolete. Critical problems
                                                                due to lack of updates and parts.
  60 F-5/IFII FGA...............................       50-60   Worn, avionics now obsolete. Serious problems due
                                                                to lack of updates and parts.
  F-5A/B........................................       10-20   Worn, avionics now obsolete. Serious problems due
                                                                to lack of updates and parts.
  RF-4E.........................................        8-15   Worn, avionics now obsolete. Serious problems due
                                                                to lack of updates and parts.
  RF-5E.........................................         0-5   Worn, avionics now obsolete. Serious problems due
                                                                to lack of updates and parts. (May be in
                                                                storage).
  F-14 AWX......................................          60   Worn, avionics now obsolete. Critical problems
                                                                due to lack of updates and parts. Cannot operate
                                                                some radars at long ranges. Phoenix missile
                                                                capability cannot be used.
  P-3F MPA......................................           5   Worn, avionics and sensors now obsolete. Many
                                                                sensors and weapons cannot be used. Critical
                                                                problems due to lack of updates and parts.
  Key PGMs......................................          --   Remaining Mavericks, Aim-7s, Aim-9s, Aim-54s are
                                                                all long past rated shelf life. Many or most are
                                                                unreliable or inoperable.
  I-Hawk SAM....................................         100   Worn, electronics, software, and some aspects of
                                                                sensors now obsolete. Critical problems due to
                                                                lack of updates and parts.
  Rapier SAM....................................          30   Worn, electronics, software, and some aspects of
                                                                sensors now obsolete. Critical problems due to
                                                                lack of updates and parts.
  Tigercat SAM..................................          15   Worn, electronics, software, and some aspects of
                                                                sensors now obsolete. Critical problems due to
                                                                lack of updates and parts.

Navy
  Alvand FFG....................................           3   Worn, weapons and electronics suite obsolete,
                                                                many systems inoperable or partly dysfunctional
                                                                due to Critical problems due to lack of updates
                                                                and parts.
  Bayandor FF...................................           2   Obsolete, critical problems due to lack of
                                                                updates and parts.
  Hengeman LST..................................           4   Worn, needs full scale refit.
----------------------------------------------------------------------------------------------------------------

                   IRAN AND CONVENTIONAL WARFIGHTING

    Iran is too weak to seek a direct conflict that involves the US, or 
to risk another war with Iran. It will also be years before Iranian 
arms imports and military production efforts can give it enough 
capability to deliberately initiate a conflict or reveal whether it has 
aggressive intentions. Iran can threaten shipping traffic in the Gulf, 
but its acquisitions do not give it any hope of winning a naval-air 
battle against US forces in the Gulf, and it has little chance of doing 
so in the foreseeable future.
    Iran would have to rebuild and modernize both its regular navy and 
air force at levels of strength and capability it simply cannot hope to 
achieve in the next decade. Alternatively, it would need to develop its 
capabilities to deliver weapons of mass destruction to the point where 
it could back its conventional military capabilities with a threat that 
might seriously inhibit US military action and/or the willingness of 
Southern Gulf states to support the US and provide air and naval 
facilities.
    The ``wild cards'' determining the outcome of such contingencies 
are the US determination to act, the size of the US presence in the 
Gulf and US power projection capabilities at the time of a given 
crisis, Southern Gulf support for the US and willingness to provide the 
US with suitable facilities, and the political liabilities the US would 
face--if any--in terms of the response from nations outside the region. 
Far more is involved in a confrontation in the Gulf than military 
capability, and Iran would have far more contingency capability if the 
US could not respond for political or budgetary reasons.
    Iran could also try to threaten US interests indirectly and through 
asymmetric wars. Iran has a major capability to engage in asymmetric 
warfare in the Gulf. It could covertly lay free floating mines, launch 
hit and run attacks against offshore oil platforms and shipping with 
its missile patrol boats, and invade and occupy offshore facilities 
with the naval branch of its Revolutionary Guards. At the same time, it 
cannot project power across in the Gulf in the face of US opposition, 
and has never really exercised large-scale over-the-beach amphibious 
operations. Furthermore, there is little present near-term prospect 
that Iran will develop enough power projection capability--and 
supporting power from its navy and air force--to win a conflict in the 
Southern Gulf that involves US forces, or to force its way in support 
of a coup or uprising.
    At the same time, the US might still have problems in exploiting 
its military superiority and the ``revolution in military affairs'' to 
counter Iranian military involvement in the Southern Gulf:

   Iran might seek to exploit the fracture lines and political 
        unrest within and between the Southern Gulf states. This is 
        particularly true of the Shi'ite in Bahrain and Saudi Arabia, 
        but it might also prove true of future confrontations between 
        Bahrain and Qatar and Saudi Arabia and Yemen.

   The US would face serious problems in responding to any 
        change of government in a Southern Gulf state that resulted in 
        a pro-Iranian regime and which sought Iranian military advice 
        or an Iranian military presence. The US cannot save a Gulf 
        regime from its own people or (openly) endorse such action by 
        other Southern Gulf countries.

   Iran's process of creeping proliferation is making enough 
        progress that the US and the Southern Gulf states must reach 
        some degree of agreement on taking suitable counter-
        proliferation measures. A power vacuum in which Iran 
        proliferates, the Southern Gulf states grow steadily more 
        vulnerable, and US resolve seems progressively more 
        questionable could give Iran far more capability to directly or 
        indirectly intervene in Southern Gulf affairs.

   Iran might threaten regional stability by exploiting 
        internal unrest and divisions in Iraq that are serious enough 
        to split the Iraqi armed forces, and/or lead to a new Shi'ite 
        uprising. Similarly, a major Kurdish uprising would greatly 
        complicate Iraq's ability to concentrate its forces to defend 
        against an Iranian attack on Iraq's center and south. At the 
        same time, any Iranian victory over Iraq might prove to be more 
        apparent than real. It would be dependent on US toleration of 
        such an Iranian victory that did more than depose the present 
        Iraqi regime. Further, the split between Persian, Arab, and 
        Kurd seems likely to remain so great that Iraqi independence 
        would rapidly reassert itself if Iran attempted to occupy or 
        dominate a substantial part of Iraq.

    The previous contingencies assume that Iran will take offensive 
action. If it does, it may well be confronted with a US-led attack on 
Iran. If this attack is confined to naval and coastal targets, 
particularly those Iranian military capabilities that potentially 
threaten Gulf shipping, there is little Iran can do militarily to 
resist US power other than try to ride out the attack by dispersing and 
hiding its smaller boats, anti-ship missiles, etc.
    If a US-led attack includes strategic conventional missile strikes 
and bombings, there also is little Iran can do in immediate response 
other than escalate by using weapons of mass destruction. Such an 
escalation now would almost certainly end in increasing the risk and 
damage to Iran than deter or damage US forces.
    Iran, however, does have potential countermeasures to US 
conventional superiority and ability to exploit the revolution in 
military affairs. It can respond over time with terrorism, 
unconventional warfare, and proxy wars. It is much easier for air and 
missile power to inflict major damage on Iran than it is to predict or 
control the political and military aftermath. The resulting casualties 
and damage will be extremely difficult to translate into an ``end 
game.''
    Attacks on the Iranian mainland that went beyond a punitive raid 
would also be much more costly to the US, in spite of the ``revolution 
in military affairs.'' A US-led coalition could defeat Iran's regular 
forces, but would have to be at least corps level in size, and 
occupying Iran would be impractical without massive land forces of 
several entire corps. Even limited amphibious and land attacks on the 
mainland would expose the invading forces to a much higher risk of low 
intensity and guerrilla combat with Iranian forces that would 
constantly receive reinforcement and resupply. Further, Iran's use of 
terrorism and weapons of mass destruction would be politically easier 
to justify in a defensive conflict than an offensive one. Such attacks 
would probably end in futility, and in creating a revanchist Iran.

                        IRAN AND ASYMMETRIC WARS

    Iran may be able to counter US capabilities and achieve some of its 
objectives through intimidation and direct and indirect threats. Iran's 
ability to provide such threats and conduct ``wars of intimidation,'' 
will improve steadily in the near to mid-term, in spite of its military 
weakness. In many cases, its neighbors may be willing to react to such 
intimidation by accommodating Iran to some degree. This is particularly 
true of those Southern Gulf states whose gas and oil resources are most 
exposed--like Qatar--or which see Iraq as a more serious threat--like 
Kuwait.
    Iran has steadily improved the capabilities of the IRGC and the 
Quds Force for unconventional warfare, including the potential use of 
chemical and biological weapons. Iran has also demonstrated that it is 
steadily improving its ability to conduct ``proxy wars'' by training, 
arming, and funding movements like the Hezbollah.Iran also is steadily 
improving capabilities for information warfare and cyberterrorism, 
although it seems unlikely that it is capable of advanced attacks on 
protected US military and US government computer, information, and 
battle management systems. Iran probably has more capability to attack 
the US private sector and the systems of Gulf states. It also is almost 
certainly improving the defense of its own systems, which often are 
land-based and require little more than isolation from netted or open 
systems to provide a first line of defense.
    These capabilities allow Iran to conduct the kind of low-level and/
or covert asymmetric warfare where the ``revolution in military 
affairs'' as of yet has only limited value. At the same time, any use 
of such forces is unlikely to drive the US out of the Gulf, and would 
risk alienating the Southern Gulf or states without defeating them. The 
bombing of Al Khobar Towers may have demonstrated American 
vulnerabilities, but it is far from clear that it provided anyone with 
strategic benefits. As for proxy wars, it is unclear what terrorist 
movements are willing to accept such Iranian support and pay the 
probable political price tag.

                         IRAN AND PROLIFERATION

    Iran's effort to acquire chemical, biological, and nuclear 
weapons--and suitable long-range strike systems--are a serious threat 
to US interests and regional peace. They also reveal far more important 
technology transfers from Russia and other states than the transfers in 
conventional weapons:
Delivery Systems
     Iran has shorter missile range systems:
    In 1990, Iran bought CSS-8 surface-to-surface missiles (converted 
SA-2s) from China with ranges of 130-150 kilometers.
    Has Chinese sea and land-based anti-ship cruise missiles. Iran 
fired 10 such missiles at Kuwait during Iran Iraq War, hitting one US-
flagged tanker.
     The Soviet-designed Scud B (17E) guided missile currently 
forms the core of Iran's ballistic missile forces.
    Iran acquired its Scuds in response to Iraq's invasion. It obtained 
a limited number from Libya and then obtained larger numbers from North 
Korea. It deployed these units with a special Khatam ol-Anbya force 
attached to the air element of the Pasdaran. Iran fired its first Scuds 
in March, 1985. It fired as many as 14 Scuds in 1985, 8 in 1986, 18 in 
1987, and 77 in 1988. Iran fired 77 Scud missiles during a 52 day 
period in 1988, during what came to be known as the ``war of the 
cites.'' Sixty-one were fired at Baghdad, nine at Mosul, five at 
Kirkuk, one at Takrit, and one at Kuwait. Iran fired as many as five 
missiles on a single day, and once fired three missiles within 30 
minutes. This still, however, worked out to an average of only about 
one missile a day, and Iran was down to only 10-20 Scuds when the war 
of the cities ended.
    Iran's missile attacks were initially more effective than Iraq's 
attacks. This was largely a matter of geography. Many of Iraq's major 
cities were comparatively close to its border with Iran, but Tehran and 
most of Iran's major cities that had not already been targets in the 
war were outside the range of Iraqi Scud attacks. Iran's missiles, in 
contrast, could hit key Iraqi cities like Baghdad. This advantage ended 
when Iraq deployed extended range Scuds.
    The Scud B is a relatively old Soviet design which first became 
operational in 1967, designated as the R-17E or R-300E. The Scud B has 
a range of 290-300 kilometers with its normal conventional payload. The 
export version of the missile is about 11 meters long, 85-90 
centimeters in diameter, and weighs 6,300 kilograms. It has a nominal 
CEP of 1,000 meters. The Russian versions can be equipped with 
conventional high explosive, fuel air explosive, runway penetrator, 
submunition, chemical, and nuclear warheads.
    The export version of the Scud B comes with a conventional high 
explosive warhead weighing about 1,000 kilograms, of which 800 
kilograms are the high explosive payload and 200 are the warhead 
structure and fusing system. It has a single stage storable liquid 
rocket engine and is usually deployed on the MAZ-543 eight wheel 
transporter-erector-launcher (TEL). It has a strap-down inertial 
guidance, using three gyros to correct its ballistic trajectory, and 
uses internal graphite jet vane steering. The warhead hits at a 
velocity above Mach 1.5.
    Most estimates indicate that Iran now has 6-12 Scud launchers and 
up to 200 Scud B (R-17E) missiles with 230-310 KM range.
    Some estimates give higher figures. They estimate Iran bought 200-
300 Scud Bs from North Korea between 1987 and 1992, and may have 
continued to buy such missiles after that time. Israeli experts 
estimate that Iran had at least 250-300 Scud B missiles, and at least 
8-15 launchers on hand in 1997.
    US experts also believe that Iran can now manufacture virtually all 
of the Scud B, with the possible exception of the most sophisticated 
components of its guidance system and rocket motors. This makes it 
difficult to estimate how many missiles Iran has in inventory and can 
acquire over time, as well as to estimate the precise performance 
characteristics of Iran's missiles, since it can alter the weight of 
the warhead and adjust the burn time and improve the efficiency of the 
rocket motors.
     Iran has new long range North Korean Scuds--with ranges 
near 500 kilometers.
    The North Korean missile system is often referred to as a ``Scud 
C.'' Typically, Iran formally denied the fact it had such systems long 
after the transfer of these missiles became a reality. Hassan Taherian, 
an Iranian foreign ministry official, stated in February, 1995, ``There 
is no missile cooperation between Iran and North Korea whatsoever. We 
deny this.''
    In fact, a senior North Korean delegation traveled to Tehran to 
close the deal on November 29, 1990, and met with Mohsen Rezaei, the 
former commander of the IRGC. Iran either bought the missile then, or 
placed its order shortly thereafter. North Korea then exported the 
missile through its Lyongaksan Import Corporation. Iran imported some 
of these North Korean missile assemblies using its B-747s, and seems to 
have used ships to import others.
    Iran probably had more than 60 of the longer range North Korean 
missiles by 1998, although other sources report 100, and one source 
reports 170.
    Iran may have 5-10 Scud C launchers, each with several missiles. 
This total seems likely to include four new North Korean TELs received 
in 1995.
    Iran seems to want enough missiles and launchers to make its 
missile force highly dispersible.
    Iran has begun to test its new North Korean missiles. There are 
reports it has fired them from mobile launchers at a test site near Qom 
about 310 miles (500 kilometers) to a target area south of Shahroud. 
There are also reports that units equipped with such missiles have been 
deployed as part of Iranian exercises like the Saeqer-3 (Thunderbolt 3) 
exercise in late October, 1993.
    The missile is more advanced than the Scud B, although many aspects 
of its performance are unclear. North Korea seems to have completed 
development of the missile in 1987, after obtaining technical support 
from the People's Republic of China. While it is often called a ``Scud 
C,'' it seems to differ substantially in detail from the original 
Soviet Scud B. It seems to be based more on the Chinese-made DF-61 than 
on a direct copy of the Soviet weapon.
    Experts estimate that the North Korean missiles have a range of 
around 310 miles (500 kilometers), a warhead with a high explosive 
payload of 700 kilograms, and relatively good accuracy and reliability. 
While this payload is a bit limited for the effective delivery of 
chemical agents, Iran might modify the warhead to increase payload at 
the expense of range and restrict the using of chemical munitions to 
the most lethal agents such as persistent nerve gas. It might also 
concentrate its development efforts on arming its Scud C forces with 
more lethal biological agents. In any case, such missiles are likely to 
have enough range-payload to give Iran the ability to strike all 
targets on the southern coast of the Gulf and all of the populated 
areas in Iraq, although not the West. Iran could also reach targets in 
part of eastern Syria, the eastern third of Turkey, and cover targets 
in the border area of the former Soviet Union, western Afghanistan, and 
western Pakistan.
    Accuracy and reliability remain major uncertainties, as does 
operational CEP. Much would also depend on the precise level of 
technology Iran deployed in the warhead. Neither Russia nor the 
People's Republic of China seem to have transferred the warhead 
technology for biological and chemical weapons to Iran or Iraq when 
they sold them the Scud B missile and CSS-8. However, North Korea may 
have sold Iran such technology as part of the Scud C sale. If it did 
so, such a technology transfer would save Iran years of development and 
testing in obtaining highly lethal biological and chemical warheads. In 
fact, Iran would probably be able to deploy far more effective 
biological and chemical warheads than Iraq had at the time of the Gulf 
War.
    Iran may be working with Syria in such development efforts, 
although Middle Eastern nations rarely cooperate in such sensitive 
areas. Iran served as a transshipment point for North Korean missile 
deliveries during 1992 and 1993. Some of this transshipment took place 
using the same Iranian B-747s that brought missile parts to Iran. 
Others moved by sea. For example, a North Korean vessel called the Des 
Hung Ho, bringing missile parts for Syria, docked at Bandar Abbas in 
May, 1992. Iran then flew these parts to Syria. An Iranian ship coming 
from North Korea and a second North Korean ship followed, carrying 
missiles and machine tools for both Syria and Iran. At least 20 of the 
North Korean missiles have gone to Syria from Iran, and production 
equipment seems to have been transferred to Iran and to Syrian plants 
near Hama and Aleppo.
     Iran can now assemble Scud and Scud C missiles using 
foreign-made components. It may soon be able to make entire missile 
systems and warhead packages in Iran.
     A US examination of Iran's dispersal, sheltering, and 
hardening programs for its anti-ship missiles and other missile systems 
indicate that Iran has developed effective programs to ensure that they 
would survive a limited number of air strikes and that Iran had reason 
to believe that the limited number of preemptive strikes Israel could 
conduct against targets in the lower Gulf could not be effective in 
denying Iran the capability to deploy its missiles.
     Iran is developing an indigenous missile production 
capability with both solid and liquid fueled missiles.
    The present scale of Iran's production and assembly efforts is 
unclear. Iran seems to have a design center, at least two rocket and 
missile assembly plants, a missile test range and monitoring complex, 
and a wide range of smaller design and refit facilities.
    The design center is said to located at the Defense Technology and 
Science Research Center, which is a branch of Iran's Defense Industry 
Organization, and located outside Karaj--near Tehran. This center 
directs a number of other research efforts. Some experts believe it has 
support from Russian and Chinese scientists.
    Iran's largest missile assembly and production plant is said to be 
a North Korean-built facility near Isfahan, although this plant may use 
Chinese equipment and technology. There are no confirmations of these 
reports, but this region is the center of much of Iran's advanced 
defense industry, including plants for munitions, tank overhaul, and 
helicopter and fixed wing aircraft maintenance. Some reports say the 
local industrial complex can produce liquid fuels and missile parts 
from a local steel mill.
    A second missile plant is said to be located 175 kilometers east of 
Tehran, near Semnan. Some sources indicate this plant is Chinese-built 
and began rocket production as early as 1987. It is supposed to be able 
to build 600-1,000 Oghab rockets per year, if Iran can import key 
ingredients for solid fuel motors like ammonium perchlorate. The plant 
is also supposed to produce the Iran-130.
    Another facility may exist near Bandar Abbas for the assembly of 
the Seersucker. China is said to have built this facility in 1987, and 
is believed to be helping the naval branch of the Guards to modify the 
Seersucker to extend its range to 400 kilometers. It is possible that 
China is also helping Iran develop solid fuel rocket motors and produce 
or assemble missiles like the CS-80l and CS-802. There have, however, 
been reports that Iran is developing extended range Scuds with the 
support of Russian experts, and of a missile called the Tondar 68, with 
a range of 700 kilometers.
    Still other reports claim that Iran has split its manufacturing 
facilities into plants near Pairzan, Seman, Shiraz, Maghdad, and 
Islaker. These reports indicate that the companies involved in building 
the Scuds are also involved in Iran's production of poison gas and 
include Defense Industries, Shahid, Bagheri Industrial Group, and 
Shahid Hemat Industrial Group.
    Iran's main missile test range is said to be further east, near 
Shahroud, along the Tehran-Mashhad railway. A telemetry station is 
supposed to be 350 kilometers to the south at Taba, along the Mashhad-
Isfahan road. All of these facilities are reportedly under the control 
of the Islamic Revolutionary Guards Corps.
    There were many reports during the late 1980s and early 1990s that 
Iran had ordered the North Korean No Dong missile, which was planned to 
have the capability to carry nuclear and biological missile ranges of 
up to 900 kilometers. This range would allow the missile could reach 
virtually any target in Gulf, Turkey, and Israel. The status of the No 
Dong program has since become increasingly uncertain, although North 
Korea deployed some developmental types at test facilities in 1997.
    The No-Dong underwent flight tests at ranges of 310 miles (500 
kilometers) on May 29, 1993. Some sources indicate that Iranians were 
present at these tests. Extensive further propulsion tests began in 
August 1994, and some reports indicate operational training began for 
test crews in May 1995. Missile storage facilities began to be built in 
July 1995, and four launch sites were completed in October 1995.
    The progress of the program has been slow since that time, and may 
reflect development problems. However, mobile launchers were seen 
deployed in northeast North Korea on March 24, 1997. According to some 
reports, a further seven launcher units were seen at a facility about 
100 kilometers from Pyongyang.
    The No-Dong 1 is a single-stage liquid-fueled missile, with a range 
of up to 1,000 to 1,300 kilometers (810 miles), although longer ranges 
may be possible with a reduced warhead and maximum burn. There are also 
indications that there may be a No-Dong 2, using the same rocket motor, 
but with an improved fuel supply system that allows the fuel to burn 
for a longer period.
    The missile is about 15.2 meters long--four meters longer than the 
Scud B--and 1.2 meters in diameter. The warhead is estimated to weigh 
770 kilograms (1,200-1,750 pounds) and a warhead manufacturing facility 
exists near Pyongyang. The No-Dong has an estimated theoretical CEP of 
700 meters at maximum range, versus 900 meters for the Scud B, although 
its practical accuracy could be as wide as 3,000-4,000 meters. It has 
an estimated terminal velocity of Mach 3.5, versus 2.5 for the Scud B, 
which presents added problems for tactical missile defense. The missile 
is to be transportable on a modified copy of the MAZ-543P TEL that has 
been lengthened with a fifth axle and which is roughly 40 meters long. 
The added support stand for the vertical launch modes brings the 
overall length to 60 meters, and some experts questioned whether a unit 
this big is practical.
     These developments may help explain the background to 
Iran's new Shahab system:
    Some US experts believe that Iran tested booster engines in 1997 
capable of driving a missile ranges of 1,500 kilometers. Virtually all 
US experts believe that Iran is rapidly approaching the point where it 
will be able to manufacture missiles with much longer ranges than the 
Scud B.
    Eitan Ben Eliyahu--the commander of the Israeli Air Force--reported 
on April 14, 1997 that Iran had tested a missile capable of reaching 
Israel. The background briefings to his statement implied that Russia 
was assisting Iran in developing two missiles--with ranges of 620 and 
780 miles Follow-on intelligence briefings that Israel provided in 
September, 1997, indicated that Russia was helping Iran develop four 
missiles. US intelligence reports indicate that China has also been 
helping Iran with some aspects of these missile efforts.
    These missiles included the Shahab (``meteor'') missiles, with 
performance similar to those previously identified with Iranian 
missiles adapted from North Korean designs.
    The Israeli reports indicated that the Shahab 3 was a liquid-fueled 
missile with a range of 810 miles (1,200-1,500 kilometers) and a 
payload of 1550 pounds (700 kilometers).
    Israel claimed the Shahab might be ready for deployment as early as 
1999.
    Iran tested the Shahab 3 on July 21, 1998, claiming that it was a 
defensive action to deal with potential threats from Israel.
    The missile flew for a distance of up to 620 miles, before it 
exploded about 100 seconds after launch. US intelligence sources could 
not confirm whether the explosion was deliberate, but indicated that 
the final system might have a range of 800-940 miles (a maximum of 
1,240 kilometers), depending on its payload. The test confirmed the 
fact the missile was a liquid fueled system.
    Gen. Mohammad Bagher Qalibaf, head of the Islamic Revolutionary 
Guards Corps' air wing publicly reported on August 2, 1998 that the 
Shahab-3 is 53-foot-long ballistic missile that can travel at 4,300 mph 
and carry a one-ton warhead at an altitude of nearly 82,000 feet. He 
claimed that the weapon was guided by an Iranian-made system that gives 
it great accuracy: ``The final test of every weapon is in a real war 
situation but, given its warhead and size, the Shahab-3 is a very 
accurate weapon.''
    Other Iranian sources reported that the missile had a range of 800 
miles. President Mohammad Khatami on August 1, 1998 stated that Iran 
was determined to continue to strengthen its armed forces, regardless 
of international concerns: ``Iran will not seek permission from anyone 
for strengthening its defense capability.''
    Martin Indyck, the US Assistant Secretary for Near East Affairs 
testified on July 28, that the US estimated that the system needed 
further refinement but might be deployed in its initial operational 
form between September, 1998 and March, 1999.
    Iran publicly displayed the Shahab 3 on its launcher during a 
parade on September 25, 1998. The missile carrier bore signs saying, 
``The US can do nothing'' and ``Israel would be wiped from the map.''
    There are some reports of a Shahab-3B missile with extended range 
and a larger booster.
    The resulting system seems to be close to both the No-Dong and 
Pakistani Ghauri or Haff-5 missile, first tested in April 1998, raising 
questions about Iranian-North Korean-Pakistani cooperation.
    North Korean parades exhibiting the Tapeo Dong in September 1999 
exhibited a missile with rocket motor and nozzle characteristics 
similar to those of the Sahab 3.
    The Shahab 3 was tested in a launch from a transporter-erector-
launcher (TEL) from a new air base of the Islamic Revolutionary Guards 
at Mashad on February 20, 2000, and successfully demonstrated the 
integration of the engine and missile subsystems. It tested the system 
again in July 2000, with a nominal range of 810 miles.\18\
    Iran tested a solid state missile it called the Shahab D on 
September 20, 2000. The Iranian Deputy Defense Minister, Vice Admiral 
Ali Shamkani, claimed that it was part of a peaceful program for 
launching satellites.\19\
    Iranian sources indicate that the missile has a inertial navigation 
system with a CEP of 3 kilometers, making it so inaccurate that it can 
only be lethal against area targets using a weapon of mass destruction.
    Jane's Defense Weekly claimed on March 22, 2000 that US and Israeli 
intelligence officials felt the Shahab 3 was now ready for deployment.
    Iran announced on July 15, 2000 that it had successfully test-fired 
an upgraded version of its medium-range Shahab missile. An Iranian 
defence ministry source was quoted by state media as saying that the 
missile was test-fired to ensure it conforms to the latest 
technological standards. It was first tested in 1998. ``This missile is 
part of our program for the defence industry and it would in no way 
threaten other countries.'' Iran announced that the Shahab-3 is a 
ballistic missile, with a range of 800 miles, and could travel at a 
speed of 4,320 mph with a 1-ton warhead.
    Iran's Defence Minister Admiral Ali Shamkhani has said a larger 
missile, Shahab 4, was in production as a vehicle for launching 
satellites into space.\20\
    US experts indicated that they estimated the missile had a range of 
1,300 km (800 miles), making it capable of hitting Israel, and that the 
Shahab-3 was modeled mainly on North Korea's No Dong-1, but has been 
improved with Russian technology. The US intelligence community is 
divided whether Iran will sustain its current programs, and actually 
deploy a system capable of striking the US. US experts indicated that 
they estimated the missile had a range of 1,300 km (800 miles), making 
it capable of hitting Israel, and that the Shahab-3 was modeled mainly 
on North Korea's No Dong-1, but has been improved with Russian 
technology.\21\
    Secretary of Defense William Cohen stated that,\22\ ``This does not 
come as a surprise . . . I have pointed to Iran and the testing of the 
Shahab-3 and what I assume will be the testing of the 4 in the future 
and beyond that, as one of the reasons why it is important for the 
United States to undertake to research, develop and potentially deploy 
an NMD (national missile defense) system that would provide protection 
against countries such as Iran posing a threat to the United States . . 
. This represents a continuation of their testing program, whether it 
was scheduled to coincide with the discussions in Washington is a 
matter only the Iranians can determine, we don't have any information 
pertaining to that . . . We accept it for what it is, we know that they 
will continue to test it, they will continue to develop a longer-range 
missile capability and that is one of the reasons why we believe it is 
important that the United States continue its research and testing and 
the development program for the NMD, precisely to deal with countries 
such as North Korea, Iran, Iraq and others. Anytime you have success in 
a particular missile system, that gives you confidence to move forward 
with more tests, with greater capability . . . So I think there is 
obviously a potential to accelerate development with each successful 
test . . . we have discussed this in the past, we believe that North 
Korea, Iran, potentially Iraq in the future and others will develop 
long-range missile capability. This is what we anticipate, this 
confirms our anticipation, and so this is a factor that will have to be 
taken into account in terms of what the time frame will be when Iran 
will have the capability of striking US territory or that of European 
nations. . . . Only the president can decide whether we should go 
forward at this point,'' Cohen said. ``But I think this is an issue 
that is not going to go away with the elections, and if there is any 
delay in the program, that another president will have to face it at 
some point because the threat will continue to expand.''
    Israeli expressed its own concerns. Amos Yaron, director-general of 
the Defence Ministry, told Israel Radio that, ``We are looking at this 
matter for the moment with some concern because in any event they have 
the ability. We don't believe they have any intention whatsoever to 
attack the state of Israel for the moment . . . It must be remembered 
that Iran developed these capabilities as a result of the lessons they 
had from the wars of the past, which is to say from its big war against 
Iraq. Iran didn't develop this missile against the state of Israel . . 
. Now the Iranians have this ability. Between the ability and the 
intention, there is a great distance.'' A senior Israeli military 
source did predict, however, that by 2005, Iran would, with Russian 
help, achieve a military nuclear capability by 2005 with Russian help. 
Israel's army chief, Lieutenant-General Shaul Mofaz, told Israel Radio 
that the combined development of the missile and a non-conventional 
capacity posed a threat not only to Israel, but also to any country 
within range of the missile.\23\
    In spite of these developments, a number of US intelligence 
officials feel the NIC report was politicized by pressure from the 
policy level to support the NMD program, and to not disagree with the 
results of the Rumsfeld Commission. They feel that Iran still faces 
problems in in its program to build the Shahab-3, which some feel is a 
missile with a range of only 780 miles. At least one official has been 
quoted on backround as stating that, ``There is an Iranian threat to 
U.S. forces in the region, not to the continental United States.''
    US officials agree that Iran is considering developing a rocket 
that can put satellites in orbit, but note that that the development of 
such a booster would give Iran significantly enhanced capabilities to 
develop an intercontinental ballistic missile.\24\ U.S. Defence 
Department spokesman Ken Bacon stated that, ``From everything we can 
tell, it was a successful firing. It is another sign they are 
determined to build longer-range weapons of mass destruction. \25\
    In short, it is impossible to dismiss the possibility that Iran 
might continue to develop nuclear weapons and long-range missiles in 
spite of its agreements not to do so. At the same time, there is no way 
to predict that Iran will definitely pose such a threat, or the size, 
timing, and effectiveness, of any forces it may deploy. The 
justification for an NMD system can be built around the possibility of 
an Iranian threat but--as is the case with North Korea--there is no way 
that the justification for an NMD system can be based on the certainty 
of an Iranian missile threat or that the US can now tailor the 
architecture of its NMD system to a clear concept of what that threat 
will be. There equally is no way that the need for an NMD system can be 
dismissed because of the lack of a valid potential threat.
    It is still unclear when Iran will be able to bring such programs 
to the final development stage, carry out a full range of suitable test 
firings, develop highly lethal warheads, and deploy actual units. Much 
may still depends on the level of foreign assistance.
     In September 1999, the Revolutionary Guard exhibited 
another missile called the Zelzal, which it stated was ``now in mass 
production.'' The missile was said to have taken four and one-half 
years to develop and to be derived from the Zelzal 2, which the IRGC 
had exhibited earlier. Some estimates indicate that it can carry a 
warhead of 500 kilograms for up to 900 kilometers. However, the missile 
exhibited in Tehran was a rocket on a truck-mounted launch rail that 
seemed more likely to have a range of 150-200 kilometers.
     Iranian Defense Minister Shamkhani has confirmed the 
development of a ``more capable'' missile called the Shahab 4. Although 
he later called it a space booster. He has also mentioned a Shahab 5.
    Israeli and US intelligence sources have reported that Iran is 
developing the Shahab 4, with a range of 2,000 kilometers (1,250 
miles), a payload of around 2,000 pounds, and a CEP of around 2,400 
meters. Some estimates indicate that this system could be operational 
in 2-5 years.
    US Assistant Secretary for Near East Affairs testified on July 28, 
1998, that the US estimated that the system still needed added foreign 
assistance to improve its motors and guidance system.
    Some reports indicate that the Shahab 4 is based on the Soviet SS-4 
missile. Others that there is a longer range Shahab 5, based on the SS-
4 or Tapeo Dong missile. Reports saying the Shahab is based on the SS-4 
say it has a range of up to 4,000 kilometers and a payload in excess of 
one ton.
    Iran may have two other missile programs include longer-range 
systems, variously reported as having maximum ranges of 3,650, 4,500-
5,000, 6,250, or 10,000 kilometers.
    There have been reports that Iran might be using Russian technology 
to develop long-range missiles with ranges from 2,000 to 6,250 
kilometers.
    It seems clear that Iran has obtained some of the technology and 
design details of the Russian SS-4. The SS-4 (also known as the R-12 or 
``Sandal'') is an aging Russian liquid fuel designed that first went 
into service in 1959, and which was supposedly destroyed as part of the 
IRBM Treaty. It is a very large missile, with technology dating back to 
the early 1950s, although it was evidently updated at least twice 
during the period between 1959 and 1980. It has a CEP of 2-4 kilometers 
and a maximum range 2,000 kilometers, which means it can only be lethal 
with a nuclear warhead or a biological weapon with near-nuclear 
lethality.
    At the same time, the SS-4's overall technology is relatively 
simple and it has a throwweight of nearly 1,400 kilograms (3,000 
pounds). It is one of the few missile designs that a nation with a 
limited technology base could hope to manufacture or adapt, and its 
throwweight and range would allow Iran to use a relatively 
unsophisticated nuclear device or biological warhead. As a result, an 
updated version of the SS-4 might be a suitable design for a developing 
country.
     Iran is reported to have carried out the test of a sea-
launched ballistic missile in 1998.
     Russia has been a key supplier of missile technology.
    Russia agreed in 1994 that it would adhere to the terms of the 
Missile Technology Control Regime and would place suitable limits on 
the sale or transfer of rocket engines and technology. Nevertheless, 
the CIA has identified Russia as a leading source of Iranian missile 
technology, and the State Department has indicated that President 
Clinton expressed US concerns over this cooperation to President 
Yeltsin. This transfer is one reason the President appointed former 
Ambassador Frank Wisner, and then Robert Galluci, as his special 
representatives to try to persuade Russia to put a firm halt to aid 
support of the Iran.
    These programs are reported to have continuing support from North 
Korea, and from Russian and Chinese firms and technicians. One such 
Chinese firm is Great Wall Industries. The Russian firms include the 
Russian Central Aerohydrodynamic Institute, which has provided Iran's 
Shahid Hemmat Industrial Group (SHIG) with wind tunnels for missile 
design, equipment for manufacturing missile models, and the software 
for testing launch and reentry performance. They may also include 
Rosvoorouzhenie, a major Russian arms-export agency; NPO Trud, a rocket 
motor manufacturer; a leading research center called the Bauman 
Institute, and Polyus (Northstar), a major laser test and manufacturing 
equipment firm.
    Some sources have indicated that Russian military industries have 
signed contracts with Iran to help produce liquid fueled missiles and 
provide specialized wind tunnels, manufacture model missiles, and 
develop specialized computer software. For example, these reports 
indicate that the Russian Central Aerohydrodynamic Institute is 
cooperating with Iran's Defense Industries Organization (DIO) and the 
DIO's Shahid Hemmat Industrial Group (SHIG). The Russian State 
Corporation for Export and Import or Armament and Military Equipment 
(Rosvoorouzhenie) and Infor are also reported to be involved in deals 
with the SHIG. These deals are also said to include specialized laser 
equipment, mirrors, tungsten-coast graphite material, and maraging 
steel for missile development and production. They could play a major 
role in helping Iran develop long range versions of the Scud B and C, 
and more accurate variations of a missile similar to the No Dong.
    The Israeli press reported in August, 1997 that Israeli had 
evidence that Iran was receiving Russian support. In September, 1997, 
Israel urged the US to step up its pressure on Iran, and leaked 
reported indicating that private and state-owned Russian firms had 
provided gyroscopes, electronic components, wind tunnels, guidance and 
propulsion systems, and the components needed to build such systems to 
Iran.
    President Yeltsin and the Russian Foreign Ministry initially 
categorically denied that such charges were true. Following a meeting 
with Vice President Gore, President Yeltsin stated on September 26, 
1997 that, ``We are being accused of supplying Iran with nuclear or 
ballistic missile technologies. There is nothing further from the 
truth. I again and again categorically deny such rumors.''
    Russia agreed, however, that Ambassador Wisner and Yuri Koptyev, 
the head of the Russian space program, should jointly examine the US 
intelligence and draft a report on Russian transfers to Iran. This 
report reached a very different conclusion from President Yeltsin and 
concluded that Russia had provided such aid to Iran. Further, on 
October 1, 1997--roughly a week after Yeltsin issued his denial--the 
Russian security service issued a statement that it had ``thwarted'' an 
Iranian attempt to have parts for liquid fuel rocket motors 
manufactured in Russia, disguised as gas compressors and pumps.
    Russian firms said to be helping Iran included the Russian Central 
Aerohydrodynamic Institute which developed a special wind tunnel; 
Rosvoorouzhenie, a major Russian arms-export agency; Kutznetzov 
(formerly NPO Trud) a rocket motor manufacturer in Samara; a leading 
research center called the Bauman National Technical University in 
Moscow, involved in developing rocket propulsion systems; the Tsagi 
Research Institute for rocket propulsion development; and the Polyus 
(Northstar) Research Institute in Moscow, a major laser test and 
manufacturing equipment firm. Iranians were also found to be studying 
rocket engineering at the Baltic State University in St. Petersburg and 
the Bauman State University.
    Russia was also found to have sold Iran high strength steel and 
special foil for its long-range missile program. The Russian Scientific 
and Production Center Inor concluded an agreement as late as September, 
1997 to sell Iran a factory to produce four special metal alloys used 
in long-range missiles. Inor's director, L. P Chromova worked out a 
deal with A. Asgharzadeh, the director of an Iranian factory, to sell 
620 kilograms of special alloy called 21HKMT, and provide Iran with the 
capability to thermally treat the alloy for missile bodies. Iran had 
previously bought 240 kilograms of the alloy. Inor was also selling 
alloy foils called 49K2F, CUBE2, and 50N in sheets 0.2-0.4 millimeters 
thick for the outer body of missiles. The alloy 21HKMT was particularly 
interesting because North Korea also uses it in missile designs. Inor 
had previously brokered deals with the Shahid Hemat Industrial Group in 
Iran to supply maraging steel for missile cases, composite graphite-
tungsten material, laser equipment, and special mirrors used in missile 
tests.
    The result was a new and often tense set of conversations between 
the US and Russia in January, 1998. The US again sent Ambassador Frank 
Wisner to Moscow, Vice President Gore called Prime Minster Viktor 
Chernomyrdin, and Secretary of State Madeleine Albright made an 
indirect threat that the Congress might apply sanctions. Sergi 
Yastrzhembsky, a Kremlin spokesman, initially responded by denying that 
any transfer of technology had taken place.
    This Russian denial was too categorical to have much credibility. 
Russia had previously announced the arrest of an Iranian diplomat on 
November 14, 1997, that it caught attempting to buy missile technology. 
The Iranian was seeking to buy blueprints and recruit Russian 
scientists to go to Iran. Yuri Koptev, the head of the Russian Space 
Agency, explained this, however, by stating that that, ``There have 
been several cases where some Russian organizations, desperately 
struggling to make ends meet and lacking responsibility, have embarked 
on some ambiguous projects . . . they were stopped long before they got 
to the point where any technology got out.''
    The end result of these talks was an agreement by Gore and 
Chemrnmyrdin to strengthen controls over transfer technology, but it 
was scarcely clear that it put an end to the problem. As Koptev has 
said, ``There have been several cases where some Russian organizations, 
desperately struggling to make ends meet and lacking responsibility, 
have embarked on some ambiguous projects.'' Conditions in Russia are 
getting worse, not better, and the desperation that drives sales has 
scarcely diminished.
    Prime Minister Chernomyrdin again promised to strengthen his 
efforts to restrict technology transfer to Iran in a meeting with Gore 
on March 12, 1998. The US informed Russia of 13 cases of possible 
Russian aid to Iran at the meeting and offered to increase the number 
of Russian commercial satellite launches it would license for US firms 
as an incentive.
    New arrests of smugglers took place on April 9, 1998. The smugglers 
had attempted to ship 22 tons of specialized steel to Iran via 
Azerbaijan, using several Russia shell corporations as a cover.
    On April 16, 1998, the State Department declared 20 Russian 
agencies and research facilities were ineligible to receive US aid 
because of their role in transferring missile technology to Iran.
    The CIA reported in June 1997 that Iran obtained major new 
transfers of new long-range missile technology from Russian and Chinese 
firms during 1996. Since that time, there have been many additional 
reports of technology transfer from Russia.
    The Rumsfeld Commission heard evidence that Iran had obtained 
engines or designs for the RD-214 rocket engine used in the SS-4 and 
SL-7 space launch vehicle.
     Reports on Chinese transfers of ballistic missile 
technology provide less detail:
    There have been past reports that Iran placed orders for PRC-made 
M-9 (CSS-6/DF-15) missile (280-620 kilometers range, launch weight of 
6,000 kilograms).
    It is more likely, however, that PRC firms are giving assistance in 
developing indigenous missile R&D and production facilities for the 
production of an Iranian solid fueled missile.
    The US offered to provide China with added missile technology if it 
would agree to fully implement an end of technology transfer to Iran 
and Pakistan during meetings in Beijing on March 25-26, 1998.
     Iran has, however, acquired much of the technology 
necessary to build long-range cruise missile systems from China:
    Such missiles would cost only 10% to 25% as much as ballistic 
missiles of similar range, and both the HY-2 Seersucker and CS-802 
could be modified relatively quickly for land attacks against area 
targets.
    Iran reported in December, 1995 that it had already fired a 
domestically built anti-ship missile called the Saeqe-4 (Thunderbolt) 
during exercises in the Strait of Hormuz and Gulf of Oman. Other 
reports indicate that China is helping Iran build copies of the Chinese 
CS-801/CS-802 and the Chinese FL-2 or F-7 anti-ship cruise missiles. 
These missiles have relatively limited range. The range of the CS-801 
is 8-40 kilometers, the range of the CS-802 is 15-120 kilometers, the 
maximum range of the F-7 is 30 kilometers, and the maximum range of the 
FL-10 is 50 kilometers. Even a range of 120 kilometers would barely 
cover targets in the Southern Gulf from launch points on Iran's Gulf 
coast. These missiles also have relatively small high explosive 
warheads. As a result, Iran may well be seeking anti-ship capabilities, 
rather than platforms for delivering weapons of mass destruction.
    A platform like the CS-802 might, however, provide enough design 
data to develop a scaled-up, longer-range cruise missile for other 
purposes, and the Gulf is a relatively small area where most urban 
areas and critical facilities are near the coast. Aircraft or ships 
could launch cruise missiles with chemical or biological warheads from 
outside the normal defense perimeter of the Southern Gulf states, and 
it is at least possible that Iran might modify anti-ship missiles with 
chemical weapons to attack tankers--ships which are too large for most 
regular anti-ship missiles to be highly lethal.
    Building an entire cruise missile would be more difficult. The 
technology for fusing CBW and cluster warheads would be within Iran's 
grasp. Navigation systems and jet engines, however, would still be a 
major potential problem. Current inertial navigation systems (INS) 
would introduce errors of at least several kilometers at ranges of 
1,000 kilometers and would carry a severe risk of total guidance 
failure--probably exceeding two-thirds of the missiles fired. A 
differential global positioning system (GPS) integrated with the 
inertial navigation system (INS) and a radar altimeter, however, might 
produce an accuracy of 15 meters. Some existing remotely piloted 
vehicles (RPVs), such as the South African Skua claim such performance. 
Commercial technology is becoming available for differential global 
positioning system (GPS) guidance with accuracies of 2 to 5 meters.
    There are commercially available reciprocating and gas turbine 
engines that Iran could adapt for use in a cruise missile, although 
finding a reliable and efficient turbofan engine for a specific design 
application might be difficult. An extremely efficient engine would 
have to be matched to a specific airframe. It is doubtful that Iran 
could design and build such an engine, but there are over 20 other 
countries with the necessary design and manufacturing skills.
    While airframe-engine-warhead integration and testing would present 
a challenge and might be beyond Iran's manufacturing skills, it is 
inherently easier to integrate and test a cruise missile than a long-
range ballistic missile. Further, such developments would be far less 
detectable than developing a ballistic system if the program used coded 
or low altitude directional telemetry.
    Iran could bypass much of the problems inherent in developing its 
own cruise missile by modifying the HY-2 Seersucker for use as a land 
attack weapon and extending its range beyond 80 kilometers, or by 
modifying and improving the CS-801 (Ying Jai-l) anti-ship missile. 
There are reports that the Revolutionary Guards are working on such 
developments at a facility near Bandar Abbas.
     The CIA reported in January 1999 that entities in Russia 
and China continue to supply missile-related goods and technology to 
Iran. Tehran is using these goods and technologies to achieve its goal 
of becoming self-sufficient in the production of MRBMs. The July flight 
test of the Shahab-3 MRBM demonstrates the success Iran has achieved in 
realizing that goal. Iran already is producing Scud SRBMs with North 
Korean help and has begun production of the Shahab-3. In addition, 
Iran's Defense Minister has publicly acknowledged the development of 
the Shahab-4 ballistic missile, with a ``longer range and heavier 
payload than the 1,300-km Shahab-3.''
    Iran's earlier success in gaining technology and materials from 
Russian companies accelerated Iranian development of the Shahab-3 MRBM, 
which was first flight tested in July 1998.
    The CIA report on missile proliferation in September 1999 estimated 
that Iran is the next hostile country most capable of testing an ICBM 
capable of delivering a weapon to the United States during the next 15 
years.
    Iran could test an ICBM that could deliver a several-hundred 
kilogram payload to many parts of the United States in the latter half 
of the next decade, using Russian technology and assistance.
    Iran could pursue a Taepo Dong-type ICBM. Most analysts believe it 
could test a three-stage ICBM patterned after the Taepo Dong-1 SLV or a 
three-stage Taepo Dong-2-type ICBM, possibly with North Korean 
assistance, in the next few years.
    Iran is likely to test an SLV by 2010 that--once developed--could 
be converted into an ICBM capable of delivering a several-hundred 
kilogram payload to the United States.
    Analysts differ on the likely timing of Iran's first flight test of 
an ICBM that could threaten the United States. Assessments include:

   likely before 2010 and very likely before 2015 (noting that 
        an SLV with ICBM capabilities will probably be tested within 
        the next few years);
   no more than an even chance by 2010 and a better than even 
        chance by 2015;
   and less than an even chance by 2015.

     The DCI Nonproliferation Center (NPC) reported in February 
2000 that entities in Russia and China continued to supply a 
considerable amount and a wide variety of ballistic missile-related 
goods and technology to Iran. Tehran is using these goods and 
technologies to support current production programs and to achieve its 
goal of becoming self-sufficient in the production of ballistic 
missiles. Iran already is producing Scud short-range ballistic missiles 
(SRBMs) and has built and publicly displayed prototypes for the Shahab-
3 medium-range ballistic missile (MRBM), which had its initial flight 
test in July 1998 and probably has achieved ``emergency operational 
capability''--i.e., Tehran could deploy a limited number of the Shahab-
3 prototype missiles in an operational mode during a perceived crisis 
situation. In addition, Iran's Defense Minister last year publicly 
acknowledged the development of the Shahab-4, originally calling it a 
more capable ballistic missile than the Shahab-3, but later 
categorizing it as solely a space launch vehicle with no military 
applications. Iran's Defense Minister also has publicly mentioned plans 
for a ``Shahab 5.'' It also stated that:
    Finns in China provided missile-related items, raw materials, and/
or assistance to several countries of proliferation concern-such as 
Iran.
    Russian entities continued to supply a variety of ballistic 
missile-related goods and technical know-how to Iran and were expanding 
missile-related assistance to Syria and India. For example, Iran's 
earlier success in gaining technology and materials from Russian 
companies accelerated Iranian development of the Shahab-3 MRBM, which 
was first flight-tested in July 1998. Russian entities during the first 
six months of 1999 have provided substantial missile-related 
technology, training, and expertise to Iran that almost certainly will 
continue to accelerate Iranian efforts to build new indigenous 
ballistic missile systems . . . the government's commitment, 
willingness, and ability to curb proliferation-related transfers remain 
uncertain. Moreover, economic conditions in Russia continued to 
deteriorate, putting more pressure on Russian entities to circumvent 
export controls. Despite some examples of restraint, Russian businesses 
continue to be major suppliers of WMD equipment, materials, and 
technology to Iran. Monitoring Russian proliferation behavior, 
therefore, will remain a very high priority.
    Iranian Foreign Ministry spokesman Hamid Reza stated on February 3, 
2000 that Iran had no intention of seeking missiles with the range to 
reach the US, and that the CIA was only making such charges to distract 
the world for Israel's nuclear weapons program.
     A CIA report in August 2000 summarized the state of 
missile proliferation in Iran as follows: \26\
     For the second half of 1999, entities in Russia, North 
Korea, and China continued to supply the largest amount of ballistic 
missile-related goods, technology, and expertise to Iran. Tehran is 
using this assistance to support current production programs and to 
achieve its goal of becoming self-sufficient in the production of 
ballistic missiles. Iran already is producing Scud short-range 
ballistic missiles (SRBMs) and has built and publicly displayed 
prototypes for the Shahab-3 medium-range ballistic missile (MRBM), 
which had its initial flight test in July 1998. In addition, Iran's 
Defense Minister last year publicly acknowledged the development of the 
Shahab-4, originally calling it a more capable ballistic missile than 
the Shahab-3, but later categorizing it as solely a space launch 
vehicle with no military applications. Iran's Defense Minister also has 
publicly mentioned plans for a ``Shahab 5.'' Such statements, made 
against the backdrop of sustained cooperation with Russian, North 
Korean, and Chinese entities, strongly suggest that Tehran intends to 
develop a longer-range ballistic missile capability in the near future.
     Beginning in January 1998, the Russian Government took a 
number of steps to increase its oversight of entities involved in 
dealings with Iran and other states of proliferation concern. In 1999, 
it pushed a new export control law through the Duma. Russian firms, 
however, faced economic pressures to circumvent these controls and did 
so in some cases. The Russian Government, moreover, failed in some 
cases regarding Iran to enforce its export controls. Following repeated 
warnings, the US Government in January 1998 and January 1999 imposed 
administrative measures against Russian entities that had engaged in 
nuclear- and missile-related cooperation with Iran. The measures 
imposed on these and other Russian entities (which were penalized in 
1998) remain in effect, although sanctions against two entities--Polyus 
and Inor--are being lifted.
     On the ACW side, Iran (which has acknowledged a need for 
Western military equipment and spare parts) continues to acquire 
Western equipment, such as attack helicopters, but also is developing 
indigenous production capabilities with assistance from countries such 
as Russia, China, and North Korea. Indigenous efforts involve such 
systems as tanks, TOW missiles, fighter aircraft, Chinese-designed SAMs 
and anti-ship missiles, and attack helicopters.
     . . . Russian entities (have) continued to supply a 
variety of ballistic missile-related goods and technical know-how to 
countries such as Iran, India, and Libya. Iran's earlier success in 
gaining technology and materials from Russian entities accelerated 
Iranian development of the Shahab-3 MRBM, which was first flight-tested 
in July 1998. Russian entities during the second six months of 1999 
have provided substantial missile-related technology, training, and 
expertise to Iran that almost certainly will continue to accelerate 
Iranian efforts to develop new ballistic missile systems.
     Throughout the second half of 1999, North Korea continued 
to export significant ballistic missile-related equipment and missile 
components, materials, and technical expertise to countries in the 
Middle East, South Asia, and North Africa. P'yongyang attaches a high 
priority to the development and sale of ballistic missiles, equipment, 
and related technology. Exports of ballistic missiles and related 
technology are one of the North's major sources of hard currency, which 
fuel continued missile development and production.
     . . . Chinese missile-related technical assistance to 
Pakistan increased during this reporting period. In addition, firms in 
China provided missile-related items, raw materials, and/or assistance 
to several countries of proliferation concern--such as Iran, North 
Korea, and Libya. . . . China's 1997 pledge not to engage in any new 
nuclear cooperation with Iran has apparently held, but work associated 
with two remaining nuclear projects--a small research reactor and a 
zirconium production facility--continues. The Intelligence Community 
will continue to monitor carefully Chinese nuclear cooperation with 
Iran.
Chemical Weapons
     Iran purchased large amounts of chemical defense gear from 
the mid-1980s onwards. Iran also obtained stocks of non-lethal CS gas, 
although it quickly found such agents had very limited military impact 
since they could only be used effectively in closed areas or very small 
open areas.
     Acquiring poisonous chemical agents was more difficult. 
Iran did not have any internal capacity to manufacture poisonous 
chemical agents when Iraq first launched its attacks with such weapons. 
While Iran seems to have made limited use of chemical mortar and 
artillery rounds as early as 1985--and possibly as early as 1984--these 
rounds were almost certainly captured from Iraq.
     Iran had to covertly import the necessary equipment and 
supplies, and it took several years to get substantial amounts of 
production equipment, and the necessary feedstocks. Iran sought aid 
from European firms like Lurgi to produce large ``pesticide'' plants, 
and began to try to obtain the needed feedstock from a wide range of 
sources, relying heavily on its Embassy in Bonn to manage the necessary 
deals. While Lurgi did not provide the pesticide plant Iran sought, 
Iran did obtain substantial support from other European firms and 
feedstocks from many other Western sources.
     By 1986-1987, Iran developed the capability to produce 
enough lethal agents to load its own weapons. The Director of the CIA, 
and informed observers in the Gulf, made it clear that Iran could 
produce blood agents like hydrogen cyanide, phosgene gas, and/or 
chlorine gas. Iran was also able to weaponize limited quantities of 
blister (sulfur mustard) and blood (cyanide) agents beginning in 1987, 
and had some capability to weaponize phosgene gas, and/or chlorine gas. 
These chemical agents were produced in small batches, and evidently 
under laboratory scale conditions, which enabled Iran to load small 
numbers of weapons before any of its new major production plants went 
into full operation.
     These gas agents were loaded into bombs and artillery 
shells, and were used sporadically against Iraq in 1987 and 1988.
     Reports regarding Iran's production and research 
facilities are highly uncertain:
    Iran seems to have completed completion of a major poison gas plant 
at Qazvin, about 150 kilometers west of Tehran. This plant is reported 
to have been completed between November 1987 and January 1988. While 
supposedly a pesticide plant, the facility's true purpose seems to have 
been poison gas production using organophosphorous compounds.
    It is impossible to trace all the sources of the major components 
and technology Iran used in its chemical weapons program during this 
period. Mujahideen sources claim Iran also set up a chemical bomb and 
warhead plant operated by the Zakaria Al-Razi chemical company near 
Mahshar in southern Iran, but it is unclear whether these reports are 
true.
    Reports that Iran had chemical weapons plants at Damghan and 
Parchin that began operation as early as March, 1988, and may have 
begun to test fire Scuds with chemical warheads as early as 1988-1989, 
are equally uncertain.
    Iran established at least one large research and development center 
under the control of the Engineering Research Centre of the 
Construction Crusade (Jahad e-Sazandegi), had established a significant 
chemical weapons production capability by mid-1989.
     Debates took place in the Iranian parliament or Majlis in 
late 1988 over the safety of Pasdaran gas plants located near Iranian 
towns, and that Rafsanjani described chemical weapons as follows: 
``Chemical and biological weapons are poor man's atomic bombs and can 
easily be produced. We should at least consider them for our defense. 
Although the use of such weapons is inhuman, the war taught us that 
international laws are only scraps of paper.''
     Post Iran-Iraq War estimates of Iran chemical weapons 
production are extremely uncertain:
    US experts believe Iran was beginning to produce significant 
mustard gas and nerve gas by the time of the August 1988 cease-fire in 
the Iran-Iraq War, although its use of chemical weapons remained 
limited and had little impact on the fighting.
    Iran's efforts to equip plants to produce V-agent nerve gases seem 
to have been delayed by US, British, and German efforts to limit 
technology transfers to Iran, but Iran may have acquired the capability 
to produce persistent nerve gas during the mid 1990s.
    Production of nerve gas weapons started no later than 1994.
    Began to stockpile of cyanide (cyanogen chloride), phosgene, and 
mustard gas weapons after 1985. Recent CIA testimony indicates that 
production capacity may approach 1,000 tons annually.
     Weapons include bombs and artillery. Shells include 155mm 
artillery and mortar rounds. Iran also has chemical bombs and mines. It 
may have developmental chemical warheads for its Scuds, and may have a 
chemical package for its 22006 RPV (doubtful).
     There are reports that Iran has deployed chemical weapons 
on some of its ships.
     Iran has increased chemical defensive and offensive 
warfare training since 1993.
     Iran is seeking to buy more advanced chemical defense 
equipment, and has sought to buy specialized equipment on world market 
to develop indigenous capability to produce advanced feedstocks for 
nerve weapons.
    CIA sources indicated in late 1996, that China might have supplied 
Iran with up to 400 tons of chemicals for the production of nerve gas.
    One report indicated in 1996, that Iran obtained 400 metric tons of 
chemical for use in nerve gas weapons from China--including carbon 
sulfide.
    Another report indicated that China supplied Iran with roughly two 
tons of calcium-hypochlorate in 1996, and loaded another 40,000 barrels 
in January or February of 1997. Calcium-hypochlorate is used for 
decontamination in chemical warfare.
    Iran placed several significant orders from China that were not 
delivered. Razak Industries in Tehran, and Chemical and Pharmaceutical 
Industries in Tabriz ordered 49 metric tons of alkyl dimethylamine, a 
chemical used in making detergents, and 17 tons of sodium sulfide, a 
chemical used in making mustard gas. The orders were never delivered, 
but they were brokered by Iran's International Movalled Industries 
Corporation (Imaco) and China's North Chemical Industries Co. 
(Nocinco). Both brokers have been linked to other transactions 
affecting Iran's chemical weapons program since early 1995, and Nocinco 
has supplied Iran with several hundred tons of carbon disulfide, a 
chemical uses in nerve gas.
    Another Chinese firm, only publicly identified as Q. Chen, seems to 
have supplied glass vessels for chemical weapons.
    The US imposed sanctions on seven Chinese firms in May, 1997, for 
selling precursors for nerve gas and equipment for making nerve gas--
although the US made it clear that it had, ``no evidence that the 
Chinese government was involved.'' The Chinese firms were the Nanjing 
Chemical Industries Group and Jiangsu Yongli Chemical Engineering and 
Import/Export Corporation. Cheong Yee Ltd., a Hong Kong firm, was also 
involved. The precursors included tiorryl chloride, dimethylamine, and 
ethylene chlorohydril. The equipment included special glass lined 
vessels, and Nanjing Chemical and Industrial Group completed 
construction of a production plant to manufacture such vessels in Iran 
in June, 1997.
    Iran sought to obtain impregnated Alumina, which is used to make 
phosphorous-oxychloride--a major component of VX and GB--from the US.
    It has obtained some equipment from Israelis. Nahum Manbar, an 
Israeli national living in France, was convicted in an Israeli court in 
May 1997 for providing Iran with $16 million worth of production 
equipment for mustard and nerve gas during the period from 1990 to 
1995.
    CIA reported in June 1997 that Iran had obtained new chemical 
weapons equipment technology from China and India in 1996.
    India is assisting in the construction of a major new plant at 
Qazvim, near Tehran, to manufacture phosphorous pentasulfide, a major 
precursor for nerve gas. The plant is fronted by Meli Agrochemicals, 
and the program was negotiated by Dr. Mejid Tehrani Abbaspour, a chief 
security advisor to Rafsanjani.
    A recent report by German intelligence indicates that Iran has made 
major efforts to acquire the equipment necessary to produce Sarin and 
Tabun, using the same cover of purchasing equipment for pesticide 
plants that Iraq used for its Sa'ad 16 plant in the 1980s. German 
sources note that three Indian companies--Tata Consulting Engineering, 
Transpek, and Rallis India--have approached German pharmaceutical and 
engineering concerns for such equipment and technology under conditions 
where German intelligence was able to trace the end user to Iran.
     Iran ratified the Chemical Weapons Convention in June 
1997.
    It submitted a statement in Farsi to the CWC secretariat in 1998, 
but this consisted only of questions in Farsi as to the nature of the 
required compliance.
    It has not provided the CWC with any data on its chemical weapons 
program.
     The CIA estimated in January 1999 that Iran obtained 
material related to chemical warfare (CW) from various sources during 
the first half of 1998. It already has manufactured and stockpiled 
chemical weapons, including blister, blood, and choking agents and the 
bombs and artillery shells for delivering them. However, Tehran is 
seeking foreign equipment and expertise to create a more advanced and 
self-sufficient CW infrastructure.
     The CIA stated that Chinese entities sought to supply Iran 
with CW-related chemicals during 1997-1998 period. The US sanctions 
imposed in May 1997 on seven Chinese entities for knowingly and 
materially contributing to Iran's CW program remain in effect.
     The DCI Nonfroliferation Center (NPC) reported in February 
2000 that Iran, a Chemical Weapons Convention (CWC) party, already has 
manufactured and stockpiled chemical weapons, including blister, blood, 
and choking agents and the bombs and artillery shells for delivering 
them. During the first half of 1999, Tehran continued to seek 
production technology, expertise, and chemicals that could be used as 
precursor agents in its chemical warfare (CW) program from entities in 
Russia and China. It also acquired or attempted to acquire indirectly 
through intermediaries in other countries equipment and material that 
could be used to create a more advanced and self-sufficient CW 
infrastructure. It also stated that:
    Russian entities remain a significant source of biotechnology and 
chemicals for Iran. Russia's world-leading expertise in biological and 
chemical weapons would make it an attractive target for Iranians 
seeking technical information and training on BW and CW agent 
production processes.
    Chinese firms had supplied CW-related production equipment and 
technology to Iran. The US sanctions imposed in May 1997 on seven 
Chinese entities for knowingly and materially contributing to Iran's CW 
program remain in effect. In June 1998, China announced that it had 
expanded its chemical export controls to include 10 of the 20 Australia 
Group chemicals not listed on the CWC schedules.
     A CIA report in August 2000 summarized the state of 
chemical weapons proliferation in Iran as follows: \27\
    Iran remains one of the most active countries seeking to acquire 
WMD and ACW technology from abroad. In doing so, Tehran is attempting 
to develop an indigenous capability to produce various types of 
weapons--nuclear, chemical, and biological--and their delivery systems. 
During the reporting period, the evidence indicates increased 
reflections of Iranian efforts to acquire WMD- and ACW-related 
equipment, materials, and technology primarily on entities in Russia, 
China, North Korea and Western Europe.
    Iran, a Chemical Weapons Convention (CWC) party, already has 
manufactured and stockpiled chemical weapons, including blister, blood, 
and choking agents and the bombs and artillery shells for delivering 
them. During the second half of 1999, Tehran continued to seek 
production technology, training, expertise, and chemicals that could be 
used as precursor agents in its chemical warfare (CW) program from 
entities in Russia and China. It also acquired or attempted to acquire 
indirectly through intermediaries in other countries equipment and 
material that could be used to create a more advanced and self-
sufficient CW infrastructure.
    Russian entities remain a significant source of biotechnology and 
chemicals for Iran. Russia's world-leading expertise in biological and 
chemical weapons would make it an attractive target for Iranians 
seeking technical information and training on BW and CW agent 
production processes. Russia (along with its sister republics in the 
FSU) also remains an important source of conventional weapons and spare 
parts for Iran, which is seeking to upgrade and replace its existing 
conventional weapons inventories.
    Throughout the second half of 1999, North Korea continued to export 
significant ballistic missile-related equipment and missile components, 
materials, and technical expertise to countries in the Middle East, 
South Asia, and North Africa. P'yongyang attaches a high priority to 
the development and sale of ballistic missiles, equipment, and related 
technology. Exports of ballistic missiles and related technology are 
one of the North's major sources of hard currency, which fuel continued 
missile development and production.
    Prior to the the second half of 1999, Chinese firms had supplied 
CW-related production equipment and technology to Iran. The US 
sanctions imposed in May 1997 on seven Chinese entities for knowingly 
and materially contributing to Iran's CW program remain in effect. 
Evidence during the current reporting period suggests Iran continues to 
seek such assistance from Chinese entities, but it is unclear to what 
extent these efforts have succeeded. In June 1998, China announced that 
it had expanded its chemical export controls to include 10 of the 20 
Australia Group chemicals not listed on the CWC schedules.
Biological Weapons
     Weapons effort documented as early as 1982. Reports 
surfaced that Iran had imported suitable type cultures from Europe and 
was working on the production of Mycotoxins--a relatively simple family 
of biological agents that require only limited laboratory facilities 
for small scale production.
     US intelligence sources reported in August 1989, that Iran 
was trying to buy two new strains of fungus from Canada and the 
Netherlands that can be used to produce Mycotoxins. German sources 
indicated that Iran had successfully purchased such cultures several 
years earlier.
     The Imam Rem Medical Center at Mashhad Medical Sciences 
University and the Iranian Research Organization for Science and 
Technology were identified as the end users for this purchasing effort, 
but it is likely that the true end user was an Iranian government 
agency specializing in biological warfare.
     Many experts believe that the Iranian biological weapons 
effort was placed under the control of the Islamic Revolutionary Guards 
Corps, which is known to have tried to purchase suitable production 
equipment for such weapons.
     Since the Iran-Iraq War, Iran has conducted research on 
more lethal active agents like Anthrax, hoof and mouth disease, and 
biotoxins. In addition, Iranian groups have repeatedly approached 
various European firms for the equipment and technology necessary to 
work with these diseases and toxins.
    Unclassified sources of uncertain reliability have identified a 
facility at Damghan as working on both biological and chemical weapons 
research and production, and believe that Iran may be producing 
biological weapons at a pesticide facility near Tehran.
    Some universities and research centers may be linked to biological 
weapons program.
    Reports surfaced in the spring of 1993 that Iran had succeeded in 
obtaining advanced biological weapons technology in Switzerland and 
containment equipment and technology from Germany. According to these 
reports, this led to serious damage to computer facilities in a Swiss 
biological research facility by unidentified agents. Similar reports 
indicated that agents had destroyed German bio-containment equipment 
destined for Iran.
    More credible reports by US experts indicate that Iran has begun to 
stockpile Anthrax and Botulinum in a facility near Tabriz, can now mass 
manufacture such agents, and has them in an aerosol form. None of these 
reports, however, can be verified.
    The CIA has reported that Iran has, ``sought dual-use biotech 
equipment from Europe and Asia, ostensibly for civilian use.'' It also 
reported in 1996 that Iran might be ready to deploy biological weapons. 
Beyond this point, little unclassified information exists regarding the 
details of Iran's effort to ``weaponize'' and produce biological 
weapons.
     Iran may have the production technology to make dry 
storable and aerosol weapons. This would allow it to develop suitable 
missile warheads and bombs and covert devices.
     Iran may have begun active weapons production in 1996, but 
probably only at limited scale suitable for advanced testing and 
development.
     CIA testimony indicates that Iran is believed to have 
weaponized both live agents and toxins for artillery and bombs and may 
be pursuing biological warheads for its missiles. The CIA reported in 
1996 that, ``We believe that Iran holds some stocks of biological 
agents and weapons. Tehran probably has investigated both toxins and 
live organisms as biological warfare agents. Iran has the technical 
infrastructure to support a significant biological weapons program with 
little foreign assistance.
     CIA reported in June 1997 that Iran had obtained new dual 
use technology from China and India during 1996.
     Iran announced in June 1997 that it would not produce or 
employ chemical weapons including toxins.
     The CIA estimated in January 1999 that Iran continued to 
pursue purchasing dual-use biotechnical equipment from Russia and other 
countries, ostensibly for civilian uses. Its biological warfare (BW) 
program began during the Iran-Iraq war, and Iran may have some limited 
capability for BW deployment. Outside assistance is both important and 
difficult to prevent, given the dual-use nature of the materials and 
equipment being sought and the many legitimate end uses for these 
items.
     Russia remains a key source of biotechnology for Iran. 
Russia's world-leading expertise in biological weapons makes it an 
attractive target for Iranians seeking technical information and 
training on BW agent production processes.
     The DCI Nonproliferation Center (NPC) reported in February 
2000 that Tehran continued to seek considerable dual-use biotechnical 
equipment from entities in Russia and Western Europe, ostensibly for 
civilian uses. Iran began a biological warfare (BW) program during the 
Iran-Iraq war, and it may have some limited capability for BW 
deployment. Outside assistance is both important and difficult to 
prevent, given the dual-use nature of the materials, the equipment 
being sought, and the many legitimate end uses for these items.
     A CIA report in August 2000 summarized the state of 
biological weapons proliferation in Iran as follows: \28\
    For the reporting period, Tehran expanded its efforts to seek 
considerable dual-use biotechnical materials, equipment, and expertise 
from abroad--primarily from entities in Russia and Western Europe--
ostensibly for civilian uses. Iran began a biological warfare (BW) 
program during the Iran-Iraq war, and it may have some limited 
capability for BW deployment. Outside assistance is both important and 
difficult to prevent, given the dual-use nature of the materials, the 
equipment being sought, and the many legitimate end uses for these 
items.
    Russian entities remain a significant source of biotechnology and 
chemicals for Iran. Russia's world-leading expertise in biological and 
chemical weapons would make it an attractive target for Iranians 
seeking technical information and training on BW and CW agent 
production processes. Russia (along with its sister republics in the 
FSU) also remains an important source of conventional weapons and spare 
parts for Iran, which is seeking to upgrade and replace its existing 
conventional weapons inventories.
Nuclear Weapons
     By the time the Shah fell in January, 1979, he had six 
reactors under contract, and was attempting to purchase a total of 12 
nuclear power plants from Germany, France, and the US. Two 1,300 
megawatt German nuclear power plants at Bushehr were already 60% and 
75% completed, and site preparation work had begun on the first of two 
935 megawatt French plants at Darkhouin that were to be supplied by 
Framatome.
    The Shah also started a nuclear weapons program in the early to 
mid-1970s, building upon his major reactor projects, investment in 
URENCO, and smuggling of nuclear enrichment and weapons related 
technology from US and Europe.
    5 megawatt light-water research reactor operating in Tehran.
    27 kilowatt neutron-source reactor operating in Isfahan.
    Started two massive 1300 megawatt reactor complexes.
    The Shah attempted to covertly import controlled technology from 
the US/.
    US experts believe that Shah began a low-level nuclear weapons 
research program, centered at the Amirabad Nuclear Research Center. 
This research effort included studies of weapons designs and plutonium 
recovery from spent reactor fuel.
    It also involved a laser enrichment program which began in 1975, 
and led to a complex and highly illegal effort to obtain laser 
separation technology from the US. This latter effort, which does not 
seems to have had any success, continued from 1976 until the Shah's 
fall, and four lasers operating in the critical 16 micron band were 
shipped to Iran in October, 1978.
    At the same time, Iran worked on other ways to obtain plutonium, 
created a secret reprocessing research effort to use enriched uranium, 
and set up a small nuclear weapons design team.
    In 1976, Iran signed a secret contract to buy $700 million worth of 
yellow cake from South Africa, and appears to have reached an agreement 
to buy up to 1,000 metric tons a year. It is unclear how much of this 
ore South Africa shipped before it agreed to adopt IAEA export 
restrictions in 1984, and whether South Africa really honored such 
export restrictions. Some sources indicate that South Africa still made 
major deliveries as late as 1988-1989.
    Iran also tried to purchase 26.2 kilograms of highly enriched 
uranium; the application to the US for this purchase was pending when 
the Shah fell.
    The Shah did eventually accept full IAEA safeguards but there value 
is uncertain.
    In 1984, Khomeini revived nuclear weapons program begun under Shah.
    Received significant West German and Argentine corporate support in 
some aspects of nuclear technology during the Iran-Iraq War.
    Limited transfers of centrifuge and other weapons related 
technology from PRC, possibly Pakistan.
    It has a Chinese-supplied heavy-water, zero-power research reactor 
at Isfahan Nuclear Research Center, and two-Chinese supplied sub-
critical assemblies--a light water and graphite design.
    It has stockpiles of uranium and mines in Yazd area. It may have 
had a uranium-ore concentration facility at University of Tehran, but 
status unclear.
    Some experts feel that the IRGC moved experts and equipment from 
the Amirabad Nuclear Research Center to a new nuclear weapons research 
facility near Isfahan in the mid-1980s, and formed a new nuclear 
research center at the University of Isfahan in 1984--with French 
assistance. Unlike many Iranian facilities, the center at Isfahan was 
not declared to the IAEA until February 1992, when the IAEA was allowed 
to make a cursory inspection of six sites that various reports had 
claimed were the location of Iran's nuclear weapons efforts.
    (Bushehr I & II), on the Gulf Coast just southwest of Isfahan, were 
partially completed at the time of the Shah's fall. Iran attempted to 
revive the program and sought German and Argentine support, but the 
reactors were damaged by Iraqi air strikes in 1987 and 1988.
    Iran may also have opened a new uranium ore processing plant close 
to its Shagand uranium mine in March, 1990, and it seems to have 
extended its search for uranium ore into three additional areas. Iran 
may have also begun to exploit stocks of yellow cake that the Shah had 
obtained from South Africa in the late 1970s while obtaining uranium 
dioxide from Argentina by purchasing it through Algeria.
    Iran began to show a renewed interest in laser isotope separation 
(LIS) in the mid-1980s, and held a conference on LIS in September, 
1987.
    Iran opened a new nuclear research center in Isfahan in 1984, 
located about four kilometers outside the city and between the villages 
of Shahrida and Fulashans. This facility was built at a scale far 
beyond the needs of peaceful research, and Iran sought French and 
Pakistani help for a new research reactor for this center.
    The Khomeini government may also have obtained several thousand 
pounds of uranium dioxide from Argentina by purchasing it through 
Algeria. Uranium dioxide is considerably more refined than yellow cake, 
and is easier to use in irradiating material in a reactor to produce 
plutonium.
    The status of Iran's nuclear program since the Iran-Iraq War is 
highly controversial, and Iran has denied the existence of such a 
program.
    On February 7, 1990, the speaker of the Majlis publicly toured the 
Atomic Energy Organization of Iran and opened the new Jabir Ibn al 
Hayyan laboratory to train Iranian nuclear technicians. Reports then 
surfaced that Iran had at least 200 scientists and a work force of 
about 2,000 devoted to nuclear research.
    Iran's Deputy President Ayatollah Mohajerani stated in October, 
1991, that Iran should work with other Islamic states to create an 
``Islamic bomb.''
    The Iranian government has repeatedly made proposals to create a 
nuclear-free zone in the Middle East. For example, President Rafsanjani 
was asked if Iran had a nuclear weapons program in an interview in the 
CBS program 60 Minutes in February 1997. He replied, ``Definitely not. 
I hate this weapon.''
    Other senior Iranian leaders, including President Khatami have made 
similar categorical denials. Iran's new Foreign Minister, Kamal 
Kharrazi, stated on October 5, 1997, that, ``We are certainly not 
developing an atomic bomb, because we do not believe in nuclear weapons 
. . . We believe in and promote the idea of the Middle East as a region 
free of nuclear weapons and other weapons of mass destruction. But why 
are we interested to develop nuclear technology? We need to diversify 
our energy sources. In a matter of a few decades, our oil and gas 
reserves would be finished and therefore, we need access to other 
sources of energy . . . Furthermore, nuclear technology has many other 
utilities in medicine and agriculture. The case of the United States in 
terms of oil reserve is not different from Iran's The United States 
also has large oil resources, but at the same time they have nuclear 
power plants. So there is nothing wrong with having access to nuclear 
technology if it is for peaceful purposes . . .''
    The IAEA reports that Iran has fully complied with its present 
requirements, and that it has found no indications of nuclear weapons 
effort, but IAEA only inspects Iran's small research reactors.
    The IAEA visits to other Iranian sites are not inspections, and do 
not use instruments, cameras, seals, etc. The are informal walk-
throughs.
    The IAEA visited five suspect Iranian facilities in 1992 and 1993 
in this manner, but did not conduct full inspections.
    Iran has not had any 93+2 inspections and its position on improved 
inspections is that it will not be either the first or the last to have 
them.
    Iranian officials have repeatedly complained that the West 
tolerated Iraqi use of chemical weapons and its nuclear and biological 
build-up during the Iran-Iraq War, and has a dual standard where it 
does not demand inspections of Israel or that Israel sign the NPT.
    These are reasons to assume that Iran still has a nuclear program:
    Iran attempted to buy highly enriched fissile material from 
Khazakstan. The US paid between $20 million and $30 million to buy 
1,300 pounds of highly enriched uranium from the Ust-Kamenogorsk 
facility in Khazakstan that Iran may have sought to acquire in 1992. A 
total of 120 pounds of the material--enough for two bombs--cannot be 
fully accounted for.
    Iran has imported maraging steel, sometimes used for centrifuges, 
by smuggling it in through dummy fronts. Britain intercepted 110 pound 
(50 kilo) shipment in August 1996. Seems to have centrifuge research 
program at Sharif University of Technology in Tehran. IAEA ``visit'' 
did not confirm.
    Those aspects of Iran's program that are visible indicate that Iran 
has had only uncertain success. Argentina agreed to train Iranian 
technicians at its Jose Balaseiro Nuclear Institute, and sold Iran $5.5 
million worth of uranium for its small Amirabad Nuclear Research Center 
reactor in May 1987. A CENA team visited Iran in late 1987 and early 
1988, and seems to have discussed selling Iran the technology necessary 
to operate its reactor with 20% enriched uranium as a substitute for 
the highly enriched core provided by the US, and possibly uranium 
enrichment and plutonium reprocessing technology as well. Changes in 
Argentina's government, however, made it much less willing to support 
proliferation. The Argentine government announced in February, 1992, 
that it was canceling an $18 million nuclear technology sale to Iran 
because it had not signed a nuclear safeguards arrangement. Argentine 
press sources suggested, however, that Argentina was reacting to US 
pressure.
    In February 1990 a Spanish paper reported that Associated 
Enterprises of Spain was negotiating the completion of the two nuclear 
power plants at Bushehr. Another Spanish firm called ENUSA (National 
Uranium Enterprises) was to provide the fuel, and Kraftwerke Union 
(KWU) would be involved. Later reports indicated that a 10 man 
delegation from Iran's Ministry of Industry was in Madrid negotiating 
with the Director of Associated Enterprises, Adolofo Garcia Rodriguez.
    Iran negotiated with Kraftwerke Union and CENA of Germany in the 
late 1980s and early 1990s. Iran attempted to import reactor parts from 
Siemens in Germany and Skoda in Czechoslovakia. None of these efforts 
solved Iran's problems in rebuilding its reactor program, but all 
demonstrate the depth of its interest.
    Iran took other measures to strengthen its nuclear program during 
the early 1990s. It installed a cyclotron from Ion Beam Applications in 
Belgium at a facility in Karzaj in 1991.
    Iran conducted experiments in uranium enrichment and centrifuge 
technology at its Sharif University of Technology in Tehran. Sharif 
University was also linked to efforts to import cylinders of fluorine 
suitable for processing enriched material, and attempts to import 
specialized magnets that can be used for centrifuges, from Thyssen in 
Germany in 1991.
    In 1992, Iran attempted to buy beryllium from a storage site in 
Kazakhstan that also was storing 600 kilograms of highly enriched 
uranium. These contacts then seem to have expanded to an attempt to try 
the material, In 1994, they helped lead the US to buy the enriched 
material and fly it out of the country.
    It is clear from Iran's imports that it has sought centrifuge 
technology ever since. Although many of Iran's efforts have never been 
made public, British customs officials seized 110 pounds of maraging 
steel being shipped to Iran in July 1996.
    Iran seems to have conducted research into plutonium separation and 
Iranians published research on uses of tritium that had applications to 
nuclear weapons boosting. Iran also obtained a wide range of US and 
other nuclear literature with applications for weapons designs. Italian 
inspectors seized eight steam condensers bound for Iran that could be 
used in a covert reactor program in 1993, and high technology 
ultrasound equipment suitable for reactor testing at the port of Bari 
in January, 1994.
    Other aspects of Iran's nuclear research effort had potential 
weapons applications. Iran continued to operate an Argentine-fueled 
five megawatt light water highly enriched uranium reactor at the 
University of Tehran. It is operated by a Chinese-supplied neutron 
source research reactor, and subcritical assemblies with 900 grams of 
highly enriched uranium, at its Isfahan Nuclear Research Center. This 
Center has experimented with a heavy water zero-power reactor, a light 
water sub-critical reactor, and a graphite sub-critical reactor. In 
addition, it may have experimented with some aspects of nuclear weapons 
design.
    The German Ministry of Economics has circulated a wide list of such 
Iranian fronts which are known to have imported or attempted to import 
controlled items. These fronts include the:

Bonyad e-Mostazafan;
Defense Industries Organization (Sazemane Sanaye Defa);
Pars Garma Company, the Sadadja Industrial Group (Sadadja Sanaye 
        Daryaee);
Iran Telecommunications Industry (Sanaye Mokhaberet Iran);
Shahid Hemat Industrial Group, the State Purchasing Organization, 
        Education Research Institute (ERI);
Iran Aircraft Manufacturing Industries (IAI);
Iran Fair Deal Company, Iran Group of Surveyors;
Iran Helicopter Support and Renewal Industries (IHI);
Iran Navy Technical Supply Center;
Iran Tehran Kohakd Daftar Nezarat, Industrial Development Group;
Ministry of Defense (Vezerate Defa).

     Iran claims it eventually needs to build enough nuclear 
reactors to provide 20% of its electric power. This Iranian nuclear 
power program presents serious problems in terms of proliferation. 
Although the reactors are scarcely ideal for irradiating material to 
produce Plutonium or cannibalizing the core, they do provide Iran with 
the technology base to make its own reactors, have involved other 
technology transfer helpful to Iran in proliferating and can be used to 
produce weapons if Iran rejects IAEA safeguards.
    Russian has agreed to build up to four reactors, beginning with a 
complex at Bushehr--with two 1,000-1,200 megawatt reactors and two 465 
megawatt reactors, and provide significant nuclear technology.
    Russia has consistently claimed the light water reactor designs for 
Bushehr cannot be used to produce weapons grade Plutonium and are 
similar to the reactors the US is providing to North Korea.
    The US has claimed, however, that Victor Mikhaliov, the head of 
Russia's Atomic Energy Ministry, proposed the sale of a centrifuge 
plant in April, 1995. The US also indicated that it had persuaded 
Russia not to sell Iran centrifuge technology as part of the reactor 
deal during the summit meeting between President's Clinton and Yeltsin 
in May, 1995.
    It was only after US pressure that Russia publicly stated that it 
never planned to sell centrifuge and advanced enrichment technology to 
Iran, and Iran denied that it had ever been interested in such 
technology. For example, the statement of Mohammed Sadegh Ayatollahi, 
Iran's representative to the IAEA, stated that, ``We've had contracts 
before for the Bushehr plant in which we agreed that the spent fuel 
would go back to the supplier. For our contract with the Russians and 
Chinese, it is the same.'' According to some reports, Russia was to 
reprocess the fuel at its Mayak plant near Chelyabinsk in the Urals, 
and could store it at an existing facility, at Krasnoyarsk-26 in 
southern Siberia.
    The CIA reported in June 1997 that Iran had obtained new nuclear 
technology from Russia during 1996.
    A nuclear accident at plant at Rasht, six miles north of Gilan, 
exposed about 50 people to radiation in July, 1996.
    Russian Nuclear Energy Minister Yevgeny Adamov and Russian Deputy 
Prime Minister Vladimir Bulgak visited in March, 1998. and Iran and 
dismissed US complaints about the risk the reactors would be used to 
proliferate.

          Russia indicated that it would go ahead with selling two more 
        reactors for construction at Bushehr within the next five 
        years.

    The first 1,000 megawatt reactor at Bushehr has experienced serious 
construction delays. In March, 1998, Russia and Iran agreed to turn the 
construction project into a turn key plant because the Iranian firms 
working on infrastructure had fallen well behind schedule. In February, 
Iran had agreed to fund improved safety systems. The reactor is 
reported to be on a 30-month completion cycle.
    The US persuaded the Ukraine not to sell Iran $45 million worth of 
turbines for its nuclear plant in early March 1998, and to strengthen 
its controls on Ukrainian missile technology under the MTCR.
     The CIA reported in January 1999 that Russia remained a 
key supplier for civilian nuclear programs in Iran and, to a lesser 
extent, India. With respect to Iran's nuclear infrastructure, Russian 
assistance would enhance Iran's ability to support a nuclear weapons 
development effort. Such assistance is less likely to significantly 
advance India's effort, given that India's nuclear weapons program is 
more mature. By its very nature, even the transfer of civilian 
technology may be of use in the nuclear weapons programs of these 
countries.
     Following intense and continuing engagement with the 
United States, Russian officials have taken some positive steps. Russia 
has committed to observe certain limits on its nuclear cooperation with 
Iran, such as not providing militarily useful nuclear technology.
     In January 1998, the Russian Government issued a broad 
decree prohibiting Russian companies from exporting items known or 
believed to be used for developing WMD or related delivery systems, 
whether or not these items are on Russia's export control list. In May 
1998, Russia announced a decree intended to strengthen compliance of 
Russian businesses with existing export controls on proliferation-
related items. These actions, if enforced, could help to counter the 
proliferation of WMD and their delivery systems.
     However, there are signs that Russian entities have 
continued to engage in behavior inconsistent with these steps. 
Monitoring Russian proliferation behavior, therefore, will have to 
remain a very high priority for some time to come.
     On January 14, 2000, Russia's Minister of Defense Igor 
Ivanavov met with Hassan Rowhani, the secretary of Iran's Supreme 
National Security Council, and promised that Russia would maintain 
defense cooperation, and that Russia, ``intends to fulfill its 
obligations under the agrements made in 1989-1990.''
     The same day, Vice Minister Ilya Klebanov met with Hassan 
Rowhani, and announced that Iran might order three additional Russian 
reactors.
     The CIA warned in January 2000 that Russia might have sold 
Iran heavy water and graphite technology.
    China is reported to have agreed to provide significant nuclear 
technology transfer and possible sale of two 300 megawatt pressurized 
water reactors in the early 1990s, but then to have agreed to halt 
nuclear assistance to Iran after pressure from the US.
    Iran signed an agreement with China's Commission on Science, 
Technology, and Industry for National Defense on January 21, 1991, to 
build a small 27-kilowatt research reactor at Iran's nuclear weapons 
research facility at Isfahan. On November 4, 1991, China stated that it 
had signed commercial cooperation agreements with Iran in 1989 and 
1991, and that it would transfer an electromagnetic isotope separator 
(Calutron) and a smaller nuclear reactor, for ``peaceful and 
commercial'' purposes.
    The Chinese reactor and Calutron were small research-scale systems 
and had no direct value in producing fissile material. They did, 
however, give Iran more knowledge of reactor and enrichment technology, 
and US experts believe that China provided Iran with additional data on 
chemical separation, other enrichment technology, the design for 
facilities to convert uranium to uranium hexaflouride to make reactor 
fuel, and help in processing yellowcake.
    The US put intense pressure on China to halt such transfers. 
President Clinton and Chinese President Jiang Zemin reached an 
agreement at an October, 1997 summit. China strengthened this pledge in 
negations with the US in February, 1998.
    In March, 1998, the US found that the China Nuclear Energy 
Corporation was negotiating to sell Iran several hundred tons of 
anhydrous hydrogen fluoride (AHF) to Isfahan Nuclear Research 
Corporation in central Iran, a site where some experts believe Iran is 
working on the development of nuclear weapons. AHF can be used to 
separate plutonium, help refine yellow cake into uranium hexaflouride 
to produce U-235, and as a feedstock for Sarin. It is on two nuclear 
control lists. China agreed to halt the sale.
    Iran denied that China had halted nuclear cooperation on March 15, 
1998.
    Even so, the US acting Under Secretary of State for Arms Control 
and International Security Affairs stated that China was keeping its 
pledge not to aid Iran on March 26, 1998.
     The CIA reported in January 1999 that China continued to 
take steps to strengthen its control over nuclear exports. China 
promulgated new export control regulations in June 1998 that cover the 
sale of dual-use nuclear equipment. This follows on the heels of the 
September 1997 promulgation of controls covering the export of 
equipment and materials associated exclusively with nuclear 
applications. These export controls should give the Chinese Government 
greater accounting and control of the transfer of equipment, materials, 
and technology to nuclear programs in countries of concern.
     China pledged in late 1997 not to engage in any new 
nuclear cooperation with Iran and to complete work on two remaining 
nuclear projects--a small research reactor and a zirconium production 
facility--in a relatively short period of time. During the first half 
of 1998, Beijing appears to have implemented this pledge. The 
Intelligence Community will continue to monitor carefully Chinese 
nuclear cooperation with Iran.
     During the reporting period, Chinese entities provided a 
variety of missile-related items and assistance to several countries of 
proliferation concern. China also was an important supplier of ACW to 
Iran through the first half of 1998.
     The control of fissile material in the FSU remains a major 
problem:
    US estimates indicate the FSU left a legacy of some 1,485 tons of 
nuclear material. This include 770 tons in some 27,000 weapons, 
including 816 strategic bombs, 5,434 missile warheads, and about 20,000 
theater and tactical weapons. In addition, there were 715 tons of 
fissile or near-fissile material in eight countries of the FSU in over 
50 sites: enough to make 35,000-40,000 bombs.
    There are large numbers of experienced FSU technicians, including 
those at the Russian weapons design center at Arzamas, and at nuclear 
production complexes at Chelyabinsk, Krasnoyarsk, and Tomsk.
    These factors led the US to conduct Operation Sapphire in 1994, 
where the US removed 600 kilograms of highly enriched uranium from the 
Ulba Metallurgy Plant in Kazakhstan at a time Iran was negotiating for 
the material.
    They also led to Britain and the US cooperating in Auburn Endeavor, 
and airlifting fissile material out of a nuclear research facility in 
Tiblisi, Georgia. There were 10 pounds of material at the institute, 
and 8.8 pounds were HEU. (It takes about 35 pounds to make a bomb.) 
This operation was reported in the New York Times on April 21, 1998. 
The British government confirmed it took place, but would not give the 
date.
    The Jerusalem Post reported on April 9, 1998 that Iran had 
purchased four tactical nuclear weapons from Russian smugglers for $25 
million in the early 1990s, that the weapons had been obtained from 
Kazakhstan in 1991, and that Argentine technicians were helping to 
activate the weapon.
    It quoted what it claimed was an Iranian report, dated December 26, 
1991, of a meeting between Brigadier General Rahim Safavi, the Deputy 
Commander of the Revolutionary Guards and Reza Amrohalli, then head of 
the Iranian atomic energy organization.
    It also quoted a second document--dated January 2, 1992--saying the 
Iranians were awaiting the arrival of Russian technicians to show them 
how to disarm the protection systems that would otherwise inactivate 
the weapons if anyone attempted to use them.
    The documents implied the weapons were flawed by did not indicate 
whether Iran had succeeded in activating them.
    The US intelligence community denied any evidence that such a 
transfer had taken place.
    The most detailed reports of Iran's nuclear weapons program are the 
least reliable, and come from the People's Mujahideen, a violent, anti-
regime, terrorist group. Such claims are very doubtful, but the 
People's Mujahideen has reported that:
    Iran's facilities include a weapons site called Ma'allem Kelayah, 
near Qazvin on the Caspian. This is said to be an IRGC-run facility 
established in 1987, which has involved an Iranian investment of $300 
million. Supposedly, the site was to house the 10 megawatt reactor Iran 
tried to buy from India.
    Two Soviet reactors were to be installed at a large site at Gorgan 
on the Caspian, under the direction of Russian physicists.
    The People's Republic of China provided uranium enrichment 
equipment and technicians for the site at Darkhouin, where Iran once 
planned to build a French reactor.
    A nuclear reactor was being constructed at Karaj; and that another 
nuclear weapons facility exists in the south central part of Iran, near 
the Iraqi border.
    The ammonia and urea plant that the British firm M. W. Kellog was 
building at Borujerd in Khorassan province, near the border with 
Turkestan, might be adapted to produce heavy water.
    The Amir Kabar Technical University, the Atomic Energy Organization 
of Iran (AEOI) (also known as the Organization for Atomic Energy of 
Iran or AEOI), Dor Argham Ltd., the Education and Research Institute, 
GAM Iranian Communications, Ghoods Research Center, Iran Argham Co., 
Iran Electronic Industries, Iranian Research Organization, Ministry of 
Sepah, Research and Development Group, Sezemane Sanaye Defa, the Sharif 
University of Technology, Taradis Iran Computer Company, and Zakaria 
Al-Razi Chemical Company are all participants in the Iranian nuclear 
weapons effort.
    Other sources based on opposition data have listed the Atomic 
Energy Organization of Iran, the Laser Research Center and Ibn-e Heysam 
Research and Laboratory Complex, the Bonab Atomic Energy Research 
Center (East Azerbaijan), the Imam Hussein University of the 
Revolutionary Guards, the Jabit bin al-Hayyan Laboratory, the Khoshomi 
uranium mine (Yazd), a possible site at Moallem Kalayeh, the Nuclear 
Research Center at Tehran University, the Nuclear Research Center for 
Agriculture and Medicine (Karaj), the Nuclear Research Center of 
Technology (Isfahan), the Saghand Uranium mine (Yazd), the Sharif 
University (Tehran) and its Physics Research Center.
    The CIA estimated in January 1999 that Iran remains one of the most 
active countries seeking to acquire WMD technology and ACW. During the 
reporting period, Iran focused its efforts to acquire WMD-related 
equipment, materials, and technology primarily on two countries: Russia 
and China. Iran is seeking to develop an indigenous capability to 
produce various types of nuclear, chemical, and biological weapons and 
their delivery systems. It also stated that:
     Russian entities continued to market and support a variety 
of nuclear-related projects in Iran during the first half of 1998, 
ranging from the sale of laboratory equipment for nuclear research 
institutes to the construction of a 1,000-megawatt nuclear power 
reactor in Bushehr, Iran, that will be subject to International Atomic 
Energy Agency (IAEA) safeguards. These projects, along with other 
nuclear-related purchases, will help Iran augment its nuclear 
technology infrastructure, which in turn would be useful in supporting 
nuclear weapons research and development.
     Russia has committed to observe certain limits on its 
nuclear cooperation with Iran. For example, President Yeltsin has 
stated publicly that Russia will not provide militarily useful nuclear 
technology to Iran. Beginning in January this year, the Russian 
Government has taken a number of steps. For example, in May 1998, 
Russia announced a decree intended to strengthen compliance of Russian 
businesses with existing export controls on proliferation-related 
items.
     China continued to work on one of its two remaining 
projects--to supply Iran's civil nuclear program with a zirconium 
production facility. This facility will be used by Iran to produce 
cladding for reactor fuel. As a party to the Nuclear Nonproliferation 
Treaty, Iran is required to apply IAEA safeguards to nuclear fuel, but 
safeguards are not required for the zirconium plant or its products. 
During the US-China October 1997 Summit, China pledged not to engage in 
any new nuclear cooperation with Iran and to complete cooperation on 
two ongoing nuclear projects in a relatively short time. This pledge 
appears to be holding. In addition, China promulgated new export 
regulations in June 1998 that cover the sale of dual-use nuclear 
equipment. The regulations took effect immediately and were intended to 
strengthen control over equipment and material that would contribute to 
proliferation. Promulgation of these regulations fulfills Jiang Zemin's 
commitment to the United States last fall to implement such controls by 
the middle of 1998.
     Iran claims to desire the establishment of a complete 
nuclear fuel cycle for its civilian energy program. In that guise, it 
seeks to obtain whole facilities, such as a uranium conversion 
facility, that, in fact, could be used in any number of ways in support 
of efforts to produce fissile material needed for a nuclear weapon. 
Despite outside efforts to curtail the flow of critical technologies 
and equipment, Tehran continues to seek fissile material and technology 
for weapons development and has set up an elaborate system of military 
and civilian organizations to support its effort.
    The DCI Nonproliferation Center (NPC) reported in February 2000 
that Iran sought nuclear-related equipment, material, and technical 
expertise from a variety of sources, especially in Russia, during the 
first half of 1999. Work continues on the construction of a 1,000-
megawatt nuclear power reactor in Bushehr, Iran, that will be subject 
to International Atomic Energy Agency (IAEA) safeguards. In addition, 
Russian entities continued to interact with Iranian research centers on 
various activities. These projects will help Iran augment its nuclear 
technology infrastructure, which in turn would be useful in supporting 
nuclear weapons research and development. The expertise and technology 
gained, along with the commercial channels and contacts established-
even from cooperation that appears strictly civilian in nature-could be 
used to advance Iran's nuclear weapons research and developmental 
program. It also reported that:
    Russia has committed to observe certain limits on its nuclear 
cooperation with Iran. For example, President Yeltsin has stated 
publicly that Russia will not provide militarily useful nuclear 
technology to Iran. Beginning in January 1998, the Russian Government 
took a number of steps to increase its oversight of entities involved 
in dealings with Iran and other states of proliferation concern. In 
1999, it pushed a new export control law through the Duma. Russian 
firms, however, faced economic pressures to circumvent these controls 
and did so in some cases. The Russian Government, moreover, failed in 
some cases regarding Iran to enforce its export controls. Following 
repeated warnings, the US Government in January 1999 imposed 
administrative measures against Russian entities that had engaged in 
nuclear- and missile-related cooperation with Iran. The measures 
imposed on these and other Russian entities (which were identified in 
1998) remain in effect.
    Following intense and continuing engagement with the US, Russian 
officials took some positive steps to enhance oversight of Russian 
entities and their interaction with countries of concern. Russia has 
reiterated previous commitments to observe certain limits on its 
nuclear cooperation with Iran, such as not providing militarily useful 
nuclear technology, although-as indicated above-Russia continues to 
provide Iran with nuclear technology that could be applied to Iran's 
weapons program. President Yeltsin in July 1999 signed a federal export 
control law; which formally makes WMD-related transfers a violation of 
law and codifies several existing decrees-including catch-all controls-
yet may lessen punishment for violators.
    China pledged in October 1997 not to engage in any new nuclear 
cooperation with Iran but said it would complete cooperation on two 
ongoing nuclear projects, a small research reactor and a zirconium 
production facility at Esfahan that Iran will use to produce cladding 
for reactor fuel. The pledge appears to be holding. As a party to the 
Nuclear Nonproliferation Treaty (NPT), Iran is required to apply IAEA 
safeguards to nuclear fuel, but safeguards are not required for the 
zirconium plant or its products.
    Iran is attempting to establish a complete nuclear fuel cycle for 
its civilian energy program. In that guise, it seeks to obtain whole 
facilities, such as a uranium conversion facility, that, in fact, could 
be used in any number of ways in support of efforts to produce fissile 
material needed for a nuclear weapon. Despite international efforts to 
curtail the flow of critical technologies and equipment, Tehran 
continues to seek fissile material and technology for weapons 
development and has set up an elaborate system of military and civilian 
organizations to support its effort.
     The Washington Times reported on June 30, 2000, that a 
June 8th U.S. intelligence report by the National Security Agency, had 
stated that Russia is sending tritium gas to a nuclear weapons research 
center in Tehran.
     The Iranian Ministry of Defense stated on January 18, 2000 
that, ``The Islamic Republic of Iran, which has taken the initiative to 
launch a dialogue of civilizations does not need to resort to nuclear 
weapons . . . or violence.''
     On May 17, 2000, Gholamreza Aghazadeh, the head of Iran's 
Atomic Energy Organization told the visting Director General of the 
IAEA, Mohammed Elbaradei, that Iran was seeking IAEA help in running a 
nuclear research center west of Teheran studying nuclear applications 
in medicine and agriculture. He again stated that Iran opposed the use 
of nuclear technology in weapons, and claimed that Iran's nuclear power 
program had suffered because of US efforts to block technology 
transfer.
     A CIA report in August 2000 summarized the state of 
nuclear weapons proliferation in Iran as follows: \29\
    Iran remains one of the most active countries seeking to acquire 
WMD and ACW technology from abroad. In doing so, Tehran is attempting 
to develop an indigenous capability to produce various types of 
weapons--nuclear, chemical, and biological--and their delivery systems. 
During the reporting period, the evidence indicates increased 
reflections of Iranian efforts to acquire WMD- and ACW-related 
equiprhent, materials, and technology primarily on entities in Russia, 
China, North Korea and Western Europe.
    Iran sought nuclear-related equipment, material, and technical 
expertise from a variety of sources, especially in Russia, during the 
second half of 1999. Work continues on the construction of a 1,000-
megawatt nuclear power reactor in Bushehr, Iran, that will be subject 
to International Atomic Energy Agency (IAEA) safeguards. In addition, 
Russian entities continued to interact with Iranian research centers on 
various activities. These projects will help Iran augment its nuclear 
technology infrastructure, which in turn would be useful in supporting 
nuclear weapons research and development. The expertise and technology 
gained, along with the commercial channels and contacts established--
even from cooperation that appears strictly civilian in nature--could 
be used to advance Iran's nuclear weapons research and developmental 
program.
    Beginning in January 1998, the Russian Government took a number of 
steps to increase its oversight of entities involved in dealings with 
Iran and other states of proliferation concern. In 1999, it pushed a 
new export control law through the Duma. Russian firms, however, faced 
economic pressures to circumvent these controls and did so in some 
cases. The Russian Government, moreover, failed in some cases regarding 
Iran to enforce its export controls. Following repeated warnings, the 
US Government in January 1998 and January 1999 imposed administrative 
measures against Russian entities that had engaged in nuclear- and 
missile-related cooperation with Iran. The measures imposed on these 
and other Russian entities (which were penalized in 1998) remain in 
effect, although sanctions against two entities--Polyus and Inor--are 
being lifted.
    China pledged in October 1997 not to engage in any new nuclear 
cooperation with Iran but said it would complete cooperation on two 
ongoing nuclear projects, a small research reactor and a zirconium 
production facility at Esfahan that Iran will use to produce cladding 
for reactor fuel. The pledge appears to be holding. As a party to the 
Nuclear Nonproliferation Treaty (NPT), Iran is required to apply IAEA 
safeguards to nuclear fuel, but safeguards are not required for the 
zirconium plant or its products.
    Iran claims that it is attempting to establish a complete nuclear 
fuel cycle for its civilian energy program. In that guise, it seeks to 
obtain whole facilities, such as a uranium conversion facility, that, 
in fact, could be used in any number of ways in support of efforts to 
produce fissile material needed for a nuclear weapon. Despite 
international efforts to curtail the flow of critical technologies and 
equipment, Tehran continues to seek fissile material and technology for 
weapons development and has set up an elaborate system of military and 
civilian organizations to support its effort.
    During the second half of 1999, Russia also remained a key supplier 
for civilian nuclear programs in Iran, primarily focused on the Bushehr 
Nuclear Power Plant project. With respect to Iran's nuclear 
infrastructure, Russian assistance enhances Iran's ability to support a 
nuclear weapons development effort. By its very nature, even the 
transfer of civilian technology may be of use in Iran's nuclear weapons 
program. We remain concerned that Tehran is seeking more than a buildup 
of its civilian infratructure, and the IC will be closely monitoring 
the relationship with Moscow for any direct assistance in support of a 
military program. In addition, Russia supplied India with material for 
its civilian nuclear program during this reporting period.
    Following intense and continuing engagement with the US, Russian 
officials took some positive steps to strengthen the legal basis of 
export controls. President Yeltsin in July 1999 signed a federal export 
control law, which formally makes WMD-related transfers a violation of 
law and codifies several existing decrees--including catch-all 
controls--yet may lessen punishment for violators. Russian export 
enforcement and prosecution still remains weak, however. The export law 
is still awaiting completion of implementing decrees and its legal 
status is unclear. Public comments by the head of Russia's security 
council indicate that Russia obtained only three convictions for export 
control violations involving WMD and missile technology during 1998-99.
    Nonetheless, the Russian government's commitment, willingness, and 
ability to curb proliferation-related transfers remain uncertain. 
Moreover, economic conditions in Russia continued to deteriorate, 
putting more pressure on Russian entities to circumvent export 
controls. Despite some examples of restraint, Russian businesses 
continue to be major suppliers of WMD equipment, materials, and 
technology to Iran. Specifically, Russia continues to provide Iran with 
nuclear technology that could be applied to Iran's weapons program. 
Monitoring Russian proliferation behavior, therefore, will remain a 
very high priority.
    . . . Chinese missile-related technical assistance to Pakistan 
increased during this reporting period. In addition, firms in China 
provided missile-related items, raw materials, and/or assistance to 
several countries of proliferation concern--such as Iran, North Korea, 
and Libya. . . . China's 1997 pledge not to engage in any new nuclear 
cooperation with Iran has apparently held, but work associated with two 
remaining nuclear projects--a small research reactor and a zirconium 
production facility--continues. The Intelligence Community will 
continue to monitor carefully Chinese nuclear cooperation with Iran.
     US estimates of Iran's progress in acquiring nuclear 
weapons have changed over time.
    In 1992, the CIA estimated that Iran would have the bomb by the 
year 2000. In 1995, John Holum testified that Iran could have the bomb 
by 2003.
    In 1997, after two years in which Iran might have made progress, he 
testified that Iran could have the bomb by 2005-2007.
    In 1999, the NIE on proliferation estimated that Iran could test a 
missile that could reach the US by 2010, but did not change the 1997 
estimate or when Iran might acquire a bomb.
    In early 2000, the New York Time reported that the CIA had warned 
that Iran might now be able to maker a nuclear weapon. The assessment 
stated that the CIA could not monitor Iran closely enough to be certain 
whether Iran had acquired fissile material from an outside source.
    US experts increasingly refer to Iran's efforts as ``creeping 
proliferation'' and there is no way to tell when or if Iranian current 
efforts will produce a weapon, and unclassified lists of potential 
facilities have little credibility.
    Timing of weapons acquisition depends heavily on whether Iran can 
buy fissile material--if so it has the design capability and can 
produce weapons in 1-2 years--or must develop the capability to process 
Plutonium or enrich Uranium--in which case, it is likely to be 5-10 
years.

    Iran's current success in proliferating does give Iran a post-Gulf 
War edge over Iraq. It also inevitably affects US, British, Israeli and 
Southern Gulf perceptions of the risks inherent in attacking Iran. 
However, ``weapons of mass destruction'' have not yet made radical 
changes in Iran's contingency capabilities.
    Much depends upon any potential opponent's perceptions of the risk 
in engaging Iran, refusing its demands, and dealing with Iranian 
escalation and/or retaliation. It seems unlikely that Iran's ``creeping 
proliferation'' will reach the point in the near term where Iran's 
capabilities are great enough to change US, British, Israeli and/or 
Southern Gulf perceptions of risk to the point where they would limit 
or paralyze outside military action. Further, it seems unlikely that 
Iran can continue to build up its capabilities without provoking even 
stronger US counter-proliferation programs, including retaliatory 
strike capabilities. The same is true of a response from Iraq and the 
Southern Gulf states. As a result, Iran's ``creeping proliferation'' 
may end simply in provoking a ``creeping arms race.''
    There are, however, at least four contingencies that could 
challenge US regional influence:

   A successful Iranian attempt to buy significant amounts of 
        weapons grade material that suddenly shifted proliferation from 
        ``creeping'' to an active and regionally destabilizing threat 
        and potential counter to US conventional capabilities.

   Iranian acquisition of highly lethal biological weapons and/
        or change in the US and regional perception of biological 
        weapons.

   A case of lateral escalation in which Iraq found a way to 
        end UN sanctions and/or reveal a substantial break-out 
        capability of its own, creating the risk of a new Iran-Iraq War 
        using weapons of mass destruction that could affect two 
        countries with over 15% of the world's oil reserves and which 
        could spillover into other Gulf states.

   Iranian use of such weapons through proxies or in covert 
        attacks where it had some degree of plausible deniability.
        
        
                                 Notes

    \1\ Table One, Arms Control and Disarmament Agency (ACDA), World 
Military Expenditures and Arms Transfers, 1996, Washington, GPO, 1997, 
and Bureau of Arms Control, US State Department, World Military 
Expenditures and Arms Transfers, 1998, Washington, GPO, 2000.
    \2\ Table One, ACDA, World Military Expenditures and Arms 
Transfers, 1993-1994, Washington, GPO, 1995; Table One, ACDA, World 
Military Expenditures and Arms Transfers, 1995, Washington, GPO, 1996; 
and Table One, Arms Control and Disarmament Agency (ACDA), World 
Military Expenditures and Arms Transfers, 1996, Washington, GPO, 1997.
    \3\ British sources quoted in Jane's Defense Weekly, February 1, 
1992, p. 158. The Egyptian Gazette projected expenditures of $5 billion 
per year in 1992, 1993, and 1994 in its January 29, 1992, issue; The 
Jaffee Center estimated expenditures of $8.5 billion in 189 and $8.6 
billion in 1990. Andrew Duncan of the IISS estimated expenditures of 
$10 billion annually in 1992, 1993, and 1994 in Defense News, January 
27, 1992. The CIA estimate is taken from CIA, World Factbook, 1992, 
``Iran;'' CIA, World Factbook, 1993, ``Iran;'' CIA, World Factbook, 
1994, ``Iran;'' and CIA, World Factbook, 1995, ``Iran.'' It is 
extremely difficult to relate any Iranian statistics to dollar figures 
because Iran uses multiple exchange rates, and often reports inaccurate 
statistics. See Patrick Clawson, Iran's Challenge to the West, How, 
When, and Why, Washington, The Washington Institute Policy Papers, 
Number Thirty Three, 1993. P. 58.
    \4\ IISS, Military Balance, various editions.
    \5\ IISS, Military Balance, 1997-1998, p. 132. Other IISS estimates 
indicate that Iran's expenditures in constant 1995 US dollars totaled 
$19.4 million in 1985, $3 billion in 1995, and $3.3 billion in 1996. 
Middle East Economic Digest, October 24, 1997, p. 16.
    \6\ Richard F. Grimmett, Conventional Arms Transfers to the Third 
World, 1983-1990, Washington, Congressional Research Service, CRS-91-
578F, August 2, 1991, p. 53.
    \7\ Richard F. Grimmett, Conventional Arms Transfers to the Third 
World, 1986-1993, Washington, Congressional Research Service, CRS-94-
612F, July 29, 1994, p. 57, and Richard F. Grimmett, Conventional Arms 
Transfers to the Third World, 1987-1995, Washington, Congressional 
Research Service, CRS-95-862F, August 4, 1995, pp. 57-58, 67-69.
    \8\ Richard F. Grimmett, Conventional Arms Transfers to the Third 
World, 1987-1995, Washington, Congressional Research Service, CRS-95-
862F, August 4, 1995, pp. 57-58, 67-69.
    \9\ Richard F. Grimmett, Conventional Arms Transfers to the Third 
World, 1986-1993, Washington, Congressional Research Service, CRS-94-
612F, July 29, 1994, p. 57, and Richard F. Grimmett, Conventional Arms 
Transfers to the Third World, 1987-1995, Washington, Congressional 
Research Service, CRS-95-862F, August 4, 1995, pp. 57-58, 67-69.
    \10\ Richard F. Grimmett, Conventional Arms Transfers to the Third 
World, 1983-1990, Washington, Congressional Research Service, CRS-91-
578F, August 2, 1991, Conventional Arms Transfers to the Third World, 
1984-1991, Washington, Congressional Research Service, CRS-92-577F, 
July 20, 1991,Conventional Arms Transfers to the Third World, 1987-
1994, Washington, Congressional Research Service, CRS-95-862F, August 
4, 1995; Conventional Arms Transfers to the Third World, 1988-1956, 
Washington, Congressional Research Service, CRS-96-667F, August 15, 
1996; and Conventional Arms Transfers to the Third World, 1989-1996, 
Washington, Congressional Research Service, CRS-97-778F, August 13, 
1997. O = data less than $50 million or nil. All data are rounded to 
the nearest $100 million. Major West European includes Britian, France, 
Germany, and Italy.
    \11\ Richard F. Grimmett, Conventional Arms Transfers to the Third 
World. 1992-1999, Washington, Congressional Research Service, CRS-
RL30275, August 18, 2000.
    \12\ Richard F. Grimmett, Conventional Arms Transfers to the Third 
World, 1991-1998, Washington, Congressional Research Service, CRS-91-
578F, August 2, 1991; and Conventional Arms Transfers to the Third 
World, 1992-1999, Washington, Congressional Research Service, CRS-
RL30275, August 18, 2000. Expenditures less than $50 million are not 
reported. All data are rounded to the nearest $100 million. Major West 
European includes Britain, France, Germany, and Italy.
    \13\ Table II in Bureau of Arms Control, US State Department, World 
Military Expenditures and Arms Transfers, 1998, Washington, GPO, 2000.
    \14\ Richard F. Grimmett, Conventional Arms Transfers to the Third 
World, 1991-1998, Washington, Congressional Research Service, CRS-91-
578F, August 2, 1991, Richard F. Grimmett, Conventional Arms Transfers 
to the Third World, 1991-1998, Washington, Congressional Research 
Service, CRS 91-578F, August 2, 1991; and Conventional Arms Transfers 
to the Third World, 1992-1999, Washington, Congressional Research 
Service, CRS-RL30275, August 18, 2000. Expenditures less than $50 
million are not reported. All data are rounded to the nearest $100 
million. Major West European includes Britain, France, Germany, and 
Italy.
    \15\ Richard F. Grimmett, Conventional Arms Transfers to the Third 
World, 1991-1998, Washington, Congressional Research Service, CRS-91-
578F, August 2, 1991, p. 52; and Conventional Arms Transfers to the 
Third World, 1992-1999, Washington, Congressional Research Service, 
CRS-RL30275, August 18, 2000, p. 47.
    \16\ Richard F. Grimmett, Conventional Arms Transfers to the Third 
World, 1991-1998, Washington, Congressional Research Service, CRS-91-
578F, August 2, 1991, Richard F. Grimmett, Conventional Arms Transfers 
to the Third World, 1991-1998, Washington, Congressional Research 
Service, CRS-91-578F, August 2, 1991; and Conventional Arms Transfers 
to the Third World, 1992-1999, Washington, Congressional Research 
Service, CRS-RL30275, August 18, 2000. Expenditures less than $50 
million are not reported. All data are rounded to the nearest $100 
million. Major West European includes Britain, France, Germany, and 
Italy.
    \17\ Jane's Defense Weekly, June 5, 1996, p. 15.
    \18\ Associated Press, September 21, 2000, 1930; Reuters, September 
28, 2000, 1236.
    \19\ Associated Press, September 21, 2000, 1930; Reuters, September 
28, 2000, 1236.
    \20\ Associated Press, July 15, 2000, 0935; Reuters, July 15, 2000, 
0714.
    \21\ Associated Press, July 15, 2000, 0935; Reuters, July 15, 2000, 
0714.
    \22\ Reuters, July 17, 2000, 1257.
    \23\ Reuters, July 15, 2000, 2158.
    \24\ Elaine Sciolino and Steven Lee Myers, ``U.S. Study Reopens 
Division Over Nuclear Missile Threat,'' New York Times, July 4, 2000.
    \25\ July 16, 2000, 0826.
    \26\ CIA, August 10, 2000, 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 
internet edition.
    \27\ CIA, August 10, 2000, 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 
internet edition.
    \28\ CIA, August 10, 2000, 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 
internet edition.
    \29\ CIA, August 10, 2000, 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 
internet edition.

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