UNCLASSIFIED

Unclassified Report to Congress

on the Acquisition of Technology

Relating to Weapons of Mass Destruction

and Advanced Conventional Munitions,

Covering 1 January to 31 December 2007

The Deputy Director of National Intelligence for Analysis hereby submits this

report in response to a congressionally directed action in Section 721 of the FY 1997

Intelligence Authorization Act, which states:

"(a) Reports

The Director of Central Intelligence shall submit to Congress an annual report on -

(1) the acquisition by foreign countries during the preceding 6 months of dual-use

and other technology useful for the development or production of weapons of

mass destruction (including nuclear weapons, chemical weapons, and

biological weapons) and advanced conventional munitions; and

(2) trends in the acquisition of such technology by such countries."

(b) Submittal dates

(1) The report required by subsection (a) of this section shall be submitted each

year to the congressional intelligence committees and the congressional

leadership on an annual basis on the dates provided in section 415b of this

title.

(2) In this subsection:

(A) The term "congressional intelligence committees has the meaning

given that term in section 401 a of this title.

(8) The term "congressional leadership" means the Speaker and the

minority leader of the House of Representative and the majority leader

and the minority leader of the Senate.

(c) Form of reports

Each report submitted under subsection (a) of this section shall be submitted in

unclassified form, but may include a classified annex."

CIA's Weapons Intelligence, Nonproliferation, and Arms Control Center (WINPAC)

drafted this report. The National Intelligence Council reviewed and coordinated it within

the Intelligence Community (IC). As directed by Section 721, subsection (c) of the Act,

this report is unclassified. It does not present the details of the IC's assessments of

weapons of mass destruction and advanced conventional munitions programs that are

available in other classified reports and briefings for the Congress.
As required by Section 721 of the Fiscal Year 1997 Intelligence Authorization Act, the

following are country summaries of acquisition activities (solicitations, negotiations,

contracts, and deliveries) related to weapons of mass destruction (WMD) and advanced

conventional weapons (ACW) that occurred from 1 January through 31 December 2007.

This report focuses on key countries of concern that we assess are seeking WMD

capabilities.

During the reporting period, Iran continued to expand its nuclear infrastructure and

continue uranium enrichment and activities related to its heavy water research reactor,

despite United Nations Security Council Resolution 1737 adopted in late 2006, which

calls for the suspension of those activities.

• In April 2007, Iran announced it had started "industrial enrichment" at the

beginning of the year.

• Iran announced plans to hold international tenders to build two new nuclear

power plants in April 2007.

• In November 2007, The International Atomic Energy Agency (IAEA) reported that

Iran had installed and begun operating with uranium hexafluoride gas the first

3,000 centrifuges at the underground cascade halls at Natanz. Between

February and November 2007, Iran fed about 1,240 kilograms of uranium feed

gas into its cascades, and produced some low enriched uranium at an

enrichment level appropriate for reactor fuel. The President of Iran declared that

the 3,000 centrifuges were "enriching" uranium. Iran announced the

manufacturing of nuclear fuel pellets for the Arak heavy water research reactor.

• By year's end, Iran was receiving uranium fuel purchased from Russia to operate

the nuclear reactor at Bushehr. The final delivery of fuel was scheduled for

February 2008, to attempt to begin operations at the Bushehr nuclear reactor

about six months later (mid-to-Iate 2008).

Over the past year, the Intelligence Community has gained important new insights into

Iran's activities related to nuclear weapons and published a December 2007 National

Intelligence Estimate on Iranian intent and capabilities.

Analysis of events and activities associated with the Iranian nuclear program during the

reporting period has yielded the following conclusions: We assess that Iran had been

working to develop nuclear weapons through at least fall 2003, but that in fall 2003 Iran

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halted its nuclear weapons design and weaponization activities, and the military's covert

uranium conversion- and enrichment-related activities. We judge that the halt lasted at

least several years, and that Tehran had not resumed these activities as of mid-2007.

We do not know whether Iran currently intends to develop nuclear weapons, although

we assess Tehran at a minimum is keeping open the option to develop nuclear

weapons. We also assess that convincing the Iranian leadership to forgo the eventual

development of nuclear weapons will be difficult, and that Iranian entities are continuing

to develop a range of technical capabilities that could be applied to producing nuclear

weapons, if a decision is made to do so. For example, Iran's civilian uranium

enrichment program is continuing. We judge Iran probably would be technically capable

of producing enough HEU for a weapon sometime during the 2010-2015 time frame.

INRjudges Iran is unlikely to achieve this capability before 2013.

Iran's ballistic missile inventory ranks among one of the largest in the Middle East.

Iran's military developments have centered on its ballistic missile program, which it

views as its primary deterrent. Iran is fielding increased numbers of short- and mediumrange ballistic missiles (SRBMs, MRBMs) and we judge that Iran currently is focusing

on producing more capable MRBMs.

The Shahab-3 MRBM, capable of striking Israel, was formally handed over to the

Iranian military in July 2003. Iran's defense ministry in 2005 stated that it had

successfully tested an engine for a 2,000km ballistic missile and implied it would have

two-stages--a key technology in the development of longer-range ballistic missiles.

During a military parade in September 2007, Iran displayed a missile, referred to as the

Ghadr-1, which Iranian officials claimed had a range of 1,800-km. In late November

2007, Iran's defense minister claimed Iran has developed a new 2000 km-range missile

called the Ashura.

As early as 2005, Iran has stated its intentions to send its own satellites into orbit. In

2005, the government said it had allocated $500 million for space projects in the next

five years. Also, in 2005, Iran's first satellite, Sina-1, was launched on a Russian

rocket-signing a $132 million deal with a Russian firm to build and launch another

(telecommunications) satellite. Iran announced it would launch four more satellites by

2010 to improve land and mobile telephone communications.

Iranian officials, including President Ahmadi-Nejad, claimed Tehran in February 2007,

launched a probe "towards orbit" and that this device is transmitting information back to

Earth. Based on Iranian press footage of the launch, however, the vehicle-which

looked similar to the Shahab-3 MRBM, a system that probably does not have the

capability to place an object into orbit-appeared to suffer an in-flight failure. Iran's

President also announced Tehran would conduct two more rocket tests prior to

launching a "home-produced" satellite into orbit later this year, and several Iranian news

websites released photos of a new rocket called "Safir" that appears larger than

Tehran's existing ballistic missiles. This may be the space launch vehicle (SLV) Iran will

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use to attempt a satellite launch. Technologies used to build an SLV are directly

applicable to the development of longer range ballistic missiles.

Russian-entity assistance, along with assistance from entities in China and North Korea,

has helped Iran move toward self-sufficiency in the production of ballistic missiles. Iran

remains dependent on foreign suppliers for some key missile components. Iran has

received ballistic missile assistance from entities in North Korea, Russia and China. Iran

also has marketed for export gyroscopes suitable for ballistic missiles at trade shows.

While Iran ratified the Chemical Weapons Convention (CWC) in late 1997, it continues

to seek production technology, training, and expertise from foreign entities that could

advance Iran's assessed chemical weapons (CW) program. We assess that Iran

maintains the capability to produce CW agent in times of need and conducts research

that may have offensive applications. We judge that Iran still maintains a capability to

weaponize CW agents in a variety of delivery systems.

Iran probably has the capability to produce some biological warfare (BW) agents for

offensive purposes, if it made the decision to do so. We assess that Iran has previously

conducted offensive BW agent research and development. Iran continues to seek dualuse technologies that could be used for biological warfare.

In February 2007, North Korea agreed as part of the Six-Party Talks to "shut down and

seal for the purposes of eventual abandonment the Yongbyon nuclear facility, including

the reprocessing facility" as part of the Initial Actions for the Implementation of the Joint

Statement of September 2005. In mid-July 2007, North Korean officials shut down

and sealed, under IAEA monitoring and verification, the 5-megawatt electric (MWe)

nuclear reactor, a spent-fuel reprocessing facility, a nuclear fuel fabrication plant and an

unfinished 50 MWe nuclear reactor at the Yongbyon complex. North Korea also sealed

an unfinished 200 MWe reactor in Taechon. In return, the other five Parties agreed to

cooperate in economic, energy and humanitarian assistance to the DPRK, including the

provision of assistance up to the equivalent of 1 million tons of heavy fuel oil during the

period of Initial Actions and the next phase.

In the Second-Phase Actions Agreement, signed October 3,2007, Pyongyang

committed to disable the 5MWe reactor, the reprocessing facility, and the fuel

fabrication plant by December 31,2007 in exchange for a U.S. commitment to begin the

process of removing the designation of the DPRK as a state sponsor of terrorism and to

advance the processing of terminating the application of the Trading with the Enemy

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Act, in parallel with the DPRK's Second Phase actions. In November 2007, a team of

Department of Energy officials began overseeing disablement activities at Yongbyon,

and unloading of reactor fuel rods continues into 2008. North Korean officials missed a

December 31,2007 deadline for a complete and correct declaration of all its nuclear

programs.

Although North Korea has halted and disabled potions of its plutonium production

program, we assess with high confidence it has in the past pursued a uranium

enrichment capability that we judge is for nuclear weapons and assess with at least

moderate confidence that it continues to pursue such a capability.

North Korea continues to pursue the development, production, and deployment of

ballistic missiles with increasing range and sophistication. It continues to procure

needed raw materials and components from various foreign sources to support its

missile industry.

North Korea paraded its new solid-propellant SRBM for the first time in April 2007. It

demonstrated the capability to target U.S. forces and our allies in South Korea and

Japan with the flight test of six theater ballistic missiles in July 2006 and three shortrange missiles in June 2007. Development of the Taepo Dong 2

ICBM/SLV continued in 2007 despite a failed July 2006 test launch. North Korea also

continues work on an intermediate-range ballistic missile.(U)

We assess that North Korea has had a longstanding CW program. North Korea's

chemical warfare capabilities probably included the ability to produce bulk quantities of

nerve, blister, choking, and blood agents. We believe Pyongyang possesses a stockpile

of agents. North Korea has yet to accede to the CWC.

North Korea acceded to the Biological and Toxin Weapons Convention (BWC) in 1987

and claims to be in full compliance. North Korea has a rudimentary biotechnology

infrastructure that could support the production of various biological warfare agents. We

judge that North Korea possesses a conventional munitions production infrastructure

that could be used to weaponize BW agents.

Syria-despite being a Nuclear Non-Proliferation Treaty signatory with full-scope IAEA

safeguards-has been engaged for more than a decade in a covert nuclear program

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with North Korean assistance. The program involved construction of a nuclear reactor

we assess would have been capable of producing plutonium for nuclear weapons,

without informing the IAEA and while taking measures to preserve the site's secrecy.

The reactor was destroyed in September 2007, before it became operational, and Syria

has gone to great lengths to try to eradicate evidence of its existence. The covert

nature of the program, the characteristics of the reactor, and Syria's extreme efforts to

deny and destroy evidence of the reactor after its destruction are inconsistent with

peaceful nuclear applications.

Syria's ballistic missile program is a key component of its strategy to deter external

threats and is a priority in defense planning and spending. Syria possesses one of the

largest ballistic missile forces in the Middle East-eomposed of Scud-class liquid

propellant SRBMs, including Soviet and North Korean origin Scud missiles.

Additionally, Syria fields the SS-21 Mod 2 SRBM. All of Syria's missiles are mobile and

can reach much of Israel and large portions of Iraq, Jordan, and Turkey from launch

sites well within the country. Syria remains dependent on foreign suppliers for some

key ballistic missile technology. We judge that Syria's operational missile force can

employ chemical as well as conventional warheads.

Syria continued to seek dual-use technology from foreign sources during the reporting

period. Syria has had a chemical weapon program for many years and already has a

stockpile of CW agents, which can be delivered by aircraft, ballistic missile, and artillery

rockets. We assess that Syria remains dependent on foreign sources for key elements

of its CW program, including precursor chemicals.

Syria's biotechnical infrastructure is capable of supporting limited biological agent

development, but the Syrians are not believed to have achieved a capability to put

biological agents into effective weapons.

Several terrorist groups, particularly al-Qa'ida, remain interested in chemical, biological,

and radiological materials and weapons, and some groups have shown interest in

nuclear weapons as well. Many of the 33 US Department of State designated foreign

terrorist organizations worldwide have expressed interest in one or more of these

capabilities.

Some terrorist groups see employing chemical, biological, radiological, and nuclear

(CBRN) materials as low-cost, high-impact options for achieving their goals. AI-Qa'ida

and other terrorist groups show continuing interest in developing chemical and

biological capabilities for use in attacks against Western targets, especially in Iraq and

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Afghanistan. We also judge that al-Qa'ida and some other terrorist groups have the

capability and intent to develop and employ a crude radiological dispersal device.

Our highest concern is al-Qa'ida's stated readiness to attempt unconventional attacks

against the United States. A case in point is the September 2006 statement made by

al-Qa'ida in Iraq calling on scientists to join the struggle in Iraq and produce

unconventional weapons against American forces in that country. This message

regarding unconventional warfare probably demonstrates al-Qa'ida's continued interest

in obtaining and using CBRN weapons in its fight against the United States. At this

time, we do not assess that al-Qa'ida has a nuclear weapon capability, although

acquisition remains a goal. AI-Qa'ida's key obstacle to an improvised nuclear capability

remains acquiring sufficient weapons-usable nuclear material.

North Korea and entities in Russia and China continue to sell technologies and

components in the Middle East and South Asia that are dual use and could support

WMD and missile programs. North Korea is among the world's leading suppliers of

missiles and related technologies. Russian entities have supported missile and civil

nuclear programs in Iran and India. Chinese companies have been associated with

nuclear or missile programs in Pakistan and Iran.

We also see evidence of secondary proliferation, as countries who previously imported

weapons and technologies begin indigenous production and export those systems. As

their domestic capabilities grow, traditional recipients of WMD and missile technologyto include Iran and Pakistan-also are capable of supplying technology and expertise. In

addition, independent companies, scientists, and engineers may provide WMD- and

missile-related assistance.

Chinese entities-which include private companies, individuals, and state-owned

military export firms-eontinue to engage in WMD-related proliferation activities. The

United States imposed sanctions in 2007 on several Chinese companies for sales of

WMD- and ballistic missile-related technologies to Iran. Over the past several years,

China has implemented new export control legislation that approximates MTCR

controls, but recent exports to Iran and Pakistan demonstrate that Chinese entities

continue to supply a variety of missile-related items to multiple customers. While some

improvements have been noted in 2007, Beijing continued to fall short in its

enforcement of its export controls and private Chinese businesses continue to sell

materials, manufacturing equipment, and components suitable for use in ballistic

missile, chemical weapon and nuclear weapon programs to North Korea, Iran and

Pakistan.

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In 2007, China continued to offer for sale SRBMs that fall below the 300-kilometer

range/SOD kilogram payload threshold for MTCR Category I systems. China remained a

primary supplier of advanced conventional weapons to Pakistan and Iran. Although

Pakistan still represents China's most important regional partner in military technology

cooperation, Iran has been gaining ground in this area and claims it was producing the

Chinese-origin C802 antiship missiles as of 2007.

North Korea remains committed to selling missiles and related technologies to foreign

customers. Over the years, it has exported ballistic missile-related equipment,

components, materials, technical expertise and/or full missile systems to countries in

the Middle East, South Asia, and North Africa. North Korea has demonstrated a

willingness to sell complete ballistic missile systems and components that have enabled

other states to acquire longer-range capabilities earlier than would otherwise have been

possible and to acquire the basis for domestic development efforts.

In September 2007, the US imposed missile proliferation sanctions on a North Korean

corporation for two years. Nonproliferation penalties also were imposed on two Iranian

entities in September.

North Korea's relationships with Iran and Syria remain strong. North Korea provided

assistance to Syria's covert nuclear effort from the late 1990s onward and retains the

potential for exporting nuclear materials or technology.

Russian entities remain key suppliers of nuclear technology to a number of countries,

most of which is intended for civilian nuclear programs. Most recipients pose little

proliferation threat, but some-as in the case of China-pose greater concern because

the Russian assistance could be diverted to nuclear weapons programs. Russia

remains a key supplier for civilian nuclear programs in Iran, primarily related to

completing the construction of the Bushehr Nuclear Power Plant. Russian officials have

publicly expressed support for Russian involvement in future construction of a second

reactor at Bushehr, while insisting that all Iranian programs in the nuclear field be

placed under IAEA safeguards.

Russia has been India's greatest foreign provider of assistance and for its civilian

nuclear programs. Russia continues to construct two 1,ODD-megawatt light water·

nuclear reactors at Kudankulam. In January 2007, Russia signed a memorandum of

intent to build another four reactors at this site.

China remains Russia's largest purchaser of nuclear-related equipment. The Russian

nuclear industry this year completed construction of two nuclear power reactors worth

over $3 billion at China's Tianwan nuclear power plant, and is still constructing an

experimental fast reactor outside of Beijing.

Russian entities have supplied a variety of ballistic missile-related goods and technical

know-how to China, Iran, India, and North Korea.

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Russian entities also remained a source of dual-use biotechnology equipment and

related expertise. For example, Russian entities have been a source of dual-use

biotechnology, chemicals, production technology, and equipment for Iran.

Some cruise missiles and unmanned aerial vehicles (UAVs) can be used for the

delivery of nuclear, biological, and chemical weapons. Cruise missiles can be less

expensive and more accurate than ballistic missiles, and may be more difficult to defend

against than manned aircraft because of their low flight profiles and smaller radar crosssections. Other widely available potential delivery means include artillery, large

unguided rockets, multiple rocket launchers, and mortars. Aircraft, helicopters,

transport planes, and converted UAVs also are potential delivery vehicles and aerial

sprayers such as those used in agriculture can be adapted for use with many types of

helicopters, UAVs, and aircraft.

Iran continues to seek and acquire conventional weapons and production technologies,

primarily from entities in Russia and China, as well as high-quality weapon components

and dual-use items. We judge Iran continues to be interested in precision strike using

UAVs and possibly a land-attack cruise missile.

Iran has a history of supplying arms to Hizballah. Iran has reportedly supplied Hizballah

with many types of rockets since 1992. It has been reported that since Israel's

withdrawal from southern Lebanon in May 2000, there has been a dramatic increase in

Iranian weapon and weapon system shipments through Syria, with transfers continuing

even after the outbreak of hostilities with Israel in July 2006. Hizballah's reported use of

an antiship cruise missile during the 2006 war with Israel highlights the proliferation

risk of missiles and UAVs as to non-state actors. Iran appears to have gained

increased power and prestige in the process, both regionally and internationally,

creating the strong possibility that Iranian proliferation will continue to be a destabilizing

force in the Middle East.

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