Iran: Arms and Weapons of Mass Destruction Suppliers
Released: 2003-01-03T00:00:00

Russia

Iran has sought Russian assistance partly because of the limited alternatives and not necessarily because ofstrategic or ideological affinity between the twocountries. Iran's relationship with Russia is tempered by a lingering fear of Russian power and intentions.

Background to Iran-Russia Relations

In 1907, Russia concluded a treaty with Britain dividing Iran into spheres of control. Russian troops occupied northern Iran during World War I. Soviettroops invaded again in 1941, in concert with Britain, when Iran appeared to become sympathetic to Nazi Germany. After World War II, the Soviet Unionrefused to withdraw completely from Iran and it set up two autonomous zones in northern Iran, which lasted until1946, when U.S. pressure forced theSoviets to withdraw completely. Iran's Islamic revolution, which triumphed in February 1979, considered anathemaSoviet ideology and its suppression ofIslam and other religious expression. The December 1979 Soviet invasion of Afghanistan revived Iranian fears thatMoscow might have territorial designson Iran. The Soviet Union also backed Iraq with arms sales, financial credits, diplomatic support, and militaryadvice, throughout the Iran-Iraq war(1980-1988).

The Iran-Iraq war, which ended in August 1988, left Iran's conventional arsenal devastated, and the need for rearmament provided Iran and the SovietUnion an opportunity to pursue mutual interests. A U.S. military buildup in the Gulf during the Iran-Iraq war -designed to protect the free flow of oil in theGulf - had created concern in Moscow that the United States was attempting to establish hegemony in that strategicbody. Iran, partly because of U.S.efforts during the Iran-Iraq war to shut off worldwide arms sales to Iran, lacked a wide choice of willing suppliers,and the Soviet Union saw arms sales toIran as one way to broaden its influence in the Gulf. A February 1989 visit to Tehran by then Soviet ForeignMinister Edouard Shevardnadze, and hismeeting with the ailing Ayatollah Khomeini, signaled the beginning of a thaw in Iran's relations with the SovietUnion.

Iran established an arms and technology relationship with the Soviet Union during a visit to Moscow by then parliament speaker Ali AkbarHashemi-Rafsanjani in June 1989, two weeks after the death of Ayatollah Khomeini. A joint communique at theconclusion of the visit said that the twocountries would collaborate in the "peaceful use of nuclear energy," and that the Soviet Union "agreed to bolsterthe military capacity of the IslamicRepublic." (3)

The subsequent breakup of the Soviet Union in late 1991 raised Iran's importance in the strategic calculations of Russia, the successor to the Soviet Union ininternational affairs. Russia perceived an arms and technology relationship with Iran as a key part of an effort tomoderate Iranian behavior on Russia'ssouthern flank. After the dissolution of the Soviet Union in 1991, Russia and the former Communist leaders leftin charge in the six Muslim states of theformer Soviet Union (Azerbaijan, Turkmenistan, Tajikistan, Uzbekistan, Kyrgyzstan, and Kazakhstan) wereconcerned that Iran might try to spreadrevolutionary Islam into these new states. According to observers, Russia tacitly linked arms and technology salesto Iran's refraining from politicalmeddling in these states.

An additional factor in Russian planning was the aftereffects of the 1990-1991 Persian Gulf crisis, which left the United States pre-eminent in the Gulf anddemonstrated the effectiveness of U.S. military technology. The war cemented the U.S. position as the primary armssupplier to the Persian Gulf monarchystates. U.N. sanctions imposed on Iraq after its August 1990 invasion of Kuwait included a worldwide armsembargo, removing one of the key Soviet armsclients from the international market. Russian officials viewed Iran as a key source of needed new sales tocompensate for the closure of these and otherarms markets.

Attempting to curb Russia's arms and technology relationships with Iran, U.S. officials have consistently impressed upon their Russian counterparts thepossibility that Iran's historic resentment of past Russian actions in Iran might some day make Russia itself a targetof Iranian WMD. Iran and Russia arealso wary of each others' ambitions and claims on Caspian Sea energy resources, even though their positions on thedivision of resources in the sea havediffered little to date. (The two countries, along with Kazakhstan, Azerbaijan, and Turkmenistan, border the sea.) These arguments have not dissuadedRussia from selling arms and technology to Iran, and the Clinton Administration and Congress tried to use the threatof sanctions in efforts to achievenonproliferation goals.

In a few cases, the Clinton Administration took the step of imposing sanctions on Russian entities dealing with Iran, although it was reluctant to sanction theRussian government, maintaining that the United States has broad objectives in Russia. Those objectives includedpromoting economic and political reform,mutual arms control and reduction, safeguarding nuclear material, and limiting the effects of the war in Chechnya. During 1999 and 2000, the ClintonAdministration worked constructively with Russia to try to contain the Islamist threat posed by the Taliban regimeof Afghanistan and its protected "guest,"Saudi-born terrorist financier Osama bin Laden. These objectives, according to some observers, sometimesoverrode calls within and outside theAdministration to closely link U.S. relations with Russia to the abandonment of its arms and technology relationshipwith Iran.

Like its predecessor, the Bush Administration has been reluctant to risk broader relations with Russia over the Iran issue and has been reluctant to sanctionthe Russian government. Some Russian entities have been sanctioned for sales of weapons related technology toother state sponsors of terrorism: Libya,Sudan, and Syria. The Bush Administration's reluctance to strongly criticize Russia on proliferation issues has beenparticularly evident since the September11, 2001 attacks. Russia has been helpful to the United States in the response to the attacks, especially itsacquiescence to the U.S. use of bases in CentralAsia for the war effort in Afghanistan.

Advanced Conventional Weaponry

In 1991, Soviet arms ordered by Iran in 1989 began flowing to the Islamic Republic. Possibly because of fluctuations in Iranian oil revenues and its largedebt burden, it appears that Russia delivered fewer arms than Iran had originally ordered, and deliveries tapered offby the mid 1990s. Total deliveries toIran by Russia include about 30 MiG-29 and 30 Su-24 combat aircraft, (4) about300 T-72 tanks, (5) SA-5 and SA-7 surface-to-air missile systems, and threeKilo-class diesel submarines, the last of which arrived in January 1997. The submarine purchases represented thefirst deployment of the vessels by acountry in the Gulf and raised concerns among U.S. naval officials of a heightened threat to U.S. naval andinternational commercial shipping in the strategicwaterway.

The purchases and their strategic implications drew considerable attention in early 1992, when then CIA Director Robert Gates testified before the HouseArmed Services Committee that Iran was planning to spend $2 billion per year to rebuild its conventional arsenaland try to become the pre-eminent PersianGulf power. (6) In response to these assessments and to reports of Iran'sattempts to acquire WMD and delivery means, Congress passed the Iran-Iraq ArmsNonproliferation Act of 1992 (Title XVI of the National Defense Authorization Act for FY1993, P.L. 102-484 ). That law requires sanctions against foreignfirms (a ban on U.S. government procurement from and technology export licenses to the entity) and foreigncountries (a suspension of U.S. economicassistance, and of U.S. technical exchanges and assistance) that "contribute knowingly and materially to the effortsby Iran or Iraq ... to acquire chemical,biological, and nuclear weapons (7) or to acquire destabilizing numbersand types of advanced conventional weapons." As discussed below (see section onChina), the law did not precisely define "destabilizing numbers and types" of advanced conventional weapons,thereby giving the President discretion tointerpret the Act's requirements and to decide whether or not to impose sanctions under the Act.

Russian Pledge to the United States. Clinton Administration officials argued that the threat of imposingsanctions under the Act helped the United States extract a formal pledge from Russia in June 1995 not to enter any new arms contracts with Iran. Thatpledge was required for the United States to accede to Russia's membership in a multilateral export control regimeknown as the Waasenaar Arrangement, asuccessor to the Cold War era Coordinating Committee for Multilateral Export Controls (COCOM). The pledgewas obtained after numerous U.S.-Russiandiscussions on the issue, including at the Clinton-Yeltsin summits in Vancouver, Canada (April 1993), Washington(September 1994), and Moscow (May1995). Delivering a summary of the achievements of the 1995 Moscow summit, an Administration briefer statedthat "The two Presidents have resolvedsome outstanding issues associated with arms sales to Iran, and as soon as those are recorded and in agreement, it'llbe possible to welcome Russia'sparticipation as a founding member of the new post-COCOM regime." (8) Remaining issues were resolved to the Administration's satisfaction in June 1995,and Russia subsequently provided the Administration with a list of military items delivered, or yet to be delivered,under existing contracts with Iran. (9)

The New York Times reported on October 13, 2000 that, under the understanding reached with Russia, all deliveries to Iran were to end by December 31,1999, and that Russia did not honor that element of the arrangement. (10) Apartial text of a classified "Aide Memoire" setting out some elements of theU.S.-Russian understandings reached in 1995 regarding Russia's arms sales to Iran was printed in the Washington Times on October17, 2000. (11) The printedAide Memoire notes that "Russia's obligation not to conclude new contracts and other agreements on transfers ofarms and associated items to Iran willenter into force upon Russia's invitation to participate in the development of the new regime." The reference to the"new regime" seems a clear reference tothe soon to be established Wassenaar Arrangement. (12) Another point in theAide Memoire of 1995 states that the Russians were precluded from "therenegotiation or modification of existing contracts so as to increase the type or quantity of arms-related transfersfor which Russia is currently obligated."The Aide Memoire makes reference to an Annex (not published), which is part of the overall understanding, thatsets out "planned Russian transfers to Iran"and is to represent "the totality of the existing obligations that Russia reserves the right to fulfill pursuant to itsundertakings." The Russians, according to theAide Memoire, are to "terminate all arms-related transfers to Iran not later than 31 December 1999." (13) The New York Times , in a October 13, 2000 story,reported that a "classified annex" specified weapons Russia "was committed to supply to Iran: one Kilo-classdiesel-powered submarine, 160 T-72 tanks,600 armored personnel carriers, numerous anti-ship mines, cluster bombs and a variety of long-range guidedtorpedoes and other munitions for thesubmarine and the tanks." This story also noted that "Russia had already provided Iran with fighter aircraft,surface-to-air missiles, and other armoredvehicles." (14)

The 1995 Aide Memoire also states that in view of the undertakings contained in the "Joint Statement (15) and this Aide Memoire, the United States isprepared to take appropriate steps to avoid any penalties to Russia that might otherwise arise under domestic lawwith respect to the completion of thetransfers disclosed in the Annex for so long as the Russian Federation acts in accordance with these commitments." The Aide Memoire also adds that, "Thisassurance is premised on the assumption that the Russian disclosures in the Annex are complete and fully accurate." The United States added that it wished"to make clear that while noting Russia's interest in fulfilling its preexisting obligations, it in no way endorses suchtransfers." (16)

In early November 2000, following the spate of U.S. press articles about the Aide Memoire, Russia informed the United States that, as of December 1, 2000,Russia would no longer consider itself bound by the pledge not to enter into new arms deals with Iran. In responseto U.S. criticism of Russia's shift, Russiaassured the United States it would sell only "defensive" weapons to Iran, a characterization that was unsatisfactoryto the Clinton Administration. A lateDecember 2000 visit to Iran by Russia's Defense Minister resulted in an agreement for Russia to train Iranianmilitary personnel. New sales of Russian armsreportedly were discussed but none were announced. On October 2, 2001, Iran and Russia signed an agreementthat provides Iranian arms purchases overthe next 5 years, reportedly to include new MiG-29 and Sukhoi combat aircraft and anti-ship missiles, as well asthe S-300 air defense system (the Russiancounterpart of the U.S. "Patriot"). According to U.S. government data, in 2001 Iran signed arms purchaseagreements valued at about $700 million (17) ,which appears to coincide with or include the announced agreement with Russia.

The Bush Administration could choose to impose sanctions on Russia for the new sales to Iran under legislation passed by Congress in 1996; the legislationattempts to punish suppliers of conventional arms to Iran and other countries on the U.S. "terrorism list." TheAnti-Terrorism and Effective Death PenaltyAct of 1996 ( P.L. 104-132 ) built on the Iran-Iraq Arms Nonproliferation Act by requiring a cutoff of U.S. aid tocountries that aid or sell arms to countrieson the terrorism list, of which Iran is one. This law, which added a section 620H to the Foreign Assistance Act,imposes sanctions for any arms sales, notonly those considered "destabilizing in number and type." The sanctions apply only to "lethal military equipmentprovided under a contract entered intoafter the date of enactment" (April 24, 1996). The Clinton Administration considered Russian arms sales to Iranas part of a contract signed before the April1996 law was enacted, and no penalties for sales to Iran were imposed. Nor did the Clinton Administration issuea waiver to the provision in order to avoidsanctioning Russia for the Iran sales. The Bush Administration might be taking a similar position; no sanctionsagainst the Russian government or Russianentities have been imposed for the new arms agreements with Iran, although the Administration position will likelybecome clearer if and when actualdeliveries begin.

Both the Clinton and George W. Bush Administrations have sanctioned Russian entities under this provision for arms sales to other state sponsors ofterrorism. In April 1999, the Clinton Administration sanctioned three Russian entities under this provision for armssales to Syria, but the Russiangovernment was not sanctioned. In September 2002, the Bush Administration imposed sanctions under thisprovision on three Russian entities for sales toLibya, Sudan, and Syria, while electing not to sanction the Russian government. The three entities sanctioned inSeptember 2002 are the Tula DesignBureau of Instrument Building; the State Scientific Product Enterprise, Bazalt; and Rostov Air Frame Plant 168.

Ballistic Missiles

Since late 1996, U.S. officials and published reports have cited Russia, which has been a formal member of the MTCR since August 8, 1995, as a primarysupplier of Iran's ballistic missile programs. Press reports and U.S. official statements and reports since 1997 haveindicated that Russian entities haveprovided Iran's missile programs with training, testing equipment, and components including specialty steels andalloys, tungsten coated graphite,gyroscopes and other guidance technology, rocket engine and fuel technology, laser equipment, machine tools, andmaintenance manuals.

The Russian technology assistance to Iran frustrated Clinton Administration and Congress. Through a combination of engagement and selected impositionof sanctions, the Clinton Administration and Congress sought to enlist greater Russian government cooperation inhalting the technology flow, with mixedsuccess. Critics in Congress took a different view, arguing for broad and sustained application of sanctions onRussia and its entities on the grounds that theRussian government has been insincere in its pledges to crack down on technology exports to Iran by its entities.

In the 105th Congress, H.R. 2709 , the Iran Missile Proliferation Sanctions Act, passed both chambers by large margins. The bill requiredsanctions, including suspension of U.S. government assistance, on foreign entities (including governmental entitiesoperating as businesses) that assist Iran'sballistic missile programs. However, the Administration vetoed the bill on June 23, 1998 on the grounds that doingso would likely make Russia morerecalcitrant rather than promote cooperation to stop the transfers. As justification for the veto, the Administrationcited a January 1998 Russian decreetightening technology export controls and a May 1998 implementing directive as evidence of improved Russiangovernment cooperation. In an effort to atleast appear cooperative, Russia also began an investigation of eight entities for criminal violations of Russiancontrols on exports to Iran.

Administration policy on the issue appeared to suffer a setback in July 1998 - only one month after vetoing H.R. 2709 - when Iran first testedits Shahab-3 missile. On July 28, 1998, one week after that test, the Clinton Administration took steps to forestallcongressional action to override the vetoof H.R. 2709 by issuing Executive Order 13094. The order expanded a previous executive order (12938 ofNovember 14, 1994) to enable thePresident to ban U.S. trade with, aid to, and procurement from foreign entities assisting WMD programs in Iran orelsewhere. The sanctions contained in theexecutive orders were similar to those provided in the Iran-Iraq Arms Nonproliferation Act (see above), althoughthe executive orders focused onsanctioning supplier entities, not governments. Pursuant to the amended executive order, the Clinton Administrationsanctioned seven Russian entities (18) believed to be assisting Iran's Shahab program. On January 12, 1999, the Administration sanctioned three additionalRussian entities (19) believed helpingIran's missile and nuclear programs.

At the same time, the Clinton Administration tried to provide incentives for Russian cooperation and to prevent this issue from derailing progress on broaderU.S.-Russian issues. Claiming that Russia had made progress on export controls, in July 1999 the ClintonAdministration increased the quota of Russianlaunches of U.S. commercial satellites from 16 to 20 launches, with additional launches linked to further exportcontrol progress. The Administrationpraised Russia in April 2000 for reprimanding the rector of Baltic State Technical University (BSTU) - one of theentities sanctioned by the United States -and cancelling the training of Iranian technical students there. That step was taken after the election of VladimirPutin as President of Russia, and appearedto signal a U.S. hope and expectation that Putin would be more cooperative with the United States on this issue thanwas his predecessor, Boris Yeltsin. OnApril 24, 2000, the United States extended its sanctions on BSTU to the rector, Yuri Savelyev, and simultaneouslydropped the sanctions on two othermissile-related entities - the INOR Scientific Center and the Polyus Scientific Production Associates (guidancetechnology). Sanctions on the latter entitieswere dropped on the grounds that, according to the Clinton Administration, they had ended their technologyrelationships with Iran. In December 2000,although noting that individual Russian experts continued to sell their expertise to Iran, the Clinton Administrationallowed the quota on U.S. commercialuse of Russian space launches to expire at the end of 2000. U.S. officials justified the move on the grounds thatRussia, in their view, had established bettercontrols over exports by its aerospace firms. (20)

Although progress with Russia has ebbed and flowed, Congress sought stronger steps to end the missile assistance to Iran. H.R. 2709 , the billvetoed in 1998, was revived in May 1999 with the introduction of H.R. 1883 , the Iran Nonproliferation Act. In contrast to its predecessor andto the Iran-Iraq Arms Nonproliferation Act, H.R. 1883 authorized , rather than mandated, thePresident to impose sanctions on Russian entitiesthat assisted Iran's missile as well as other WMD programs. The bill passed both chambers unanimously, and wassigned into law on March 14, 2000 ( P.L.106-178 ). The sanctions authorized by the new law include:

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

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

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

denial of U.S. licenses for exports to the entity of items that can have military applications ("dual use items").

The bill also included a provision, not contained in the earlier version, that banned U.S. extraordinary payments to the Russian Aviation and Space Agencyin connection with the international space station unless the President can certify that the agency or entities underthe Agency's control had not transferredany WMD or missile-related technology to Iran within the year prior. The provision contains certain exceptions toensure the safety of astronauts who willuse the space station and for certain space station hardware. In his statement upon signing the bill into law, thePresident noted that Russia "continues to bea valued partner in the International Space Station." On October 16, 2000, the National Aeronautics and SpaceAdministration (NASA) testified before aHouse International Relations Committee oversight hearing on implementation of the Iran Nonproliferation Act. The U.S. space agency indicated that it hascontinued extraordinary payments to Russian entities for work on the space station under an exemption in the Actallowing for payments to ensure spacecrew safety (Section 6F).

Available evidence suggests that some Russian assistance to Iran's ballistic missile programs continues. In its report for Congress in January 2002, the CIAsaid "Russian entities during the period (first half of 2001) continued to supply a variety of ballistic missile relatedgoods and know how to countries such asIran, Libya, India, and China." The Bush Administration has not added any Russian entities to those alreadysanctioned for WMD technology sales to Iran.

Nuclear Issues

Since January 1995, when Iran signed an $800 million contract with Russia for the completion of the 1,000 megawatt nuclear power reactor at Bushehr, theU.S. Administration and Congress have been concerned about the potential for Iran to use the project to advancea nuclear weapons program. Although thework on Bushehr is far behind its original schedule, Russia asserts that the project will be operational by 2005. Iranian technicians have begun nuclear plantoperations training in Russia. In July 2002, Russia raised U.S. concerns by floating a plan to build five morereactors in Iran over the next ten years; U.S.pressure contributed to Russia's backtracking on the plan and its subsequent statements that the expanded projectmight not go forward.

When the Bushehr contract was first signed, some in Congress said that sanctions should have been imposed on Russia under the Iran-Iraq ArmsNonproliferation Act. However, the Clinton Administration asserted that the law did not specifically requiresanctions for transfers of civilian nucleartechnology permitted to be transferred under the NPT. In taking this position, the Clinton Administration signaledthat it preferred to work with Russia toend, or at least limit, the scope of the project. The Clinton Administration also sought to separate the issue frombroader U.S. - Russian relations by waiving- when possible - provisions of recent foreign aid laws making one half (or more) of U.S. aid to the Russiangovernment contingent on ending assistance toIran's nuclear and missile programs. The Clinton Administration limited the types of aid subject to cuts so that aidcould still flow to local Russiangovernments and for humanitarian and nuclear dismantlement programs. (22) On the other hand, as noted above, the Administration did impose sanctions ontwo Russian entities - the Scientific Research and Design Institute of Power Technology (NKIET) and the D.Mendeleyev University of ChemicalTechnology - when there was firm evidence that these entities were continuing to help Iran in the nuclear field.

The Clinton Administration's decision to rely primarily on engagement rather than punishment of Russia, a policy continued by the Bush Administration,has yielded some benefits. The Clinton Administration obtained Russian pledges not to supply Iran with anytechnology that could contribute to a nuclear weapons program, including uranium enrichment equipment. In September 2000, the ClintonAdministration successfully persuaded Russia to block a saleto Iran by one of its research centers of a laser device that the United States believed Iran would only use for anuclear weapons program. In regionaldiplomacy, the Clinton Administration dealt the Bushehr project a setback in March 1998 when visiting Secretaryof State Albright initialed an agreementwith Ukraine under which it pledged to drop the sale of the turbines for the reactor. In mid-2002, in a further nodto U.S. concerns, Russia finalizedagreement with Iran for Russia to reprocess spent nuclear fuel from the Bushehr project.

Some in Congress believe that the United States is indirectly helping the Bushehr project - a project the United States strongly opposes - and that such aidshould cease. About $1.5 million of the budget of the International Atomic Energy Agency (IAEA), an organizationto which the United States contributes,has gone toward technical assistance (primarily training in nuclear safety) to the Bushehr project during 1995-1999. Section 307 of the Foreign AssistanceAct of 1961 exempts the IAEA (and UNICEF) from a ban on U.S. contributions to programs in countries namedin that section. Ending this IAEAexemption was the subject of bills ( H.R. 1477 and S. 834 ) in the 106th Congress, whichwere not adopted. In the 107th Congress,the measure passed as Subtitle B of an FY2002 foreign relations authorization bill ( H.R. 1646 , P.L. 107-228 ). On the other hand, somemaintain that funding IAEA assistance to Bushehr ensures that the United States can obtain information on theBushehr project. The IAEA also is helpingensure the plant will be operated safely when it becomes operational.

Chemical and Biological Programs

Recent U.S. proliferation reports say that Iran has sought chemical weapons technology and chemical precursors from Russia (and China) in order to create amore advanced and self-sufficient chemical warfare infrastructure. According to those same U.S. reports, Iran hasexpanded its efforts to acquire"biotechnical" materials and expertise from entities in Russia and elsewhere. Press reports indicate Iran hasrecruited Russian scientists to work on itsbiological program. (23)

U.S. official statements on efforts to dissuade Russian WMD-related technology sales generally omit discussion of chemical or biological technology. U.S.statements note that outside assistance to Iran's chemical and biological program is "difficult to prevent, given thedual-use nature of the materials, theequipment being sought, and the many legitimate end uses for these items." The relative absence of publicdiscussion could, alternately, suggest that theprovision of Russian chemical or biological technology to Iran has not reached the level at which intense U.S.diplomatic pressure has been deemedwarranted.

China (24)

Overview of China-Iran Relations

Iran and China have not been close ideologically or politically, but Iran was never occupied or invaded by China's troops and Iran does not fear China'slong-term ambitions as Iran might fear those of Russia. Under the Pahlavi dynasty, Iran cut diplomatic relationswith China after the People's Republic ofChina (PRC) was established in 1949. As PRC-Soviet relations worsened in the late 1960s and the 1970s, relationsthawed as China saw a strong Iran -even though it was governed by the pro-U.S., anti-Communist Shah Mohammad Reza Pahlavi - as an obstacle toSoviet aims to expand its influence in thePersian Gulf, according to articles in China's press during that period. After the fall of the Shah at the hands of theIslamic revolution in February 1979,Iran-China relations warmed further. In January 1980, China abstained on a U.N. Security Council vote to sanctionIran for the November 4, 1979 seizure ofthe U.S. Embassy in Tehran.

In an effort to bolster Iran against Iraq, which was backed by the Soviet Union, China established itself as a key arms supplier to Iran soon after the Iran-Iraqwar broke out in September 1980. In June 1985, at the height of the Iran-Iraq war, then parliament speaker AliAkbar Hashemi-Rafsanjani visited Beijingand reportedly signed missile technology agreements with China. (25) Thatvisit apparently opened Iran to the supply of Chinese-made Silkwormsurface-to-surface anti-ship missiles (55 mile range). During the latter stages of the Iran-Iraq war, which ended inAugust 1988, Iran fired Silkworms at U.S.Navy-escorted oil tankers in the Persian Gulf and at Kuwaiti oil terminals. During 1987-88, China reportedly builtIran's infrastructure to design, build, andtest ballistic missiles and to extend their ranges.

In May 1989, then President (now Supreme Leader) Ali Khamene'i visited China to cement China-Iran defense and political relations. Iran's strategicrationale for buying arms and technology from China is, in part, to counter U.S. pressure on Iran by buildingalliances with other big powers. China seesarms sales to Iran as a means to perhaps divert some U.S. military forces from areas near Taiwan and possibly asretribution for continued U.S. arms sales toTaiwan. Others note that China has not cultivated Iran exclusively, but has sought to expand its influence broadlywithin the Middle East. Those who holdthis view point out that China maintains good relations with moderate Arab states including Saudi Arabia and Egypt. Some experts perceive China'sinterests in Iran as more narrow: China wants to guarantee itself supplies of oil to feed its growing economy, andto earn revenues from sales of weapons andtechnology to Iran.

As in the Russia case, the United States has a broad agenda with the PRC. Aside from nonproliferation issues, the high priority issues on the U.S.-Chinaagenda include: encouraging a peaceful resolution of the dispute between the PRC and Taiwan, U.S.-PRC traderelations, and China's human rights record. The Clinton Administration maintained that it needed to keep the broader issues in mind when faced with a decisionwhether or not to impose sanctions onChina for its relations with Iran. Some, particularly those who believe the United States should do more to containthe PRC's growing strategic power,argued that the Clinton Administration was too willing to accept China's nonproliferation pledges at face value. Some in Congress have taken this latterview and want to ensure that China is sanctioned if it provides WMD-related technology to Iran. The ClintonAdministration efforts slowed China'scooperation with Iranian WMD programs in some areas. However, a visit to China by President Khatemi in June2000 raised U.S. fears that new WMD orweapons cooperation would be agreed between Iran and China, but both countries strongly denied that the visitinvolved or resulted in new militarycooperation agreements.

The Bush Administration has sanctioned a relatively large number of China's entities for proliferation activities with Iran, even as the Bush Administrationhas cultivated China as a partner in the overall war on terrorism spawned by the September 11, 2001 attacks. This,combined with U.S. government reportsover the past few years, suggests that China continues to provide advanced conventional arms and WMD-relatedtechnology to Iran. Then leader of ChinaJiang Zemin visited Iran in April 2002 and signed agreements covering, according to official Iranian and Chinesestatements, oil, gas, trade, transportation,educational and cultural exchange, and information technology. It is not known from open sources whether or notWMD or arms related technologytransfers were discussed.

Anti-Ship Cruise Missiles And Other Advanced Conventional Weapons

Over the past five years, China has supplied Iran with artillery pieces , tanks, the Chinese version of the SA-2 surface-to-air missile, and 24 F-7 combataircraft, but it is China's past sales to Iran of anti-ship cruise missiles that have caused the most significant U.S.concern. The anti-ship missiles improveIran's ability to strike at U.S. forces and installations or commercial shipping in the Gulf. China has delivered toIran 15 Hudong fast attack craft, as well asten other French-made patrol boats. Of the 15 Hudong s, five were delivered to Iran's RevolutionaryGuard, which is a bastion of Iran's hardline politicalelements, and ten went to its regular Navy. The ships are outfitted with about 150 C-802 anti-ship cruise missile(75 mile range), also supplied by China. (The C-802 is not covered under the Missile Technology Control Regime because its range and payload are underthe regime's threshold.) Iran tested theChinese-supplied air-launched C-801K missile (25 mile range) on one of its U.S.-made F-4 Phantom aircraft (26) in June 1997, prompting Secretary ofDefense Cohen to assert that Iran posed a "360 degree threat" to U.S. forces. In October 2000, Iran's RevolutionaryGuard Navy reportedly tested a"modified" version of a Chinese-made anti-ship missile, possibly indicating Iran had increased its range. (27)

Congressional debate about the Chinese anti-ship missile transfers centered on whether the transfers, which occurred in the early 1990s, should havetriggered U.S. sanctions under the Iran-Iraq Arms Nonproliferation Act of 1992. (28) In mid-1996, some in Congress pressed the Clinton Administration toimpose sanctions on China for the C-802 transfers, and the Clinton Administration said it considered that step. InApril 1997, electing to negotiate the issuewith China rather than impose sanctions, the Administration determined that the C-802 and C-801 transfers to Iranwere "not of a destabilizing number andtype" to warrant U.S. sanctions. Some in Congress disagreed with the determination, and the disagreementsharpened after Secretary Cohen's June 1997statement that the C-801K posed a new threat to U.S. forces in the Gulf.

The issue of sanctions for the C-802 and C-801 sales quieted when China pledged to Secretary of State Albright in September 1997, and again to Secretaryof Defense Cohen in January 1998, that it would halt further sales of C-802's and C-801's to Iran. U.S. officials saythat China is upholding this pledge.

Other reported sales by China to Iran appear to violate the spirit, if perhaps not the letter, of China's pledges. The Washington Times reported on August 19,1999, that China had agreed to modify Iran's FL-10 anti-ship cruise missiles (20-30 mile range) to enable them tobe fired from helicopters or fast attacknaval craft. U.S. officials said the reported deal would not technically violate China's pledges because thoseassurances applied only to the C-802 andC-801. (29) In May 2002, the Washington Times reported that China had soldIran additional patrol boats designed to carry up to eight C-701 anti-shipmissiles. That missile has a range of about 10 miles, and China reportedly shipped some of those missiles to Iranearly in 2002. (30)

Ballistic Missiles

Recent U.S. CIA and DoD proliferation reports have said that entities in China continue to supply ballistic missile-related technology and advice to Iran'sShahab missile program. In the mid-1990s, there were numerous press reports, such as a November 21, 1996 Washington Times report quoting U.S.intelligence sources, that China had sold Iran guidance technology (gyroscopes and accelerometers), special steelsuited to missile fabrication, and missilesequipment, possibly for use in the Shahab program. There have been no confirmed deliveries of entire M-9 or M-11ballistic missiles to Iran, both of whichare considered to have range/payload combinations that are covered by MTCR guidelines.

The Clinton Administration tried to limit China's missile assistance to Iran primarily through diplomatic engagement. On November 22, 1996, and again onSeptember 10, 1997, the State Department said the United States had not determined that China had violated itsMarch 1992 commitment to adhere to theterms of the MTCR. In March 1998, the Clinton Administration reportedly offered China expanded cooperationon commercial space ventures in return foran end to all Chinese assistance to Iran's ballistic missile programs and its joining the MTCR. In November 2000,the Clinton Administration negotiated anagreement with China under which China issued (November 21, 2000) a public statement that it would not assistother countries' efforts to develop ballisticmissiles and that it would adopt a control regime for exports of technology that could be used for ballistic missiles. The U.S. insistence that China join theMTCR was dropped, and the Clinton Administration said it would not sanction China for past missile assistanceto Iran or Pakistan and that U.S.-Chinacommercial space cooperation would resume. Simultaneously, recipient entities in Pakistan and Iran (the Ministryof Defense and Armed Forces Logistics,the Armed Forces Logistics Command, and the Defense Industries Organization) were sanctioned, although thesanctions (a ban on U.S. trade with andexports to the sanctioned entities) were already in force under broader U.S. sanctions laws and regulations on Iran.

Some subsequent press reports seemed to support critics who urged the United States not to rely too heavily onbilateral anti-proliferation agreements withChina. On January 26, 2001, the Washington Times quoted unnamed U.S. officials as saying that theChinese firm Norinco (China North IndustriesCorporation) had recently shipped specialty metals and chemicals used in missile production to Iran's Shahid (MartyrBakeri Industrial Group, a defensefirm involved in Iran's missile program. (31)

The Bush Administration has sanctioned several entities of China that appear to have been involved in missile proliferation activities, althoughAdministration pronouncements and reports generally list a number of entities without specifically identifying thetype of equipment transferred or Iranianprogram assisted. The sanctions were imposed on January 16, 2002, May 9, 2002, and July 9, 2002, underauthorities including the Iran-Iraq ArmsNonproliferation Act and the Iran Nonproliferation Act. Many of the names of the entities sanctioned appear toduplicate each other, which could reflectimprecise information on the exact name of the entity alleged to be transferring technology to Iran. In other cases,entities sanctioned are repeated insuccessive designations, suggesting that these entities could be involved in several of Iran's WMD programs. Forthe list of sanctioned entities, see FederalRegister: January 24, 2002; May 16, 2002; and July 25, 2002, where these sanctions are announced.

Nuclear Issues

In the nuclear field, the Clinton Administration extracted significant pledges from China to limit its relationship with Iran. In February 1993, Chinacontracted to construct in Iran two 300 megawatt nuclear reactors and to provide related technology and training. (32) In mid-1997, Administration officialssaid they had blocked a deal between Iran and a Chinese government-owned firm for the sale to Iran of a "uraniumconversion facility," although Chinareportedly gave Iran blueprints for the facility. (33) In advance of the October1997 U.S.-China summit, the Administration said it received a firm writtenassurance that China would end its nuclear relations with Iran (not build the reactors contracted in 1993), althoughtwo small ongoing projects would becompleted. One project is to supply Iran's civilian nuclear program with a zirconium production facility, for whichIAEA safeguards are not required, andthe other is to build a small research reactor, which the United States judged does not pose a significant proliferationconcern.

The Administration apparently extracted the PRC pledge by promising, in exchange, to certify to Congress that China is cooperating to end nuclearproliferation. This certification, required by P.L. 99-183 and issued in January 1998, opened China to nuclearcooperation with the United States under a1985 bilateral agreement. Congress did not formally disapprove within the thirty legislative day period, and thecertification took effect on March 18, 1998. Published reports by U.S. intelligence agencies in 2000 and 2001 said that China was living up to that pledge, butthe more recent reports by U.S.intelligence, and public statements in June 2002 by senior State Dept. official John Wolf, have refrained from thatpositive assessment. Specific allegationsof any nuclear transfers from China have not been made public.

Chemical and Biological Programs

Since the early 1990s, U.S. officials have identified firms in China as suppliers of Iran's chemical weapons program, although some U.S. officials attributedthe assistance to Iran to a lack of export controls by China's government. On May 22, 1997, Secretary of StateAlbright imposed U.S. sanctions, under theChemical and Biological Warfare Elimination Act of 1991 ( P.L. 102-182 ), on two PRC firms (Nanjing ChemicalIndustries Group and Jiangsu YongliChemical Engineering and Technology Import/Export Corp.), five PRC citizens, and one Hong Kong firm (CheongLee Ltd.) for knowingly and materiallyaiding Iran's chemical weapons programs. The Clinton Administration said there was no evidence the PRCgovernment was aware of the transfers. On June10, 1997, the State Department announced suspension of an Exim Bank loan for a U.S. firm's exports to the Nanjingfirm above. In June 1998, Chinaappeared to address U.S. concerns by expanding chemical export controls to include ten chemicals not banned forexport under the Chemical WeaponsConvention but included in the more restrictive "Australia Group" chemical export control list. The sanctions onthe entities remain in effect.

The Bush Administration clearly believes that entities in China are assisting Iran's chemical weapons program. In four separate determinations, the BushAdministration has imposed sanctions on several chemical firms based in China - June 14, 2001; January 16, 2002;May 9, 2002; and July 9, 2002. In thefirst three cases, the sanctions were imposed pursuant to the Iran Nonproliferation Act of 2000. In the latest case,sanctions were imposed pursuant to theIran-Iraq Arms Nonproliferation Act and the nonproliferation provisions of the Arms Export Control Act and theExport Administration Act. One firmsanctioned by the Bush Administration is the Jiangsu Yongli Chemicals and Technology Import-Export Corporation,the same firm sanctioned by theprevious administration. Other sanctioned entities with names that clearly indicate their involvement in the chemicalindustry include: Liyang ChemicalEquipment Company, and the Zibo Chemical Equipment Plant.

North Korea

Overview of North Korea-Iran Relations. NorthKorea has tended to align itself with countries in theMiddle East, such as Iran, Libya, and Syria, that have opposed U.S. policy in the region or have hosted terroristorganizations. Pyongyang's motive,according to many observers, has been to serve its own interests by building alliances with countries that opposeU.S. global influence. North Koreasupported the 1979 Islamic revolution in Iran, which overthrew a key U.S. ally, the Shah, and it provided missiletechnology to Iran to help it in its 1980-88war with Iraq. The United States backed Iraq in that war. In their statements and cooperation, Iran and North Koreaappear to try to reinforce each other'scriticism of the United States as a global hegemon bent on dominating developing nations. Iran uses that argumentto criticize the U.S. military presence inthe Persian Gulf monarchy states, and North Korea likewise derides the U.S. military presence in South Korea. North Korea also has sought to earn hardcurrency from sales of arms and technology to Middle Eastern countries.

Over the past decade, North Korea and Iran have been further drawn together by U.S. references to both of them as "rogue states" and as targets of U.S.economic sanctions. As noted above, both of them, along with Iraq, were designated by President Bush as part of"an axis of evil" in his January 29, 2002State of the Union message. At the same time, North Korea has deflected some scrutiny by emphasizing that it isnot a Muslim nation and asserting that ithas no connections to Islamic terrorist groups such as Al Qaeda or those backed by Iran. Iran, by contrast, has beenidentified by the United States for over adecade as the most active state sponsor of terrorism because of its backing for Islamic terrorist organizations suchas Lebanese Hizballah and Hamas, aPalestinian organization.

Even though President Bush described North Korea as part of an axis of evil in early 2002, later in the year the Administration appeared to move moretoward the engagement policy with North Korea that was followed during by the Clinton Administration. Thatpolicy is discussed in greater detail below, inthe context of the Clinton Administration's efforts to broaden its October 1994 framework agreement on nuclearissues to halting North Korea's missiletesting and missile exports (to Iran and other countries) as well. At the end of 2002, however, a sense of crisisdeveloped as North Korea admitted toworking on a uranium enrichment route to a nuclear weapon, and later unfroze its plutonium program that had beensuspended under the October 1994framework agreement. North Korea expelled IAEA inspectors monitoring that agreement in December 2002.

The sense of crisis developed at the same time as there were revelations of two previously unknown nuclear sites in Iran, as note above. Although theseparate Iran and North Korea revelations coincided in time, there was nothing to indicate that Iran and North Koreaare working together on nuclearweapons technology.

Ballistic Missiles

North Korea's defense relationship with Iran appears mostly limited to ballistic missiles, building on a long-standing missile relationship with Iran. (34) During Iran's war with Iraq, North Korea provided Iran with about 100 Scud-B ballistic missiles, as well as facilitiesin which Iran could produce the Scud-Bindigenously. (35) North Korea also reportedly sold Iran conventionalweapons, including mini-submarines and mines, and provided training to Iran'sRevolutionary Guard. Some reports indicate that North Korea helped Revolutionary Guard naval units track andtarget U.S. ships during their skirmisheswith U.S. forces in the Gulf in 1987-88). In 1991, North Korea reportedly began to supply Scud-C missiles to Iranand, in 1992, the State Departmentsanctioned Iran's Ministry of Defense and Armed Forces Logistics, along with two North Korean firms, for allegedmissile proliferation activities. In March1992, U.S. Navy ships tracked - but did not attempt to intercept - a North Korean ship, believed to be carryingScud-C missiles, that docked in Iran. InAugust 2000, North Korean leader Kim Jong-Il publicly admitted that North Korea had sold complete missiles toIran and Syria. Iran refuted Kim'sassertion.

In the early 1990s, Iran reportedly discussed with North Korea the purchase of North Korean-made Nodong 1 missiles (1,000 mile range). Iranian officialsattended test launches of the Nodong 1 during its development in North Korea, according to a number of pressreports. U.S. scrutiny of the Iran-North Korearelationship, U.S. sanctions on North Korean entities, and U.S.-North Korea talks on missile exports (36) apparently contributed to Iran's decision to build theShahab missile indigenously, based on the Nodong design. In May 1996, one month after the first U.S.-NorthKorea talks on missile exports to Iran (andother Middle Eastern countries), the Administration issued another determination (37) that entities in Iran and North Korea had engaged in missileproliferation activities. On August 6, 1997, following another round of U.S.-North Korea missile talks, the UnitedStates imposed trade sanctions on twoNorth Korean firms for missile-related activities believed to involve Iran and Pakistan.

The Clinton Administration's engagement of North Korea began gradually in 1994 with a U.S. effort to halt North Korea's nuclear program and, later, itsdevelopment of missiles capable of hitting the United States. The Clinton Administration attempted to extendagreements in these areas to the additionalgoal of curbing North Korea's ballistic missile technology relationship with Iran and other countries. In May 1999,a U.S. envoy to North Korea, formerDefense Secretary William Perry, reportedly offered a lifting of U.S. sanctions on North Korea in exchange for ahalt to its testing of missiles and an end toits exports of missile technology to the Middle East and Pakistan. In July 2000, U.S.-North Korea talks on missileexports faltered when the United Statesrefused North Korea's demand that it receive $1 billion annually for three years to compensate for the halting ofexports. The Clinton Administrationappeared to be on the verge of a broad nonproliferation agreement with North Korea before President Clinton leftoffice, but no agreement was finalized. Because some of the nonproliferation issues were not resolved by the end of his term, President Clinton did not goforward with a late-term visit to NorthKorea.

In the course of engaging North Korea, the Clinton Administration continued to sanction North Korean entities that were known to be assisting Iran. InFebruary 2000, U.S. intelligence officials indirectly confirmed press reports that North Korea had delivered to Iran12 engines that would be critical to Iran'sefforts to build extended-range Shahab missiles. (38) Two months later, onApril 6, 2000, the Department of State imposed sanctions on one North Koreanand four Iranian entities for engaging in missile technology proliferation activities. The sanctions were imposedpursuant to the Arms Export Control Actand the Export Administration Act, as carried out under Executive Order 12924 of August 19, 1994. The NorthKorean entity sanctioned was theChanggwang Sinyong Corporation; the four Iranian entities sanctioned were: the Ministry of Defense and ArmedForces Logistics; the Aerospace IndustriesOrganization; the Shahid Hemmat Industrial Group, and the Sannam Industrial Group. In practice, the sanctions(no U.S. licenses for exports to theseentities, no U.S. government contracts with the entities, and no imports to the United States of products from theseentities) will have little or no effect. TheUnited States does not export to or contract with these entities, and no Iranian or North Korean products permittedto be imported to the United States areproduced by these organizations.

Despite U.S. efforts to halt North Korean exports of technology to the Middle East, by all accounts North Korean assistance to Iranian weapons programs is continuing. The CIA proliferation report of January 2002 said that entities in North Korea continue to supply crucialballistic missile-related equipment,technology, and expertise to Iran. The Clinton Administration again sanctioned the Changgwang entity for missileproliferation to Iran on January 2, 2001,and the Bush Administration sanctioned Changgwang for similar activity yet again on June 14, 2001. Both lattersanctions were imposed pursuant to theIran Nonproliferation Act.

Anti-Ship Missiles

Some reports have appeared recently to suggest that Iran and North Korea have begun to cooperate on anti-ship missiles. According to press reports in early2000, Iran sent to North Korea a few of the C-802 anti-ship missiles Iran bought from China. (39) Iran reportedly has asked North Korea to help upgrade theaccuracy of the missiles. Iran might also be seeking to persuade North Korean to manufacture the missile - orprovide Iran the technology to produce themissile itself - to compensate for China's cutoff of additional supplies of the C-802.

Other Suppliers

Information on Iranian efforts to acquire weapons and technology from other suppliers appears sketchy, andsuggests that Iran is willing to deal with anumber of suppliers and middlemen to acquire needed technology. Most suppliers to Iran possess former Sovietbloc equipment and technology that canreplace, complement, or supplement the technology Iran is acquiring from Russia. However, Iran does not limit itsbuying to former Soviet bloc states; itcontinues to attempt, according to the most recent CIA reports to Congress, to approach entities in Western Europefor WMD and missile technology. Majorexamples of suppliers to Iran, other than its three key supplier countries, include the following:

Poland sold Iran 100 T-72 tanks in 1994, and subsequently pledged to the United States not to sell Iran any additionaltanks.

In 1997, the U.S. Department of Defense purchased 21 Russian-made MiG-29's from Moldova after reportedly receiving informationthat Iran was seeking to buy the aircraft.

As noted above, in 1998 the U.S. Administration successfully dissuaded Ukraine from supplying key turbines for the Bushehr nuclearreactor project.

In 1999, a Czech firm, ZVVZ Milevesko, signed a contract to supply air conditioning technology for the Bushehr reactor. TheAdministration asked the Czech government to ban that sale, and the Czech government subsequently draftedlegislation preventing Czech firms fromsupplying the plant. In April 2000, the lower house of the Czech parliament rebuffed objections from the upperSenate in passing the law, which isexpected to be signed by President Vaclav Havel.

Some past CIA nonproliferation reports have said that Indian firms had supplied Iran's chemical weapons program, although the 2000,2001, and 2002 nonproliferation reports do not mention India specifically as a supplier to Iran. However, the July9, 2002 sanctions determination againstnine entities of China for alleged missile and chemical proliferation to Iran, referenced above, also included anindividual apparently of Indian origin - HansRaj Shiv. The determination said Shiv was "previously residing in India, and last believed to be in the Middle East." The determination did indicate anyconnection between Shiv and the government of India or impose sanctions on that government.

The May 9, 2002 determination discussed above imposed sanctions not only on entities from China, but also on two entities fromMoldova (one firm, Cuanta, S.A. and one individual, Mikhail Pavlovich Vladov); and two entities from Armenia(one firm, Lizen Open Joint StockCompany, and one individual, Armen Sargsian). That determination was issued in response to reports of chemicaland missile proliferation to Iran. Thegovernments of Moldova and Armenia were not sanctioned, and the determination did not indicate knowledge ofthe sanctioned activity on the part of thosegovernments.