Iran Update: Number 154

  • Iran invites IAEA to visit; latest Board of Directors report more detailed and critical
  • Attack on the British Embassy in Tehran
  • European efforts to coordinate sanctions
  • New U.S. sanctions package targets Iran’s Central Bank and oil sector
  • Massive explosion destroys Iranian missile testing center
  • Iran’s military plans drills to simulate closing the strategic Strait of Hormuz
  • U.S. surveillance drone captured in Iran
  • Highlights from Brookings Institution event on Iran

Tehran invites IAEA for visit; latest Board of Directors report more detailed and critical

Tehran has this week invited International Atomic Energy Agency (IAEA) representatives to visit the country. Further details of the invitation letter have not been made public and it was unclear yet whether the invitation was a direct response to IAEA Director General Yukiya Amano’s request made in November for a special Agency visit to Iran.  Amano has repeatedly called on Iran to provide more information and allow more access to relevant facilities to dispel doubts about the peaceful nature of its nuclear program. The IAEA has confirmed that is working on possibly sending a delegation to the country.

The most recent IAEA Board of Governor’s report, issued on November 8, included more information obtained from the IAEA and several member states that suggests Iran has attempted to pursue the capacity to develop nuclear weapons. The report documents, with more detail in an annex, how Iran allegedly made some successful efforts “to procure nuclear related and dual use equipment and materials by military related individuals and entities;” tried “to develop undeclared pathways for the production of nuclear material;” and conducted “[w]ork on the development of an indigenous design of a nuclear weapon including the testing of components”(p.8). The report also alleges that Iran engaged within a covert foreign network to pursue these activities.  Although most of the information points to work before 2003, the report noted that the IAEA was unable to obtain as much information thereafter and that some suspicious activities “may still be ongoing”.  According to the Agency, Iran’s program under IAEA safeguards has a total stockpile of 4,922 kg of low enriched uranium (enriched to 3.5 percent) and has produced 70-80 kg of uranium enriched to 19.75 percent.

The IAEA Board of Governors adopted a resolution formally condemning Iran in the wake of the report. The United States and allies were also using the report to bolster their case for more economic pressure on Iran (see sections on sanctions, below). Iran’s ambassador to the IAEA, Ali Asghar Soltaniyeh, called the report “unfounded, groundless and scientifically baseless”. President Mahmoud Ahmadinejad said that the information was based on “empty claims” of U.S. origin.


Attack on the British Embassy in Tehran

Hundreds of Iranian protesters stormed the British Embassy compound in Tehran on November 29. Following a demonstration outside, the protestors broke into the embassy grounds, ransacked the compound, and vandalized offices. The delayed intervention of Iranian security forces and the involvement of Basij paramilitaries in the protest led many to believe that the Iranian government approved the attack.

The impetus for the attack on the British Embassy seems to have been Britain’s decision to implement stringent new economic sanctions targeting the Central Bank of Iran, which followed the release of the IAEA’s latest safeguards report. The week prior to the attack, Iran’s parliament passed a resolution significantly downgrading diplomatic ties with Britain and ordered the expulsion of the British ambassador. Iranian Supreme Leader Ali Khamenei and other senior regime officials railed against Britain in public speeches.

The subsequent fallout from the British Embassy marked a new low in diplomatic relations between Iran and Britain as well as between Iran and the broader European Union. Britain closed its embassy in Tehran, recalled all of its diplomats, and accused the Iranian regime of direct involvement in the attack. Britain also ordered the expulsion of all Iranian diplomats from London. Italy, France, Germany, and the Netherlands recalled their ambassadors from Iran for consultations. The United Nations, the United States, and the European Union all issued condemnations of the incident.


European efforts to coordinate sanctions

Following a meeting of European foreign ministers in Brussels, the EU approved sanctions on December 1, blacklisting a wide array of Iranian individuals, groups, and businesses. During the meeting France was actively pushing other EU member states to approve new measures embargoing Iranian oil and freezing the assets of Iran’s central bank. However, the representatives failed to reach an agreement on this front, as Greece, a major importer of Iranian oil, lodged concerns over the economic impact of such a move.

Although French officials indicated they would continue to push for an EU-wide embargo of Iranian oil, reports indicate EU officials were wary of implementing such measures. A European embargo of Iranian oil could potentially deliver significant economic harm to an already fragile European Union, as it would impact some of the Union’s weakest economies, such as Italy, Spain, and Greece, which depend heavily on Iranian oil. Also, despite being intended to cut Iranian profits from oil sales, which deliver around half of the regime’s budget revenue, energy analysts and traders indicate an embargo could increase oil prices and thereby compensate Iran for any lost purchases. Discussions on coordinating an EU oil embargo on Iran continued during a private meeting hosted by the Italian Foreign Ministry on December 20 in Rome. Representatives from the European Union, and also from the United States and other countries, agreed to continue exploring ways to further increase pressure on Iran.


New U.S. sanctions package targets Iran’s Central Bank and oil sector

Despite stiff objections from the Obama administration, the U.S. Senate passed by 100-0 a package of severe economic sanctions targeting the Central Bank of Iran and the country’s oil sector. The measure, put forth by Senators Mark Kirk (Republican -Illinois) and Robert Menendez (Democrat-New Jersey), is an amendment to the FY 2012 Defense Authorization bill. The new, stringent sanctions would block any foreign financial institutions that conduct transactions with the Central Bank of Iran. Furthermore, the sanctions target foreign central banks involved with Iran in the sale or purchase of petroleum or petroleum products.

The measure allows the U.S. President to waive implementation of the sanctions if the President feels it jeopardizes U.S. national security. It also includes a waiting period for the sanctions on petroleum transactions, which would only be implemented if in that time the President determines that the affected country has not significantly reduced its purchases of Iranian oil and is able to locate adequate sources of alternative supply.

Administration officials urged lawmakers to remove the provision targeting foreign banks engaged in oil transactions with Iran and also to extend the grace period of implementation. The administration is concerned that, by alienating Asian and European nations that do business with the Central Bank of Iran, such measures could undermine and damage the international coalition arranged to isolate Iran. Under Secretary of the Treasury for Terrorism and Financial Intelligence, David Cohen, said the new penalty “risks fracturing the international coalition that has been built up over the last several years to bring pressure to bear on Iran, especially today in the aftermath of what has occurred in Tehran over the last several days, in the aftermath of the IAEA report, and in the growing sense of urgency internationally with respect to Iran’s nuclear program.”

During a speech at the Saban Center in Washington, DC on December 2, U.S. Defense Secretary Leon Panetta iterated his support for using sanctions against Iran to slow down its nuclear program and again cautioned against military action, saying that it would set back Iran’s nuclear program by two years at the most.


Massive explosion destroys Iranian missile testing center

On November 12, a massive explosion at an Iranian military compound killed 17 people and destroyed much of the facility. The base, located in the town of Bid Kaneh near Tehran, was a central testing site for Iran’s missile forces. The casualties from the blast included Gen. Hassan Tehrani Moghaddam, the head of Iran’s missile program. Conflicting reports about the cause of the explosion have emerged; with some Iranian reports suggesting sabotage and others indicating an accident took place. Regardless of its cause, many outside observers have asserted that the explosion represents a significant setback to Iran’s missile program, given the near total destruction of the base as well as the deaths of Gen. Maghaddam and other missile experts stationed there.  Reports by analysts and statements by government officials indicate the base was a major testing site for advanced solid-fuel missiles.


Iran’s military plans drills to simulate closing the strategic Strait of Hormuz

Parviz Sorouri, a member of Iran’s parliamentary national security and foreign policy committee, indicated that his country’s military was planning drills to simulate closing down the Strait of Hormuz in the Persian Gulf. In remarks quoted by the ISNA news agency, Sorouri stated: “If the world wants to make the region insecure, we will make the world insecure.” Echoing Mr. Sorouri’s statement, a December 13 editorial in the conservative Iranian daily “Kayhan”, known to express the sentiments of Supreme Leader Ali Khamenei, asked, “Why has the Islamic Republic of Iran not used its unchallengeable right till now, when there is a conspiracy of imposing sanctions against our country’s oil?”

Following these remarks, oil prices rose sharply amidst fears that Iran could follow through on this threat. The Strait of Hormuz is one of the world’s key oil transit “choke points”, connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. Approximately one-third of total seaborne oil passes through the strait.

When reached for comment by Iran’s Fars News Agency, a spokesman for Iran’s Foreign Ministry stated that the closure of the Strait of Hormuz was not on Iran’s “agenda (at present)” but he warned that “if threats against Iran come to trample upon the rights of our nation while others use the strait for exporting their oil, then Iran will be entitled to the right to close the Strait of Hormuz.” Iran has repeatedly warned in the past that in the event of a conflict it will seek to blockade the strait.

Meanwhile, King Abdullah called on other members of the Gulf Cooperation Council (GCC) to join Saudi Arabia in forming a “single entity” to improve coordination of their approach to Iran. Other countries in the GCC include Bahrain, Kuwait, Oman, Qatar, and the U.A.E. Members were to study the proposal and return with a decision in March.


U.S. surveillance drone captured in Iran

In early December an advanced American unmanned aerial vehicle (UAV) went down in Iran 140 miles from the eastern border with Afghanistan. Iran’s military claimed it had electronically intercepted and downed the aircraft, while American officials asserted the drone crashed due to a loss of communication and malfunction. The circumstances surrounding the crash of the drone remain unclear. The drone, a sophisticated RQ-170 Sentinel stealth model, is used for high-altitude reconnaissance and surveillance missions. The United States has confirmed that the aircraft had been conducting sensitive intelligence-gathering operations monitoring Iranian nuclear sites.

After having been captured by Iranian armed forces, Iran’s Press TV broadcast footage of two officers of Iran’s Revolutionary Guard examining what they claimed to be the Sentinel drone. While Pentagon spokesmen would neither confirm nor deny that the aircraft in the video was indeed the drone that had been lost, they indicated U.S. officials were busy examining the footage closely. Aviation experts are divided in their opinions over whether or not the drone shown on Iranian TV is the real thing. Following the televised display of the purported drone, Iran issued a formal complaint to the U.N. Security Council and lodged a diplomatic protest with the Swiss ambassador to Tehran, who handles American interests in Iran. Iran refused U.S. requests to return the drone.

Iranian state TV reported that experts are busy extracting and recovering data from the drone’s database. In addition, senior lawmaker Parviz Sorouri, a member of the Iranian parliament’s national security and foreign policy committee, claimed that in the future Iran will be able to mass-produce replicas of the drone through reverse-engineering.


Highlights from Brookings Institution event on Iran

An event at the Brookings Institution on November 22 discussed “Iran and international pressure: an assessment of multilateral efforts to impede Iran’s nuclear program.” Russian expert John Parker (Institute for National Strategic Studies at the National Defense University) said there was “genuine annoyance” in Moscow over the nature of the November 8 IAEA report which was seen as undermining a step-by-step approach favored by Russia. Some Russian experts believe it will take “more than several years” for Iran to become nuclear-capable, with a workable warhead on a missile, he said. Russia is wary of measures that would cause Iran to bolt from the IAEA and abandon the Nuclear Non Proliferation Treaty. Parker also said that the return to the presidency of Vladimir Putin was unlikely to change Russia’s policy regarding Iran.

China expert Yun Sun noted the strong trade links binding China to Iran, its third largest source of oil. China agrees with the goal of constraining Iran’s nuclear program but disagrees on the approach she said, favoring dialogue over sanctions. Chinese experts say the likelihood of military action is rather low because of the U.S. domestic focus, and believe that Israel would not launch a preemptive strike without U.S. approval.

The Brookings session concluded with a keynote speech by Tom Donilon, U.S. National Security Adviser, who contrasted the success of the Obama administration’s strategy in isolating Iran with that of George W. Bush’s. (To view the video or read the transcript of the event, see this page on the Brookings Institution’s website.)


With contributions from Brett DuBois, Anne Penketh and Chris Lindborg, BASIC


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