Order Code RS21592
August 15, 2003
CRS Report for Congress
Received through the CRS Web
Iran’s Nuclear Program:
Recent Developments
Sharon Squassoni
Specialist in National Defense
Foreign Affairs, Defense, and Trade Division
Summary
Iran may be poised to clear one of the biggest technical hurdles in a nuclear
weapons program – production of fissile material (enriched uranium in this case). In
June, International Atomic Energy Agency (IAEA) Director General ElBaradei issued
a report stating that Iran did not meet all of its obligations under its nuclear safeguards
agreement pursuant to the Nuclear Nonproliferation Treaty (NPT), but stopped short of
reporting non-compliance. This report, which will be updated as needed, analyzes the
findings of the IAEA report and their significance for a possible nuclear weapons
program. See also CRS Report RL30551, Iran: Arms and Weapons of Mass Destruction
Suppliers.
Background
Iran has had a nuclear program for close to fifty years, beginning with a research
reactor purchased from the United States in 1959 and branching out to nuclear power in
the 1970s. U.S. concerns about Iran’s intentions to develop nuclear weapons are long-
standing, but have escalated in the last two years. First, the program has clearly
advanced.1 Much concern in the last decade focused on the provision of expertise via the
Bushehr nuclear reactor project with Russia and possible cooperation in laser uranium
enrichment technology. Despite U.S. attempts to impose an international embargo on
nuclear cooperation with Iran since the 1980s, Iran may now be poised to clear the biggest
technical hurdle in developing nuclear weapons – the production of fissile material
(enriched uranium or plutonium). Despite Iran’s assertions that its nuclear program is
strictly peaceful, few observers believe that enriching uranium is necessary or economic
for a civilian nuclear fuel cycle like Iran’s. A key question is whether Iran has crossed the
threshold of enrichment. Despite media reports that samples taken at the Natanz
1 Leonard S. Spector, “Iran’s Secret Quest for the Bomb.” YaleGlobal, May 16, 2003.
Congressional Research Service ˜ The Library of Congress

---

CRS-2
centrifuge facility show evidence of enrichment, the International Atomic Energy Agency
(IAEA) has not yet fully analyzed the samples.2
A second reason that concern about Iran’s program has grown is that the Bush
administration’s emphasis on three “axis of evil” states – Iraq, Iran, and North Korea –
has refocused attention on weapons of mass destruction (WMD) programs. Some
observers have argued that the WMD capabilities of Iran and North Korea were more
worrisome than those of Iraq, particularly in the nuclear area. It is fairly evident that
Iran’s uranium centrifuge enrichment capability – a key technology that is difficult to
detect and quite efficient for producing highly enriched uranium for simple gun-type
assembly nuclear weapons – is more advanced than Iraq’s and, possibly, North Korea’s.3
Third, the National Council of Resistance of Iran (NCR) has been more active in
exposing nuclear facilities in Iran.4 The NCR, which has been on the State Department’s
list of foreign terrorist organizations since 1997, held three press conferences in the last
year to reveal alleged covert nuclear weapons-related sites. On August 14, 2002, the
NCR unveiled satellite photographs of nuclear sites at Natanz and Arak. On May 27,
2003, the NCR revealed sites that might be used for uranium enrichment to complement
Natanz: the Lashkar-Abad site near Hashtgerd and a site near Ramandeh village. On July
8, 2003, the NCR revealed two more sites, including the Kolahdouz Complex (related to
centrifuge enrichment) and Ardekan Nuclear Fuel Site.
The NCR and other exiled groups have a mixed record of providing accurate
information, but revelations have been useful in giving the IAEA leverage to investigate
claims.5 Following the August 2002 NCR press conference, Iran’s Vice President Reza
Aghazadeh informed the IAEA about its activities in the nuclear fuel cycle; according to
the IAEA, DG ElBaradei asked Aghazadeh to confirm media reports of the facilities at
Natanz and Arak at the September General Conference.6 IAEA inspectors have made
multiple visits to Iranian facilities in 2003.
2 See “Iran Samples Show Enriched Uranium - Diplomats,”Reuters, July 18, 2003, and “Iran
probe time line lengthens as IAEA mulls Natanz sample data,” Nucleonics Week, July 31, 2003.
The issue is not quantity of uranium enriched, but whether any enrichment may have occurred.
3 In November 2002, the CIA gave Congressional staffers a white paper on North Korea’s
enrichment capabilities, which said North Korea had recently begun constructing a centrifuge
facility and began seeking in 2001 large quantities of centrifuge-related equipment. Iran,
according to the IAEA’s report, is constructing a commercial scale plant (built for 50,000
centrifuges) and has an operational pilot plant. See CRS Report RL31900, Weapons of Mass
Destruction: Trade Between North Korea and Pakistan.
4 The NCR, according to its web site, was established in 1981 and is based in Paris. It has been
described as the political arm or umbrella for other Iranian resistance groups, including the
People’s Mujahedin of Iran and the Muhahedin-e Khalq organization (MEK or MKO).
5 In February 1992, the People’s Mujahedin of Iran revealed two “secret Iranian” nuclear sites
– Darkhouin and Gurgan – which had been sites for terminated French and Russian power reactor
projects. See Mark Hibbs, “IAEA Explores Iran’s Intentions, Minus Evidence of Weapons
Drive,” Nucleonics Week, February 13, 1992.
6 “Iran’s Nuclear Policy (Peaceful, transparent, Independent),” H.E. Mr. Reza Aghazadeh, May
6, 2003.

---

CRS-3
What Inspections Revealed
The IAEA released a somewhat atypical report at the June 2003 Board of Governors
meeting: Implementation of the NPT Safeguards Agreement in the Islamic Republic of
Iran, Report by the Director General, GOV/2003/40.7 While the DG often reports
generally on the status of safeguards agreements, and reports in detail for countries like
Iraq or North Korea which are in noncompliance, the 8-page report revealed significant
details of Iran’s program that might in the past have been considered to be safeguards-
confidential information. (Iran’s rebuttal to the Board of Governors on June 18, 2003
pointed out the unusual nature of this). However, DG ElBaradei stated that issues needed
to be resolved as soon as possible, that Iran should cooperate and demonstrate full
transparency, and that safeguards need to be more robustly implemented, even failures
of reporting that previously might have been overlooked.8
The IAEA report identified three major areas of concern for implementing nuclear
safeguards: Iran’s failure to report uranium imported from China in 1991; questions
about the centrifuge enrichment program; and questions about the heavy water program.
Although the kinds and amounts of uranium imported without any declarations are
insignificant for use in a nuclear weapon, Iran was technically incorrect in assuming that
because the quantities did not exceed one effective kilogram that it did not have to place
it under safeguards.9 The real problem is that such material was used to experiment with
processes that are relevant for nuclear weapons development.
The 1800 kilograms of natural uranium consisted of: uranium hexafluoride (UF6),
which is used in centrifuge enrichment; uranium tetrafluoride (UF4); and uranium oxide
(U02). The containers of UF6 reportedly were lighter than declared, leading to a concern
that some of the UF6 was used to perform tests of the centrifuge equipment. Iran
converted the UF4 into uranium metal (see below), and used the UO2 in various
processing experiments, including isotope production and purification and conversion
processes. Some of these processes are also used in plutonium reprocessing (e.g.,
dissolution in nitric acid and separation in a pulse column). In short, the use of
undeclared material allowed Iran to experiment with processes that, had they been under
safeguards, would have come under serious scrutiny.
The most serious questions about the centrifuge enrichment program relate to
whether Iran would have proceeded with the production of centrifuge equipment and
construction of facilities, particularly the commercial-scale plant, without fully testing the
centrifuge equipment with UF6 process gas. Some observers believe that centrifuge
7 “Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran, Report by
the Director General, GOV/2003/40,” June 6, 2003 (released June 19, 2003).
8 See [www.iaea.org/worldatom/Press/Statements/2003/ebsp2003n016.shtml#technical] for the
text of ElBaradei’s intervention.
9 Natural uranium is a source material, not special fissionable material. It is not used in a nuclear
explosive because in its natural state it is not fissile. The IAEA acknowledges that large
quantities of source material have the potential to be significant for weapons if they are processed
(enriched) and therefore has developed the concept of “effective kilogram.” 1800 kg of natural
uranium is the equivalent of 0.18 effective kilogram.

---

CRS-4
assemblies can be tested adequately with other gases; others believe that the enormous
investment in equipment would require testing with nuclear material.
The heavy water program poses a large question mark about Iranian intentions. The
NCR indicated that Iran had a production plant for heavy water at Arak. Iran reportedly
told the IAEA initially that it planned to produce heavy water at Arak for export, but in
May 2003, it told the Agency it planned to build a research reactor for research and
development, radioisotope production, and training that would use heavy water as a
coolant and moderator. The heavy water production plant is not subject to safeguards.
As a result of the inspections, 5 additional facilities will be put under safeguards.
a fuel manufacturing plant at Esfahan and the IR-40 research reactor at Arak, both in the
planning stages; the two centrifuge enrichment plants at Natanz; and the Jabr Ibn Hayan
Multipurpose Laboratories (JHL). This last facility is not new, but previously had not
been under safeguards. However, since JHL had been used to convert UF4 into uranium
metal in 2000 and store the undeclared uranium imported from China, it is required to be
under safeguards. According to the June report, Iran was obligated to identify JHL by
providing design information as soon as possible before the nuclear material was
introduced into the facility and to negotiate with the Agency on how to verify holdings
at the facility (an agreement called a facility attachment).
The two enrichment plants detected by satellite imagery have drawn the most
attention.10 The pilot fuel enrichment plant began to operate in June (although not all
centrifuges have been installed), despite requests by the IAEA to delay operations, and
the commercial-scale plant is still under construction. The pilot facility eventually will
have about 1000 centrifuges installed. The commercial-scale plant is planned to have
50,000 centrifuges but is not scheduled to introduce nuclear material in the near future.
These plants are built partly underground, raising concerns about the transparency of
Iran’s program.
Significance for a nuclear weapons program
The IAEA did not report Iran as violating its safeguards agreement, which would
have required the DG to inform the Board and for the Board to inform the UN Security
Council and General Assembly. Rather, the June report stated that “Iran failed to meet
its obligations under its Safeguards Agreement with respect to reporting of nuclear
material, the subsequent processing and use of that material and the declaration of
facilities where the material was stored and processed.” Since nuclear safeguards rely on
accounting procedures, failures to report material can be significant, but some failures are
more significant than others. A discrepancy in accounting for weapons-grade plutonium
or highly enriched uranium would certainly have more significance for a nuclear weapons
program than a discrepancy for natural uranium. Nonetheless, some argue that a pattern
of deceptions is significant, and in part, a principle underlying strengthened safeguards
is the evolution from a strict accounting approach to be able to see the “forest” as well
as the “trees.”
10 See website, [www.isis-online.org] for satellite photos of the enrichment plant.

---

CRS-5
The IAEA posed several questions in its June 2003 report, which indicate some
areas of concern. First, the Agency would like more information on Iran’s centrifuge
enrichment program and also its laser enrichment program, which was acknowledged for
the first time this year. A detailed chronology and description of research and
development efforts could help the Agency verify whether it is plausible that Iran would
construct centrifuge plants without testing centrifuge assemblies with UF6. A related
question is the involvement of other facilities such as the Kalaye Electric Company in
undeclared enrichment. Many believe that Iran’s refusal to allow environmental sampling
at Kalaye masked potentially undeclared enrichment. If Iran did enrich small quantities
of nuclear material, such a violation of safeguards would be more significant than mere
reporting omissions. The ability to take environmental samples at Kalaye will be key to
establishing whether undeclared enrichment has taken place.
Additionally, the Agency questioned the uses of uranium metal in Iran’s nuclear
program, since Iran admitted to converting UF4 into metal at the JHL facility and the role
of heavy water in the fuel cycle. While none of Iran’s proposed reactors would use
uranium fuel in metal form, the production of radioisotopes for medical purposes, like
Molybdenum-99, can use highly enriched uranium metal fuel plates. It is possible to use
low-enriched uranium in these fuel plates, although some experts have claimed that it is
not as efficient. With respect to heavy water, a key concern is the potential for heavy
water reactors to produce weapons-grade plutonium, and as a byproduct, tritium, which
is a key ingredient in boosted fission weapons.11 Iran’s experiments at the JHL facility
indicate an interest in reprocessing technologies, but it is difficult to tell from this what
commitment Iran might make to plutonium production. A key feature of the Russian-
Iranian Bushehr project is Russia’s commitment to take back the spent fuel from Bushehr,
eliminating an excuse for Iran to reprocess. Iran has agreed to this requirement, although
it has not yet signed the required protocol.
Iran’s Response
In the 1970s, the Shah’s plan to build 23 nuclear power reactors may have been
regarded as grandiose, but was not necessarily viewed as a “back door” to a nuclear
weapons program, possibly because Iran did not seek the technologies to enrich its own
fuel or reprocess its own spent fuel.12 There were a few suspicions of a nuclear weapons
program, but these abated in the decade between the Iranian 1979 revolution and the end
of Iran-Iraq war, both of which brought a halt to nuclear activities. Iran’s current plans
– to construct nuclear power plants with a total capacity of 6000MW within two decades
– are still ambitious, and some question the need for nuclear power in a state with
considerable oil and gas reserves. It should be noted, however, that Iran is using the same
argument it used in the 1970s: that nuclear power is necessary in the context of rising
domestic energy consumption rates and a desire to preserve oil and gas to generate
foreign currency. Iran’s now publicly stated intention to explore fuel cycle, safety, and
waste management technology – particularly– has raised concerns.
11 Natural uranium produces more plutonium when irradiated than low- or high-enriched uranium.
12 Iran’s AEOI sought laser enrichment technology in the United States in the late 1970s, and the
former head of the AEOI stated that reprocessing-related experiments were conducted. In
addition, there were intelligence reports that the Shah had a secret group to work on nuclear
weapons. See Leonard S. Spector, Nuclear Ambitions (Colorado: Westview Press), 1990, p. 204.

---

CRS-6
Iranian officials call the speculations over the secrecy of Natanz and Arak “quite
unfounded and irrational;” that it is not obligated under its current safeguards agreement
to declare the heavy water production plant; and that it made no attempt to hide
construction (although it did argue similarly for the enrichment plant). In May 2003, the
Iranian officials told other NPT Prepcom delegates that “we consider the acquiring,
development and use of nuclear weapons inhuman, immoral, illegal and against our basic
principles. They have no place in Iran’s defense doctrine.”13 On August 6, President
Khatami stated that Iran “cannot use such weapons based on our Islamic and moral
teachings,” but that Iran would not give up nuclear technology for power generation.14
Next Steps
The IAEA in June 2003 called upon Iran to:
•
rectify all safeguards problems identified in the report and resolve open questions;
•
not introduce nuclear material into the Natanz enrichment plant;
•
sign the Additional Protocol without any conditions. 15
Since June, Iran has taken some steps to rectify safeguards problems, but it has introduced
nuclear material into the Natanz plant and appears to be negotiating with the IAEA on the
additional protocol. Iran’s signing the Additional Protocol (INFCIRC/540), which was
developed in response to the failure of nuclear safeguards in Iraq and is designed to
strengthen the IAEA’s ability to detect undeclared nuclear activities, will be a key step
towards greater transparency. In July, AEOI’s Mr. Aghazadeh said Iran was considering
signing the additional protocol.16 In August, IAEA experts met with Iranian officials to
discuss the additional protocol and a team of inspectors planned to conduct additional
verification activities, possibly including more environmental sampling.
The IAEA will issue another report at the September Board of Governors meeting.
The United States expects that “further information will point to only one conclusion: that
Iran is aggressively pursuing a nuclear weapons program.”17 A finding of noncompliance
may rest on more definitive results of environmental sampling which, by some accounts,
may not yet be ready. Barring the possibility of contaminated samples, if further analysis
shows evidence of indigenous enrichment, then Iran’s violations of its safeguards
agreement would appear to be more serious than technical reporting failures and could
begin a chain of events leading to UN Security Council resolutions.
13 Statement by H.E. Mr. G. Ali Khoshroo, Deputy Foreign Minister for Legal and International
Affairs, Second Session of the Prepcom for the 2005 NPT Review Conference, April 29, 2003.
14 “Iran Denies It’s Building Nuclear Bomb,” Associated Press, August 7, 2003.
15 See [www.iaea.org/worldatom/Press/P_release/2003/med-advise_072.shtml] for text.
16 “U.N.’s Nuclear Watchdog Presses Iran for More Cooperation,” Los Angeles Times, July 10,
2003
17 Statement of the U.S. at June 2003 IAEA Board of Governors Meeting; Agenda Item 6 (B).

---