Order Code RS21592
Updated March 17, 2005
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
Since 2003, International Atomic Energy Agency (IAEA) inspections of Iran’s
nuclear program have revealed significant undeclared activities with potential
application for nuclear weapons, including uranium enrichment facilities and plutonium
separation efforts. Pressed to give up these activities, Iran has declared twice
(November 2003 and November 2004) that it would temporarily halt such activities in
exchange for technical cooperation with Germany, France, and the UK. Yet, most
evidence indicates that Iran has never completely suspended its enrichment activities,
raising the question of whether Iran is buying time to build nuclear weapons or
effectively using its program as a bargaining chip for wider economic gain. Ever on the
brink of being declared in violation of the Nonproliferation Treaty (NPT), Iran has
allowed IAEA inspectors access only when pressed. This report, which is updated as
needed, analyzes the significance of the IAEA’s findings for a possible Iranian nuclear
weapons program.
Background
Iran has had a nuclear program for close to 50 years, beginning with a research
reactor purchased from the United States in 1959. The Shah’s plan to build 23 nuclear
power reactors by the 1990s was regarded as grandiose, but not necessarily viewed as a
“back door” to a nuclear weapons program, possibly because Iran did not then seek the
technologies to enrich or reprocess its own fuel.1 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 seven nuclear power plants (1000 MW each) by 2025
1 However, there were reports that Iran’s AEOI sought laser enrichment technology in the United
States in the late 1970s, and 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.
Congressional Research Service ˜ The Library of Congress

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— are still ambitious, particularly for a state with considerable oil and gas reserves.2 Iran
argues, as it did in the 1970s, that nuclear power is necessary for rising domestic energy
consumption, while oil and gas are needed to generate foreign currency.
Iran has asserted repeatedly that its nuclear program is strictly peaceful, but few
observers believe that such an ambitious program is necessary or economic for Iran. In
May 2003, Iranian officials stated 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.”3 On August 6, 2003, President Khatami stated that
Iran “cannot use such weapons based on our Islamic and moral teachings.”4
The United States has long been concerned about Iran’s intentions to develop nuclear
weapons. U.S. attempts to impose an international embargo on nuclear cooperation with
Iran since the 1980s were mostly successful, but an overwhelming focus on restricting
Russian cooperation on the Bushehr nuclear power reactor project may have caused the
United States to overlook help that Iran apparently was acquiring from Pakistan in
uranium enrichment technologies, according to some observers.
What Inspections Revealed
In 2002 the National Council of Resistance of Iran (NCR) helped expose Iran’s
undeclared nuclear activities by providing information about nuclear sites at Natanz
(uranium enrichment) and Arak (heavy water production). In two years of intensive
inspections, the IAEA has revealed significant undeclared Iranian efforts in uranium
enrichment (including centrifuge, atomic vapor laser isotope separation and molecular
laser isotope separation techniques), as well as significant foreign suppliers of technology,
undeclared separation of plutonium, and undeclared imported material. Iranian officials
have delayed inspections, changed explanations for discrepancies, cleaned up facilities
and in one case, Lavizan-Shian, razed a site.5 According to IAEA Director General
Mohamed ElBaradei, “Iran tried to cover up many of their activities, and they learned the
hard way.”6 Only in January 2005 did Iranian officials share a copy of A.Q. Khan’s 1987
offer of a centrifuge enrichment “starter kit.”7
Inspections through June 2003 revealed various reporting failures on Iran’s part
(including failure to report uranium imported from China in 1991) and raised serious
questions, particularly about how Iran was able to advance to a production stage of
centrifuge enrichment without having introduced nuclear material into the process
2 See statement by Iran’s Foreign Minister Kamal Kharrazi at [http://www.pbs.org/newshour/bb/
middle_east/july-dec04/iran_9-27.html].
3 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, Apr. 29, 2003.
4 “Iran Denies It’s Building Nuclear Bomb,” Associated Press, Aug. 7, 2003.
5 David Albright and Corey Hinderstein, “Iran: Countdown to showdown,” Bulletin of Atomic
Scientists, November/December 2004, vol. 60, no. 6.
6 “Iran Was Offered Nuclear Parts,” Washington Post, Feb. 27, 2005.
7 Ibid.

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(required to be declared to the IAEA).8 Overall, undeclared uranium raises a red flag
since it could allow Iran to experiment with processes relevant to a nuclear weapons
program.9 In fact, Iran converted some uranium into metal and used other uranium in
various processing experiments, including isotope production and purification and
conversion processes. Some of these processes are relevant to plutonium reprocessing
(e.g., dissolution in nitric acid and separation in a pulse column).10 In mid-2003, Iran
admitted it conducted “bench scale” uranium conversion experiments a decade ago
(required to be reported to the IAEA). Later, Iran admitted that it used, for those
experiments, some safeguarded material that had been declared lost in other processes (a
safeguards violation). After inspections in January 2004, the IAEA concluded that,
“given the size and capacity of the equipment used, the possibility cannot be excluded that
larger quantities of nuclear material could have been involved than those declared.”11 The
IAEA has deemed credible Iran’s explanation that it needed to convert uranium into metal
for its laser enrichment program (revealed only in October 2003).
Iran’s two centrifuge enrichment plants at Natanz have generated significant
concern.12 The pilot fuel enrichment plant (planned to have 1000 centrifuges) started up
in June 2003 but shut down again after Iran decided to halt enrichment activities in
December 2003. Construction on the commercial-scale plant (planned to have 50,000
centrifuges) has also been suspended. The plants are built partly underground, raising
concerns about the transparency of Iran’s program. For safeguards purposes, a key
question has been whether Iran had introduced uranium gas (process gas, or UF6) into its
pilot-scale plant because the slight enrichment of uranium that would have resulted would
have been a safeguards violation if undeclared. Iranian officials first told the IAEA that
it was too difficult to use process gas and that highly enriched uranium (HEU) particles
found at the Natanz pilot plant in 2003 came from contamination from foreign-origin
centrifuge assemblies. Analyses of the samples showed different levels of enrichment at
different locations, from 36% enrichment on domestically manufactured components to
54% enrichment on imported components, and 70% enrichment at the Kalaye Electric
Company workshop. Iran had admitted just to 1.2% domestic enrichment. In addition,
other sampling revealed UF6 contamination at the Tehran research reactor. In October
2003, Iranian officials admitted they tested centrifuges at the Kalaye Electric Company
using UF6 between 1998 and 2002. The IAEA has not ruled out the possibility that Iran’s
own enrichment activities could be the source of the HEU in samples.
8 Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran, Report by
the Director General, GOV/2003/40, June 6, 2003.
9 Iran imported, but did not declare, 1800 kilograms of natural uranium in different forms:
uranium hexafluoride (UF6), which is used in centrifuge enrichment; uranium tetrafluoride
(UF4); and uranium oxide (U02).
10 Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran, Report by
the Director General, GOV/2003/75, Nov. 10, 2003.
11 Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran, Report by
the Director General, GOV/2004/11, Feb. 24, 2004.
12 See website [http://www.isis-online.org/images/main_satellite_index.html] for satellite photos
of various Iranian sites.

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Iran has been particularly slow in revealing two other developments related to
enrichment — the existence of more sophisticated centrifuge designs (using maraging
steel or composite rotors) and the laser enrichment program. Although Iran provided
significant detail about the P-1 centrifuges in its October 2003 declaration, it did not
admit until asked by the IAEA in January 2004 that it possessed more advanced centrifuge
designs (P-2). In light of Libya’s admission that Pakistan supplied it with P-2 centrifuge
designs, Iran’s possession of P-2 designs is not surprising. Iran also did not admit until
October 2003 that it also pursued a laser enrichment program beginning in the 1970s,
focusing on two techniques — atomic vapor laser isotope separation (AVLIS) and
molecular laser isotope separation (MLIS). Although the IAEA has concluded that Iran’s
declaration of very small enrichment levels and quantities appears consistent with
available information, it will continue this issue.
The heavy water program also has raised questions about Iran’s intentions.
Reportedly, Iran first told the IAEA that it planned to produce heavy water for export, but
then told the Agency in May that the heavy water would be used as a coolant and
moderator for a planned research reactor for research and development, radioisotope
production, and training. Subsequently, Iran’s design information for the facility omitted
necessary hot cell equipment for producing radioisotopes. The Agency has asked Iran to
clarify this issue, given reports of efforts by Iran to import hot cell equipment. Despite
the Board’s call for Iran to halt construction of the heavy water reactor, apparently
construction continues.
In October 2003 Iran revealed that it had conducted plutonium reprocessing
experiments in a hot cell at the Tehran Nuclear Research Center and estimated the amount
separated as 200 micrograms. The IAEA calculated that more plutonium would have
been produced (about 100g) and Iran admitted in May 2004 that it understated the
amount. Inspections also revealed that Iran experimented in irradiating bismuth, which
can be used to produce Polonium-210 for civilian purposes (for nuclear batteries) or in
conjunction with beryllium to create a neutron initiator for a nuclear weapon. These
experiments were conducted between 1989 and 1993. Polonium, it should be noted, is
not ideal for nuclear weapons purposes, according to many observers.
IAEA Board of Governors Actions
The IAEA has resisted pressure to call Iran in violation of its NPT obligations.
According to the IAEA Statute, if inspectors find a state in noncompliance with its
safeguards agreement, they report that to the Director General who in turn informs the
Board. The Board then informs all members, the UN Security Council, and the General
Assembly.13
In September 2003 the Board called on Iran to suspend all further uranium
enrichment and reprocessing activities, resolve all outstanding issues, be transparent and
cooperative with the IAEA, and sign, ratify and implement the Additional Protocol. In
advance of the October 31, 2003 compliance deadline set by the Board, EU foreign
ministers (the so-called EU-3: Germany, France, UK) opened negotiations with Iran.
Initially, the EU ministers agreed that once international concerns were fully resolved,
13 For text of the Statute, see [http://www.iaea.org/About/statute_text.html#A1.12].

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Iran “could expect easier access to modern technology and supplies in a range of areas.”14
Iran said it would sign the NPT Additional Protocol and suspend all uranium enrichment
and “processing activities.” Specifically, Iran told the Agency that it would suspend:
operation and/or testing of centrifuges at the pilot plant, further introduction of any
nuclear material into any centrifuges, and installation of new centrifuges at the pilot plant
and at Natanz. Iran also said it would withdraw nuclear material from any centrifuge
facility to the extent practicable.15 During the period of suspension, Iran said it did not
“intend to make new contracts for the manufacture of centrifuge machines and their
components;” that the Agency could supervise the storage of machines assembled during
that period; that it had dismantled its laser enrichment projects and that it was not
constructing or operating any plutonium separation facility. However, Iran reportedly
continued to assemble centrifuges, and many observers felt Iran had not lived up to its
part of the bargain. On February 24, 2004, Iran stated it would “suspend the assembly and
testing of centrifuges and suspend the domestic manufacture of centrifuge components,
including those related to existing contracts.”16
Although the Director General’s March 2004 report to the Board noted that Iran had
been actively cooperating with the Agency, including providing access to workshops at
military sites, Iran omitted any mention of advanced centrifuge designs (P-2) in its
October 2003 declaration and the Agency was not able to resolve the major outstanding
issue of LEU and HEU contamination at Kalaye and Natanz. Between February and June
2004, the IAEA attempted to verify Iran’s pledges to suspend activities. Its June 2004
report (GOV/2004/34) assessed that Iran had delayed inspections at the Natanz pilot scale
enrichment plant; Iran had not suspended UF6 production or domestic production of
centrifuge components; and Iran had not previously declared the procurement of 4000
magnets (and orders for more) for P-2 centrifuges.
The DG’s November 2004 report ( GOV/2004/83) noted that Iranian cooperation had
improved since October 2003. At the March 2005 Board meeting, however, Deputy
Director for Safeguards Goldschmidt gave a detailed list of Iranian actions from
November 2004 to March 2005. Some observers believe the lack of a formal report by
ElBaradei was a tactical move to allow EU-Iranian negotiations to proceed; others believe
that it was a further indication of the Board’s inability to call Iran in noncompliance.
Despite the suspension agreement, Iran continue the production of UF4, as well as
quality control testing on centrifuge components.
Since September 2003, U.S. officials have maintained that “the facts already
established would fully justify an immediate finding of noncompliance by Iran with its
safeguards obligations.”17 In November 2003 (GOV/2003/81), the Board resolved that
“should any further serious Iranian failures come to light, the Board of Governors would
meet immediately to consider, in light of the circumstances and of advice from the
14 “Statement by the Iranian Government and visiting EU Foreign Ministers,” Reuters, Oct. 21,
2003.
15 GOV/2004/11, February DG’s report on Iran, p. 10.
16 Ibid.
17 Statement of Ambassador Kenneth Brill at September 2003 IAEA Board of Governors
Meeting.

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Director General, all options at its disposal, in accordance with the IAEA Statute and
Iran’s Safeguards Agreement.” In June 2004 the Board of Governors noted
(GOV/2004/49) with concern continuing discrepancies about HEU contamination and the
nature of the P-2 centrifuge program and called upon Iran to halt UF6 production and
planned construction of the research reactor designed to use heavy water, but did not call
these serious Iranian failures. The resolution noted the Board would remain seized of the
matter. The Board’s November 2004 resolution (GOV/2004/90) was very mild, and the
March 2005 Board did not issue a resolution.
Significance for a Nuclear Weapons Program

Nuclear safeguards are fundamentally accounting procedures to ensure that material
is not diverted to weapons use. Some failures to report material can be insignificant,
while others are potentially important. Iran claims that “The failures...are minor, and are
only on the order of the gram or milligram.”18 A discrepancy in accounting for large
quantities of weapons-grade plutonium or highly enriched uranium would certainly be
more significant for a nuclear weapons program than a discrepancy for smaller quantities
or for other materials like natural uranium. However, some argue that a pattern of
deception is significant and safeguards should be evolving from a strict accounting
approach (seeing the “trees”) to evaluating the program in its entirety (the “forest”).
Iran has pursued at least three different methods for uranium enrichment and has
experimented with separating plutonium. Uranium conversion activities also contribute
to what looks like a steady accrual of expertise in weapons-relevant areas. Iran, according
to many observers, does not have nuclear weapons and is years away from producing
quantities of fissile material (highly enriched uranium or plutonium) that it could use in
nuclear weapons. There is some question about whether Iran might have received the
same nuclear weapon design that Libya received from A.Q. Khan. If so, the predominant
technical hurdle for Iran to clear is the production of sufficient fissile material.
At this juncture, the crucial point is whether or not Iran can be persuaded to give up
uranium enrichment and plutonium reprocessing capabilities that could be used to make
fissile material for nuclear weapons in exchange for wide-ranging assistance from the
European Union and the United States.19 President Khatami stated in March 2005 that
ending Iran’s uranium enrichment program is “completely unacceptable,” but that Iran
would provide “objective guarantees” of the peaceful uses of enrichment.20 Iran may be
a test case for whether NPT members feel that enhanced inspections under the Additional
Protocol will be enough to verify the absence of undeclared activities. Thus far, it appears
that more rigorous IAEA inspections with wider access have provided a wealth of data
about Iran’s efforts. Nonetheless, the United States and its allies, meanwhile, are
exploring ways to limit access to enrichment and reprocessing technology globally,
precisely because of the threat Iran potentially poses.
18 “After Report, Iran Acknowledges ‘Minor’ Breach of Nuclear Pact,” Washington Post, Nov.
12, 2003.
19 See CRS Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman
20 “Iran Offers Europe ‘Guarantees’ On Its Nuclear Program,” New York Times, Mar. 17, 2005.

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