Order Code RS21592
Updated May 18, 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. Also since 2003, Iran has been negotiating with Germany, France,
and the UK (EU-3) for a wide range of assistance in exchange for a halt to such
activities. 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. Although the EU-3 are seeking a permanent suspension, Iran insists its
suspension is temporary. 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 Pakistani scientist
A.Q. Khan’s 1987 offer of a centrifuge enrichment “starter kit.”7
Inspections through June 2003 revealed various reporting failures by Iran (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 (a step required
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, Nov./Dec. 2004, vol. 60, no. 6.
6 “Iran Was Offered Nuclear Parts,” Washington Post, Feb. 27, 2005.
7 Ibid.

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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 nuclear weapons development.9 Iran
did experiment, converting some uranium into metal and using other uranium in isotope
production, purification and conversion processes, some of which 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) and later, admitted that
it used for those experiments some safeguarded material that had been declared lost in
other processes (a safeguards violation). In February 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 uranium 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 suspended 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
transparency. 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 be 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 high enrichment at different locations: 36%
enrichment on domestically manufactured components; 54% on imported components;
and 70% at the Kalaye Electric Company workshop. Iran had admitted just to 1.2%
domestic enrichment. In October 2003, Iranian officials admitted they tested centrifuges
at the Kalaye Electric Company using UF6 between 1998 and 2002. The IAEA did not
rule out the possibility that Iran’s own enrichment activities could be the source of the
HEU in samples.
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
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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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). Press reports about Iran’s AVLIS and MLIS
programs began appearing in 1998.13 At that time, it was anticipated that Iran would sign
the Additional Protocol, providing more information about its nuclear fuel cycle, but this
did not occur until 2003 (and even then, the additional protocol is not yet ratified).
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,
then told the Agency that the heavy water would be used as a coolant and moderator for
a planned IR-40 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, which the Agency asked Iran to clarify, given
reports of Iranian efforts to import hot cell equipment. Construction of the heavy water
reactor has continued into 2005, despite the Board’s call for a halt in 2004. The
foundation of the reactor has been poured, and the heavy water production plant may soon
produce heavy water.14
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, according to many
observers, is not ideal for nuclear weapons purposes.
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 informs the Board of
Governors. The Board informs all IAEA member states, the UN Security Council, and
the General Assembly.15 Reportedly, the EU-3 agreed with the United States to call for
UN Security Council action if their negotiations with Iran fail.16
13 “Iran Said To Be Stepping Up Effort to Support Laser Enrichment Program, Nuclear Fuel, Oct.
5, 1998.
14 For analysis, see [http://www.isis-online.org/publications/iran/arakconstruction.html].
15 For text of the Statute, see [http://www.iaea.org/About/statute_text.html#A1.12].
16 “Europeans Agree To Meeting With Iran On Nuclear Program,” Washington Post, May 17,
2005.

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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, and
set an October 31 compliance deadline. EU foreign ministers (the EU-3: Germany,
France, UK) attempted to help resolve the issue, traveling to Tehran and agreeing that
once international concerns were fully resolved, Iran “could expect easier access to
modern technology and supplies in a range of areas.”17 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.18 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.”19
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 failed to mention 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, IAEA
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 continued the production of UF4, as well as
quality control testing on centrifuge components. In March, 2005, Iran proposed running
its pilot-scale enrichment facility to EU negotiators, which they rejected. In April 2005,
Iran announced it would start-up its UF6 production (uranium conversion) unless
17 “Statement by the Iranian Government and visiting EU Foreign Ministers,” Reuters, Oct. 21,
2003.
18 GOV/2004/11, February DG’s report on Iran, p. 10.
19 Ibid.

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negotiations with the EU progressed. The next, perhaps final negotiations are scheduled
for the last week in May 2005.
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.”20 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...all options at its disposal, in accordance with the IAEA
Statute and Iran’s Safeguards Agreement.” In June 2004 the Board 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. In the interim, negotiations by the EU seem to be failing to obtain
Iran’ agreement on a key objective — a permanent halt to uranium enrichment activities.
Iran repeatedly has asserted its moratorium is temporary and that it has a right to pursue
peaceful uses of nuclear energy.
Significance for a Nuclear Weapons Program

Nuclear safeguards are fundamentally accounting procedures to detect if material is
diverted for weapons. Failures to report material can be significant or trivial, depending
on the circumstances. Discrepancies involving large quantities of weapons-grade
plutonium or highly enriched uranium are certainly more significant for a nuclear
weapons program than those involving smaller quantities or non-weapons grade materials
like natural uranium. Nonetheless, many hold that discrepancies often establish a pattern
of deception that is significant.
By many accounts, Iran is years away from producing weapons-grade plutonium or
highly enriched uranium. That said, Iran has pursued at least three different methods for
uranium enrichment and has experimented with separating plutonium. Uranium
conversion activities contribute to what looks like a steady accrual of expertise in
weapons-relevant areas. The conversion of 37 tons of raw uranium into UF4 before last
November’s suspension also raises questions. Most important, if Iran received the same
nuclear weapon design that Libya received from A.Q. Khan, the remaining technical
hurdle would be fissile material production — one reason why the EU’s efforts to
persuade Iran to give up uranium enrichment and plutonium reprocessing are so crucial.
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.21 Although some NPT members may feel that enhanced
inspections under the Additional Protocol will be enough to verify Iran’s enrichment,
others feel that access to enrichment and reprocessing technologies must be restricted.
This debate likely will be played out in the NPT Review Conference taking place in New
York throughout May 2005 and beyond.
20 Statement of Ambassador Kenneth Brill at September 2003 IAEA Board of Governors
Meeting.
21 “Iran Offers Europe ‘Guarantees’ On Its Nuclear Program,” New York Times, Mar. 17, 2005.

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