Order Code RS21592
Updated August 2, 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
International Atomic Energy Agency (IAEA) inspections of Iran’s nuclear program
since 2003 have revealed significant undeclared activities with potential application for
nuclear weapons, including uranium enrichment facilities and plutonium separation
efforts. Ever on the brink of being declared in violation of the Nuclear Nonproliferation
Treaty (NPT), Iran has allowed IAEA inspectors access only when pressed. Iran agreed
to suspend its enrichment and reprocessing activities in exchange for promises of
assistance from Germany, France, and the UK (EU-3). Negotiations with the EU-3 are
ongoing, although on August 1, 2005, Iran told the IAEA of its plans to resume uranium
conversion, regardless of what the EU-3 offer. This report will be updated as needed.
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
— 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. Few observers
1 However, there were reports that Iran sought laser enrichment technology in the United States
in the late 1970s, and conducted reprocessing-related experiments. 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.
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].
Congressional Research Service ˜ The Library of Congress

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believe that such an ambitious program is necessary or economic for Iran, including the
United States.
Iran has asserted repeatedly that its nuclear program is strictly peaceful, stating in
May 2003 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 Iranian officials have also insisted on their right to develop peaceful
uses of nuclear technology. 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. Uranium enrichment can be
used for both peaceful (nuclear fuel) and military (nuclear weapons) uses. At the heart
of the debate are Iran’s intentions, which have been cast into doubt by revelations of
almost two decades of clandestine activities, and whether the international community can
adequately verify compliance at enrichment facilities or should further restrict access to
sensitive nuclear technologies.
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 three 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.4 According to IAEA Director General
Mohamed ElBaradei, “Iran tried to cover up many of their activities, and they learned the
hard way.”5 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.”6
Iran failed to report not just activities, but also material imports (including uranium
imported from China in 1991) Undeclared uranium imports (a U.S. concern with respect
to Iraq in 2003) raise a red flag since further experiments with the material, particularly
those relevant to nuclear weapons could be hidden more easily if the material is
undeclared.7 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
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 David Albright and Corey Hinderstein, “Iran: Countdown to showdown,” Bulletin of Atomic
Scientists, Nov./Dec. 2004, vol. 60, no. 6.
5 “Iran Was Offered Nuclear Parts,” Washington Post, Feb. 27, 2005.
6 Ibid.
7 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).

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column).8 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.”9 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).
Enrichment Activities. Inspections revealed two enrichment plants at Natanz —
a pilot-scale (planned to have 1000 centrifuges) facility and a commercial-scale plant
under construction (planned to have 50,000 centrifuges). The pilot-scale plant started up
in June 2003 only to shut down after Iran suspended enrichment activities in December
2003. Construction on the commercial-scale plant has also been suspended. The plants
are built partly underground, raising concerns about intentions. Several questions have
been raised in connection to those plants in the course of inspections:
Did Iran introduce uranium gas (process gas, or UF6) into the pilot-
scale plant? If so, the slight enrichment of uranium that would have resulted would
have been a safeguards violation if undeclared. Iranian officials told the IAEA that it was
too difficult to use process gas, but that Iran was able nonetheless to advance to a
production stage of centrifuge enrichment.10
Where did the highly enriched uranium (HEU) particles come from?
Iranian officials asserted that highly enriched uranium (HEU) particles found at the Natanz
pilot plant in 2003 came from contamination from foreign-origin centrifuge assemblies,
which was the first clue revealing the Pakistani A.Q. Khan network as supplier of some
centrifuges to Iran. Iran admitted to enriching uranium to just 1.2%, while the particles
sampled ranged from 36% U-235 to 70% U-235 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.
Why did Iran keep other information hidden? Iran has been particularly slow
to reveal the existence of more sophisticated centrifuge designs (using maraging steel or
composite rotors) and its laser enrichment program. Iran provided significant detail about
the P-1 centrifuges in its October 2003 declaration, but 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
8 Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran, Report by
the Director General, GOV/2003/75, Nov. 10, 2003 (title referred hereafter to as “Iran”).
9 Iran, Report by the Director General, GOV/2004/11, Feb. 24, 2004.
10 Iran, Report by the Director General, GOV/2003/40, June 6, 2003.

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it also pursued a laser enrichment program beginning in the 1970s, focusing on two
techniques.11
Plutonium-Related Activities. 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 between 1989 and 1993 on 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. Polonium, according to many
observers, is not ideal for nuclear weapons purposes.
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.12
NPT Compliance Issues
The IAEA has not yet found Iran in noncompliance with its NPT obligations. Since
early 2003, the Director General (DG) has made special reports to the Board of Governors,
which have called upon Iran to take certain actions. At the March 2005 Board of
Governors meeting, DG ElBaradei refrained from making a special report and instead let
the deputy director for safeguards report on Iran’s progress. This had the effect of de-
escalating issues related to Iran’s compliance.
Procedures and Practice. Noncompliance with the NPT is fundamentally
noncompliance with a nuclear safeguards agreement. 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.13 In the case of Iran,
the DG has not yet found Iran in noncompliance with its safeguards agreement, despite
numerous discrepancies. Since 2003, the United States has maintained that “the facts
already established would fully justify an immediate finding of noncompliance by Iran
11 “Iran Said To Be Stepping Up Effort to Support Laser Enrichment Program, Nuclear Fuel,
October 5, 1998.
12 For analysis, see [http://www.isis-online.org/publications/iran/arakconstruction.html].
13 For text of the Statute, see [http://www.iaea.org/About/statute_text.html#A1.12].

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with its safeguards obligations.”14 There is considerable room for interpretation, both by
IAEA inspectors and the DG. In one respect, this may be considered necessary, because,
for example, 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 clearly more significant for a nuclear weapons program than
those involving smaller quantities or non-weapons grade materials like natural uranium.
However, many hold that discrepancies establish a pattern of deception that is significant.
Board of Governors Actions. The first step the Board took was in September
2003, calling 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. Iran responded by agreeing to sign
the Additional Protocol and voluntarily suspend all uranium enrichment and “processing
activities.” The suspension covered: 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.
Yet, Iran reportedly continued to assemble centrifuges.
The Board resolved in November 2003 (GOV/2003/81) 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.” Between February and June 2004, the IAEA attempted to verify
Iran’s pledges to suspend activities. The DG reported in March 2004 that Iran had been
actively cooperating with the Agency, including providing access to workshops at military
sites, but that 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. The 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. While 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, the resolution noted only the Board would remain seized of
the matter. In March 2005, Iran was reported to continue the production of UF4, as well
as quality control testing on centrifuge components. The March 2005 Board, however, did
not issue a resolution on Iran.
EU-3 Negotiations. Since October 2003, the foreign ministers of Germany,
France, and the UK (EU-3) have been negotiating with Iran on restricting its nuclear
14 Statement of Ambassador Kenneth Brill at September 2003 IAEA Board of Governors
Meeting.
15 GOV/2004/11, February DG’s report on Iran, p. 10.

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program in exchange for wide-ranging assistance. If EU-3 negotiations fail, it is not clear
even then that the IAEA would call Iran into noncompliance, since the Iranian suspension
is voluntary. Reportedly, the EU-3 agreed with the United States in May to call for UN
Security Council action if their negotiations with Iran fail.16 Negotiations seem to be
failing to obtain Iran’s agreement on a key objective — a permanent halt to uranium
enrichment activities. In March 2005, Iran proposed running its pilot-scale enrichment
facility, which EU-3 negotiators rejected. In April 2005, Iran said it would start-up its
uranium conversion plant unless negotiations progressed. A top Iranian negotiator told
the press that the EU “would have to offer significant incentives like a deal for 10 nuclear
reactors.”17 Iran demanded a new negotiating proposal by July 31, but the EU-3 delayed,
arguing that the incoming Iranian president would be better able to respond in August. On
August 1, Iran informed the IAEA it would resume uranium conversion, stating that since
uranium conversion was not considered by the IAEA to be enrichment, this would not
violate its voluntary suspension.18
Significance for a Nuclear Weapons Program

Iran is likely years away from producing weapons-grade plutonium or highly enriched
uranium. Vice Adm. Jacoby, director of the Defense Intelligence Agency, told the Senate
Armed Services Committee in March 2005 that Iran is expected to be able to produce a
weapon early next decade. According to one report, the new National Intelligence
Estimate on Iran assesses that it will be ten years before Iran has a bomb.19 That said, Iran
has pursued three different methods of enriching uranium and has experimented with
separating plutonium, suggesting a steady accrual of expertise in weapons-relevant areas,
according to some observers. If Iran received the same nuclear weapon design that A.Q.
Khan gave Libya, the remaining technical hurdle (albeit the most difficult) would be fissile
material production. A key challenge is verifying that there are no undeclared enrichment
facilities or capabilities. Although some NPT members may feel that enhanced
inspections under the Additional Protocol will be enough to verify compliance, others feel
that access to enrichment and reprocessing technologies must be restricted.
Some observers are concerned about the potential for the Bushehr and the
heavy-water-moderated IR-40 reactors to be used for clandestine plutonium production.
In addition to IAEA safeguards on these reactors, Iran must also send Bushehr’s spent fuel
back to Russia for disposal under a 2005 agreement, which according to some observers,
could provide further assurances of non-diversion.
16 “Europeans Agree To Meeting With Iran On Nuclear Program,” Washington Post, May 17,
2005.
17 “Iran Seeks Incentives from Europe in Nuclear Impasse,” New York Times, May 19, 2005.
18 INFCIRC/648, Communication dated 1 August 2005 received from the Permanent Mission of
the Islamic Republic of Iran to the Agency. Available at [http://www.iaea.org]
19 “Iran is Judged 10 Years From Nuclear Bomb,” Washington Post, August 2, 2005.

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