Iran: Arms and Technology Acquisitions

Iran: Arms and Technology Acquisitions

97-474 F
Updated June 22, 1998
CRS Report for Congress
Received through the CRS Web
Iran: Arms and Technology Acquisitions
Kenneth Katzman
Specialist in Middle Eastern Affairs
Foreign Affairs and National Defense Division
Summary
The Clinton Administration and Congress are pressing to persuade Iran’s major
arms and technology suppliers, primarily Russia and China, to sever their military
relations with Iran. The Administration’s need to engage supplier countries on a wide
range of issues often has complicated U.S. efforts to end their dealings with Iran, and
has led some in Congress to demand that the Administration do more to compel supplier
countries to end transfers to Iran. Both the House and the Senate have passed a bill
(H.R. 2709), by overwhelming margins, imposing sanctions on foreign entities that
contribute to Iran's efforts to develop ballistic missiles. The Clinton Administration has
said a veto is likely; it has until June 23 to do so. This report will be updated in
response to legislative and policy developments.
Introduction
Whatever Iran’s intentions, arms and technology transfers have given that country
additional capabilities with which to threaten the Persian Gulf monarchies and U.S. forces
in the Gulf. Possibly in an effort to compensate for its continuing conventional military
weaknesses relative to U.S. forces, Iran is attempting to obtain weapons of mass
destruction (WMD) technology.
Russia 1
Russia has largely completed delivery of arms ordered by Iran in 1989. It has already
delivered about 40 MiG-29 and Su-24 combat aircraft, about 150 T-72 tanks, SA-5 and
SA-6 surface-to-air missile systems, and three Kilo-class diesel submarines, the last of
which arrived January 18, 1996. In response to Administration pressure and U.S.
sanctions legislation, Russia formally pledged in June 1995 not to enter any new arms
1 See CRS Report 94-138, Iran: Conventional Arms Acquisitions; and CRS Report 98-299,
Russian Missile and Nuclear Reactor Transfers to Iran.
Congressional Research Service ˜ The Library of Congress

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contracts with Iran, although prior arms contracts could be implemented. The
Administration considers deliveries to Iran after that time as part of these contracts.
Ballistic Missiles. Until 1997, Russia had not been identified publicly as a major
supplier of ballistic missile technology to Iran. However, on February 12, 1997, during
a visit to Washington by Russian Prime Minister Chernomyrdin, the United States
protested a Russian transfer to Iran of technology that can be used to produce a missile
with a range and payload (300 km range, 500kg payload) covered by the Missile
Technology Control Regime (MTCR). Russia has been a formal member of the MTCR
since August 8, 1995. The Iranian missile programs receiving Russian assistance have
been cited by press reports as the Shahab (Meteor)-3 (800-930 mile range, 1,650 lb
payload) and the Shahab-4 (1,240 mile range, 2,200 lb payload). 2 There is concern in
the United States and the Middle East that the Russian assistance could help Iran become
self-sufficient in missile production, and press reports say Iran could be within a year or
two of fielding the Shahab-3.3
Since August 1997, an Administration envoy, Frank Wisner (succeeded in March
by Robert Galluci) , has been discussing with Russia U.S. evidence that Russian institutes
and scientists are continuing to help Iran develop a self-sufficient long range missile
capability. On a visit to Moscow in September 1997, Vice President Gore said that a
U.S.-Russian inquiry had uncovered a vigorous Iranian effort to obtain nuclear and
ballistic missile technology from Russia. The United States praised a January 22 decree
by Chernomyrdin adopting tighter controls on exports of technology such as that useful
to Iran's missile or other WMD programs, as well as a May 14 directive establishing
export control units in Russian entities working in the missile and nuclear fields.
The Administration has asserted that the Russian directives and pledges of further
cooperation merit a veto of the Iran Missile Proliferation Sanctions Act of 1997 (H.R.
2709), which passed the House on November 12, 1997 by voice vote and the Senate, on
May 22, by a vote of 90-4. The House passed the bill, as amended, on June 9, by a 392-
22 vote. The bill would require sanctions, including suspension of U.S. government
assistance, on foreign entities (including governmental entities operating as businesses)
that assist Iran's ballistic missile programs. Supporters of the bill maintain that
assistance to Iran by 18-20 Russian entities is continuing and that greater U.S. pressure
is needed if Russia is to vigorously enforce its new directives. In an attempt to respond
to this view, the Administration said April 16 it would give "extra scrutiny" to Russian
entities before approving U.S. aid to them. In addition, a provision of a FY1998
emergency supplemental appropriation (P.L. 105-174) provides $179 million for systems
to counter the Iranian missile threat.
Russia-Iran Nuclear Plant Deal. The Clinton Administration has expended
significant effort to end Russian-Iranian nuclear cooperation on the grounds that
technology and skills transferred to Iran would enable Iran to further a nuclear weapons
program. Observers also fear that Iran might try to exploit contacts within Russia’s cash-
Gertz,
2
Bill. Russia, China Aid Iran's Missile Program. Washington Times, September 10, 1997.
P.1.
3 Lippman, Thomas. U.S. Keeps After Russia To Halt Flow of Missile Technology to Iran.
Washington Post, January 18, 1998. P.A9.

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strapped Ministry of Atomic Energy (MINATOM) to obtain, illegitimately, controlled or
prohibited materials or technology. Russia maintains that these fears are unfounded
because Iran is a party to the Nuclear Nonproliferation Treaty and accepts International
Atomic Energy Agency (IAEA) visits to declared nuclear facilities. Russia’s program of
nuclear cooperation with Iran centers on a contract, signed January 8, 1995, to complete
the 1,000 Megawatt number one reactor at Bushehr within five years, at a cost to Iran of
about $800 million. The reactor was begun by German firms in 1974, but work stopped
after the 1979 Islamic revolution and the plant was damaged by Iraq during the Iran-Iraq
war.
President Clinton, during a May 1995 summit with President Yeltsin, obtained a
pledge that Russia would not supply Iran with uranium enrichment equipment or a
research reactor. Russia has said publicly that it, not Iran, will reprocess the spent reactor
fuel. Nonetheless, the initial phase of the Bushehr nuclear plant project is proceeding.
Russian and Iranian officials have said the plant should be operational by 2001, although
technical problems might further postpone completion. In addition, in February and
March 1998, Iran and Russia agreed that Russia will take over from Iran construction of
support facilities at the Bushehr site and will build two additional 640 megawatt nuclear
reactors at Bushehr. The project suffered a setback on March 6, when visiting Secretary
of State Albright initialed an agreement with Ukraine under which it pledged to drop the
sale of the turbines for the reactor. However, the head of Iran's Atomic Energy Agency
visited Russia in mid-May to discuss increased cooperation, including possible
acquisition of a nuclear reactor. The visit reportedly included a Russian demonstration
of uranium enrichment technology.
The Bushehr reactor project has attracted continuing congressional concern.
Within three months of the deal, President Clinton signed into law a defense
supplemental appropriation (P.L. 104-6) that contained a provision precluding U.S.
cooperation with Russia on civilian nuclear projects if it went ahead with the Bushehr
deal. The Administration has refused to renew some civilian nuclear cooperation
agreements with Moscow. However, the Administration formally waived provisions of
FY 1996 and FY1997 foreign aid appropriations laws (P.L. 104-107 and P.L. 104-208,
respectively) that made U.S. aid to Russia contingent on termination of the deal with Iran,
on the grounds that it is more crucial to support reform in Russia. The FY1998 foreign
aid appropriations law (P.L. 105-118) cuts 50% of U.S. aid to the Russian government
unless it ends nuclear or ballistic missile cooperation with Iran.
China
Over the past few years, China has replaced Russia as Iran’s leading source of
conventional arms, according to Administration officials. Some of China's possible
motives for arming Iran include: a desire to divert U.S. forces to the Persian Gulf and
away from areas near Taiwan; to retaliate for U.S. arms sales to Taiwan; to improve
China's ability to obtain Iranian oil exports or investment projects; and to earn hard
currency. China, a key conventional weapons supplier to Iran during the Iran-Iraq war
(1980-88), has helped Iran rearm from that war by supplying a wide array of equipment,
including about 100 artillery pieces, several hundred tanks, 45 of the Chinese version of
the SA-2 surface-to-air missile, and about 25 F-7 combat aircraft.

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Anti-Ship Missiles. Iran’s purchases of Chinese naval equipment have caused
more U.S. concern than other conventional weapons categories, because the acquisitions
improve Iran’s ability to strike at U.S. forces and installations or commercial shipping in
the Gulf. Fifteen fast attack craft, as well as ten other French-made patrol boats, are
outfitted with C-802 anti-ship cruise missile (120 km range), also supplied by China.
(Iran is believed to have received over 100 C-802's.) The C-802 is not covered under the
MTCR because its range and payload are under the regime’s threshold. Iran tested the
Chinese-supplied air-launched C-801K missile on one of its operational U.S.-made F-4
Phantom aircraft in June, prompting Secretary of Defense Cohen to assert that Iran now
poses a "360 degree threat" to U.S. forces. The threat would increase if Iran acquires an
over-the-horizon targeting capability for the missile. A few days prior to the October
1997 U.S.-China summit, U.S. officials said that China had pledged to Secretary of State
Albright in September that it would halt further sales of anti-ship cruise missiles to Iran.

Congressional debate about the Chinese anti-ship missile transfers have centered on
whether the transfers trigger U.S. sanctions under the Iran-Iraq Arms Non-Proliferation
Act of 1992 (50 U.S.C. 1701). That law requires sanctions on persons or countries that
provide destabilizing numbers or types of advanced conventional weapons to Iran (or
Iraq). Administration officials determined that the C-802 and C-801 transfers to Ira
4
n
“are not of a destabilizing number and type” to warrant U.S. sanctions. However, no
agreed definition of "destabilizing" was stipulated in the law. Some in Congress believe
that, because U.S. defense officials have stated that the missiles pose a threat to U.S.
forces, China should have been sanctioned for the transfers.
In advance of the October 1997 U.S.-China summit, China's Foreign Minister
pledged to halt further anti-ship missile sales to Iran. Secretary of Defense Cohen said
his counterparts reiterated that pledge during his January 1998 visit to China. It is not
clear, however, whether any more of the missiles will be delivered to Iran under existing
Iran-China contracts.
Weapons of Mass Destruction and Delivery Means.5 China has reportedly
supplied Iran with advice and technology to produce weapons of mass destruction and
delivery systems. There have been no confirmed deliveries of entire M-9 or M-11
ballistic missiles to Iran, both of which are considered to have range/payload
combinations that exceed MTCR guidelines. However, on June 22, 1995, the New York
Times quoted a May 1995 Central Intelligence Agency study as concluding that China
had “delivered dozens, perhaps hundreds, of missile guidance systems and computerized
machine tools to Iran...” Other sources said rocket propellent ingredients were provided
as well. A No
6
vember 21, 1996 Washington Times report quoted an October 1996 CIA
report as saying China had sold Iran guidance technology and components to test ballistic
4 This law was amended by Section 1408 the FY1996 defense authorization law (P.L. 104-106)
to also sanction the provision to Iran or Iraq of equipment for chemical, biological, or nuclear
weapons.
For
5
further information, see CRS Issue Brief 92056, Chinese Proliferation of Weapons of Mass
Destruction: Current Policy Issues, and CRS Report 96-767, Chinese Proliferation of Weapons
of Mass Destruction: Background and Analysis, both by Shirley Kan. See also: CRS Report 96-
572, Iran: Military Relations With China, by Kenneth Katzman.
6Chinese Shipments Violate Controls. Jane’s Defence Weekly. July 1, 1995.

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missiles, possibly for use in the Russian-assisted Shahab program. On November 22,
1996, and again on September 10, 1997, the State Department said the United States had
not determined that China had violated its March 1992 commitment to adhere to the
terms of the MTCR. In March 1998 the Administration reportedly offered China
expanded cooperation on commercial space ventures in return for an end to all Chinese
assistance to Iran's ballistic missile programs and its joining the MTCR. China has
rejected formally joining that control regime.
In May 1998, China reportedly transferred to Iran 1,000 tons of specialty steel for
possible use in Iran's missile programs and discussed with Iran sales of telemetry
equipment for missile testing. Asked about the press
7
reports, Secretary of State Albright
testified before the Senate Appropriations Committee June 16 that the United States had
continuing concerns about China's proliferation record. One day later, and about a week
before President Clinton's trip to China, China announced new regulations controlling
dual use technology exports.
Under a contract signed in February 1993, China agreed to expand its nuclear
cooperation with Iran by constructing in Iran two 300 megawatt nuclear reactors and
providing technology and training. In mid-1997, Administration officials said they had
8
blocked a deal between Iran and a Chinese government-owned firm for the sale to Iran
of a “uranium conversion facility, ” although China reportedly had given Iran blueprints
9
for the facility. In advance of the Octob
10
er 1997 U.S.-China summit, the Administration
said it received a firm written assurance that China would end its nuclear relations with
Iran, although two small ongoing projects would continue.
11
The Administration said
that, in order to certify to Congress that China is cooperating to end nuclear proliferation,
it required this assurance, even though Iran's known nuclear facilities are under IAEA
safeguards. This certification, required by P.L. 99-183 and signed on January 12, 1998,
opened China to nuclear cooperation with the United States under a 1985 bilateral
agreement. Despite press reports on March 13 that China and Iran negotiated in early
1998 to supply Iran with uranium enrichment material, Congress did not formall
12
y
disapprove within the thirty legislative day period, and the certification took effect on
March 18. Nonetheless, an Iranian newspaper reported May 10 that an Iranian nuclear
team might visit China in June 1998 to discuss peaceful nuclear cooperation.
7Gertz, Bill. China Assists Iran, Libya on Missiles. Washington Times, June 16, 1998.
8 During 1985-87, China supplied Iran with a small research nuclear reactor and an
electromagnetic isotope separator (calutron).
Smith,
9
R. Jeffrey. China Firm That Angered Washington May Get New Deal. Washington Post,
June 20, 1996. P. A21.
1 0 Pomfret, John. U.S. May Certify China on Curbing Nuclear Exports. Washington Post,
September 18, 1997. P.A28.
These
11
projects are a zero power nuclear reactor and a factory to produce tubing for nuclear fuel
rods.
12The Administration discovered the negotiations and scuttled the sale, according to a March 13,
1998 Washington Post article, entitled U.S. Action Stymied China Sale to Iran, by Barton
Gellman and John Pomfret.

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U.S. officials have said publicly that Iran has a large and increasingly self-sufficient
chemical weapons program that has been supplied or assisted, in part, by Chinese firms.
On May 22, 1997, Secretary of State Albright announced that U.S. sanctions would be
imposed, under the Chemical and Biological Warfare Elimination Act of 1991 (P.L. 102-
182), on two Chinese firms (Nanjing Chemical Industries Group) and Jiangsu Yongli
Chemical Engineering and Technology Import/Export Corp.) and one Hong Kong firm
(Cheong Lee Ltd.) for knowingly and materially aiding Iran’s chemical weapons
programs. The Administration said there was no evidence the Chinese government was
aware of the transfers. On June 10, 1997, the State Department announced suspension
of an Exim bank loan for a U.S. firm’s exports to the Nanjing firm above. According to
an October 30, 1997, Washington Times report, the Nanjing company has recently
finished building in Iran a plant that can be used to manufacture equipment suitable for
a chemical weapons program. A London Daily Telegraph report of May 24, 1998 said
that Iran had recently received from China's Sinochem 500 tons of material banned under
the Chemical Weapons Convention, to which Iran has been a party since November 1997.
Other Suppliers
Among other suppliers, North Korea has an established relationship with Iran. The
core of Iran’s current missile force consists of 200-300 North Korean-supplied Scud-B
and Scud-C missiles, with ranges of 320 km and 500 km respectively. North Korea has
also supplied ten to fifteen mobile launchers. Iran reportedly wanted to take delivery of
North Korean-made Nodong 1 missiles (1,000 mile range) when those are ready for
export, and it reportedly has partially funded the development of the missile. In an
apparently successful attempt to head off deliveries of the Nodong, the United States, as
part of the October 1994 agreement with North Korea on nuclear issues, began talks with
North Korea in April 1996 on limiting North Korean missile sales to the Middle East.
U.S. officials hailed the talks as a “good beginning,” but the Administration issued a
determination
13 on May 29, 1996 that entities in Iran and North Korea had engaged in
missile proliferation activities.
On August 6, 1997, following a second round of U.S.-North Korea talks on Middle
East missile sales (June 11-13), the United States imposed trade sanctions on two North
Korean firms for missile-related activities believed to involve Iran and Pakistan. Iran's
Shahab program, assisted primarily by Russia, is apparently based on the Nodong design.
On June 17, 1998, the Washington Post reported that North Korea's official media had
acknowledged that North Korea had and would continue to export ballistic missiles,
although no specific technology or recipients were mentioned in the North Korean
announcement. No U.S.-North Korean missile export control talks have been held since
the June 1997 discussions.
1 3 See Federal Register, June 12, 1996. P. 29785. Bureau of Political-Military Affairs,
Department of State. Public Notice 2404.