Russian Missile Technology and Nuclear Reactor Transfers to Iran

Russian Missile Technology and Nuclear Reactor Transfers to Iran

98-299 F
CRS Report for Congress
Received through the CRS Web
Russian Missile Technology and
Nuclear Reactor Transfers to Iran
Updated December 14, 1998
(name redacted)
Specialist in Russian Affairs
(name redacted)
Specialist in Middle Eastern Affairs
(name redacted)
Specialist in U.S. Foreign Policy
Foreign Affairs and National Defense Division
(name redacted)
Specialist in Energy Policy
Environment and Natural Resources Policy Division
Congressional Research Service ˜ The Library of Congress

ABSTRACT
This report examines Russian ballistic missile and nuclear reactor technology transfers to
Iran and U.S. responses to those transfers. The report analyzes Iran’s ballistic missile and
nuclear power programs, the significance of Russia’s contributions to those programs,
resulting U.S. security concerns, and Russian-Iranian cooperation from the perspectives of
Moscow, Tehran, and Washington. The report describes a large number of bills and
resolutions in the 105th Congress that addressed Russian transfers of sensitive technologies
to Iran, including H.R. 2709, Title I of which was the “Iran Missile Proliferation Sanctions
Act.” The report also summarizes existing U.S. legislation relevant to the Russian
technology transfers to Iran, such as the Arms Export Control Act (P.L. 90-629), the Export
Administration Act (P.L. 96-72), the Iran-Iraq Arms Nonproliferation Act of 1992 (P.L. 102-
484), and the current Foreign Operations Appropriations Act (P.L. 105-118, Title II). This
report builds upon CRS Report 95-641, Russian Nuclear Reactor and Conventional Arms
Transfers to Iran, May 25, 1995. This report may be updated or superceded by a new
report, depending on action in the 106th Congress on these issues.

Russian Missile Technology and
Nuclear Reactor Transfers to Iran
Summary
Many in Congress and the Clinton Administration charge that Russian entities
are assisting Iran in developing ballistic missiles. Russia is also building a nuclear
power station in, and is furnishing other nuclear services to, Iran. Congress has
passed legislation requiring the President to impose sanctions for missile technology
transfers, arms sales, nuclear technology transfers, and large-scale investments in
Iran. H.R. 2709, which includes the “Iran Missile Proliferation Sanctions Act of
1997,” is one of several bills designed to tighten existing sanctions law. It was
amended and passed by the Senate on May 22, 1998 and by the House on June 9 by
very large bipartisan majorities. Nevertheless, President Clinton vetoed the bill on
June 23 and said he would work to sustain the veto. The Administration opposes
congressionally mandated sanctions because it believes they limit Administration
flexibility and could harm U.S.-Russian relations and Russia’s post-Soviet transition.
A veto-override attempt was postponed following President Clinton's July 15
announcement of sanctions on Russian entities suspected of missile technology
transfers. Although Iran tested a new medium-range ballistic missile on July 22, no
veto override vote was attempted before the session ended. The Administration says
it gives Russian missile technology and nuclear reactor transfers high priority, but
many in the 106 Congress are likely to cite the missile test as evidence of lack o
th
f
progress on the issue and might seek passage of similar legislation in the new
Congress.
Moscow has indirectly acknowledged that there have been missile technology
transfers to Iran by Russian entities, but the Russian Government denies its own
involvement and says it is upholding its commitments under the Missile Technology
Control Regime (MTCR). Russian assistance appears to have significantly
accelerated Iran’s missile program, which reportedly is developing medium-range
ballistic missiles that could threaten U.S. forces and allies throughout the region,
including Israel. This threat is compounded by Iran’s reported pursuit of nuclear,
biological, and chemical weapons.
Russia’s 1995 decision to construct a large nuclear power station in Iran and to
provide related nuclear facilities and services has also drawn sharp criticism from the
Administration and the Congress, which fear that these projects might benefit an
Iranian nuclear weapons program. Moscow is going ahead with these projects
despite the threat of U.S. economic sanctions. U.S.-Russian commercial relations
might also be threatened by sanctions, and they are far more important to Russia than
its commercial relations with Iran. U.S. assistance to Russia would also be
threatened. The reactor project could provide Russia with billions of dollars of hard
currency earnings, far more than the amount of direct U.S. aid threatened by
sanctions. But indirect U.S. assistance to Russia, through such institutions as the
IMF, is vitally needed by Moscow and far exceeds the earnings from its nuclear
projects in Iran.

Contents
The Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Russian Missile Technology Transfer to Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Details of the Russian Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Role of the Russian Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Significance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Threat to U.S. Interests in the Middle East . . . . . . . . . . . . . . . . . . . . 10
Russia as a Proliferator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Russian-Iranian Nuclear Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Iran’s Nuclear Power Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
The Bushehr Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
U.S. Concerns about Nuclear Proliferation . . . . . . . . . . . . . . . . . . . . . . . . 13
Iran’s Nuclear Weapons Activities . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Iran and the NPT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Iranian Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Israeli Security Concerns about Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Russian Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
U.S. Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Dual Containment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Missile Technology Transfers to Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Russian Nuclear Cooperation with Iran . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Selected Legislation in the 105 Congress
th
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Legislation to Sanction Iran or Russia or Make Policy Statements . . . . . . 24
Legislation that Supports Missile Defense Programs to Counteract Iran’s
Missile Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Legislation to Sanction Iran or Russia or Make Policy Statements . . . . . . 24
Legislation that Supports Missile Defense Programs to Counteract Iran's Missile
Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Table 1. Selected Iranian Ballistic Missile Programs . . . . . . . . . . . . . . . . . . . . . 6

Russian Missile Technology and Nuclear
Reactor Transfers to Iran
The Issues

Many in Congress and the Clinton Administration charge that the Russian
Government is directly or indirectly involved in assisting Iran to develop medium-
range ballistic missiles. At the same time, Russia is building a nuclear power station
in Iran and has agreed to furnish Iran with a wide range of other nuclear services.
The issue is whether or not Russian entities should be sanctioned for transferring
missile technology to Iran (as would have been required by H.R. 2709), whether such
sanctions would be detrimental to U.S. efforts to dissuade Russians from transferring
missile technology to Iran (as President Clinton contended in his veto of H.R. 2709),
and whether Administration actions aimed at curbing Russian missile technology
transfers are effective. The 106 Congress may revisit this issue.
th
Congress has expressed strong opposition to, and passed legislation requiring
the President to impose sanctions for missile technology transfers, arms sales, nuclear
technology transfers, and large-scale investments in Iran. On November 12, 1997,
the House passed H.R. 2709 (Title I of which is the “Iran Missile Proliferation
Sanctions Act”), sponsored by House International Relations Committee Chairman
Gilman, that would have required the Administration to impose additional unilateral
economic sanctions on foreign entities that contribute to Iran’s efforts to develop
ballistic missiles. The Administration failed to persuade the Senate to reject the bill1,
which was approved by that body with an amendment on May 22, 1998 by a vote of
90-4. On June 9, the House passed the Senate version of the bill by a vote of 392-22.
Despite these apparently "veto-proof" majorities, President Clinton vetoed the bill on
June 23 and said he would work to sustain the veto. His veto message said that the
bill would make it harder to achieve the nonproliferation goals it is intended to serve.
Russian officials and news media reacted sharply to congressional passage of the bill,
with newspapers warning that new economic sanctions reduce the likelihood of
1 On May 20, 1998, Stephen Sestanovich, the President’s special adviser on the former
Soviet Union, told the Senate Foreign Relations subcommittee on Europe that sanctions
would be “profoundly counterproductive to U.S. national interest with respect to Russia.”
Although he acknowledged that Russia had not yet succeeded in stopping the leakage of
missile technology to Iran, he warned that sanctions could “risk inadvertently undermining
our efforts to stop Russia’s support of Iran’s missile programs.” President Clinton conveyed
a similar message in a White House meeting with a group of Senators on the evening of
May 20. Reuters; AP, May 21, 1998.

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Duma ratification of START II. The bill’s support
2
ers question whether Moscow can
or will stop the missile technology transfers without additional pressure. An effort
to override the veto, scheduled for July 17, was postponed indefinitely and not
revived when the Administration announced that it would impose trade sanctions on
the Russian entities identified by Moscow as being investigated for possible violation
of Russian export controls. On July 28, President Clinton issued an executive order
that tightens U.S. restrictions on proliferation of weapons of mass destruction and
their means of delivery, including Russian missile technology transfers to Iran. (See
p. 21-23, below.) A White House press release that day said that pursuant to this
executive order, all U.S. assistance to and trade with seven Russian entities under
investigation by Russian authorities was being terminated. (See p. 9, below.)
The supplemental appropriation bill (H.R. 3579/P.L. 105-174) provides funds
to enhance theater missile defense systems largely in response to Russian cooperation
with Iran on missile development. The FY1998 foreign aid bill (H.R. 2159/P.L. 105-
118) provides for cuts in aid to the Russian Government if it does not terminate its
nuclear projects and missile technology transfers to Iran. Sanctions for improper
missile technology transfers under the Arms Export Control Act, Export
Administration Act, and Iran-Iraq Arms Nonproliferation Act of 1992 may also
applicable to the Russia-Iran transfers.
The Administration says it has made the missile technology transfer issue a very
high priority in official and unofficial dealings with Russian officials, including the
talks between Vice President Gore and Premier Yevgenny Primakov inManila (July
28, 1998) and Presidents Clinton and Yeltsin in Moscow (September 1-2, 1998).
Although there are recent signs of change in Iran and in U.S. policy toward Iran,
there has been a strong consensus in Congress and the executive branch, shared by
many foreign governments, that Iran is still a leading sponsor of state terrorism and
a potential threat to U.S. and western interests. Hence, the United States has sought
to keep military and weapons of mass destruction technology from Iran. Russia’s
military, political, and economic cooperation with Iran may undermine this policy
and is a major source of tension in U.S.-Russian relations.
The Clinton Administration has made repeated high-level representations to the
Russian Government to persuade it to end missile technology and nuclear reactor
transfers to Iran — with mixed success. The Administration considers cooperation
with post-Communist Russia, sometimes expressed in terms of “partnership,” and
assistance in Russia’s transition toward democracy and a market economy to be very
important U.S. goals, despite the fact that U.S.-Russian relations have soured lately,
not only over Iranian issues but also because of Russian opposition to U.S. policy
toward Iraq, Serbia, and NATO enlargement. Thus, the U.S. objectives of containing
Iran and cooperating with Russia appear to be in conflict. Critics of the
Administration are likely to point to Iran's July 22, 1998 test of an 800-mile range
missile, apparently constructed with Russian assistance, as evidence that the
Administration's approach is not succeeding.
Russia,
2
United States: Moscow Condemns Senate Vote on Sanctions, FBIS, Foreign Media
Note, May 26, 1998.

CRS-3
The Clinton Administration takes the general position that while it strongly
opposes some of Russia’s dealings with Iran, congressionally mandated unilateral
sanctions will not change Russian policy and, furthermore, U.S.-Russian relations are
too important to be put at risk over disagreements on Iran. Sanctions have rarely
been imposed against post-Soviet Russia, in part because of President Clinton’s
exercise of national security waiver authority included in the FY1996 and FY1997
foreign aid appropriations bills’ sanctions focused on the nuclear reactor deal.
Russian Missile Technology Transfer to Iran
In 1987, at U.S. urging, the G-7 countries established the Missile Technology
Control Regime (MTCR), aimed at limiting the proliferation of missiles and missile
technology. The MTCR is an informal arrangement consisting of guidelines for
transfers of missiles and related technology, and an annex listing items to be
controlled. Nations that join the regime adopt the guidelines as national policy and
undertake to restrain missile transfers through their export control systems. Thirty-
two countries have become partners in the MTCR, including Russia (1995).
In January 1997, an Israeli delegation told White House officials and Members
of Congress that Russian firms and institutes were providing critical assistance to
Iran’s missile development program. Within a short time, they said, Russian
equipment and technology would help Iran overcome obstacles it had encountered
in developing medium-range ballistic missiles that could deliver chemical weapons
throughout the Middle East. U.S. intelligence reportedly confirmed the Israeli
conclusions. The government of Israel raised the alarm in strong terms to the United
States and Russia because it would be threatened by these new missiles. The
transfers became a central issue of U.S.-Russian relations and have been discussed
at numerous high-level bilateral meetings. The Russian transfers apparently were in
violation of the MTCR guidelines and the U.S.-Russian agreement to ban new arms
sales to Iran. Under certain circumstances, such transfers would trigger statutory
U.S. economic sanctions. But as months passed and more details of the transfers
appeared in the press, many Members of Congress questioned Russia’s denials and
lack of effective U.S. or Russian action to stop the flow of missile technology to Iran.
For the past few years, some Members of Congress have been frustrated by the
Administration’s decisions not to impose sanctions against Russian and Chinese
firms that exported sensitive missile or nuclear technology. The Administration has
often been able to avoid implementing the missile sanctions provisions of the Arms
Export Control Act (AECA, P.L. 90-629), the Export Administration Act of 1979
(EAA, P.L. 96-72), the Iran-Iraq Arms Nonproliferation Act of 1992 (IIANA), the
Foreign Assistance Act of 1961 (FAA, P.L. 87-195), and the annual Foreign
Operations Appropriations Act because of exclusions, waivers, definitions that allow
for broad interpretation, and the lack of certain binding requirements in the laws.
These sanctions had been legislated largely during previous Administrations to put
teeth into U.S. nonproliferation policy and the multilateral nonproliferation regimes,
but some Members concluded they were not sufficiently rigorous and introduced bills
to tighten the requirements for sanctions. Numerous bills were introduced to

CRS-4
encourage or force the Administration to take stronger measures against Russia and
Iran. (See the summary of legislation in the 105 Congress at the end of this report.)
th
Rep. Gilman introduced The Iran Missile Proliferation Sanctions Act of 1997
(H.R. 2709) which would have required the President to identify to Congress “every
foreign person with respect to whom there is credible information indicating that that
person” has transferred missile technology to Iran and to impose economic sanctions
against that person unless the President can rebut the information or justify a waiver
on grounds of national security. Congressional action on this issue focused largely
on H.R. 2709. This bill would have closed two loopholes of the AECA (sec. 73(a)
and (b)) and EAA (sec. 11B(b)(1) and (2)). The first of these loopholes ties statutory
sanctions to a presidential determination which the President is not required to make;
the second makes sanctions inapplicable against most exporters in a country, such
as Russia, that is an “adherent” to the MTCR. The proposed bill would also apply
sanctions to all persons who have exported missile technology to Iran, unlike the
IIANA, which ties statutory sanctions to a presidential determination that transfers
are of “destabilizing numbers and types of advanced conventional weapons,” and
that does not explicitly include ballistic missiles in the law’s definition of advanced
conventional weapons. The bill might also block foreign assistance to any
proliferating entity, whereas sections 498A, 620G and 620H of the FAA and Title II
of the annual Foreign Operations Appropriations Acts have not been successful in
blocking such assistance. The bill does, however, include authority for a presidential
waiver on national security grounds.
President Clinton vetoed H.R. 2709 on June 23, 1998 saying, “if enacted, it
would damage the U.S. national interest, making it harder to achieve goals it is
intended to serve." He further wrote that, "The battle against proliferation is most
effective as a cooperative enterprise," implying that unilateral economic sanctions are
less effective. He also said that the standard of evidence in H.R. 2709 for
establishing that a person or entity had wrongly transferred missile technology is
"unworkably low" and that the sanctions "are also disproportionate." He argued that
the imposition of unilateral American sanctions would make it more difficult to win
Russian government cooperation on the important missile proliferation issue and
perhaps on other issues such as "arms control, law enforcement, counter-narcotics
and combating transnational crime."
There appears to be support in various departments of government and in the
Congress for the view that sanctions have contributed to U.S. nonproliferation
policies in some other situations. There is also a view that the government and
Congress have, at least in some cases, used sanctions inconsistently and ineffectively.
Other Members introduced legislation to authorize additional funds for ballistic
missile defenses and other measures to counter the emerging threat posed by Iran and
other countries.
Details of the Russian Transfers
During the Iran-Iraq War (1980-1988), Iran reportedly acquired Soviet-made
Scud-B missiles from Libya and manufactured variants of the Scud-B acquired from
North Korea. In the meantime, the Soviet Union sold over 800 Scud-Bs directly to

CRS-5
Iraq. These missiles gave Iraq a big advantage in the deadly missile exchange known
as the War of the Cities (March-April 1988) and helped force Iran to end the war
before achieving its goals. Neither side used chemical warheads on their missiles
during the war, but since then both reportedly have developed such warheads.3
After the war, Iran bought additional missiles and missile production technology
from North Korea and reportedly subsidized North Korean development of the
Nodong missile (1,300 km range) and perhaps longer-range missiles. Although the
Nodong could reach all of Iraq from Iran, it is unclear whether it could reach Israel.
Pyongyang reportedly agreed in 1993 to supply Iran up to 150 Nodong missiles, but
the United States persuaded North Korea not to deliver them.4 Iran has apparently
not acquired a significant number of Nodong missiles. Tehran then broadened its
search for missile technology in support of its own missile development programs.
Iran reportedly encountered numerous technical problems with its ambitious
missile programs and sought Russian help with guidance systems, engines, advanced
materials, electronics, testing equipment, and other systems that it could not develop
indigenously. Despite pledges by Soviet leaders in 1990 and by various Russian
leaders since then to ban missile exports, President Yeltsin’s 1994 agreement to
refrain from new arms sales to Iran, and Russia’s entry into the MTCR in October
1995, there are recurring reports that Russian companies are selling missile
technology to Iran and other countries.
On February 6, 1997, Vice President Gore issued a diplomatic warning to then-
Premier Chernomyrdin regarding Russian transfers to Iran of parts and technology
associated with SS-4 medium-range ballistic missiles.5 Over the next several
months, press reports indicated that Russian enterprises provided Iran specialty steels
and alloys, tungsten coated graphite, wind tunnel facilities, gyroscopes and other
guidance technology, rocket engine and fuel technology, laser equipment, machine
tools, and maintenance manuals. U.S. and Israeli concerns have focused on Russian
help in the development of two liquid-fuel, medium range missiles — the Shahab 3
and the Shahab 4. (See table below.) Israeli and U.S. officials believe the Shahab
missiles are further improvements on the North Korean Nodong, and, according to
press reports, U.S. officials estimate Iran could deploy the Shahab 3 within a year or
two, and could deploy the Shahab 4 within 3 years. One article cited a “classified
U.S. intelligence report” as predicting Iran would field prototypes of both missiles
within 18 months. Analysts believe that the integration of a nuclear, biological, or
chemical warhead, development of a sophisticated guidance system, and a system to
separate the warhead from the missile body will take Iran more than several months.
Israeli intelligence also reported the development of other Iranian missiles, the
Shahab 5, with ranges of 5,500 km and 10,000 km (the latter is the distance from Iran
Carus,
3
Seth, Ballistic Missiles in Modern Conflict, New York, Praeger, 1991, p. 1-9, 35-48.
4Flight International, October 23-29, 1996, p. 17.
Los
5
Angeles Times, February 12, 1997, and Komersant-Daily, February 14, 1997, p. 4, as
reported in FBIS-SOV-97-032, February 14, 1997. The SS-4, developed in the 1950s, had
a one-stage, liquid-fuel engine and a range of 1,800 to 2,000 km. It was being phased out of
the Soviet inventory when it was eliminated under the INF Treaty in the 1980s.

CRS-6
to Alaska or to the northeastern portion of the United States).6 A report from a
congressionally-mandated commission headed by former Defense Secretary
Rumsfeld, released in July 1998, estimated that Iran could demonstrate an ICBM
similar to North Korea's Taepo Dong 2 (up to 10,000 km range) within five years of
a decision to proceed. In addition, the report said Iran is seeking and has acquired
components that can be combined to produce missiles capable of reaching the United
States.7
Russian assistance has apparently helped Iran overcome a number of obstacles
and advance its missile development program faster than expected. The Rumsfeld
Commission said, "The ballistic missile infrastructure in Iran is now more
sophisticated than that of North Korea and has benefitted from broad, essential
assistance from Russia and important assistance from China as well." Many analysts
believe continued Russian technical assistance would enable Iran to make further
strides that would otherwise require years of research, development, testing, and
evaluation. The Director of Central Intelligence reported to Congress that Iran is
using goods and technology acquired from Russia, China, and North Korea to
achieve its goal of becoming self-sufficient in producing medium-range ballistic
missiles.
8 This progress was confirmed by Iran's July 22 test of the Shahab-3 missile,
although it is not known how successful the test was.
Table 1. Selected Iranian Ballistic Missile Programs
Range
Payload
Missile
Type
(km)
(kg)
Motor
Status
Nodong
MRBM
1,300
1,000
Liquid

Shahab-3
MRBM
1300-1500
750
Liquid
In Development
Shahab-4
MRBM
2000
1000
Liquid
In Development
Zelzal-1
Produced since
(Earthquake)
SRBM
100-150
?
Solid
1991
Zelzal-2
SRBM
350-400
?
Solid
-
Zelzal-3
MRBM
1000-1500
?
Solid?
-
5,500/
In Development,
Shahab 5
ICBM?
10,000
750
?
Unconfirmed
SRBM: Short Range Ballistic Missile, 70-1000 km (43-620 mi.)
Defense
6
News, April 14-20, 1997, pp. 1, 26; October 6-12, 1997, p. 4; February 2-8, 1998,
p. 8; International Herald Tribune, December 9, 1997, p. 1; Jane’s Intelligence Review
Pointer, December 1997, p. 5; New York Times, August 22, 1997, p. 1; Washington Post,
December 31, 1997, p. A1; Washington Times, October 2, 1997, p. A 11; October 10, 1997,
pp. A1, A11, and January 20, 1998, p. A12; FBIS documents FTS19981021001050 and
FTS199881022001488, Izvestiya, October 21 and 22, 1998.
7 Report of the Commission to Assess the Ballistic Missile Threat to the United States,
Executive Summary, July 15, 1998, p. 13-14.
8 Unclassified Report on Proliferation-Related Acquisition in 1997, Director of Central
Intelligence, p. 2,3.

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MRBM: Medium Range Ballistic Missile, 1001-3000 km (621-1860 mi.)
ICBM: Intercontinental Ballistic Missile, 5500+ km (3101+ mi.)
Sources: This table is based on information derived from numerous recent press reports.
Various Russian entities are alleged to have been assisting Iran’s missile
programs.
9 In March 1998, the State Department listed (but did not make public) 20
Russian entities suspected of transferring missile technology to Iran. On July 15,
1998, Russian authorities announced that nine Russian entities were being
investigated for suspected violation of laws governing export of dual-use
technologies. The nine include the Inor NPO, Polyus Research Institute, and Baltic
State Technical University cited earlier, plus the Grafit Research Institute,
Tikhomirov Institute, the MOSO Company, the Komintern plant (Novosibirsk),
Europalace 2000, and Glavcosmos.
10
Iran has an extensive network of research institutes and factories engaged in the
development of missiles, many of which reportedly have received assistance from
Russia. These are dispersed about the country and some are probably hardened
against aerial bombardment.11
Role of the Russian Government
It is not clear whether the Russian government has allowed or encouraged this
assistance or merely been unable to detect or prevent it. Initially, Moscow denied
that its missiles or missile technology had been transferred to Iran, but in September
1997, Russian officials reportedly stated that such transfers were being made without
the consent of the government. In January 1998, after repeated detailed complaints
by numerous U.S. officials, Yuri Koptev, head of the Russian space agency, said of
13 cases raised by the U.S. Government, 11 had no connection to technology
transfers related to weapons of mass destruction (nuclear, biological, or chemical)
that were banned under a 1996 agreement. Two cases “which could be interpreted
as an attempt to transfer dual-purpose technology,” were stopped and the government
9 According to early western press reports, the Kuznetzov NPO (Scientific Production
Association), Inor NPO, Energmash NPO, Ployus Research Institute, the Central
Aerohydrodynamic Institute (TSAGI), the Bauman Institute, the Rusian Space Agency, and
Rosvoorouzhenie (Russian Government arms export agency) all helped Iranian missile
development. Defense News, October 6-12, 1997, p.4; Washington Post, December 31,
1997, p. A1; Washington Times, October 2, 1997, p. A1 October 20, 1997, pp. A1, A1.
1 0 Itar-Tass, July 15, 1998. Glavcosmos was incorrectly identified in a New York Times
article as "the Russian equivalent of NASA," implying that hastily applied sanctions against
Glavcosmos could adversely affect the international space station project. Steven Erlanger,
"U.S. Imposes Curbs on 9 Russian Concerns," New York Times, July 16, 1998, p. 10.
During the Soviet period, Glavcosmos was roughly analogous to NASA, but it has been
superceded in that role by the Russian Space Agency, which is not in the group of nine
suspect entities. Glavcosmos now has a vague middle-man status and is not believed to be
involved in the space station project.
Center
11
for Nonproliferation Studies database abstract of Jane’s Defence Weekly, April 23,
1997, p. 4 and related articles, and abstract of Iran Brief, September 9, 1996, pp. 1-2;
Washington Times, February 24, 1998, p. A3.

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was investigating one of them.12 Koptev reportedly was irate that an Israeli
intelligence report said he was involved in the transfers.13
The Russian government has taken some steps to stop the flow of missile
technology and resolve the issue with the United States. In November 1997, nine
months after Vice President Gore first raised the issue, Russia expelled an Iranian
diplomat for trying to buy missile engine blueprints. He was reportedly the lead
figure in Iran’s quest for Russian nuclear, chemical, biological, and missile
technology. On January 22, 1998, Premier Chernomyrdin issued a decre
14
e
prohibiting any Russian entity from exporting materials or services that it knows will
be used to develop weapons of mass destruction or their delivery systems, and
requiring government approval for exports that might be used for such purposes,
whether or not they are included on Russia’s export control list, “... if the Russian
foreign trade participants have grounds to believe that the products and services
might be used...” for such purposes. The decree, which authorizes the Russia
15
n
government to block exports and to penalize companies that make unapproved
exports, reportedly was prompted by a telephone call from Gore to Chernomyrdin.16
Since then, there have been conflicting reports about the implementation of the
decree and new allegations have arisen.
In February 1998, the Washington Times reported that Russia’s Federal Security
Service (FSB, a successor to the KGB) was still working with Iran’s intelligence
service to pass technology through a joint research center, Persepolis, with facilities
in St. Petersburg and Tehran. In March, The Washington Post and a Moscow
newspaper ran stories detailing years of FSB complicity in recruiting and transporting
Russian missile scientists to work in Iran, although neither claimed the practice was
ongoing.
17 According to the Russian Space Agency, the following steps were taken
in early 1998: the Ministry of Education instructed all universities and institutes to
stop training Iranian students in missile technology and related subjects; the Central
Aerohydrodynamic Institute terminated cooperation with Iran on wind tunnel tests;
NPO Energmash stopped delivering special fire-fighting equipment to Iran; all
activities of the Iranian firm SANAM in Russia were terminated; and all contracts
of the Ramensky aviation design bureau and of NPO Lavochkin with Iran were
terminated. Nevertheless, according to U.S. press reports, Russian firms continue to
12Philadelphia Inquirer, September 26, 1997, p. 3; Associated Press, Russia Halts Missile-
technology Sales to Iran, January 30, 1998.
13Washington Times, October 20, 1997, pp. A1, A11.
14International Herald Tribune, December 9, 1997, p. 1.
Tightening
15
Control Over Exports of Dual-Use Products and Services Related to Weapons
of Mass Destruction and their Means of Delivery, Russian Space Agency, Executive Letter
No. 53, February 23, 1998, implementing the January 22, 1998 decree.
1 6 Nucleonics Week, January 29, 1998, p. 14; Radio Free Europe/Radio Liberty (RFE/RL)
Newsline, January 23, 1998.
1 7 Daniel Williams, “Russian Spy Agency Linked to Iran,” Washington Post, March 23,
1998, p. A14, and conversation with Mr. Williams; Yevgeniya Albats, “Our Man in
Tehran,” Novaya Gazeta Ponedelnik [Moscow], March 16-22, 1998, p. 4-5, cited in
FBIS-TAC-98-076, March 17, 1998.

CRS-9
supply missile technology to Iran. A truckload of Russian stainless steel that would
be particularly useful in constructing missile fuel tanks was intercepted as it was
about to cross the border from Azerbaijan into Iran. Another shipment of Russian
missile-related material on its way to Iran was seized in Austria. And the Moscow
Aviation Institute is reportedly still training Iranian missile technicians.18
On May 14, 1998, a few days before the G-8 meeting in Birmingham, England,
Yeltsin’s spokesman announced additional measures to tighten control over the
export of missile and nuclear technology. He declared that: supervisory bodies will
be established at all enterprises dealing with those technologies; the Russian Space
Agency will play a greater role in overseeing exports of missile technologies; and
stricter licensing requirements will be implemented. After the G-8 meeting
19
,
President Clinton said that he and Yeltsin had discussed the issue “in some
significant detail” and that they had reached understandings that “will bear fruit.”
Yeltsin said that he was creating a new government commission to improve control
over high-tech exports, including those to Iran. U.S. Deputy Secretary of State
Strobe Talbott, present during the Yeltsin-Clinton talks, said that Yeltsin had
“reaffirmed in the clearest and most unambiguous terms” his commitment to ending
the flow of missile technology to Iran.20
On July 15, the newly created Russian export control commission announced
criminal investigations of nine Russian entities for suspected violations "of the
established state system of export control and of attempts to export dual-purpose
goods and services connected with weapons of mass destruction and their means of
delivery by missile." Most of the nine are state-owned entities. The commission also
announced that it was drafting a bill to strengthen export controls over private
companies not subject to direct state oversight. On the same day, the Clinto
21
n
Administration announced that it would, where appropriate, end assistance to and
trade with the Russian entities under investigation. A White House statement said
22
that the Russian commission's actions "demonstrate the growing effectiveness of
U.S.-Russian cooperation in halting the proliferation and transfer of dangerous
weapons technology and materials." At an international conference in Manila o
23
n
July 28, Secretary of State Albright and then-Foreign Minister Primakov reportedly
agreed that in light of the Indian and Pakistani nuclear tests and Iran's recent missile
18New York Times, April 25, 1998, pp. 1, 24; Washington Times, June 23, 1998, pp A1,
A14.
19Jamestown Monitor, May 19, 1998.
20Ibid.
21Jamestown Monitor, July 16, 1998. The nine Russian entities are named on p.8, above.
2 2 A July 28 White House press release announced trade sanctions against seven Russian
entities. According to the State Department, the United States has no information about two
of the nine Russian entities under investigation in Russia, the Tikhomirov Institute and the
Komintern plant. Under U.S. laws and regulations, they are exclude from U.S. sanctions at
this time. Conversation with State Department official, July 29, 1998.
23U.S. Newswire, July 15.

CRS-10
test, proliferation was "the premier security issue of the post-Cold War period."24
President Clinton raised the issue with President Yeltsin at the Moscow summit on
September 1-2, 1998. Officials on both sides have cautioned earlier, however, that
it might be difficult to halt all unauthorized or illegal missile technology transfers,
especially by individual scientists and small private enterprises. Some Russian
officials continue to argue that many U.S. and Israeli allegations of illicit missile
technology transfers to Iran are unrelated to missile technology. In November 1998,
25
Robert Gallucci, the State Department's special representative on nonproliferation,
was quoted as saying, "We are still concerned about contacts, cooperation and
assistance between Russia and Iran, and we are discussing that with [Moscow]. It is
still an issue."26
Turmoil in the Russian government raises questions about the future efficacy
of the Gore-Chernomyrdin Commission mechanism, which, according to the White
House, relied in large part on the personal rapport and trust built up between Gore
and Chernomyrdin over five years. In March 1998, Yeltsin dismissed Premier
Chernomyrdin and replaced him with Sergei Kiriyenko, who was in turn dismissed
in August 1998 and replaced by Yevgeny Primakov. In addition, Yeltsin's failing
health has further diminished his own role in government. These developments raise
concerns about Moscow's ability and willingness to enforce export controls. U.S.
and Russian officials say that a Gore-Primakov Commission will succeed its
predecessor and continue the same work. As Foreign Minister, however, Primakov
was a leading proponent of Russian cooperation with Iran.
Significance
Threat to U.S. Interests in the Middle East. The Russian transfers of missile
technology are of importance because they have apparently accelerated Iran’s ability
to produce missiles that could reach U.S. troops and friendly countries throughout the
Middle East — as well as southern Russia and perhaps Greece — and deliver
weapons of mass destruction. Iran produces chemical weapons for delivery of blister,
blood, and choking agents and might have the ability to fit chemical warheads to
ballistic missiles. Iran is also conducting research on biological and nuclear weapons
but it is not known when the country might have such weapons that could be
delivered by a ballistic missile. U.S. intelligence estimates that Iran could produce
an atomic bomb — though perhaps not a nuclear missile warhead — by the middle
of the next decade.
27
2 4Carol Giacomo, "U.S., Russia Will Discuss Ending the Spread of Nuclear Weapons,"
Washington Times, July 29, 1998, p. 15.
2 5An official of the Russian Foreign Ministry's export control department was quoted as
saying on July 17, 1998 that, "[M]ost of these allegations simply are U.S. rhetoric aimed at
undercutting Moscow's trade." Simon Saradzhyan, "Alleged Missile Sales to Iran Divide
Russia's Leadership," Defense News, July 27-August 2, 1998, p. 3, 20.
Bill
26
Gertz, "U.S. Hasn't Stemmed Flow of Missile Technology to Iran," Washington Times,
November 18, 1998, p. 3.
2 7 Ibid; Office of the Secretary of Defense, Proliferation: Threat and Response, November
(continued...)

CRS-11
Russia as a Proliferator. The Russian missile technology transfers are also
important as an indicator of Russia’s willingness and ability to control exports of
dangerous technology to countries that are trying to acquire weapons of mass
destruction and have a history of belligerence. The United States has taken great
efforts to establish and win Russian participation in nonproliferation regimes for
nuclear, biological, and chemical weapons and missile delivery systems. The United
States has given Russia technical assistance on operating an effective export control
system and, through the Nunn-Lugar Comprehensive Threat Reduction initiative, has
also helped Russia with the safe and secure transportation, storage, and
dismantlement of its weapons of mass destruction. Because Russia has large
inventories of weapons of mass destruction, large quantities of equipment and
material to produce and deliver such weapons, and large numbers of underemployed
scientists and technicians, it is critical to U.S. nonproliferation goals that Russia
maintain strict control of these resources.
Russian-Iranian Nuclear Cooperation
Iran’s Nuclear Power Program
Iran’s efforts to add nuclear power generation to its electric power grid began
in 1974, when it contracted with the West German nuclear firm Kraftwerk Union
(KWU) to build two large pressurized water reactors (PWRs) at Bushehr, near Kharg
Island. At one point 10,000 workers were reported at the construction site.
28
Following the 1979 revolution, the Islamic government canceled the project, but a
few years later changed its mind and asked KWU to finish the plants. However, the
West German government prohibited KWU from sending nuclear components and
personnel to Bushehr because of Iran’s war with Iraq. In fact, Iraqi air raids and
missile attacks damaged the project. Although at the time it was canceled in 1979
the two plants were said to be 70% and 50% complete, essentially no components of
the nuclear steam supply system had been shipped to Iran.
Even after the Iraq-Iran war ended, Germany and Iran could not agree on a plan
to finish the project, and Iran turned to Russia for help. In January, 1995, the Russian
nuclear agency MINATOM signed a contract to finish one unit of the Bushehr project
for $800 million, with a projected 55-month construction schedule. The Russian
29
agency later decided not to try to finish the German plant, but to build a Russian-
designed PWR on the site instead.
27(...continued)
1997, p. 27; Reuters, Nov. 18, 1997.
28“Possibility Raised for Resuming Iranian Nuclear Project.” Nucleonics Week, December
22, 1983, p. 1. The number may be exaggerated, but it is not impossible. In U.S. nuclear
construction projects at their peak construction workers numbered in the thousands.
Hoffman,
29
David. “Russia Expanding Role in Iranian Power Plant.” The Washington Post,
February 22, 1998, p. A30.

CRS-12
Why Is Oil-Rich Iran Building Nuclear Power Plants? At the time the
Shah’s government first started a nuclear power program, questions were raised
about the economic role nuclear power could play in a nation with vast oil and gas
resources. In the 1970s, however, there was widespread belief that world oil supplies
were limited and prices would continue to rise as they had during the 1973 Arab oil
embargo. At the same time, nuclear power was viewed as a technology already cost-
competitive with oil and gas and sure to become more so as it matured and as fossil
fuel prices increased. In such a situation, oil and gas deposits were looked on by
many as resources that would increase in value in the future, worth preserving by
substituting cheap nuclear power.
Since the 1970s, however, the world energy picture has changed radically.
World proved oil reserves, instead of declining, have increased by about 50% over
what they were in 1973, and real prices have declined below what they were before
the oil crisis. Iran’s petroleum resources are thus declining in value, and exports are
limited by world demand rather than supply. While this trend has been taking place,
nuclear power has turned out to be more costly than anticipated. Nuclear plants may
make economic sense for countries without domestic energy resources, like Japan,
France, South Korea, and Taiwan, where they can contribute to energy security and
save the cost of importing fuels for power generation. But it is difficult to argue that
oil-rich countries like Iran will soon recover the high capital costs of building nuclear
power plants through the increased sale of oil and gas in the current world petroleum
market.
The Bushehr Project. In one respect, Bushehr is a bargain for Iran. The
Russian offer to build a 1,000-megawatt plant at Bushehr for $800 million is far
below the typical cost of such a facility.
However, progress on the project has been slowed by technical and financial
difficulties. Some 750 Russian technical personnel are reported to be on site. In
February 1998, Viktor Mikhailov, then head of MINATOM, complained that the
Iranian participants in the project, who had been responsible for preparing the site for
the installation of the nuclear components, had not done so, and that this task would
have to be done by the Russians also. Yevgeny Adamov, who was appointed Atomic
Energy Minister in March 1998 after Mikhailov unexpectedly resigned, is cited in the
press as confirming that the Russian agency would take over construction of the
entire plant, adding that the 1995 contract would have to be renegotiated to reflect the
additional work.30
Adamov reportedly also said that the recent decision by the Ukraine government
not to sell electric generating turbines for the Bushehr project would not delay its
completion. Ukraine’s decision to cancel the $45 million sale came at the urging of
the United States. Adamov said the turbines could be built in a plant in St.
Petersburg. However, the Ukraine has been the primary supplier of turbines for
Russian-designed nuclear power plants.
“Russia
30
Confirms Plan to Build Nuclear Plant in Iran.” Associated Press. March 11, 1998.

CRS-13
U.S. Concerns about Nuclear Proliferation
The United States has opposed the Bushehr project since the Islamic revolution,
both during Iran’s negotiations with KWU to finish the plant, and since the Russians
took over the project. However, U.S. concerns are not focused primarily on the
power plant itself. It is not expected that Iran would divert weapons material from
the Bushehr PWR. If Iran has a program to produce nuclear weapons, as the United
States believes, then it is aimed at producing or obtaining highly enriched uranium,
or at clandestine construction of a small reactor specifically designed to produce
bomb-quality plutonium.
The Bushehr plant itself is therefore not considered a source of weapons
material. Rather, the project is viewed as a proliferation risk because it entails
massive involvement of Iranian personnel in nuclear technology, and extensive
training and technological support from Russian nuclear experts. This involvement
and training may well provide a cover for those Iranians who are pursuing
development of nuclear weapons. It would be much more difficult for Iran to conceal
its weapons activities if the Bushehr project were canceled. As long as it continues,
regardless of delays or difficulties, it can shelter the clandestine activities of the
weapons program.
Iran’s Nuclear Weapons Activities. The Shah’s government reportedly had
a small nuclear weapons research program. The present Iranian government denies
having any interest in nuclear weapons, although Iranian officials have on occasion
made statements supporting acquisition of nuclear weapons and have asserted that
Israel has nuclear weapons that are not subject to international inspections or
monitoring.
31 However, senior U.S. officials — including the Secretary of State, the
Secretary of Defense, and past directors of the CIA, have stated repeatedly that Iran
has a program to develop nuclear weapons.
32
This U.S. assessment is reportedly based partly on intelligence reports, but it is
reinforced by Iran’s continued efforts to procure equipment and technologies
unnecessary for power production but needed for weapons development. Despite
insisting that its interest in nuclear energy is only for civilian power production, Iran
reportedly has attempted to obtain facilities such as uranium enrichment plants,
which are necessary to produce highly enriched uranium for weapons, and heavy
water, used in plutonium production reactors. Recently, an Iranian attempt to obtain
from China large amounts of a chemical necessary to prepare natural uranium for
enrichment elicited a protest from the United States and a denial from China.33
Similarly, news reports that Russia had agreed to sell Iran tritium, which is used in

31 Elaine Sciolino, “Report Says Iran Seeks Atomic Arms,” New York Times, Oct. 31, 1991.

32 Nonproliferation Center, Central Intelligence Agency, The Weapons Proliferation Threat,
March 1995, p. 12; R. James Woolsey, Director of Central Intelligence, Testimony before
a hearing on Proliferation Threats of the 1990's, Senate Governmental Affairs Committee,
Feb. 24, 1993, S. Hrg. 103-208, p. 53; Elaine Sciolino, “CIA Says Iran Makes Progress On
Atom Arms,” New York Times, Nov. 30, 1992.
33“Spokesman Denies Nuclear Sales to Iran.” Agence France Press, March 17, 1998.

CRS-14
nuclear explosives, and was considering selling centrifuge technology for uranium
enrichment, were denied by Adamov. Iran had had talks 18 months earlier with
Mikhailov about obtaining a research reactor, Adamov said, but the Russian
government has not yet approved the project. A research reactor, although much
34
smaller than the Bushehr PWR, might be technically easier to convert to weapons
material production.
Other governments concur with the U.S. assessment. Although Russian
officials now say they have no evidence of such a program, a 1993 Russian
intelligence service report concluded that Iran “has a program of military-applied
research in the nuclear sphere.” The report predicted that “without outside scientific
and technical assistance, the appearance of nuclear weapons in Iran in this
millennium is unlikely.” A more recent Russian intelligence report — release
35
d
after the controversy over Russian nuclear sales to Iran — backed away from the
earlier assessment. Russia, eager for income from the sales of nuclear plant
36
s
abroad, insists that it is doing nothing more than fulfilling its obligation as a nuclear
weapons state to provide peaceful nuclear technology to non-nuclear signatories of
the Nuclear Nonproliferation Treaty (NPT).
The Russians also argue that the PWR reactors they are building in Iran cannot
be used for bomb-making and will be closely monitored by Russian and IAEA
safeguards, and that the Russian reactors are the same type that the United States is
helping provide for North Korea — a state that is not in full compliance with IAEA
safeguards. Nevertheless, Adamov was quoted in the press as acknowledging Iran’s
weapons ambitions. “I am sure that Iran is trying to create a nuclear arsenal. It
would be foolish to suppose that they do not want to create one,” he is quoted as
saying after he was confirmed in his new job as MINATOM head by President Boris
Yeltsin.
37 During a visit to Iran in November 1998, Adamov said that he had reached
agreement with Iranian officials for speeding up construction of the Bushehr project
and that Russia might agree to build other such reactors in Iran.38
Iran and the NPT. Iran is a signatory of the NPT, and accepts International
Atomic Energy Agency (IAEA) safeguards on its nuclear program. That program
consists mostly of a small research reactor in Teheran. The uncompleted Bushehr
project has not received any nuclear fuel and hence is not yet subject to IAEA
inspection. In response to charges that it has had a secret nuclear weapons program
since 1992, Iran has invited the IAEA to visit various facilities suspected of housing
secret weapons work. The visits produced no new information about undeclared
nuclear activities.
3 4 Shepherd, Leslie. “Iranian Nuclear Chief to Visit Russia Amid Controversy.” AP, May
8, 1998.
3 5 JPRS-TND-93-007, Mar. 5, 1993, “Russian Federation: Foreign Intelligence Service
Report,” p. 28.
3 6 JPRS-TAC-95-009-L, Apr. 6, 1995, “Russian Foreign Intelligence Service Report on
Nuclear Nonproliferation Treaty,” p. 19.
37“Russia Says Nuclear Sales to Iran Pose No Threat.” Reuters, May 11, 1998.
38RFE/RL Newsline, November 25, 1998.

CRS-15
In the absence of IAEA evidence, the U.S. claim that Bushehr is a proliferation
threat is difficult to openly demonstrate. Nevertheless, the United States maintains
that Russia’s nuclear cooperation with Iran will provide Teheran with the knowledge
and technological foundation needed to operate a clandestine nuclear weapons
program.
Iranian Issues
Iran’s relations with Russia are based on strategic interests, but tempered by
lingering fear of Russian power and intentions. In 1907 Russia concluded a treaty
with Britain dividing Iran into spheres of control — Russia’s in the north, Britain’s
in the south, and a neutral center for Iran. Russian troops occupied northern Iran
during World War I. Soviet troops invaded again in 1941, in concert with Britain,
when Iran was becoming sympathetic to Germany. The then Shah, Reza Shah
Pahlavi, was forced to abdicate in favor of his son, Mohammad Reza Pahlavi, the last
Shah of Iran. The Soviet Union refused to withdraw completely from Iran in 1945
and set up two autonomous republics in the north — one in Iranian Azerbaijan
(inhabited by Azeris, a Turkic people) dominated by the pro-Moscow Tudeh Party
and another in the Kurdish areas of northern Iran. These autonomous zones
threatened to break up Iran and emboldened pro-Communist elements throughout the
country. A combination of U.S. threats and Iranian oil concessions persuaded the
Soviets to withdraw in 1946, and the Soviet-sponsored autonomous republics
collapsed and were occupied by Iranian government forces.

Throughout most of the first decade of Iran’s Islamic Republic, formed in 1979
after the fall of the Shah, the Soviet Union loomed as a potential threat. The Soviet
invasion of Afghanistan (on Iran’s eastern flank) in December 1979 revived Iranian
fears that Moscow might have territorial designs on Iran. The Soviets also backed
Iraq through the 1980-88 Iran-Iraq war. Iraq and the U.S.S.R. had close ties dating
to a 1972 Treaty of Friendship, and Moscow was Iraq’s most important arms supplier
during that war. The United States and its allies also tilted toward Iraq, leaving Iran
virtually isolated and with few outside sources of arms supply. Partly as a result of
its isolation, Iran suffered a series of major battlefield defeats in 1988 that forced
Ayatollah Khomeini to accept a U.N.-brokered end to the war.
Its armed forces devastated after the war, Iran looked to rebuild. It found a
willing collaborator in the Soviet Union, which was looking to broaden its influence
in the Persian Gulf. A February 1989 visit to Tehran by Soviet Foreign Minister
Edouard Shevardnadze, and his meeting with the ailing Ayatollah Khomeini,
signaled a thaw in Iran’s relations with the Soviet Union. Iran established an arms
and technology transfer relationship in a key visit to Moscow by then parliament
speaker Ali Akbar Hashemi-Rafsanjani, June 19-23, 1989. (The visit began two
weeks after Ayatollah Khomeini died, and two months before Rafsanjani was elected
President of Iran.)
The Rafsanjani visit represented a strategic breakthrough that set the tone for
current Russian-Iranian relations. The joint communique issued at the conclusion of
the Rafsanjani visit said that the two countries would collaborate in the “peaceful use

CRS-16
of nuclear energy” and that the U.S.S.R. “agreed to bolster the military capacity of
the Islamic Republic.” The visit also resulted in agreements for Iran to expor
39
t
natural gas to the Soviet Union and participate in Central Asian railway construction.

Soon after the Rafsanjani visit, Soviet/Russian weaponry began flowing into
Iran. Since 1991, Iran has taken delivery of 25 MiG-29 and about 12 Su-24 combat
aircraft. Russia also has transferred to Iran 150 T-72 tanks, three Kilo-class diesel
submarines, and SA-5 and SA-6 anti-aircraft missiles. This weaponry has helped
40
Iran rebuild its arsenal, which was depleted in the eight-year war with Iraq. Even
with these acquisitions, Iran is not as well equipped as Iraq in armored vehicles,
although Iraq’s force is deteriorating due to a lack of spare parts. Iran also lacks the
logistical capabilities to cross the Persian Gulf in force. On the other hand, the Kilo
submarines are a new capability for a Persian Gulf country. U.S. military officials
are concerned that the submarines — coupled with other naval equipment received
from China — enhance Iran’s ability to threaten commercial or military shipping in
the Gulf and might enable it to lay mines undetected. The commander of Iran’
41
s
Revolutionary Guard said on November 18, 1998 that ships (including U.S. ships)
entering the Gulf must report their passage to Revolutionary Guard forces based on
Iranian islands in the Gulf.
This strategic relationship with Russia might help explain why Iran, contrary to
widespread expectations, has emphasized economic cooperation over religion and
ideology in its relations with the predominately Muslim states of the former Soviet
Union. After the Soviet Union broke up in 1991, Russia and the secular leaders of
the Soviet successor states in the south were concerned that Iran might try to spread
revolutionary Islam in Central Asia and the Caucasus. However, former President
Rafsanjani and other Iranian pragmatists saw these regions as an export market and
a means to thwart U.S. efforts to isolate Iran. Rafsanjani appears to have made a case
within Iran that political meddling in Central Asia, which Russia considers its sphere
of influence, could jeopardize continued sales of advanced conventional weapons and
equipment related to weapons of mass destruction. Iran also saw Russia as an ally
in arguing that all states bordering the Caspian Sea should share in Caspian oil and
gas development.
The election in May 1997 of a relative moderate, Mohammad Khatemi, as Iran’s
president produced speculation that Iran might try to scale back its weapons of mass
destruction programs and, correspondingly, to distance itself from Russia. Since
taking office in August 1997, Khatemi has tried to improve relations with the Arab
Gulf states and the West, including the United States. At the same time, however,
Iran’s weapons of mass destruction programs have reportedly continued apace and
relations with Russia have broadened. In September 1997, the Russian gas company
Gazprom announced it would invest $600 million (a 30 percent share) in a tri-
39Islamic Republic News Agency [IRNA] on Communique, June 25, 1989, in FBIS-NES -
89-121, June 26, 1989, p. 31-33.
4 0 See Eisenstadt, Michael. Iranian Military Power: Capabilities and Intentions. Policy
Paper Number 42. Washington Institute for Near East Policy, 1996, p. 36.
4 1 Gertz, Bill. “U.S. Commander in Gulf Sees Increased Threat From Iran,” Washington
Times, January 29, 1997, p.A5.

CRS-17
national project to develop Iran’s large South Pars offshore gas field. In February
1998, Iran’s Foreign Minister visited Moscow and stated, “the political will exists
between the leadership of our two countries to increase mutual cooperation in the
economic and political fields and on the international stage.” It should be noted that
42
Khatemi does not have firm control over Iran’s defense establishment. Supreme
Leader Ali Khamenei, a political hardliner, is Commander-in-Chief of the armed
forces. It is doubtful that, even if he were so inclined, Khatemi could slow Iran’s
WMD programs.
Israeli Security Concerns about Iran
Israel views Iran’s ballistic missile program as a threat to its security and
national survival. Iranian leaders have called for Israel’s destruction and do not
recognize its right to exist. While much of the Arab world has moved toward
acceptance of Israel under various conditions, Iran still formally rejects the idea of
coexistence, although there are signs that Khatemi might be trying to reduce Iran’s
active opposition to the Middle East peace process. Iran is loosely allied with Syria,
with which Israel is still technically in a state of war. According to annual State
Department reports on international terrorism, Iran gives financial and material
assistance to groups such as Hizballah, Hamas, and Palestinian Islamic Jihad, that
have committed acts of terrorism in Israel and fight Israeli troops in south Lebanon.
Israeli concerns may be heightened by memories of Iraq’s firing of 39 Scud missiles
at Israel during the 1991 Persian Gulf. Israel fears that Iran already has chemical
warheads and might develop the capability to launch biological agents and eventually
nuclear warheads at Israel on the ballistic missiles it is developing. In view o
43
f
Israel’s small size and the concentration of its population in a few urban centers,
Israelis are vulnerable to even a small number of weapons of mass destruction.
Russian Issues
Russia’s multifaceted cooperation with Iran is motivated by geopolitical,
economic, and political considerations. It is not a new policy. After Iran’s Islamic
revolution in 1979, and especially after the Soviet withdrawal from Afghanistan a
decade later, Moscow actively sought a rapprochement with Iran. Rafsanjani’
44
s
1989 visit to Moscow started the flow of sophisticated Soviet weapons to Iran.
Through the 1990s, both Moscow and Tehran carefully broadened and extended their
cooperation into what has become a mutually beneficial, though unofficial, alliance
of convenience.
Jones,
42
Gareth. “Russia, Iran Vow to Beef Up Ties, United Over Iraq,” Reuters, February
25, 1998.
Ze’ev
43
Schiff, “Iran’s Missiles — What’s New?” Ha’aretz [Tel Aviv], November 10, 1997,
p. 3, cited in FBIS-TAC-97-314.
4 4 This overview of Russian-Iranian relations is based in part on the work of Robert O.
Freedman. See, for example, his “Russia and Iran: A Tactical Alliance,” SAIS Review, v.
17, summer-fall 1997. See also, Soviet Policy Toward Iran and the Strategic Balance in
Southwest Asia, CRS Report 87-592, June 19, 1987, by (name redacted).

CRS-18
From a geopolitical perspective, no country is more important to Russia in the
Middle East/Persian Gulf/Southwest Asia region than Iran. Iran’s location also
enables it to play a role in Central Asia and the Caucasus. These are all areas of
strong Russian interest. It appears that Russia’s top foreign policy priority is to be
the dominant force on the territory of the former Soviet Union. As noted above,
Moscow values Iran’s restraint in the predominantly Muslim Soviet successor states
in Central Asia. Russia and Iran also share an interest in countering Azerbaijan and
45
have cooperated against the puritanical Islamist Taliban movement in Afghanistan.
As Russian foreign policy became more nationalistic and resentful of American
“global hegemonism” and “unilateralism” under Foreign Minister Primakov,
Moscow turned further toward Tehran as a partner. Iran’s low-keyed response to
Russia’s war in Chechnya and its pro-Serb policies in Bosnia, despite the “anti-
Islamic” aspects of those Russian policies, also helped solidify their relations.
There is also an important economic dimension to Russia’s cooperation with
Iran. Russian defense and nuclear industries have been in severe economic distress
for years, further exacerbated by Russia's virtual economic collapse in 1998. Iran
reportedly pays hard currency for nuclear reactors, missile technology, and
conventional weapons purchases.
In the Soviet period, the defense sector absorbed a huge percentage of GDP. In
the space of just a few years, however, this sector was displaced from its position
near the top of the pyramid to a relatively low status in which many of its major
elements are struggling to survive. MINATOM, which employs about one million
people, is in much the same economic condition as the rest of the defense industrial
sector. Workers are being paid subsistence and below-subsistence wages while many
enterprises and research institutes stand idle. Salaries often are months in arrears.
The director of a prestigious nuclear institute committed suicide because he could not
pay his workers. Against this background, foreign reactor sales are viewed as a
matter of survival in MINATOM. Nuclear reactor sales worldwide have been slow
since the accidents at Three Mile Island and Chernobyl. MINATOM reportedly is
discussing reactor sales with China, India, Egypt, and Cuba. Those governments,
however, unlike Iran, seek Russian loans to finance part or all of the sales.
MINATOM’s first completed foreign sales contract was with Iran. The contract
for the first reactor at Bushehr is valued at $800 million. With recent contracts for
two additional reactors at Bushehr, MINATOM spokesmen put the total Iran
package at $3-4 billion, over 15 years. U.S. estimates of the total Iran package are
as high as $8 billion. The entire Russian state budget for 1998, even before the
devaluation of the ruble in August, was less than $80 billion. A multi-billion dollar
sale to Iran would be a very significant input. Despite U.S. objections, Moscow
appears determined to go ahead with the reactor deal. Missile technology transfers
may also be motivated by economic factors. Russian advocates of close cooperation
Some
45
Azeri leaders publically declare the goal of absorbing “southern Azerbaijan,” which
is part of Iran. Baku also resists Russian attempts to dominate Caspian Sea oil and regional
pipelines. This provides a basis for Russo-Iranian cooperation against Azerbaijan.

CRS-19
with Iran argue that profits from the reactor project and other deals far exceed the
amount of U.S. aid that might be jeopardized by sanctions.
Although official U.S. foreign aid to Russia in FY1998 is expected to be $120-
$130 million, the United States has much greater economic importance to Russia.
The value of U.S. investments in Russia (where the United States is the largest
foreign investor), of the U.S. market for Russian sales, and of indirect U.S.
Government assistance via multibillion dollar IMF loans (which have strong U.S.
political backing within the IMF and on which Russia is highly dependent) and U.S.
support of Russian space activities far exceeds the value of Iranian contracts with
Russian enterprises. U.S. economic sanctions could be made to be very painful to
Russia if a decision were taken to pursue such a course, especially in view of
Russia’s renewed economic crisis in late 1998. The Administration, however, still
46
wishes to avoid this approach because of concerns that severe economic sanctions
and pressure might seriously strain already tense U.S.-Russian relations and
endanger Russia’s fragile progress toward democratization and market reform. The
Administration also argues that the Russian Government is now taking effective steps
to curb missile technology transfers to Iran.
There are international and domestic political calculations that seem to reinforce
Moscow’s cooperation with Iran. Many Russians argue that close collaboration or
alliance with Iran (and China) is an appropriate response to NATO enlargement.
Also, as U.S.-Russian relations become more contentious and Russian resentment of
U.S. global preeminence (and of Russia’s dependence on U.S.-backed IMF loans)
grows, many analysts believe it is politically expedient for Yeltsin to be seen as
“standing up to America” by rebuffing U.S. pressure on Iran. This helps assuage
Yeltsin’s communist and nationalist opposition in the Duma. It also strikes a
resonant chord in Russian public opinion. These political considerations, however,
are probably not as important as the geopolitical and economic factors noted above.
The clearly articulated policy of the Russian Government to treat Iran as a
valued partner, if not an ally, may undermine Russian officials’ willingness to
effectively implement exports controls on sensitive technology to Iran. Furthermore,
many Russian commentators and officials argue that U.S. opposition to Russia’s
cooperation with Iran is commercially motivated. There are two versions of this
argument: a) the United States wants to cripple Russian enterprises that are powerful
competitors to U.S. arms and nuclear reactor exporters; and/or, b) U.S. firms dream
of eventually recapturing the Iranian market that they dominated until 1979.
Some observers have posited serious policy differences within the Russian
Government on issues of cooperation with Iran. This view usually juxtapose
47
d
"reformers" such as Chubais, Nemstov, and their allies, who advocate close
4 6 A recent Russian newspaper article critical of the government’s complicity in Iran’s
missile development program cautioned that, “Military assistance to Iran could bring Russia
approximately $2 billion annually. Possible losses from various sanctions [by] the EU and
the United States total approximately $50 billion.” Albats, “Our Man in Tehran,” p. 4. This
was written before the July 1998 IMF-brokered $22 billion loan package for Russia.
47See, for example, Saradzhyan, "Missile Sales to Iran."

CRS-20
cooperation with the United States, against "hardliners" in the national security and
military-industrial apparatus, and their communist and nationalist allies, who assert
that Russian and U.S. interests as fundamentally antagonistic. In late 1998, the
reformers -- who are widely blamed for the economic collapse -- were greatly
weakened, while Primakov and the military-industrial complex are in the ascendant.
This would seem to auger ill for U.S.-Russian cooperation on control of exports to
Iran. On the other hand, the economic collapse that propelled Primakov into the
Premiership has also made Russia highly dependent on economic assistance from the
IMF and other international financial institutions in which the U.S. Government has
a powerful voice -- hence, a potentially increased source of leverage.
U.S. Policy
Dual Containment
Throughout its first term, the Clinton Administration consistently characterized
Iran as an “outlaw state” that should be contained and isolated. According to the
Administration, the key U.S. objections to Iran’s international behavior include its
support for international terrorism, its active opposition to the Arab-Israeli peace
process, and its efforts to acquire weapons of mass destruction. In 1993, the
Administration placed the containment of Iran within a broader policy framework of
“dual containment” that casts both Iran and Iraq as “rogue regimes” that it seeks to
keep weak. (For information on dual containment, see CR
48
S Report 97-231F, Iran:
U.S. Policy Options, by (name redacted), updated November 4, 1998.)
One of the elements of dual containment has been to cut off the supply of arms
and technology to Iran. U.S. pressure on Russia, beginning in 1991, did not
persuade Russia to cancel arms sales to Iran. However, after two years of talks on
the issue, in May 1995 the United States and Russia finalized an agreement under
which Russia pledged not to enter into any new arms agreements with Iran. On the
basis of that understanding, the United States dropped its objection to Russian entry
into a new, nonbinding export monitoring regime, the Wassenaar Arrangement.
However, the U.S.-Russian agreement on conventional sales to Iran has not
contributed to a resolution of bilateral differences on the nuclear power plant deal
or on Russian entities’ assistance to Iran’s ballistic missile programs.
U.S. efforts to cut off Iran’s supply of strategic weapons and conventional arms
has continued despite the election of Mohammad Khatemi as Iran’s president. His
election, and subsequent statements indicating a desire for better relations with the
United States, have produced signs of a possible easing of hostility between the
United States and Iran. In January 1998, Khatemi publicly called for greater
unofficial scholarly and cultural exchanges between the United States and Iran.
4 8 On May 19, 1993, former NSC Senior Director for the Near East Martin Indyk first
described the Administration’s policy as one of “dual containment” of Iran and Iraq. Text
of Martin Indyk’s speech can be found in the proceedings of the Soref Symposium,
Challenges to U.S. Interests in the Middle East: Obstacles and Opportunities, May 18-19,
1993. Washington, Washington Institute for Near East Policy, p. 1 - 8.

CRS-21
Under pressure from more conservative senior leaders, including Supreme Leader Ali
Khamenei, Khatemi stopped short of calling for dialogue with the U.S. government.
U.S. officials, from President Clinton down, have responded that the United States
would prefer a political dialogue with the Iranian government, but would look to
facilitate the “people-to-people” exchanges mentioned by Khatemi.
On June 17, the Administration appeared to shift further toward conciliation in
a speech by Secretary of State Albright. Secretary Albright said that the two
countries should work to develop a roadmap of confidence building measures that
could eventually lead to a normalization of relations. President Clinton echoed those
comments the following day, and in a message broadcast in advance of the June 20
World Cup soccer match between Iran and the United States. Teheran reacted
cautiously to the statements. Iran’s foreign minister, responding to the Albright
speech in late September 1998, reiterated that Iran requires concrete signs of change
in U.S. policy (easing of sanctions) before relations can improve.
Members of Congress, although increasingly open to dialogue with Iran, oppose
easing of sanctions in advance of concrete changes in Iranian behavior. Some
Members of Congress opposed Administration consideration of removing Iran from
the list of states that do not cooperate with U.S. anti-narcotics efforts. Iran was re-
designated as non-cooperative in February 1998 (as it has been every year since
1987), although the Administration noted reports of Iranian progress on anti-
narcotics efforts. Several Members also opposed the Administration's May 18 waiver
of sanctions on the foreign firms that invested in Iran's South Pars gas field. A
provision of the Omnibus Appropriation Act (P.L. 105-277) expresses the sense of
the Congress that there be no easing of U.S. policy toward Iran until Iran alters its
objectionable policies.
In addition, some pro-Israel groups and Iranian opposition groups want strict
enforcement of all U.S. sanctions against Iran. Some of these groups oppose easing
pressure on Iran as long as it supports terrorism, seeks weapons of mass destruction,
and hinders the Arab-Israeli peace process. They also maintain that Khatemi’s grip
on power is not firm, and he could quickly be ousted or neutralized by hardline
elements within the regime. Others believe that Khatemi himself has undertaken a
“charm offensive” in an effort to blunt U.S. sanctions, with no real intention of
improving relations with the West.
Missile Technology Transfers to Iran
The Arms Export Control Act (AECA, P.L. 90-629) restricts exports of military
items, including missiles and related technology. The Export Administration Act of
1979 (EAA, P.L. 96-72), until it expired on August 20, 1994, contained the legal
authority for the government to control exports of civilian goods and technology that
are also useful for missile production. Congress has not passed a revised version of
the EAA. President Clinton reimposed export controls under the authority of the
International Emergency Economics power Act (IEEPA). He did this by declaring
a national emergency to deal with the threats to the United States caused by the lapse
of the EAA and system of export controls (Executive Order 12924, August 19, 1994).
Each year he has extended that national emergency.

CRS-22
In November 1990, Congress amended the AECA and the EAA to include
export restrictions and penalties to be imposed on U.S. and foreign persons and firms
that improperly transfer missile technology. In many cases, the sanctions provisions
of these laws do not apply to companies or individuals exporting from countries that
are adherents to the MTCR.
In addition to these general policies against missile proliferation, Congress
sharpened U.S. policy toward Iran by passing and later amending the Iran-Iraq Arms
Nonproliferation Act of 1992 (P.L. 102 -484). This law requires sanctions against
those who provide weapons of mass destruction or destabilizing types and numbers
of advanced conventional weapons to Iran or Iraq, although it also gives the President
waiver authority.
Congress also amended the Foreign Assistance Act of 1961 (FAA) to prohibit
aid to: 1) states of the former Soviet Union that transfer technology that contributes
to the production of missiles or weapons of mass destruction (sec. 498A), 2)
countries that aid terrorist states (sec. 620G, 22 U.S.C. 2377), and countries that
provide military equipment to terrorist states (sec. 620H). Finally, the last several
Foreign Operations Appropriations Acts have reduced aid to Russia unless the
President certifies it has terminated its ballistic missile and nuclear technology
assistance to Iran.
On November 14, 1994, President Clinton declared a national emergency under
the authority of the IEEPA in light of the dangers of the proliferation of nuclear,
biological, and chemical weapons and the means of delivering such weapons (E.O.
12938). This executive order declared the export control regulations initiated by
President Bush under the Enhanced Proliferation Control Initiative remained in force.
On July 28, 1998, President Clinton issued an amendment to E.O. 12938 (effective
July 29, 1998). The amendment adds penalties for contributions to foreign nuclear
weapons and missile programs as well as the chemical and biological programs
previously covered. Whereas E.O. 12938 required a finding that a foreign person
"knowingly and materially" contributed to proliferation, the amendment requires a
finding only that a foreign person made a "material contribution" (removing the
factor that the person did so knowingly), or that a foreign person attempted to
contribute materially to proliferation efforts. The amendment expands the range of
potential penalties to include the prohibition of U.S. government assistance, as well
as previously specified penalties prohibiting imports and procurement from the
proliferating person. Also the amendment authorizes the Secretary of State to tailor
the U.S. response to proliferation efforts by determining the extent to which these
measures should be imposed, considering national security and foreign policy
interests, the likely effectiveness of such measures, and their costs and benefits.
In addition to appealing to Russian national security interests and threatening
economic sanctions, the Administration is using economic incentives to try to deny
Iran missile technology. In March 1998, the Administration offered to increase the
number of western commercial satellites Russia would be allowed to launch. Under
a 1996 agreement, Russia was limited to launching 20 western geostationary
satellites through the year 2000. Since then, the demand for commercial launches has
increased. American businesses in joint ventures with Russians have urged the
Administration to increase Russia’s quota, but it had hesitated until now. Each

CRS-23
launch costs $60-$100 million. U.S. officials say publicly that the additional satellite
launches were not offered as a quid pro quo, nor merely as an enticement for Russian
cooperation on Iran. But both sides privately acknowledge linkage between
additional launches and more effective Russian control of missile technology.49
Since early 1997, the Administration has considered Russian missile technology
transfers to Iran a high priority. The President appointed a special representative for
this issue, who met frequently with Russian officials in Moscow and Washington.
In addition, Vice President Gore took the issue up directly with former Premier
Chernomyrdin in their talks in Washington, March 10-11, 1998, where they agreed
to set up a special expert joint commission to focus on issues of missile and nuclear
technology transfers. Russian officials at that time reportedly gave assurances that
tougher controls on missile technology transfers had recently been put in place and
that some violators were already being prosecuted.
50
Russian Nuclear Cooperation with Iran
Following the announcement of the Russian-Iranian nuclear reactor deal in
January 1995, the Clinton Administration mounted an intense effort to persuade
Moscow to cancel the deal, with frequent meetings at the sub-ministerial level and
between the U.S. Secretaries of State and Defense and their Russian counterparts and
with Chernomyrdin. Moscow consistently rebuffed the U.S. overtures. At the
Clinton-Yeltsin summit in Moscow in May 1995, Yeltsin made a significant
concession by agreeing not to provide Iran with gas centrifuge equipment — which
would have enabled Iran to produce highly enriched (weapons grade) uranium.
(These centrifuges had been included in the January 1995 Russian-Iranian
agreement.) Moscow also pledged to tighten its monitoring of Iran’s nuclear program
and to bring all spent nuclear fuel back to Russia.
Nevertheless, although the Administration has continued to view the Bushehr
nuclear reactor program as a very serious matter, it apparently has come to believe
that it cannot persuade the Russian Government to renounce the deal. As noted
above, Congress has included economic sanctions against Russia in the foreign aid
bill each year since 1995, but has acceded to Administration requests for inclusion
of presidential waiver authority on national security grounds.
With H.R. 2709, Congress confronted Russia and the Administration with more
stringent requirements for sanctions in connection with missile technology transfers,
although the bill also provided authority for a presidential waiver on national security
grounds.
49Jamestown Monitor, March 10, 1998; Defense News, March 16-22, 1998, p. 12.
50CRS interviews with congressional staff and Russian diplomats, March 1998.

CRS-24
Selected Legislation in the 105 Congress
th
The 105 Congress considere
th
d several bills dealing with Russian-Iranian missile
technology and nuclear reactor transfers. Several bills called for sanctions against
Iran, Russia, or any foreign person who attempts to contribute to Iran’s ballistic
missile or nuclear programs. The “Iran Missile Proliferation Sanctions Act” (Title
I of H.R. 2709) had broad bipartisan support and was passed in both chambers in a
bill that included implementing legislation for the Chemical Weapons Convention.
However, the President vetoed the bill and Congress did not try to override the veto.
Nonbinding resolutions would have condemned Russian missile technology transfer
to Iran, urged the President to impose sanctions, or cut U.S. contributions to the
International Atomic Energy Agency (IAEA) programs providing technical assistance
to the Iranian nuclear projects. Other legislation called for the President to expedite
missile defense programs to counter the Iranian missile threat and provided additional
funds for such programs.
Legislation to Sanction Iran or Russia or Make Policy Statements
H.R. 331, introduced 1/7/97 by Rep. Solomon, referred to the Committee on
International Relations and to the Committee on Banking and Financial Services.
The bill would have, among other things, prohibited foreign assistance to Russia
unless the President certified Russia was not providing Iran or others any goods or
technology that would contribute to the acquisition of chemical, biological, nuclear,
or advanced conventional weapons.
H.R. 1182, introduced 3/20/97 by Rep. Menendez, referred to the Committee on
International Relations. The bill would have limited the U.S. share of assistance for
the International Atomic Energy Agency (IAEA) projects in Iran among other
countries.
H.R. 1486, introduced 4/29/97 by Rep. Gilman, referred to the Committee on
International Relations, reported 5/9/97 (H.Rept. 105-94). The bill would have
limited economic assistance to Russia unless the President certified that the Russian
government had terminated assistance to Iranian missile and nuclear programs and
was taking appropriate steps to prevent assistance from Russian persons.
H.R. 1757, (Foreign Relations Authorization Act, Fiscal Years 1998 and 1999)
introduced 6/3/97 by Rep. Gilman, referred to the Committee on International
Relations, amendment 150 proposed by Rep. Fox and agreed to 6/4/97, bill reported
to the President and vetoed 10/21/98. Amendment would commend Ukraine for
declining to participated in construction of nuclear reactors in Iran.
H.R. 1759, (Foreign Assistance Reform Act of 1997) introduced 6/3/97 by Rep.
Gilman, referred to the Committee on International Relations. The bill would have
limited foreign assistance to Russian unless the President certified Russia had
terminated assistance to Iran’s missile and nuclear programs.

CRS-25
H.R. 2159, (Foreign Operations Appropriations Act FY 1998), introduced 7/14/97
by Rep. Callahan, referred to the Appropriations Committee, President signed
11/26/97, P. L. 105-118. The act prohibited assistance to Russia unless the President
certified Russia had terminated assistance to Iranian missile and nuclear programs.
Similar language was included in the 1996 appropriation bill, P. L. 104-107, and
subsequent appropriation bills. See also S. 955, the Senate version of the FY 1998
bill.
H.R. 2709, (Iran Missile Proliferation Sanctions Act of 1997), introduced 10/23/97
by Rep. Gilman, referred to the Committee on International Relations, passed House
amended 11/12/97, passed Senate 5/22/98, vetoed by the President 6/23/98 (H. Doc.
105-276). No further action.
H.R. 2709 was the primary effort of Congress to require the President to impose
sanctions for missile technology transfers, arms sales, nuclear technology transfers,
and large-scale investments in Iran. The bill combined the requirement to impose
economic sanctions against Russian missile proliferators with authority for the
President to implement the Chemical Weapons Convention (CWC), legislation that
the White House wanted. Specifically, the bill required the President to report
periodically to Congress on foreign persons who transferred goods or technology or
provided or attempted to provide assistance that contributed to Iran’s ballistic missile
program. The bill would have required the imposition of sanctions against those
persons, prohibiting U.S. exports of Munitions List items and dual-use goods and
technology to them and barring them from U.S. financial assistance. After the House
passed H.R. 2709 on November 12, 1997, the Administration failed to persuade the
Senate to reject the bill, which was approved by that body with an amendment on
May 22, 1998 by a vote of 90-4. On June 9, the House passed the Senate version of
the bill by a vote of 392-22. Despite these apparently "veto-proof" majorities,
President Clinton vetoed the bill on June 23 and said he would work to sustain the
veto. His veto message said that the bill would make it harder to achieve the
nonproliferation goals it was intended to serve.
Russian officials and news media reacted sharply to congressional passage of
the bill, with newspapers warning that new economic sanctions reduce the likelihood
of Duma ratification of START II. The bill’s supporters question whether Moscow
can or will stop the missile technology transfers without additional pressure. An
effort to override the veto, scheduled for July 17, was postponed indefinitely when
the Administration announced that it would impose trade sanctions on the Russian
entities identified by Moscow as being investigated for possible criminal violation
of Russian export controls. On July 28, President Clinton issued an executive order
that tightened U.S. restrictions on proliferation of weapons of mass destruction and
their means of delivery, including Russian missile technology transfers to Iran. A
White House press release that day said that pursuant to this executive order, all U.S.
assistance to and trade with seven Russian entities under investigation by Russian
authorities was being terminated.
The CWC implementing legislation was included in the Omnibus Consolidated
and Emergency Supplemental Appropriation Act for Fiscal Year 1999 (Conference
Report on H.R. 4328, Division I, Chemical Weapons Convention, p. H11274,
Congressional Record, Oct. 19, 1998.)

CRS-26

H.R. 2930, introduced 11/8/97 by Rep. Gilman, referred to the Committee on
International Relations. The bill would have imposed sanctions on foreign persons
who transfer items contributing to Iran’s ballistic missile program.
H.R. 3616, (National Defense Authorization Act, FY 1999), introduced 4/1/98 by
Rep Spence, signed by the President 10/21/98, P.L. 105-277. The act withholds $5
million for a U.S.-Russian observational satellite until the administration certifies it
has received detailed information regarding the nature, extent, and implications of
ballistic missile technology transfers from Russian sources to Iran.
H.R. 3743, introduced 4/29/98 by Rep. Menendez, referred to the Committee on
International Relations, passed House amended 8/3/98. The bill would have withheld
U.S. voluntary contributions for programs of the International Atomic Energy
Agency in Iran.
H.R. 4328, (Omnibus Consolidated and Emergency Supplemental Appropriation Act
FY 1999) introduced 7/24/98 by Rep. Wolf (as Transportation appropriation bill),
President signed 10/21/98, P.L. 105-277. The act withholds 50 percent of funds
appropriated for Russia until the President certifies that the Russian government has
terminated assistance for Iran’s nuclear reactor, related nuclear research facilities, or
ballistic missile capability. It includes a sense of Congress statement that Iran has
failed to reciprocate the Administration’s steps toward rapprochement, including the
President’s waiving of the Iran-Libya Sanctions Act and his veto of the Iran Missile
Proliferation Sanctions Act (H.R. 2709) and that the Administration should make no
further concessions until Iran has made appropriated changes. The act also
authorizes the President to implement the Chemical Weapons Convention, a
provision that had been tied to sanctions in H.R. 2709.
H.R. 4569, (Foreign Operations Appropriation Act, FY 1999), introduced 9/15/98
by Rep. Callahan, referred to the Appropriations Committee, passed the House
9/17/98. Measures subsumed into the Omnibus bill (H.R. 4328). The bill would
have prohibited aid to Russia until the President certified it had terminated missile
assistance to Iran.
H.R. 4851, introduced 10/19/98 by Rep. Menendez, referred to the Committee on
International Relations, passed House 10/20/98. The bill would have withheld
assistance for IAEA projects relating to Iran’s nuclear power plant.
S. 955, (Foreign Operations Appropriations Act FY 1998), introduced 6/24/97 by Sen
McConnell, referred to the Appropriations Committee, amendment 905 proposed by
Sen. Kyl and agreed to in the Senate 7/16/97, bill passed Senate 07/17/97,
incorporated into H.R. 2159 on 9/5/97 (see above.) The provision would prohibit
assistance to Russia unless the President certified Russia had terminated assistance
to Iranian missile and nuclear programs.
S. 1311, (Iran Missile Proliferation Sanctions Act of 1997) introduced 10/23/97 by
Sen. Lott, referred to the Committee on Foreign Relations. The bill, like H.R. 2709,
would have required the President to report on and impose sanctions against foreign
persons who provide assistance to Iran’s ballistic missile program.

CRS-27
S. 2334, (Foreign Operations Appropriation Act, FY 1999), introduced 7/21/98 by
Sen. McConnell, referred to the Appropriations Committee, passed the Senate 9/2/98,
Senate vitiated previous passage 10/21/98. Measures subsumed into the Omnibus
bill (H.R. 4328). The bill would have prohibited aid to Russia until the President
certified it had terminated missile assistance to Iran.
H. Con. Res. 118, introduced 7/22/97 by Rep. Harman, referred to the Committee
on International Relations, and H. Con. Res. 121, introduced 7/24/97 by Rep.
Harman, referred to the Committee on International Relations, Committee markup
10/9/97. Both resolutions would have called for the President to: demand that the
government of Russia take actions to stop Russian missile assistance to Iran; impose
sanctions against such Russian entities; raise the threshold for waivers of prohibitions
on aid to Russia; and encourage European allies to take similar steps.
H. Con. Res. 342, introduced 10/8/98 by Rep. DeLay, referred to the Committees on
International Relations and National Security. The resolution would have declared
the that President should impose sanctions under the Arms Export Control Act and
the Iran-Iraq Arms Non-Proliferation Act of 1992, expedite the U.S. missile defense
system, and provide Israel a third Arrow missile battery.
S.Con.Res. 25, introduced 5/5/97 by Sen. Snowe, referred to the Committee on
Foreign Relations. The resolution would have urged the condemnation of Russia for
providing Iran nuclear assistance and declared Russia ineligible for U.S. assistance
under the Freedom Support Act.
S.Con.Res. 48, introduced 7/31/97 by Sen. Kyl, referred to the Committee on
Foreign Relations, Senate agreed 11/7/97, referred to the Committee on Foreign
Relations. The resolution would have called for the President to: demand that the
government of Russia to take actions to stop Russian missile assistance to Iran,
impose sanctions against such Russian entities; raise the threshold for waivers of
prohibitions on aid to Russia; and encourage European allies to take similar steps.
H. Res. 188, introduced 7/17/97 by Rep Gilman, referred to the Committee on
International Relations, amendment proposed and accepted (H. Amdt. 465) and
House agreed to resolution 11/6/97. Among other things, the resolution calls for the
President to: demand the government of Russia to take actions to stop Russian
missile assistance to Iran; impose sanctions against such Russian entities; raise the
threshold for waivers of prohibitions on aid to Russia; and encourage European allies
to take similar steps.
Legislation that Supports Missile Defense Programs to Counteract
Iran’s Missile Program
H.R. 2786, (Theater Missile Defense Improvement Act of 1998) introduced 10/31/97
by Rep. C. Weldon, referred to the Committee on National Security and the
Committee on International Relations, House amended and passed 3/30/98. The bill
would have authorized funds for specific missile defense programs and directed the
Secretary of Defense to identify other actions to counter medium-range ballistic
missile programs of Iran and other countries. See also S. 1387. Funds for missile

CRS-28
defense were authorized in P.L. 105-261 (H.R. 3616) and appropriated in P.L. 105-
262 as well as in the Omnibus and Supplemental Appropriation FY 1999, P.L. 105-
277 (H.R. 4328).
H.R. 3579, (Emergency Supplemental Appropriation FY 1998), introduced 3/27/98
by Rep. Livingston, conference (H.Rept. 105-504, 4/30/98) adopted modified
provisions proposed by Sen. Kyl as an amendment to S. 1768, President signed
5/1/98, P.L. 105-174. The act includes $179 million to support selected theater
missile defense programs to counter the emerging missile threat. It provides $45
million for aspects of Israel’s Arrow system and $38 million for Navy Theater Wide
missile defense.
H.R. 4327, introduced 7/24/98 by Rep. Saxton, referred to Committee on National
Security. The bill would have directed the President to commence an emergency
program to build a theater missile defense system capable of defending against the
type of ballistic missile tested by Iran on July 21, 1998.
S. 1387, introduced 11/6/97 by Sen. Kyl, referred to Committee on Armed Services.
The bill would have authorized additional funds for missile defenses and other
measures to counter the emerging ballistic missile threat form Iran and prohibited $3
million for U.S.-Russia cooperative missile defense projects. See also H.R. 2786.
S. 1768, (Emergency Supplemental Appropriation FY 1998), amendment 2079
introduced by Sen. Kyl and agreed to by the Senate 3/24/98 would have provided
$151 million for selected theater missile defense programs. See H.R. 3579 above.
H. Con. Res. 342, introduced 10/8/98 by Rep. DeLay, referred to the Committees on
International Relations and National Security. The resolution would have declared
that the President should: impose sanctions against certain Russian entities under the
Arms Export Control Act and the Iran-Iraq Arms Non-Proliferation Act of 1992;
expedite the U.S. missile defense system; and provide Israel a third Arrow missile
battery.

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