FPI Bulletin: Iranian Procurement Efforts Threaten Nuclear Deal

July 13, 2016

Iran may have violated the nuclear deal, German intelligence suggests. In its annual report, the Bundesamt für Verfassungsschutz (BfV), the German equivalent of the FBI, stated that Tehran continued its “illegal proliferation-sensitive procurement activities” at “a quantitatively high level” in 2015, thereby raising questions about the adequacy of the accord’s provisions governing Tehran’s procurement of dual-use technology. The Obama administration, which has dismissed the June 28 report as inconsequential, should further investigate Germany’s allegations, take steps to strengthen the agreement’s procurement channel, and impose sanctions on Iran in response to any violation.

A separate BfV report, released on July 4, provided further details, identifying 141 illicit procurement efforts in 2015 likely tied to the proliferation of weapons of mass destruction. Using front companies in the United Arab Emirates, Turkey and China, among other countries, Tehran attempted to acquire products with both civilian and military purposes, ranging from “basic materials such as chemicals or fibers to high technology and from the smallest of spare parts such as seals to industrial plants.”

The Obama administration appears unconcerned about the German claims, noting that they span only 2015, while the implementation of the deal, formally known as the Joint Comprehensive Plan of Action (JCPOA), began in January 2016. “We have no information to indicate that Iran has procured any materials in violation of the JCPOA,” said State Department spokesman John Kirby on Friday. “More generally, the IAEA has reported that Iran continues to implement its nuclear-related commitments under the deal. We understand that Germany shares this view and is not suggesting that Iran has violated its JCPOA commitments.”

This response is misleading. According to the June 28 report, “it is safe to expect that Iran will continue its intensive procurement activities in Germany using clandestine methods to achieve its objectives.” Two German intelligence officers also told the Wall Street Journal that Tehran’s procurement efforts have in fact continued in 2016.

Moreover, as the June 28 report notes, the regime’s procurement efforts aimed in part to advance its ballistic missile program, which Chancellor Angela Merkel, in a speech to Germany’s parliament last week, criticized for continuing “unabated” in defiance of the U.N. Security Council resolution that followed the nuclear deal. An unrepentant Iran dismissed the German leader’s rebuke. “Iran will continue with full force its missile program based on its defensive plans and national security calculations,” said Foreign Ministry spokesman Bahram Qasemi.

Tehran’s behavior suggests that it deliberately seeks to bypass the specific mechanism established by the accord to restrict its acquisition of dual-use technology. In accordance with the JCPOA (Annex IV, Section 6), a Procurement Working Group (PWG), consisting of representatives from each party to the agreement, reviews proposals by individual states to transfer dual-use goods to Iran. Within 30 days, the PWG, operating by consensus, submits its recommendation to the U.N. Security Council for a vote. Any one member of the Security Council can then veto the transaction. In this context, Tehran’s concealment of its procurement efforts in 2015 flouts the spirit of the JCPOA. If the German intelligence officers interviewed by the Journal are correct, Iran has also violated the letter of the JCPOA in 2016.

In fact, newly emerging evidence appears to support the officers’ assertions. In a July 7 report, the Institute for Science and International Security notes that Tehran recently attempted to acquire carbon fiber, a key ingredient for the construction of advanced centrifuges, from an undisclosed country, but the supplier and its government rebuffed the regime. Asked about this claim the next day, Kirby said, “I haven’t seen that report and therefore wouldn’t be proficient enough to speak to that finding.” The Institute also reports that previously sanctioned Iranian entities may be seeking illicit goods from China. With “a history of poor implementation and enforcement of its export and sanctions laws,” writes the Institute, “China is unlikely to prevent Iran’s illicit procurement.”

The Obama administration has also overlooked systemic flaws in the operations of the PWG itself. As the Institute states in an April 2016 report, the PWG — in response to a request from Russia and China, which are responsible for refurbishing the Fordow enrichment plant and the Arak heavy water reactor — has exempted items transferred to both locations from its purview. Fordow and Arak lie at the heart of the regime’s decades-long efforts to develop fissile material for a uranium bomb and a plutonium bomb, respectively. “These exemptions,” states the Institute, “undermined the fundamental purpose” of the PWG and “set dangerous precedents for it.”

Likewise, the Institute adds, the 30-day timeframe may prove insufficient for the parties to the JCPOA to mount a comprehensive investigation of a proposed acquisition, while the PWG suffers from an archaic application system that requires states to scan and email its proposals, thereby increasing the possibility of data errors. The group reportedly is also understaffed, lacks experience in Iranian nuclear and procurement issues, and offers no way to address potential deception by Tehran. As the Institute notes, the detection of illicit “exports or imports will require intelligence information. It may be difficult to know whether the Iranian government has authorized a domestic entity to make a proliferation-sensitive import outside the Procurement Channel and it may be able to deny any involvement.”

The White House should stop turning a blind eye both to Iran’s conduct and to the weaknesses of the PWG. Rather, it should state explicitly that Tehran’s alleged procurement efforts last year, at a minimum, constitute bad faith, and that any similar behavior this year will trigger meaningful sanctions. The administration should also immediately impose new sanctions on sectors of Iran’s economy that support its illicit ballistic missile program, and demand the requisite reforms in the PWG’s operations. If Washington fails to act, it will have demonstrated that the nuclear accord lacks the “unprecedented” inspection and verification measures that President Obama has repeatedly described as integral to its success.

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