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FM Zarif to Russia : State of Relations

Mark N. Katz

Iranian Foreign Minister Mohammad Javad Zarif will visit Russia on April 22 for a ministerial meeting of Caspian Sea countries. What is the status of relations between Tehran and Moscow?
      Moscow and Tehran have long appeared to have good relations but they are, in fact, often contentious. Iran values Russia’s role in tempering Western demands about its nuclear program and on other issues. At the same time, the Islamic Republic does not want to be drawn into defending Russia in the tense dispute over Ukraine, which pits Russia against the United States and Europe.
     Ironically, Moscow’s relations with Washington and the West today are worse than Tehran’s. Russia is actually concerned about losing influence in Iran, both because of President Hassan Rouhani’s more moderate tone on foreign policy and international tensions since the Crimea crisis erupted in February 2014.
On what issues do they collaborate? On what issues are they divided?
      Moscow and Tehran are often divided over the very issues on which they collaborate. 
      One of the biggest problems, for example, has been Iran’s first nuclear reactor at Bushehr. Russia was instrumental in completing the Bushehr reactor, but the long-delayed opening as well as numerous contract disputes became sources of tension. 
      Moscow has been helpful to Iran in delaying or limiting sanctions introduced by the West at the U.N. Security Council since 2006. But Tehran has also been annoyed that Russia voted to approve four resolutions that it could have vetoed. 
            Moscow has been an important arms supplier for Iran, but Tehran has been unhappy about the limits to cooperation. Tehran was furious in 2010 when Moscow canceled the S-300 air defense missile systems sold to Iran—even though Tehran had already paid for them. 
      Moscow and Tehran have been especially divided over how to draw the maritime boundaries in the Caspian Sea, an issue that will be discussed during the April 22 ministerial meeting. Given the failure of past meetings to make progress, prospects for this round are no better.
      One issue on which Moscow and Tehran have agreed is Syria. Both have supported the Assad regime’s campaign against the uprising launched in 2011. 
What is Russia’s stance on Iran’s nuclear program? What role has it played in the latest rounds of diplomacy?
            Moscow does not want Iran to acquire nuclear weapons, but it traditionally has not been as concerned as Washington. Moscow is far more concerned about maintaining and building Russia’s economic relationship with Tehran, especially in the area of petroleum, atomic energy and weaponry.
            Moscow fears a nuclear accord will improve Iranian-American relations, and that Tehran may then have less need for Russia for trade or as an ally. 
What is Iran’s stance on the unrest in Ukraine? And on Russia’s actions?
            The Iranian reaction to events in Crimea and Ukraine has been mixed. Some Iranian leaders have complained that the West is bullying Russia, while others warned about the general dangers of separatism, an issue about which Iran also feels vulnerable. Iran did not show up for a vote at the United Nations on Resolution 68/39 declaring that the Crimea referendum in March about joining Russia was invalid. Iran was one of 24 states that was absent for the vote. Events in Ukraine are not central to Iranian foreign policy. Tehran certainly does not want the Ukrainian crisis to jeopardize nuclear negotiations with the world’s six major powers.
Has the Iran-Russia relationship changed since President Hassan Rouhani took office in August 2013? If so, how?
            Before Rouhani’s election, Moscow hoped to play the role of mediator between Iran and the West, thus making Russia important for both sides. But the improved atmosphere between Iran and the West since Rouhani took office has lessened the need for Russian mediation. Even Iran and the United States can—and have had—direct talks with each other.
Mark N. Katz, professor of government and politics at George Mason University.

Click here for his chapter on Iran-Russia relations.

Photo credits: President.ir


Obama Rules on UN Appointees

      On April 18, President Barack Obama signed Senate Resolution 2195 into law, banning appointees to the United Nations that have “engaged in espionage or terrorist activity directed against the United States or its allies.” Senator Ted Cruz (R-TX) sponsored the bill in response to reports that Iran’s potential nominee for U.N. ambassador, Hamid Aboutalebi, was a member of the Muslim Students Following the Imam’s Line — the group that seized the U.S. Embassy in Tehran on Nov. 4, 1979 and held 52 Americans hostage for 444 days. The bill actually did not mention Aboutalebi by name. The White House previously told Tehran that Aboutalebi’s nomination was “not viable” but did not specify if it would bar him from entering the United States. The following is the full text Obama’s statement and information on the bill.

            Today I have signed into law S. 2195, an Act concerning visa limitations for certain representatives to the United Nations.  S. 2195 amends section 407 of the Foreign Relations Authorization Act, Fiscal Years 1990 and 1991, to provide that no individual may be admitted to the United States as a representative to the United Nations, if that individual has been found to have been engaged in espionage or terrorist activity directed against the United States or its allies, and if that individual may pose a threat to United States national security interests.  As President Bush observed in signing the Foreign Relations Authorization Act, Fiscal Years 1990 and 1991, this provision "could constrain the exercise of my exclusive constitutional authority to receive within the United States certain foreign ambassadors to the United Nations." (Public Papers of the President, George Bush, Vol. I, 1990, page 240).  Acts of espionage and terrorism against the United States and our allies are unquestionably problems of the utmost gravity, and I share the Congress's concern that individuals who have engaged in such activity may use the cover of diplomacy to gain access to our Nation.  Nevertheless, as President Bush also observed, "curtailing by statute my constitutional discretion to receive or reject ambassadors is neither a permissible nor a practical solution."  I shall therefore continue to treat section 407, as originally enacted and as amended by S. 2195, as advisory in circumstances in which it would interfere with the exercise of this discretion.


             On April 7, the Senate unanimously passed a bill by Ted Cruz (R-TX) barring known terrorists from obtaining visas to enter the United States as representatives to the United Nations. Iranian President Hassan Rouhani’s nomination of Hamid Aboutalebi as U.N. ambassador spurred the legislation. Aboutalebi was allegedly a member of the Muslim Students Following the Imam’s Line, the group that seized the U.S. Embassy in Tehran on Nov. 4, 1979 and held 52 Americans hostage for 444 days.
            Cruz introduced the bill on April 1 and argued that it would be “unconscionable” for the United States “to host a foreign national who showed a brutal disregard for the status of our diplomats when they were stationed in his country” in the “name of international diplomatic protocol.”
State Department deputy spokeswoman Marie Harf called the nomination “extremely troubling” in remarks to the press on April 2. “We're taking a close look at the case now, and we've raised our serious concerns about this possible nomination with the government of Iran. But we do take our obligations as host nation for the United Nations very seriously,” she said. Representative Doug Lamborn (R-CO) has introduced companion legislation, H.R. 4357 for consideration. The House would need to approve the measure before sending it to President Obama to sign it into law. On April 8, White House Spokesperson Jay Carney said the administration shares the Senate's concerns and that the U.S. government had informed Tehran that the "potential selection is not viable." The following is a statement by Cruz and the full text of S. 2195.  

S. 2195
To deny admission to the United States to any representative to the United Nations who has been found to have been engaged in espionage activities or a terrorist activity against the United States and poses a threat to United States national security interests.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
Section 407(a) of the Foreign Relations Authorization Act, Fiscal Years 1990 and 1991 (8 U.S.C. 1102 note) is amended--
(1) by striking ``such individual has been found to have been engaged in espionage activities'' and inserting the following: ``such individual--
``(1) has been found to have been engaged in espionage activities or a terrorist activity (as defined in section 212(a)(3)(B)(iii) of the Immigration and Nationality Act (8 U.S.C. 1182(a)(3)(B)(iii)))''; and
(2) by striking ``allies and may pose'' and inserting the following: ``allies; and ``(2) may pose''.
Passed the Senate April 7, 2014.



Khamenei’s Red Lines on Nuclear Talks

            On April 9, Supreme Leader Ayatollah Ali Khamenei outlined six redlines on nuclear talks in an address to the Atomic Energy Organization of Iran. The semi-official government website NuclearEnergy.ir pulled out his six points and distributed the graphic below. The following are excerpts from his speech marking National Nuclear Technology Day.  

Address to the Atomic Energy Organization of Iran
             The purpose of agreeing with these negotiations was to change the atmosphere of hostility that the camp of arrogance [the West] has created against Iran. These negotiations should continue, but everyone should know that despite this, the activities of the Islamic Republic in the area of nuclear research and development will not stop in any way. None of the nuclear achievements of the country can be given up. Besides, the relations of the International Atomic Energy Agency with Iran should be normal and ordinary relations.
       Another plot that global arrogance [the West] has tried very hard to implement against the Islamic Revolution is to influence the major policies of Iran and to shatter the willpower of the political management of the country. But the camp of arrogance has failed to do this until today and by Allah's favor, it will continue to fail in the future.
       The nuclear issue is an example of this, through which they tried to create an environment against the Islamic Republic and to spread lies. Their goal is to preserve the international environment against Iran with this excuse. This was why there was an agreement with the new plan of the administration for the nuclear issue. The purpose of this agreement was to remove the international environment against Iran, to seize the initiative from the other side and to reveal the truth for public opinion in the world. Of course, these negotiations do not mean that the Islamic Republic will compromise its scientific-nuclear movement.
             The nuclear achievements that have been made so far are, in fact, a message to the people of Iran that they can take the paths which lead to the lofty peaks of science and technology. Therefore, this scientific-nuclear movement should not be stopped in any way or slowed down.
             None of the nuclear achievements of the country can be given up. No one has the right to trade these achievements and no one will do this.
             At that time [a few years ago], a formula was devised for producing fuel. But the Americans created obstacles in the way of this process. This was contrary to what they had said to their friends in the regions and to a South American country - and these people believed what the Americans said. The Americans foolishly thought that they had put Iran in dire straits.
             At that time, I said that America does not want to solve this issue. Later on, everyone saw that when a nuclear agreement was in its final stages, the Americans did not allow it to be finalized.At that time, westerners began to ridicule our experts who had announced that they have the capability to produce fuel plates for the Tehran research reactor. But our youth accomplished this feat in less than the arranged time and as a result, the enemies were astonished.
             If some people think that the price of nuclear achievements has been sanctions and pressures, we should remind them that even before the nuclear excuse, sanctions and pressures existed against Iran.
             During the time when there was no nuclear excuse, a western court put Iran on a trial in absentia. Of course, in the present time, they do not have the courage to do this because of the national power of the country. Sanctions and pressures do not exist because of the nuclear issue. Rather, they are opposed to the independent identity - which originates from Islamic faith and belief - and the future prospects of the people of Iran and the Islamic Republic and to their refusal to be bullied by anyone.
             Therefore, if it is said that sanctions and pressures are the price that we have paid for our nuclear achievements, this is not true because even if sanctions did not exist, they would make another excuse, as the Americans bring up the issue of human rights in today's negotiations.
             Even if the issue of human rights is resolved, they will find another excuse. Therefore, the only way is to continue our path of progress with complete power and to stand up against their bullying.
             The negotiators of the country should not give in to any bullying of the other side. Besides, the relations of the International Atomic Energy Agency with Iran should be normal and ordinary relations.

Iran Nuke Odyssey 1: Under the Shah

Ali Vaez, Karim Sadjadpour (via Carnegie Endowment for International Peace)

Conception (1957–1979)
      The genesis of Iran’s nuclear program can be traced back to 1957. Ironically, it was the United States—then Tehran’s key strategic patron—that sowed the seeds of nuclear development by signing an agreement with Iran under the auspices of President Dwight Eisenhower’s Atoms for Peace initiative. The American Machine and Foundry Company supplied Iran’s first nuclear facility at Tehran University with a 5 megawatt (MW) reactor at the cost of $1 million. Another American firm, General Dynamics, provided 5.15 kilograms of weapons-grade highly enriched uranium to Iran for fueling the Tehran Research Reactor. Initial progress, however, was slow, with the reactor only becoming operational in November 1967.
            In 1968, Iran was among the first countries to sign the NPT, which was ratified by the Iranian parliament two years later. Tehran completed its safeguards agreement with the IAEA in 1974. In the same year, the Atomic Energy Organization of Iran was established, and Akbar Etemad, a French- and Swiss-educated reactor physicist, was appointed its president.
            Boosted by the 1974 oil boom, Shah Mohammad Reza Pahlavi abruptly decided to make nuclear energy a priority for his government. The official narrative was that oil, “a noble material,” should not be wasted, and thus Iran’s energy portfolio should be diversified. For the shah, nuclear technology was not only essential to modernity, but it also symbolized Iran’s newly attained power and prestige.
            An American firm, the Stanford Research Institute, determined that if Iran were to achieve energy autonomy fit for a “great power,” it needed to generate 23,000 megawatts electrical (MWe) from nuclear power by 1994. Partly based on this advice, the shah then announced an ambitious plan to rapidly develop several full-fledged nuclear reactors in record time. Although no decision was made on the total number of reactors, the unrealistically ambitious goal was to develop one reactor per year.
            Meanwhile, Iran’s nuclear cadre was being trained. The Atomic Energy Organization of Iran signed special contracts with prestigious universities and technical centers around the world to cultivate the human capital for its nuclear program. Among these institutions was the Massachusetts Institute of Technology, which received a $20 million endowment from Iran in return. Many of the future decisionmakers in the Islamic regime’s nuclear program, including Ali Akbar Salehi, the current foreign minister and former head of Iran’s Atomic Energy Organization, were among the trainees of this program.
            By 1977, with exceptional royal support, the Atomic Energy Organization of Iran had undergone a stunning expansion and employed more than 3,800 experts, engineers, technicians, and interns. Students sent abroad for training returned home as nuclear experts. The organization witnessed a twelve-fold increase in the number of its nuclear scientists, from 67 in 1974 to 862 in 1977. In the last years of the Pahlavi monarchy, the organization had the second-highest budget in the country following the National Iranian Oil Company. Its employees were among the highest paid in Iran. Etemad had the monarch’s carte blanche for his agency’s expenditures, and the annual budget skyrocketed from $30.8 million in 1975 to $1.3 billion in 1976 and over $3 billion (corresponding to more than $11 billion in 2012 dollars) in 1977.

            The shah’s insistence on mastering the complete fuel cycle and on possessing plutonium reprocessing capabilities—at the time an easier way to fuel a nuclear weapon than enriched uranium—intensified U.S. concerns about Iran’s proliferation intentions. Washington, still reeling from India’s nuclear test in 1974, was suspicious, and the administration of Gerald Ford required assurances that Iran’s intentions were peaceful. 

            Recently declassified documents reveal striking details about the bitter U.S.-Iranian nuclear negotiations from 1974 to 1978. Surprisingly, the same issues that have caused the current nuclear showdown between Iran and the West—access to sensitive technology, fuel stockpiles, and additional safeguards—were in contention then. When no agreement could be reached, the U.S. government barred American companies from selling nuclear technology to Iran. The shah reciprocally decided that, “unless it was clear that Iran was not being treated as a second-class country,” he would look for alternative vendors.
            France and West Germany filled the gap. The Atomic Energy Organization of Iran commissioned the German firm Kraftwerk Union (a joint venture of Siemens AG and AEG Telefunken) to build two 1,196 MWe pressurized water reactors. The turnkey contract, which would deliver the power plate in a completed state, was worth $4.3 billion (nearly $21 billion in 2012 dollars). Construction began in August 1975, with a planned completion date of 1981. The choice of location, the southeastern city of Bushehr, rendered the enterprise particularly costly, as it was prone to seismic activity and located in an underdeveloped region that lacked essential physical infrastructure. Yet Bushehr was chosen mainly due to its location on the shores of the Persian Gulf to facilitate shipping of the nuclear power plant’s machinery and equipment.
            The shah also had an extensive plan for acquiring nuclear fuel. In 1975, he provided a $1 billion (and another $180 million in 1977) loan for the construction of the Eurodif nuclear consortium enrichment plant in France. As part of the agreement, Sofidif  enterprise was established with Iran and France holding 40 and 60 percent of its shares, respectively. Subsequently, Sofidif acquired a quarter of Eurodif stocks, which gave Iran a 10 percent share of the enriched uranium produced. Furthermore, Iran signed a $700 million contract to purchase 600 tons of uranium yellowcake from South Africa and obtained a 15 percent stake in the RTZ uranium mine in Namibia. In parallel, Iran started an extensive uranium exploration effort both inside and outside the country. 
            An agreement was also reached with French company Framatome to build two 900 MWe nuclear power generators valued at $2 billion at Darkhoveen, near the city of Ahwaz on the banks of the Karun River. Moreover, France indicated its willingness to build eight additional plants for Iran if the United States continued to bar American firms from selling Iran nuclear power plants at an estimated price of $16 billion.
            Finally, in 1978 there was a breakthrough in nuclear negotiations between Tehran and Washington. The shah agreed to forego plans to build a plutonium processing plant, to put Iran’s nuclear activities under enhanced monitoring, and to send spent nuclear fuel to the United States. Reciprocally, the Carter administration agreed to allow American companies to sell reactors to Iran. The coming political tumult in Tehran, however, would render these agreements moot.
            Income disparity and economic malaise had begun to fuel domestic discontent with the shah’s rapid modernization programs, which many Iranians perceived as profligate and corrupt. The monarch was forced to rein in his atomic dreams. The storm of an Islamic revolution was brewing on the horizon, and the government of Prime Minister Jamshid Amouzegar began a review of the nuclear program. In 1979, Prime Minister Shahpour Bakhtiar began to roll the program back. When the country descended into revolutionary turmoil later that year, one of Bushehr’s reactors was 85 percent complete and the other was half constructed.
Click here for the full report.
Click here for Ali Vaez's article "Iran Sanctions: Which way out?"
Click here for Karim Sadjadpour's chapter on Supreme Leader Ayatollah Ali Khamenei.


Iran Nuke Odyssey 2: After the Revolution

Ali Vaez, Karim Sadjadpour (via Carnegie Endowment for International Peace)


Caesura (1979–1984)
            One of the first debates among the revolutionaries who overthrew the shah was about the legacy of the ancien régime. The royal heritage included the nuclear program, deemed by the revolutionaries as a costly Western imposition on an oil-rich nation. Yet, antinuclear rhetoric was not purely ideological. A pragmatic cost-benefit analysis indicated that while a gas-fired power plant would cost $300/kilowatt in Iran, the predicted costs of Bushehr would be between $2,500 and $3,000/kilowatt. Moreover, in the aftermath of the 1979 nuclear incident at Three Mile Island in the United States, safety concerns about the nuclear installations in Iran preoccupied the new authorities. Other arguments against the program included Iran’s limited uranium resources, earthquake-prone terrain, and lack of expertise.
            The death knell for Iran’s nuclear program was Ayatollah Khomeini’s pronouncement that the unfinished plants in Bushehr would be used as “silos to store wheat.” In July 1979, construction of all nuclear power plants came to a halt. The transitional government of Prime Minister Mehdi Bazargan abandoned all of the existing nuclear contracts. But the decision was not cost free.
            In retaliation and against the backdrop of the seizure of the U.S. embassy in Tehran, Western countries refused to deliver machinery Iran had already purchased at a hefty price. The United States—whose diplomats were taken hostage in Tehran for 444 days—ceased supplying highly enriched uranium fuel for the Tehran Research Reactor, which was forced to temporarily shut down. The halt of nuclear plant construction led to an exodus of Iranian nuclear scientists.
            The Kraftwerk Union also terminated its Bushehr contract, but Iran had already sunk $5.5 billion deutsche marks (nearly $2.8 billion in 1979 dollars and $9.6 billion in 2012 dollars) into the project. A bitter legal dispute ensued in several international courts. Based on a 1982 International Chamber of Commerce ruling, the German companies had to deliver some 80,000 pieces of equipment, but Iran’s efforts to obtain compensation for unfinished reactors and paid nuclear fuel came to naught. A German offer to provide Iran with modern gas-fired power plants to settle the $5.4 billion claim also fell on deaf ears.
            Lawsuits with the French over Eurodif were eventually settled in 1991; Iran was reimbursed a total of $1.6 billion for its original 1974 loan plus interest. To date, Iran is still listed as an indirect stockholder of Eurodif but under the 1991 settlement has no right to enriched uranium from the facility. This experience soured prospects of any future joint ownership of foreign facilities for Iran.
            In September 1980, Saddam Hussein’s Iraq invaded an Iran still in the throes of post-revolutionary chaos. What would become an eight-year war severely damaged Iran’s nuclear infrastructure. In retaliation for Iran’s failed raid on Iraq’s Osirak nuclear reactor, Iraqi air forces attacked the Bushehr power plant seven times during the war, leaving the plant in ruins. According to estimates by engineers from both Siemens and Technischer Überwachungsverein, the repair bill for the damages and environmental exposure of the two reactors in Bushehr ranged between $2.9 and $4.6 billion.
Concealment (1984–2002)
            By the mid-1980s, as revolutionary fervor in Iran began to subside while the country was still in a full-blown war with Iraq, Tehran’s leaders began to reconsider their nuclear program as a deterrence option. Iranian leaders felt isolated—a calculus that was exacerbated by the fact that Saddam Hussein was abetted by great powers with sophisticated weapons and (courtesy of the United States) crucial intelligence to locate Iranian military targets. Moreover, the drain of war had pushed the country into a severe energy crisis, evidenced by frequent blackouts.
            It was against this backdrop that Iran’s nuclear program, dormant since 1979, was resurrected. A nuclear program could potentially alleviate Iran’s dire electricity needs and serve as a deterrent against the Islamic regime’s foreign foes. In 1984, then President Ali Khamenei, the current supreme leader, obtained authorization from Ayatollah Khomeini to restart the nuclear program and allocated funds for the effort in the national budget. 
            Facing unprecedented international isolation, the Iranian government searched in vain for a partner to complete the Bushehr project, but due to U.S. opposition all efforts came to naught. Only one man provided Tehran with a promising response—the father of Pakistan’s nuclear weapons program, Abdul Qadeer (A.Q.) Khan. He visited Bushehr twice, in February 1986 and January 1987. But soon it became clear that the completion of Bushehr was beyond A.Q. Khan’s ability. Tehran grew convinced that the only option available to it was self-sufficiency.
            Their first step was to acquire nuclear fuel-cycle capabilities. A.Q. Khan had already offered assistance by providing enrichment technology to Iran. With the endorsement of the then prime minister, Mir Hossein Moussavi (who was put under house arrest, accused of “sedition,” in the aftermath of the 2009 disputed presidential election), a deal was struck between the representatives of the Atomic Energy Organization of Iran and A.Q. Khan’s illicit nuclear network. Iran’s uranium enrichment program was thus born in secret through the acquisition of technical drawings, manufacturing instructions, and samples of components for P-1 centrifuges (a 1970s Dutch design stolen by A.Q. Khan).
            With design information in hand, Iran started a wide-ranging procurement effort to obtain critical parts for building centrifuge cascades. For example, in 1988 the Iranian front company Kavosh Yar, a subsidiary of the Atomic Energy Organization, acquired centrifuge components and vacuum valves from the German company Leybold worth $500,000. In 1995, Iran revisited A.Q. Khan’s “nuclear Walmart” and bought parts and designs for the more advanced P-2 centrifuge.
            Iran also sought to upgrade the Tehran Research Reactor, the renovation of which had been pending since the shah’s era. In 1987, while renovating the reactor’s core, Argentina’s Applied Research Institute converted the reactor’s fuel from weapons-grade 93 percent enriched uranium to slightly less than 20 percent. The cost was $5.5 million. Argentina’s Nuclear Energy Commission also signed an agreement to supply 115.8 kilograms of the Tehran reactor’s required 19.75 percent enriched uranium, which was eventually delivered in 1993.
            By the mid-1990s, the nuclear program had once again become a national priority with more than $800 million allocated to it in the national budget. The nuclear technology center located in the city of Isfahan, south of Tehran, was inaugurated in 1990 and with it a wide-ranging quest to find additional nuclear partners. Despite generous offers from Iran, the government of Pakistan remained reluctant to share its nuclear know-how with its neighbor. But China was interested. Beijing conducted nuclear trade worth $60 million annually with Tehran, turning China into Iran’s primary nuclear partner. In 1991, Tehran secretly imported approximately one ton of uranium hexafluoride from China but failed to report the purchase to the IAEA, a requirement under its NPT safeguards agreement.
            U.S. pressure brought the Sino-Iranian cooperation to an end—another wakeup call that Iran would have to rely on native expertise. Thus began a renewed effort to bring Iran’s migrated nuclear talents back home and to train new experts. A group of 77 Iranian nuclear scientists were sent to study at Italy’s International Center for Theoretical Physics in Trieste, which was saved from financial crisis by a $3 million loan from Iran.
            Finally, a cash-strapped Russia took on the task of completing the Bushehr nuclear plant in 1992. Moscow’s impetus for entering the Iranian market was above all to rescue its post-Soviet nuclear industry from insolvency. A turnkey agreement was signed between the Atomic Energy Organization of Iran and AtomStroyExport, a subsidiary of the Russian Atomic Energy Agency. Moscow was to supply a 915 MWe VVER-1000 light-water reactor, which is suitable for power generation and not prone to proliferation. Tehran, in turn, agreed to pay 80 percent of the value of the contract in cash and the remaining 20 percent in kind. On the ruins of the crippled reactor, the Russians planned to build a sui generis nuclear plant—cobbled together with residual German equipment and scrambled Russian technology.
            From the outset, the project was plagued with problems. The design of the Russian VVER reactor was incompatible with the German foundations of the Bushehr plant. It cost Iran an additional $140 million to solve the problem. Due to American objections, Moscow also backed off from constructing a centrifuge-based uranium enrichment facility in Iran and instead agreed to supply the reactor’s nuclear fuel for a ten-year period with a price tag of $300 million. After a sixteen-year hiatus, the Bushehr reactor was once again a construction site. The initial completion date was set for 2001, but the estimate would prove off by more than a decade. But since construction began, between 250 to 3,000 engineers and technicians from Russia and other former Soviet Union countries have been working in Iran, reportedly earning $5,000 to $20,000 per month.
            From 1992 to 2002, Iran made steady progress toward an indigenous nuclear fuel cycle. Enrichment experiments were secretly conducted, contrary to Iran’s NPT safeguards obligations, on test centrifuges in a research and development facility installed at Kalaye Electric Company. Another vast clandestine enrichment facility was built underground near the city of Natanz. Buried under 25 feet of cement and concrete, construction of the gas centrifuge facility at one point consumed all of the cement produced in Iran. The Atomic Energy Organization of Iran had also started to secretly construct a heavy-water production plant and a 40 MW research reactor near Arak. 
Crisis (2002–2008)
            In August 2002, an Iranian opposition group, the National Council of Resistance (a front for the Mojaheden-e Khalq, a militant Marxist-Islamist cult that helped topple the shah and now calls for the overthrow of the Islamic Republic), revealed information about Iran’s undeclared nuclear enrichment facilities in Natanz and heavy-water production plant in Arak. The revelation ignited an international crisis. 
            Between 2003 and 2005—against the backdrop of the U.S. invasion of Saddam Hussein’s Iraq—France, Germany, and Britain (the EU-3) led a diplomatic effort to resolve the nuclear crisis. Iran, sobered by the fact that the United States had just defeated an Iraqi army in three weeks that they had fought to a standstill over eight years, initially agreed to suspend its enrichment program. It also voluntarily implemented the IAEA’s Additional Protocol, which allows for more intrusive inspections, for more than two years. But as the situation in Iraq began to deteriorate, turning in Iran’s favor, oil prices began to soar, and the EU-3 failed to bridge the gap between Iran and the United States, Tehran’s leaders grew emboldened enough to reject what they believed to be the West’s underlying objective: to get them to permanently give up their right to enrich uranium. On August 8, 2005, in the final days of Mohammad Khatami’s presidency, Iran restarted uranium conversion at its Isfahan facility.
            With the election victory of President Mahmoud Ahmadinejad in 2005, Iran adopted a harsher stance in negotiations. Eventually, in January 2006, it broke the IAEA seals and restarted uranium enrichment. On February 4, 2006, the IAEA’s Board of Governors voted to refer Iran to the United Nations Security Council for its noncompliance with its NPT safeguards agreement obligations. On July 31, 2006, Security Council Resolution 1696 was issued by unanimous vote, calling on Iran to stop uranium enrichment efforts within one month.
            Tehran continued to insist on its “inalienable right” to pursue uranium enrichment on its soil. Consequently, on December 23, 2006, the Security Council passed Resolution 1737, imposing international sanctions on Iran. This was the beginning of a mutual cycle of escalation. A third Security Council Resolution (1747) was adopted in March 2007. Several weeks later, Iran announced that it had reached industrial-scale uranium enrichment capabilities with the installation of 3,000 centrifuges in Natanz.
            Amid growing concerns about the possibility of a U.S. or Israeli military strike on Iran’s nuclear facilities, an unexpected U.S. National Intelligence Estimate was released in 2007, stating that Tehran had halted its structured nuclear weapons program in 2003. The report cooled temperatures, providing space for Iran and the IAEA to work on a “modality plan” for resolving outstanding issues within a year, and by February 2008, the IAEA closed the file on most of those issues. 
            But new evidence surfaced from a stolen laptop that allegedly contained information about Iran’s clandestine nuclear weapons program. The incident soured relations between Tehran and the IAEA and resulted in a four-year-long stalemate in talks about Iran’s pre-2003 activities. In March 2008, Security Council Resolution 1803 was passed, imposing further economic sanctions on Iran. The United States and its allies also started levying increasingly burdensome individual sanctions against Tehran. 
Click here for the full report.
Click here for Ali Vaez's article "Iran Sanctions: Which way out?"
Click here for Karim Sadjadpour's chapter on Supreme Leader Ayatollah Ali Khamenei.


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