Thursday, April 12, 2012

Eye on Iran: Iran to Offer New Proposals at Nuclear Talks

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Reuters: "Iran will present new proposals at talks on Saturday aimed at easing concerns about its nuclear activity, state television said, but it was unclear if Tehran was willing to address its disputed uranium enrichment drive as six world powers want. It was the latest apparent attempt to strengthen Iran's position ahead of the talks, which the powers insists must tackle higher-grade enrichment by Tehran seen in the West as a disguised bid to develop the means to make nuclear weapons... 'Iran's representatives will participate in the negotiations with new initiatives and we hope that the (six powers) will also enter talks with constructive approaches,' said the head of Iran's Supreme National Security Council, Saeed Jalili, according to Iran's English-language Press TV on Wednesday. Jalili, Iran's chief nuclear negotiator, said it was 'ready to hold progressive and successful talks on cooperation' but that 'the language of threat and pressure against the Iranian nation has never yielded results.'"

Reuters: "China's ZTE Corp, which recently sold Iran's largest telecommunications firm a powerful surveillance system, later agreed to ship to Iran millions of dollars worth of embargoed U.S. computer equipment, documents show. The American components were part of an 8 million euro ($10.5 million) equipment-supply contract, dated June 30, 2011, between ZTE, a Chinese trading firm and a unit of the consortium that controls the Iranian telecom, Telecommunication Co. of Iran, according to documents reviewed by Reuters. ZTE is China's second-largest telecommunications equipment maker. The documents shed further light on how Iran obtains sophisticated American tech products despite U.S. sanctions on Iran. China is a major conduit. Reuters in March revealed an earlier deal between ZTE and TCI, which centered on non-American surveillance equipment but also included some U.S. tech goods. The latest deal, though smaller in scale, was much more reliant on U.S. products."

AFP: "Spain stopped importing Iranian oil 'at the end of February' because of the imposition of a gradual European Union embargo, the foreign ministry said Tuesday. 'We haven't imported Iranian oil since the end of February as businesses have diversified their buying because of European sanctions,' a ministry spokesman said. 'This is the logical fallout of Spain's support for European sanctions,' he said, adding that this had complicated financial transactions with Tehran. 'Spain is badly hit because we used to import a lot of Iranian oil,' he added. Last year, Iran was Spain's third largest oil provider with a total of 7.5 million tonnes, just over 14 percent of its total imports, according to official Spanish figures."

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Nuclear Program & Sanctions

Reuters: "Iran's oil production could fall almost 15 percent this year due to reduced foreign investment, the U.S. Energy Information Administration (EIA) said on Tuesday in a report highlighting the growing strain on Tehran's oil sector even before factoring in the effect of new sanctions. The EIA estimated Iran's oil output would fall about 500,000 barrels per day by the end of 2012, declining from 3.55 million bpd at the end of last year, as many foreign companies have been forced out of the country by existing restrictions."

Reuters: "Ship owners covered by Japan P&I club must alert the maritime insurer in advance of any plans to transport Iranian oil and petrochemicals that could fall foul of Western sanctions, the insurer said... Although Japan's P&I Club, which provides insurance for shipping companies, does not directly fall under the sanctions regime, it is largely dependent on the European reinsurance market to hedge its risk. 'Any reinsurers including other (P&I clubs) subject to EU legislation will not be able to pay out if a claim involves a sanctioned cargo,' said Japan's main ship insurer in a circular to its members on Tuesday... The insurer, whose members include shipping firms Kawasaki Kisen Kaisha, Mitsui O.S.K. Lines, ad Idemitsu Tanker Co, has said it would only provide coverage worth a maximum $8 million for a tanker carrying Iran oil and petrochemicals, down from the typical $1 billion coverage."

Bloomberg: "China Ocean Shipping Group Co., the nation's biggest sea-cargo carrier, said a government-backed insurer will probably cover oil shipments from Iran so deliveries aren't disrupted by European trade sanctions. 'There is a big chance the government may get a state- owned insurer to underwrite the ships,' Meng Qinglin, managing director at Cosco Group's tanker unit, Dalian Ocean Shipping Co., said in a phone interview yesterday. It's not clear when plans will be finalized, he said. A number of government departments are discussing the issue, Meng said, as China, the biggest buyer of Iranian crude, seeks to ensure that EU sanctions coming into force July 1 don't interrupt supplies. The EU embargo, prompted by Iranian nuclear plans, affects shipments to China and other countries as 95 percent of oil tankers are insured by the 13 members of the London-based International Group of P&I Clubs."

GlobalPost: "A lawsuit alleging that Africa's biggest cell phone company conspired to help Iran obtain South African weapons and government support for its nuclear program has drawn fresh scrutiny to Pretoria's close ties with the Islamic Republic... Obama, in a message on the Iranian New Year holiday last month, spoke of an 'electronic curtain' around Iran, noting that 'the regime monitors computers and cell phones for the sole purpose of protecting its own power.' On this point, MTN is being pressured to abandon its business in Iran from lobby groups such as United Against Nuclear Iran, which has petitioned the US Congress to back efforts to encourage divestment. Avi Jorisch, a former US Treasury Department official, accused MTN of following Iranian government instructions to suspend text-messaging services and block Skype, used heavily by Iran's opposition movement during protests following the 2009 presidential election."

AP: "Iran's official Press TV says the country plans to ban imports from 100 European companies as part of Tehran's pre-emptive retaliation against an EU embargo that is to go into effect in July. The station reported Wednesday that Tehran took the measure to punish European countries for sanctions imposed by the bloc on Iran over its controversial nuclear program. It did not say which companies or countries would be singled out by the import ban."

JTA: "Maryland lawmakers unanimously passed an Iran trade sanctions bill. The state's Senate and House of Delegates unanimously passed the Iran Certification Act, and it is expected to be signed in the coming days by Gov. Martin O'Malley and go into effect June 1. With its signing, Maryland would become the fifth state in the nation to sign such a bill. The measure calls for operations seeking businesses with the state to show by Jan. 1, 2013 that they are not engaging 'in investment activities in Iran.' It requires the Board of Public Works to create a publicly available list of companies or people engaged in such business dealings, to update the list every 180 days, and 90 days before that to notify in writing people or operations about to go on the list, which would allow for a written response."

Foreign Affairs

AP: "Special envoy Kofi Annan said Wednesday in Tehran that Iran could help solve the crisis in Syria, where activists reported fresh violence near the capital Damascus a day before an international cease-fire is supposed to take effect. Iran is one of Syria's strongest allies, and former U.N. chief Annan went there to bolster support for his faltering plan to stop the country's slide toward civil war. 'Iran, given its special relations with Syria, can be part of the solution,' Annan said during a news conference with Iran's Foreign Minister Ali Akbar Salehi. 'The geopolitical location of Syria is such that any miscalculation and error can have unimaginable consequences.'"

Opinion & Analysis

Bloomberg Editorial Board: "Apologies to Ronald Reagan as we mangle his catchphrase, but what the U.S. and other world powers need to do in negotiations with Iran later this week is to 'accept, but verify' an Iranian nuclear-fuel program that's limited to producing low civilian-grade fuel. Only the most reckless gambler would bet on a breakthrough in the talks, due to take place in Istanbul on April 14. Ten years of abject diplomatic failure, distrust and Iranian filibustering have fed a justifiable cynicism. Nor is an election year a good time to ask President Barack Obama to make the kinds of compromises that any negotiated deal would have to include. Still, some important facts surrounding the nuclear debate have changed since the two sides last met -- disastrously --more than a year ago, again in Istanbul. Both Iran and the Obama administration should seize the opportunity to use these changes, because the alternatives to a deal are far worse. The most important development is the pressure that harsh U.S.-led economic sanctions have placed on Iran, severely crimping the oil revenues on which the government budget relies and halving the real value of the currency. For the first time, Iran now faces clear and imminent costs and penalties should it refuse to engage with negotiators from the so-called P5+1 -- the U.S., Russia, China, France, the U.K. and Germany -- as it did last January. Were it not for the ramped-up sanctions, Iran would probably not have agreed to discuss its nuclear program this weekend at all. The U.S. and the P5+1 meanwhile, also for the first time, will go into this weekend's talks ready to drop the demand that Iran freeze all uranium enrichment, distinguishing instead between the low enriched fuel used for power generation, and higher grades of uranium that could be processed more quickly for use in a weapon... A recent New York Times report suggests the U.S. and its allies will focus on getting Iran to halt the enrichment of uranium to 20 percent, the level required for a medical reactor in Tehran, and transferring out of the country the roughly 100 kilograms (220 pounds) of the fuel that Iran has already produced in exchange for ready-made fuel rods. An initial response from the Iranian Atomic Energy Organization head, Fereydoun Abbasi, suggests Iran could be open to such a deal. This would be a concession on previous U.S. negotiating positions -- and our own previous recommendations -- as it would, in effect, allow Iran to go on enriching fuel for power generation at 3.5 percent to 5 percent. But the goal of ending all enrichment was to prevent Iran from mastering the technology that would allow it to create fuel for a bomb, should it decide to build one. That technology has been mastered and can't be unlearned. Focusing instead on intrusive monitoring is the right move."

David Albright, Andrea Stricker, Paul Brannan, and Christina Walrond in ISIS: "On April 8, Tehran Iranian Student News Agency (ISNA) conducted an interview in Farsi with the head of Iran's nuclear program, Fereydoun Abbasi-Davani, during which he offered to cap Iran's production of 20 percent low enriched uranium (LEU) when Iran has stockpiled enough of the fuel it needs to run the Tehran Research Reactor (TRR) and a second research reactor not yet declared to the International Atomic Energy Agency (IAEA). He stated that Iran would continue enrichment to 3.5 percent for power generation. ISIS calculates that Iran has already stockpiled enough 20 percent LEU to run the TRR for 5 to 10 years at 5 mega-watts-thermal (MW-thermal) and 10 to 20 years if the reactor operates at 3 MW-thermal, its current power level (See ISIS's more detailed calculations about the fuel requirements of the Tehran Research Reactor here). Therefore, Abbasi-Davani's offer to halt 20 percent enrichment at some point in the future should not be accepted and the P5+1 should reject anything less than an immediate freeze in negotiations with Iran. The P5+1 should also not accept a plan to build a second research reactor as a reason to continue 20 percent LEU production. Abbasi-Davani announced that Iran is planning to build a 10 MW-thermal pool type reactor, but it has not begun construction, nor has it even selected where to build it. Thus, any fuel loading of this second reactor is years away. This proposed new reactor would require each year 2-3 times the amount of 20 percent LEU as the TRR. Thus, Iran could argue that it needs to produce considerably more 20 percent LEU than it has today, even though any actual new need for 20 percent LEU is far off in the future. On balance, Iran does not need to continue production of 20 percent LEU for the TRR or start new production for another research reactor. Its continued enrichment up to 20 percent poses a growing threat for breakout."

David Albright and Paul Brannan in ISIS: "The March 13, 2012 ISIS report 'Satellite Image of Building which Contains High Explosive Test Chamber at the Parchin Site,' identified the location of a high explosive test chamber at Iran's Parchin military site, a site that is of interest to the International Atomic Energy Agency (IAEA). Subsequently, ISIS acquired an earlier image that shows the construction of this building (see figure 1). This GeoEye commercial satellite image taken on March 14, 2000 of the Parchin site shows the foundation of the building that would contain the explosive test chamber. The chamber itself is not yet placed on the foundation in this image. According to IAEA information, the chamber was constructed in 2000 and designed to contain explosions involving up to 70 kilograms of high explosives. Later commercial satellite imagery from 2004 shows the building which contains the explosive test chamber (see figure 2). ISIS will continue seeking imagery of the Parchin site from later in the year 2000. An important question is which experiments were allegedly done in the chamber that are related to the development of nuclear weapons? In the November 2011 IAEA safeguards report on Iran, the IAEA described evidence that Iran used the test chamber to conduct high explosive tests in the early 2000s, possibly related to nuclear weapons development. A senior U.S. official told CNN, 'We know explosive compression was done at this chamber'. As the IAEA notes, using a chamber would aid in preventing the dispersal of detectable material used in testing. As far as can be determined, neither the IAEA nor the U.S. government is alleging that such experiments happened after 2004."

David Albright and Paul Brannan in ISIS: "Recent media reporting about the U.S. intelligence findings on Iran's nuclear weaponization program has focused on the relatively narrow technical question of whether the Iranian regime has made the decision to restart an effort to actually build nuclear weapons. The recent reporting shows that the U.S. intelligence community assesses that this decision on restart has not yet been made. However, this reporting does not address the broader question of whether Iran decided many years ago to seek nuclear weapons and put in place specific nuclear capabilities to allow it to do so expeditiously. As a result, the NIE conclusion about restart, as reported publicly, may provide false comfort about the status of Iran's nuclear effort and the likelihood of Iran building nuclear weapons. When or if Iran will actually decide to breakout and make nuclear weapons depends on a range of political and technical factors. At the upcoming negotiations between Iran and the P5+1, the priority should be achieving both a set of interim measures that reduce the chance of Iran breaking out and the outlines of a long-term agreement that can establish confidently that Iran will not pursue nuclear weapons."

Eye on Iran is a periodic news summary from United Against Nuclear Iran (UANI) a program of the American Coalition Against Nuclear Iran, Inc., a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. Eye on Iran is not intended as a comprehensive media clips summary but rather a selection of media elements with discreet analysis in a PDA friendly format. For more information please email

United Against Nuclear Iran (UANI) is a non-partisan, broad-based coalition that is united in a commitment to prevent Iran from fulfilling its ambition to become a regional super-power possessing nuclear weapons. UANI is an issue-based coalition in which each coalition member will have its own interests as well as the collective goal of advancing an Iran free of nuclear weapons.

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