U.S. Concerned Chinese Companies May Be Aiding Iran Nuclear Weapon Effort

Indira A.R. Lakshmanan – Bloomberg March 10, 2011

The U.S. government is concerned Iran may be working with Chinese companies to obtain sensitive technology that may be useful for developing a nuclear weapons capability, Robert Einhorn, the State Department’s special adviser for nonproliferation and arms control, said yesterday.

Einhorn’s comments are the latest reflection of unease among U.S. officials and proliferation experts that China remains a gap in enforcing United Nations sanctions on Iran, which the government in Beijing supported last year.

“Implementation is not uniform,” said Einhorn, speaking at an event sponsored by the nonprofit Arms Control Association at the Carnegie Endowment for International Peace in Washington.

China responded by saying relations with Iran don’t violate any international treaties or regulations.

“On China’s military exports, we take a cautious and responsible attitude,” Foreign Ministry spokeswoman Jiang Yu told reporters today in Beijing.

The U.S. believes that “Iran is moving to the threshold” of making a nuclear weapon, regardless of whether its leaders decide they want to make one, Einhorn said. Iran insists that its nuclear work is for energy and medical purposes.

“We don’t see breakout” – a term referring to the ability to make a nuclear weapon – “as imminent at this stage,” Einhorn said.

‘Iran’s Drive’

A Defense Intelligence Agency assessment scheduled for release to Congress today concludes that “international economic sanctions are not stopping Iran’s drive to enrich uranium,” according to an advance copy of the 2011 World Wide Threat Assessment.

The U.S. and its allies were frustrated by what they saw as Iran’s refusal to negotiate seriously at nuclear talks held in January in Istanbul, and now have “no choice but to increase the cost to Iran” by tightening implementation of existing penalties and expanding “sanctions in a variety of ways,” Einhorn said.

As multinational energy companies have responded to UN, U.S. and European sanctions by withdrawing investment in Iranian oil and gas activities, China’s state energy companies appear to have taken a “go-slow” approach to involvement in Iran’s oil industry, Einhorn said.

China’s position is that it’s “prepared to live up to the terms” of last year’s UN Security Council sanctions resolution, yet “not prepared to go beyond” that by adopting unilateral sanctions, Einhorn said.

China Violations

During a visit to Beijing last September, Einhorn discussed with officials the U.S. concern that certain Chinese companies were violating UN sanctions against Iran, perhaps without the knowledge of the Chinese government.

U.S. and European officials credit the sanctions with hindering Iran’s efforts to acquire carbon fiber and maraging steel, an alloy that can be used to make centrifuges that enrich uranium to fuel a nuclear bomb. Iran may be running out of maraging steel, according to David Albright, a nuclear physicist who inspected Iran’s nuclear facilities for the UN’s atomic energy agency in the 1990s.

While the U.S. and Europe have developed law enforcement and export-control networks to detect Iranian front companies attempting to buy dual-use technology or materials, in China “a large amount” of equipment and materials reaches Iranian buyers, Albright, president of the Institute for Science and International Security in Washington, said at a forum in January.

Smuggling Efforts

An unclassified Pentagon review of Iran’s military power last year found that both China and North Korea had assisted Iran “in developing and expanding its missile program,” and made reference to smuggling efforts through China.

Einhorn said Iran’s oil production is declining and “it’s not going to pick up without” the return of foreign investment. “We hope that as the costs mount that thoughtful Iranians realize” that a nuclear weapons program isn’t worth the penalties the country is paying in diplomatic and economic isolation, he said.

Speaking at the same forum, John Limbert, an Iran expert and former State Department deputy assistant secretary for Near Eastern affairs, suggested that the Obama administration’s efforts at engagement with Iran have failed because of the simultaneous imposition of tougher sanctions.

Referring to the administration’s so-called dual-track approach on Iran, Limbert said, “I’ve never seen a train that can run on two tracks.”

‘Problem With Sanctions’

“The problem with sanctions is they overtook this idea of engagement,” said Limbert, a professor at the U.S. Naval Academy, who was among hostages held in the U.S. embassy in Iran from 1979 to 1981. Limbert said the U.S. and its allies missed an opportunity by rejecting Iran’s counter-offer to swap uranium stockpiles for nuclear material to use in a medical research reactor in Tehran.

He said it isn’t clear whether sanctions can persuade Iran to abandon its nuclear program or break the deep freeze in relations with the U.S. “They haven’t in 30 years,” Limbert said.

Kenneth Katzman, an analyst for the nonpartisan Congressional Research Service, said sanctions have had a discernible impact on the energy industry in Iran, where new investment has essentially dried up.

“Iran is now viewed by international businessmen as a third rail – you touch it, you die,” he said, citing a reported 75 percent to 80 percent drop in sales of refined gasoline to Iran following U.S. sanctions last year.

To contact the reporter on this story: Indira Lakshmanan in Washington at ilakshmanan@bloomberg.net

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