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Cablegate: Critical Equipment Needs for Iran,S New Ir-2

O 152142Z MAY 08
FM SECSTATE WASHDC
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UNCLAS STATE 052030


E.O. 12958: N/A
TAGS: KNNP TRGY PREL PARM IR MNUC AORC IAEA UNSC

SUBJECT: CRITICAL EQUIPMENT NEEDS FOR IRAN,S NEW IR-2
CENTRIFUGE DESIGN (SBU)

REF: A. A STATE 021770
B. B STATE 039585

1. (U) This is an action request. Please see paragraph 11.

----------
BACKGROUND
----------

2. (SBU) OBJECTIVES: To encourage Nuclear Suppliers Group
(NSG) Participating Governments (PGs) to conduct outreach to
manufacturers, law enforcement, and customs officials within
their countries to make them aware of key commodities that
Iran may attempt to acquire in support of its gas centrifuge
program. Also, request PGs to reinforce within their
industry, business, and law enforcement communities the
restrictions detailed in United Nations Security Council
Resolutions (UNSCR) 1737 and 1803 regarding transferring to
Iran certain nuclear- and missile- related items, including
some dual-use commodities. Finally, request PGs to share
with the International Atomic Energy Agency (IAEA) and other
NSG governments their efforts to conduct outreach and any
information on inquiries or denials.

3. (SBU) BACKGROUND: On 22 February 2008, IAEA Director
General ElBaradei reported to the IAEA Board of Governors
details of the installation of the first round of the next
generation gas centrifuge (IR-2) at the Pilot Fuel Enrichment
Plant (PFEP) at Natanz, Iran. This report also highlighted
other research and development work on different, and more
advanced, centrifuge designs that Iran is undertaking. These
activities are in direct contravention of UN Security Council
Resolutions (UNSCR) 1737, 1747, and 1803, which, inter alia,
require Iran to suspend its enrichment-related activities.
Iranian President Ahmadinejad recently visited Natanz. Photos
posted on the www.president.ir website (and emailed to Posts)
show the interior of the PFEP, including the newly installed
IR-2 centrifuges. Also included are pictures of some of the
component parts that make the IR-2 a vast improvement over
the P-1 design. Such improvements include a rotor tube made
of carbon composite (carbon fiber and epoxy resin) rather
than from high-strength aluminum alloy or maraging steel as
used in earlier versions of Iran's centrifuges. Washington
has identified a list of critical technologies (see para 12)
that Iran will likely need to support its planned deployment
of the IR-2, but which it cannot manufacture indigenously and
therefore would need to procure from foreign suppliers.

4. (SBU) In an effort to disrupt these Iranian procurement
efforts for the IR-2, Washington would like to provide PGs
with this list of critical commodities. Washington requests
that PGs use this information to conduct aggressive outreach
activities with their local commercial, law enforcement, and
customs officials to ensure that they are aware of the
possibility that Iran may be looking to their companies to
supply or transship these materials. This information will be
discussed in more detail during the upcoming NSG Plenary in
Berlin, May 19-25.

5. (SBU) Depending on their technical specifications, the
commodities on this list may be on the NSG dual-use annex,
which consists of items with both nuclear and non-nuclear
applications. Such items are subject to the NSG's
"Guidelines for Transfers of Nuclear-related Dual-Use
Equipment, Materials, Software, and related technology" (See
the IAEA Information Circular numbered INFIRC/254/Rev.7/Part
2), which is available on the IAEA and NSG websites. In
addition, items that would be useful for certain sensitive
nuclear activities (including some items not on the NSG
control lists) have been included in procurement watch-lists
that the U.S. has shared with NSG PGs.

6. (SBU) UNSCR 1737 (23 December 2006) requires all States to
prevent the transfer to Iran of NSG Trigger List items (as
reflected in UN Security Council document S/2006/814), as
well as any other items a state determines would contribute
to proliferation sensitive nuclear activities (e.g., uranium
enrichment, reprocessing, and heavy water-related
activities). UNSCR 1803 strengthened the existing UNSCR 1737
restrictions on the transfer of dual-use items to Iran by
imposing an outright prohibition against the transfer to Iran
of any NSG-controlled dual-use items, unless specifically for
exclusive use in light water reactors or when necessary for
IAEA technical cooperation projects.

7. (SBU) By providing this information, the U.S. hopes to
increase international awareness of the controlled
commodities being sought by Iran. Armed with this
information, governments and companies will be able to take
proactive steps to deny Iran the key commodities that it
requires to advance its nuclear program, and thereby make it
harder for Iran to secure such items. This will also assist
countries to comply with the prohibitions on the transfer of
such items included in UNSCRs 1737 and 1803.

8. (SBU) States should review all requests to transfer any
such items with a strong presumption of denial if there is
reason to suspect that the end-user may be in Iran and to
ensure that the items are not diverted to Iran. Furthermore,
states should ensure that they abide by the conditions
established in paragraph 5 of UNSCR 1737 for the transfer of
dual-use items under the LWR or IAEA assistance exemptions.
These conditions are described in REF A, and include meeting
the NSG's guidelines, obtaining end-use verification rights,
and notifying the UNSC Sanctions Committee. Washington
believes that any such notification should include details
about how the exporting state has satisfied these procedural
requirements, in particular, post-shipment end-use and
end-user checks. If states are not in a position to execute
their end-use verification rights, they should not/not
transfer the items in question to Iran.

9. (SBU) States should also be aware that, as evidenced by
the number of Iranian front companies designated by the UNSC
in Resolutions 1737, 1747, and 1803, Iran makes frequent use
of deceptive tactics in order to obtain items and technology
in furtherance of its nuclear program. Furthermore, as
described in IAEA Director General ElBaradei's report of 22
February 2008, Iran has admitted to attempting to evade
international sanctions in order to procure sensitive
nuclear-related technologies. States must remain vigilant to
these tactics when considering transfers to ensure the items
are not diverted to Iran's nuclear program. Their companies
may be unwittingly assisting with Iran's efforts to procure
relevant technology.

10. (SBU) The U.S. has begun reaching out to U.S. companies
that manufacture the commodities listed in the non-paper, and
will issue a Department of Commerce Advisory stressing the
potential that Iran will look to U.S. companies as suppliers
for these critical commodities.

11. (SBU) ACTION REQUEST: Posts are requested to approach
appropriate host government contacts at both the foreign
ministry and other agencies responsible for export control
issues to provide them with the detailed information on the
types of commodities that would support Iran's expanded
enrichment activities, as listed in the non-paper below (para
12), leaving a copy of the non-paper and the attached
pictures. Posts should also urge the host government to
report back to the USG, the NSG, and the IAEA on any activity
they find relative to Iran's procurement efforts for the
listed commodities. A follow-on cable will be sent to posts
where specific company information is available.
12. (U) BEGIN U.S. NON-PAPER

-- Iran continues to develop and test its uranium enrichment
capabilities in violation of United Nations Security Council
(UNSC) resolution 1737.

-- At the same time Iran continues to refuse to acknowledge
and disclose to the International Atomic Energy Agency (IAEA)
its nuclear weaponization-related studies.

-- Iran thus appears to be establishing a fissile material
production capability while preserving its options to
weaponize such material.

-- It remains critical to the stability of the Middle East
region and our shared global nonproliferation objectives,
that Iran not succeed in developing a nuclear weapons
capability.

-- In the spirit of our nonproliferation cooperation, we
would like to make you aware of critical commodities Iran may
seek in support of its expanding uranium enrichment efforts,
including expanding to a new, more advanced centrifuge
design, the so-called "IR-2."

-- We hope to increase international awareness of the
commodities being sought by Iranian companies that are either
controlled under the Nuclear Suppliers Group (NSG) guidelines
or on individual countries' watch-lists. Governments and
companies should take proactive steps to deny Iran key
commodities it requires to advance its nuclear program. In
this way, we believe that countries will be better able to
comply with the prohibitions on the transfer of such items
included in United Nations Security Council Resolutions 1737
and 1803.

-- Based on our assessments, as well as those of the IAEA
Director General's report to the Board of Governors on 22
February 2008, we believe that Iran will continue to actively
pursue its procurement efforts for the commodities listed
below.

-- The images posted on the www.president.ir website of
Iranian President Ahmadinejad's recent visit to the Pilot
Fuel Enrichment Plant at Natanz appear to further
substantiate these findings.

-- The commodities of most concern include:

-- Carbon fiber - High-strength carbon fiber is controlled
by the NSG for dual-use reasons (2.C.7) as it is a critical
material necessary to fabricate composite rotors for gas
centrifuges. Carbon fiber is also used in a wide variety of
applications, including structural shapes or components for
aircraft, missiles, bicycles, pressure vessels, sporting
goods and automobiles. High-strength carbon fiber is included
on the gas centrifuge procurement watchlist.

-- Filament winding machines - Filament winding machines are
controlled by the NSG for dual-use reasons (3.B.4) because
they can be used to fabricate composite rotors for gas
centrifuge applications. They can also be used to
manufacture aircraft parts, storage tanks, and pressure
vessels, and are useful in fabricating sporting goods, such
as golf club shafts, fishing rods, ski poles, and tennis
rackets. Filament winding machines are included in the
gas-centrifuge procurement watchlist.

-- Epoxy Resins and related hardening/accelerator agents -
Epoxy resins are important "catch all" items because these
adhesives are needed to bind the carbon fibers used in
uranium enrichment centrifuges and missile structures. The
corrosion resistance of a resin is an important property for
these applications, but epoxy resins are widely available and
used in numerous military and commercial applications. Epoxy
resins are included in the gas-centrifuge procurement
watchlist.

-- Curing and Baking ovens/furnaces - Curing and baking
furnaces (autoclaves) are essential elements for constructing
composite structures by heating and "curing" the thermoset
epoxy resin and carbon fibers into the finished carbon
composite gas centrifuge rotor tube. Autoclaves are not
unique to nuclear applications, and thus are covered under
individual countries "catch all" controls, but the scale
required for nuclear applications is much larger and the
temperature-pressure controls more stringent than for other
application (most notably for sporting equipment and
lightweight automotive parts). The gas-centrifuge procurement
watchlist lists curing and baking ovens/furnaces.

-- Iran's IR-2 gas centrifuge also likely requires either
maraging steel or high-strength aluminum alloy for the end
caps and baffles of the rotor. Thus, these two materials
remain a critical import need for Iran for continued
industrial-scale expansion of their gas centrifuge process.

-- UNSCR 1737 prohibits states from transferring to Iran
items controlled on the NSG's Trigger List (items especially
designed and prepared for sensitive nuclear activities), as
reflected in UN Security Council document S/2006/814, and any
dual-use item that a state determines would contribute to
proliferation sensitive nuclear activities.

-- UNSCR 1803 strengthens this measure by explicitly
prohibiting the transfer of any NSG-controlled dual-use item
to Iran, unless for exclusive use in light water reactors or
IAEA technical cooperation projects. In those exempted
circumstances where the items are to be used in a light water
reactor, states must notify the UNSC Iran Sanctions Committee
and the IAEA in advance of the intended transfer. In
addition, end-use verification in Iran, and compliance with
NSG guidelines are required when such a transfer occurs.

-- The strong risk of diversion in Iran suggests that states
should handle requests for sensitive items by Iran and
Iranian-associated firms with a strong presumption of denial.
Moreover, if a state is not in a position to execute its
end-use verification rights, that state should not consent to
the transfer.

-- As evidenced by the number of Iranian front companies
designated by the UNSC in Resolutions 1737, 1747, and 1803,
Iran makes frequent use of deceptive tactics in order to
obtain items and technology in furtherance of its nuclear
program. Furthermore, DG ElBaradei's 22 February 2008 report
noted that Iran has admitted to attempting to evade
international sanctions in order to procure sensitive
nuclear-related technologies. States must remain vigilant to
these tactics when considering transfers to ensure the items
are not diverted to Iran's nuclear program. Their companies
may be unwittingly assisting with Iran's efforts to procure
relevant technology.

-- We would like encourage a strengthened international
effort to share information that would assist governments to
prohibit the transfer of these commodities to Iran. For
example, we would like to suggest that PGs share information
on manufacturers, make/model numbers, and any other
identifying information related to these critical commodities
with customs inspectors and others in countries where these
items might be transited or transshipped. In this way, we
can help facilitate legitimate commerce, while providing
additional assurances that critical commodities can be
identified and will be stopped.

-- We encourage you to use the information provided above to
conduct outreach to any companies within your country that
have the capability to manufacture or transship these
commodities to ensure they are aware of the prohibitions
outlined in UNSCRs 1737, 1747, and 1803. We also encourage
you to request your companies to inform your government of
any suspicious procurement attempts of these commodities from
Iran or third parties.We ask that you notify the U.S.
government, the NSG, and the IAEA of any suspected
procurement attempts by Iran so that we all can better track
Iran's efforts.

-- We are reaching out to other NSG members and outreach
countries in the hopes that we can collectively make prevent
Iran from acquiring any equipment that could provide a
material contribution to its uranium enrichment programs.

-- We appreciate your cooperation in this important matter
and look forward to discussing this further during the
upcoming NSG plenary in Berlin.

END U.S. NON-PAPER.

--------------------------
REPORTING DEADLINE AND POC
--------------------------

(U) Posts are requested to report any substantive responses.
Caroline Russell (ISN/CPI, 202-647-1296,
russellca@state.sgov.gov) and Richard Nephew (ISN/RA,
202-736-4730, nephewrm@state.gov) are the Department's POC
for this activity.
RICE


NNNN


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