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Subject: U.S. Halted Nuclear Bid By Iran; China, Argentina Agreed to Cancel Technology
Date: Tue, 17 Nov 92 04:36:11 EST
Message-ID: <27.1992Nov17.043611@AmeriCast.com>

U.S. Halted Nuclear Bid By Iran; China, Argentina Agreed to Can-
cel Technology Transfers<By Steve Coll<Washington Post Foreign
Service=

VIENNA - Iran was on the verge earlier this year of obtaining
equipment from China and Argentina that would have allowed it to
begin its own nuclear manufacturing, but quiet intervention by
the United States has blocked the transfers at least for now, ac-
cording to officials involved in the negotiations.

U.S. officials describe Iran's contracts with Argentina for
nuclear-fuel fabrication equipment, and with China for a large
research reactor, as part of what one called a "suspicious pro-
curement pattern" in the nuclear area that has led Washington to
accuse Tehran of clandestine efforts to build nuclear weapons.
CIA director Robert Gates testified earlier this year that Iran
was seeking a nuclear bomb and could have one by the year 2000 if
the West does not prevent it.

In response to these concerns, the United States has stepped up
satellite reconnaissance of Iran's nuclear-related facilities,
has passed on intelligence to inspectors at the Vienna-based
International Atomic Energy Agency (IAEA) who visit Iran, and is
attempting to closely monitor Iranian nuclear procurement,
Western officials said.

Iranian officials say that in the Argentine, Chinese and other
deals, they have gone out of their way to submit to full interna-
tional nuclear safeguards and to invite extra inspections to
prove that their nuclear program is peaceful and mainly for civi-
lian electricity generation. They accuse the United States of ig-
noring, in Iran's case, nuclear safeguards agreements that it
otherwise promotes and of waging a propaganda campaign to desta-
bilize Iran's government.

The cat-and-mouse negotiations over Iran's deals with Argentina
and China illustrate some of the predicaments Washington faces as
it attempts to control sensitive technology transfers to Iran,
which is in the midst of a major economic and military rebuilding
program constructed largely with Western investment and bank
lending.

The United States has publicly and privately warned fellow IAEA
members to keep a tight lid on Iran's nuclear ambitions or risk
repeating mistakes made with Iraq several years ago.

In the Iraqi case, IAEA inspectors discovered after the 1991 Per-
sian Gulf War that despite declaring peaceful intentions and sub-
mitting to international safeguards, Iraq had been engaged for
years in a secret program to acquire nuclear weapons by smuggling
components from the West, and that the weapons program was far
more extensive than previously believed.

Washington suspects Iran of having a similar clandestine nuclear
weapons program but so far has produced "no smoking gun," as one
official put it, to prove its suspicions. U.S. officials have
said Washington's estimate of Iran's nuclear intentions is based
in part on information derived from highly sensitive sources,
which they would not disclose publicly or share in detail with
other governments.

European officials say, however, that while Iran may be dabbling
with a nuclear weapons program, there is no sign of an ambitious,
secret effort like Iraq's.  Nonetheless, the United States is
warning its Western allies and other IAEA members not to turn a
blind eye to even small doubts about Iran's nuclear procurement.
In the cases of the Argentine and Chinese deals this year, the
United States succeeded.

U.S. officials were sufficiently alarmed by the proposed sale of
Argentine equipment - which would have enabled Iran to convert
natural uranium into precursor forms of highly enriched uranium
used in nuclear weapons - that they undertook what one called a
"long and tough" lobbying campaign in Europe and Argentina to
stop the shipment, which officials said was packed and ready to
go to Iran around the first of this year.

In the end, the U.S. ambassador to the IAEA, Richard T. Kennedy,
succeeded in persuading Argentina in part because he agreed to
help the affected state-owned Argentine company Investigaciones
Aplicadas to find alternative nuclear business in the United
States to compensate for the loss of the Iran sale, officials in-
volved said. In March, Investigaciones Aplicadas signed a memo of
understanding to develop future business with General Atomics,
Inc. of San Diego, although officials of the two companies said
they have yet to come up with any deals together.

The Argentine government, which has been moving steadily toward
improved relations with the United States, was also persuaded be-
cause their export equipment could be linked by Iran to supplies
from China, a nuclear weapons state involved in the past in sen-
sitive exports to such nuclear threshold countries as Algeria and
Pakistan, said one official closely involved.

Meanwhile, State Department officials lobbied heavily with the
Beijing government to prevent the sale to Iran of a large nuclear
research reactor, rated at more than 20 megawatts, that would
have included a supply of enriched fuel and would have allowed
Iran to conduct a variety of work related to the nuclear fuel cy-
cle, officials and diplomats said.

J. Stapleton Roy, the U.S. ambassador to Beijing, visited a
Chinese nuclear facility outside the capital in March and in-
spected a model of the reactor bound for Iran, according to a
Western diplomat in Beijing. On that occasion and others, U.S.
diplomats lobbied senior Chinese officials to block the transfer.

Western sources said the Chinese never directly answered the U.S.
protests, or promised that they would not sell reactors to Iran.
But National Nuclear Corp. official Xuehong Liu told the trade
journal Nucleonics Week on Sept. 23 that China "could not supply"
the research reactor to Iran for "technical reasons."

One Bush administration official confirmed that China had ap-
peared to respond to U.S. pressure, but expressed a note of cau-
tion saying that there were some suggestions from the Chinese
side that they would review the issue after the U.S. presidential
election and that the decision to hold off on the reactor might
be reconsidered.

In early September, just days after the Bush administration de-
cided to sell F-16 fighter jets to Taiwan, angering Beijing, Chi-
na announced it would provide Iran with a 300-megawatt commercial
nuclear reactor. But the United States is less concerned about
that sale than about the research reactor because the commercial
reactor contains Western components that can be embargoed, effec-
tively blocking the sale to Iran. In contrast, the research reac-
tor can be manufactured and shipped by China on its own.

Mohammed Ayatollahi, Iran's ambassador to the IAEA, said in an
interview that Iran sought the Argentine equipment because there
had been problems with safeguarded Argentine shipments of en-
riched uranium used in Iran's only functioning nuclear reactor, a
small research reactor supplied by the United States in 1967. To
overcome these supply problems, Iran wanted to buy equipment to
fabricate nuclear fuel on its own, but Argentina broke its con-
tract under U.S. pressure, he said.

In the case of the Chinese reactor and related equipment for
heavy water fabrication sought from Argentina, Iran wanted to
develop its capacity to meet an announced goal of generating 20
percent of its electrical power with nuclear reactors to meet
civilian needs and to preserve oil reserves for the long term,
Ayatollahi said.

"All the nuclear programs of Iran are peaceful and will remain
peaceful," he said. "This is not propaganda. This is the policy
the government has adopted." The United States is skeptical of
this assertion for several reasons, Western officials said. U.S.
energy specialists say oil-rich Iran has no economically sensible
reason for pursuing nuclear power.  Iran has, moreover, bought or
attempted to buy nuclear facilities and Western high technology.

They also cite a pattern of Iranian procurement of nuclear facil-
ities and Western high technology such as instruments and test
equipment that could be used in a nuclear weapons program. Anoth-
er concern is Iran's close and often secretive contacts with Chi-
na and Pakistan, which are known to have engaged in clandestine
nuclear programs. China has shipped Iran a single calutron - an
outdated and relatively easily obtainable machine that can make
weapons-grade uranium very slowly - which IAEA inspectors saw
during a visit earlier this year.

In addition, U.S. officials worry that because inspectors have
not yet been able to identify the sources of Iraq's secret nu-
clear procurement in the West, clandestine nuclear supply net-
works may be intact that Iran could exploit.

To build a nuclear weapon, Iran would most likely need to get
equipment from the West to enrich uranium to the high levels
needed for nuclear bombs, officials said. Inspectors in Iraq have
found that Baghdad tried two methods of secret uranium enrichment
simultaneously: It built tens of calutrons and at the same time
it smuggled parts for a centrifuge, a much more sophisticated and
faster means of separating and enriching uranium.

Some of the biggest worries about Iran's present program focus on
centrifuge technology, officials said. Pakistan, which announced
this year that it is capable of manufacturing a nuclear bomb,
stole the design and key components for a uranium centrifuge from
a European consortium during the late 1970s and early 1980s, Ger-
man and Dutch prosecution records show. Whether Pakistan has in
turn secretly sold its centrifuge design to Iran is a major con-
cern in the West, officials said.

Pakistan denies any such sale. Even if it has done so, Iran would
still need to undertake a major clandestine procurement program
to build its own centrifuge facility, officials and nuclear spe-
cialists said. That is one reason officials worry about Iraq's
still-undiscovered network for centrifuge technology procurement:
fear that Iran may be exploiting it.

Arguing that such a smuggling program is well beyond the means
and ambitions of the Tehran government, Ayatollahi said: "A
weapons program is not easy. It requires a complete (nuclear)
fuel cycle and billions of dollars and you can't just buy it. . .
. The (IAEA) knows exactly what we have. We reiterate that if
there is any doubt in your mind, let us know. We are fully tran-
sparent."<

Correspondents Don Podesta in Buenos Aires and Lena H. Sun in
Beijing and staff writers John M. Goshko and Daniel Southerland
in Washington contributed to this report.<02:22 11-17C9999-----

Copyright 1992, The Washington Post.  This story is from the
Washington Post's Capitol Edition On-Line and is not to be ar-
chived or redistributed.

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