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Subject: West Upping Technology Sales to Iran; Equipment Intended For Civilian Projects
Date: Tue, 10 Nov 92 04:53:22 EST
Message-ID: <26.1992Nov10.045323@AmeriCast.com>

West Upping Technology Sales to Iran; Equipment Intended For
Civilian Projects Has Military Uses<By Steve Coll<Washington Post
Foreign Service=

LONDON, Nov. 9 - State-of-the-art Western technologies are pour-
ing into Iran this year as European, Asian and U.S. companies
rush to profit from Tehran's attempt to infuse its Islamic revo-
lution with modern science and to rehabilitate the war-shattered
Iranian economy.

Much of the technology being transferred to Iran in the Western
export boom is categorized as militarily useful by the U.S.
government. But relatively little is being held back. That is be-
cause of policy differences on Iran between Washington and its
Western allies, and a recent loosening of U.S. export controls
related to Iran, according to public records, businessmen,
economists and military analysts.

Concerned about Iran's military buildup, the Bush administration
has begun a diplomatic campaign to stop the major industrialized
nations from selling militarily useful technology to Iran. The
campaign is aimed at inhibiting Tehran's ability to develop and
produce both conventional armaments and weapons of mass destruc-
tion, including the ballistic missiles, nuclear arms and germ
weapons that Iran is now seeking, according to U.S. officials.
(Details on Page A30.) The technology reaching Iran includes ra-
dar testing devices, navigation and avionics equipment, oscillo-
scopes, logic analyzers, fiber optic cables, digital switches,
high-speed computers, remote sensors and jet engines, according
to these sources. While Iran has ordered the equipment for civi-
lian projects, such as new airports and telephone networks,
Western analysts and U.S. officials say the technology easily can
be converted to military use in time of war.

The transfers are similar to what occurred in Iraq during the
1980s, when the West sold large quantities of arms and technology
to the regime of President Saddam Hussein, nominally in order to
assist it in the war it was then waging with Iran. Iraq eventual-
ly used its stockpile to mount its invasion of Kuwait in August
1990, causing the West to respond in what became the Persian Gulf
War. Since the war ended early last year, the previous Western
sales to Iraq have been a source of continuing controversy both
in the United States and in Europe, with critics charging that
ill-advised arms and technology transfers precipitated Iraq's ag-
gression in Kuwait.

It is not clear whether the same amount of direct military equip-
ment is reaching Iran from the West today. Also, the technology
transfers are occurring in a context of peacetime free market
economic reform in Iran, in contrast with Iraq's wartime buildup
during the 1980s. Iranian leaders describe their reconstruction
plan as an effort to improve the country's standard of living and
repair the damage done by nine years of war with Iraq.

Nonetheless, the parallels are close enough to prompt some
analysts to argue that recent Middle Eastern history is in the
process of repeating itself.

In recent months, intelligence analysts and government officials
in both the West and the Middle East have warned that Iran is
seeking to position itself as the dominant power in the Persian
Gulf in the wake of Iraq's defeat in the gulf war, threating
pro-Western countries in the region. Saudi officials have been
alarmed by such Iraniky M%UMcials and independent military
analysts report that Iran  is attempting to rebuild its conven-
tional military forces through large-scale acquisitions from
former East Bloc countries, including scores of fighter aircraft,
bombers, submarines and tanks from the former Soviet Union, tac-
tical missiles from China and medium-range missiles from North
Korea. While analysts disagree about how many of these reported
defense deals will lead to actual deliveries to Iran, there is
agreement that the military sales are sizable and of significant
quality.

Recent U.S. intelligence estimates have warned that Iran could
become a major military threat to the Middle East by the end of
the decade. "The intelligence (news) is bad," said an administra-
tion official who declined to be named. "We have a real problem"
with what U.S. analysts consider to be Iran's continuing effort
to develop weapons of mass destruction, including nuclear arms
and germ weapons that could require significant Western assis-
tance.

"Are we getting a repetition of what we are seeing in Iraq? The
answer is yes," the official added.

Western governments so far have been united in their official op-
position to direct, large-scale military or nuclear sales to
Iran. France and Germany this year have refused Iranian requests
for renewed nuclear ties, although Iran is reported by U.S.  of-
ficials to be seeking nuclear weapons material from non-Western
countries.  But on policy questions concerning "dual use" tech-
nology that can be appropriate for both civilian and military
projects, the West has been less stalwart and far from unified.

Overall exports from the West to Iran have skyrocketed during the
last three years. German exports have approximately quadrupled
since 1989 to a projected level of more than $5 billion this
year.  Japanese exports to Iran have almost tripled during the
same period to a projected figure of more than $2.5 billion this
year. Italy's exports have quadrupled to more than $2 billion.
U.S. exports have risen from none in 1989 to an expected level of
more than $650 million in 1992, according to statistics compiled
by the Middle East Economic Digest.

In total, Iran imported $28 billion in goods during its 1991-92
fiscal year, according to figures reported by the Tehran central
bank - a 30 percent rise over the previous year and nearly triple
the level in the mid-1980s. The great majority of these imports
were from the West.

In many cases, the imports will be paid for with government
credits and loan guarantees extended by European and Asian
governments, according to businessmen, consultants and government
officials involved in the trade. Other trade is being financed by
increased Iranian oil sales, including a present annual rate of
more than $3.5 billion in sales to U.S. oil companies, as well as
by European bank lending tied to future Iranian oil exports, ac-
cording to economists and oil industry sources.

As the departing Bush administration and the incoming Clinton ad-
ministration wrestle with questions about the booming Western
trade with Iran, they face several predicaments.

One is that European and Asian government officials often
describe the recent developments in Iran in a different light
than does Washington. Some European officials see Iranian
President Ali Akbar Hashemi Rafsanjani's decisive moves toward
international capitalism as a complex but potentially moderating
influence. Iranians sympathetic to Rafsanjani say his free market
drive marks the start of a basic shift in the Islamic
government's foreign policy away from exporting revolution.

European governments also are reluctant to inhibit booming trade
with Iran at a time of economic slump and job losses, an approach
that appears to have been mirrored somewhat by the U.S. Commerce
Department during the last two years, according to public
records.

Also, in urging curtailment of technology transfers to Iran by
West European countries, Japan and Russia, the United States is
seen as undermined by its own massive military and high-
technology transfers to Saudi Arabia and the smaller Persian Gulf
states.

While this debate continues, technology transfers to Iran are
proceeding at breakneck speed, according to interviews and public
records. Three particularly sensitive areas are aviation, commun-
ications and computer-related electronics, military analysts
said.  Iran intends by the mid-1990s to build 21 new airports,
for a total of 63, and to modernize existing facilities, accord-
ing to Vahe Petrossian, the Iranian-born editor of Iran Quarterly
Report, a London-based economic monitoring service. Toward that
end Iran is seeking a wide range of aviation-related electronics,
radars, avionics equipment, instrument landing systems, naviga-
tional aids, air traffic control systems and test equipment,
Petrossian said.

This civilian aviation program is connected to Iran's effort to
rehabilitate and modernize its military air force, said Paul
Beaver, publisher of the military journal Jane's Defence Weekly.
"A lot of it does overlap," Beaver said. "They are interested in
any electronic technologies they can get their hands on - radar,
both air and ground, and testing equipment." At recent defense
exhibitions in Moscow and Greece, Beaver said he met Iranian pro-
curement officials who were looking closely at in-flight refuel-
ing technology, early-warning radar systems and avionics equip-
ment.  "They were looking at everybody - East and West," Beaver
said.

Air defense systems based on commercially available Western tech-
nology would make it relatively easy for a potential enemy sup-
plied by the West, such as Saudi Arabia, to defeat the system or
to employ countermeasures, Beaver noted. But electronics avionics
and test equipment, can be used to upgrade a wide range of mili-
tary systems, he and other analysts said.

A 1992 criminal case in Newport Beach, Calif., suggests how pro-
cured Iranian technology can cross easily between civilian and
military users. Betweeen 1989 and 1990, Iranian citizen Reza
Amiri acquired oscilloscopes, pulse generators, computer software
and other technology from California companies and exported it
illegally to Iran by falsifying export licenses, according to
court records. Amiri set up shop in Tehran and declared that most
of what he was buying was for the Iranian telephone company. But
he also placed orders for similar technology on behalf of the
Iranian Defense Ministry and falsified license documents to dis-
guise these sales, the records show.

Amiri pleaded guilty to U.S. export violations last summer. He
then returned to Iran, at least partly because of the urgings of
an Orange County, Calif., judge, to retrieve an especially sensi-
tive oscilloscope that can be used in missile guidance and nu-
clear testing. But the Iranian government confiscated Amiri's
passport and has refused to let him return to the United States
for criminal sentencing, according to Teresa Barrera, Amiri's Los
Angeles attorney.

Another example cited by some analysts is Airbus Industries' an-
nounced sale of two A-300 passenger jets to Iran. The planes are
equipped with sophisticated avionics equipment and supported by a
range of electronic testing gear. A spokesman for the company
said negotiations for further sales were continuing. The U.S.
Commerce Department has licensed General Electric Co. to provide
engines for the Airbus planes. Other civilian aircraft deals in-
volving European firms and Boeing Co. are reported near comple-
tion but are being held up by U.S.  government reluctance to
grant licenses, according to lawyers and officials involved.

Complementing Iran's aviation rebuilding program is an effort to
upgrade its communications system with Western technology. An-
nounced deals this year include contracts with European firms for
digital switches, fiber optic cables, millions of communications
lines and related electronics.  While the primary purpose of this
program is civilian, it will be connected inevitably with efforts
to improve Iranian military "command and control" systems, said
retired British air force wing commander Ken Petrie, now an
analyst at the International Institute for Strategic Studies in
London.  Petrie formerly helped to plan similar communication
systems for NATO in Germany. "In a time of war, the military will
take over" the civilian technology, he said. "There's bound to be
overlap between civilian and military."

A prominent Iranian newspaper reported two months ago that French
telecommunications giant Alcatel Alsthom SA would soon sell a
communications satellite to Iran and launch it on Tehran's
behalf. An Alcatel spokeswoman said she could not comment on that
report, and it is not clear whether the deal will go through.

Western specialists said the Iranian satellite deal, designated
Zhorech, has been under consideration for some time. If it were
to go through in the present liberalized atmosphere, Western
firms would handle the satellite engineering and launch without
direct Iranian participation. But Iran would gain a widened,
flexible communications capacity that could be used for many pur-
poses, including military ones, the specialists said.

In event of war, a Western supplier could in theory turn the sa-
tellite off, but the Iranians would retain the technology to
switch it on again. "It would be like having a toy fight where
you turn it off, they turn it back on," one specialist said.

The United States has contributed to the wave of technology
transfers to Iran with government licensed exports, Commerce
Department documents declassified last summer by the House
Foreign Affairs Committee show. Between August 1991 and February
1992, Commerce licensed for civilian projects in Iran such tech-
nology as digital computers, radar testing equipment, computer
design software, inertial navigation equipment and other technol-
ogy, the documents show. In many cases, Commerce granted appro-
vals despite objections from the Defense and State departments,
according to these records.

Among the large U.S. companies that have acknowledged U.S.
government-licensed technology sales to Iran recently are IBM
Corp. and Honeywell Inc. IBM reentered the Iranian market in
February 1992 after a decade-long absence and now sells personal
computers, software and mid-size business computers through five
representatives appointed in Iran, a company official said. IBM
may bid for deals involving its largest computers, the official
added, but he said he did not know whether such contracts or U.S.
government licensing agreements were presently in negotiation.

Honeywell won a contract earlier this year to supply remote sen-
sors, electronic controls, high-speed computers and software for
a large civilian petrochemical plant in Bandar Abbas. The
Honeywell technology involved is manufactured by a Phoenix unit
that separately produces space and aviation equipment, including
avionics equipment for Boeing, Honeywell officials said. The of-
ficials said that while nobody can guarantee that Iran will not
use the petrochemical plant technology for military purposes,
Honeywell has a corporate policy of forgoing sales where there
are reasons to be concerned about military conversion of its
technology. In any event, they added, their sale was cleared
through the Commerce Department.

Thomas Whalen, a Washington attorney who represents Iran Air in
Commerce licensing proceedings, said the U.S. government has re-
cently eased somewhat its attitude toward technology transfers to
Iran.  "It's a little easier on dual-use items, where there's
some commitment (by Iran) that it will not be used for military
purposes," Whalen said. "It's not a routine thing. The Commerce
Department really looks this over carefully. But is it easier to-
day than it was two years ago? The answer is yes."

"The definition in the last analysis is that they (Commerce)
should not help Iran develop war technology," said Hooshang
Amirahmadi, an Iranian-born Rutgers University specialist on
Iran's economy who also consults for U.S. companies seeking con-
tracts with Tehran. "The problem is, how do you judge? Some of
the companies have been able to get away with it and they have
tried to define their products in civilian terms."<

Staff writer R. Jeffrey Smith contributed to this story from
Washington.< 02:21 11-10C9999-----

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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