Wikileaks - MLIV

154129 5/15/2008 21:42 08STATE52030 Secretary of State UNCLASSIFIED O 152142Z MAY 08 FM SECSTATE WASHDC TO AMEMBASSY ANKARA IMMEDIATE AMEMBASSY ASTANA IMMEDIATE AMEMBASSY ATHENS IMMEDIATE AMEMBASSY BEIJING IMMEDIATE AMEMBASSY BERLIN IMMEDIATE AMEMBASSY BERN IMMEDIATE AMEMBASSY BRASILIA IMMEDIATE AMEMBASSY BRATISLAVA IMMEDIATE AMEMBASSY BRUSSELS IMMEDIATE AMEMBASSY BUCHAREST IMMEDIATE AMEMBASSY BUDAPEST IMMEDIATE AMEMBASSY BUENOS AIRES IMMEDIATE AMEMBASSY CANBERRA IMMEDIATE AMEMBASSY COPENHAGEN IMMEDIATE AMEMBASSY DUBLIN IMMEDIATE AMEMBASSY HELSINKI IMMEDIATE AMEMBASSY KYIV IMMEDIATE AMEMBASSY LISBON IMMEDIATE AMEMBASSY LJUBLJANA IMMEDIATE AMEMBASSY LONDON IMMEDIATE AMEMBASSY LUXEMBOURG IMMEDIATE AMEMBASSY MADRID IMMEDIATE AMEMBASSY MOSCOW IMMEDIATE AMEMBASSY NICOSIA IMMEDIATE AMEMBASSY OSLO IMMEDIATE AMEMBASSY OTTAWA IMMEDIATE AMEMBASSY PARIS IMMEDIATE AMEMBASSY PRAGUE IMMEDIATE AMEMBASSY PRETORIA IMMEDIATE AMEMBASSY RIGA IMMEDIATE AMEMBASSY ROME IMMEDIATE AMEMBASSY SEOUL IMMEDIATE AMEMBASSY SOFIA IMMEDIATE AMEMBASSY STOCKHOLM IMMEDIATE AMEMBASSY TALLINN IMMEDIATE AMEMBASSY THE HAGUE IMMEDIATE AMEMBASSY TOKYO IMMEDIATE AMEMBASSY VALLETTA IMMEDIATE AMEMBASSY VIENNA IMMEDIATE AMEMBASSY VILNIUS IMMEDIATE AMEMBASSY WARSAW IMMEDIATE AMEMBASSY WELLINGTON IMMEDIATE AMEMBASSY ZAGREB IMMEDIATE USMISSION UNVIE VIENNA IMMEDIATE 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.
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BACKGROUND
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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.
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REPORTING DEADLINE AND POC
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(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

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