All posts by Project Alpha

What the Hanoi Summit Tells Us About North Korea’s Nuclear Intentions

Christopher Watterson, Research Associate (christopher.watterson@kcl.ac.uk)

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What the Hanoi Summit Tells Us About North Korea’s Nuclear Intentions

The second U.S.-North Korea summit was a bust, with Kim and Trump leaving Hanoi without any mutual concessions or even a joint statement. In a post-mortem press conference North Korea explained its negotiating position, stating that it was willing to verifiably decommission the Yongbyon site in exchange for sanctions relief. While this would appear to be a significant concession given that Yongbyon contains North Korea’s only operational 5 MWe reactor and proven uranium enrichment facility, this article argues that the North Korean offer does not represent a sincere commitment to denuclearisation but rather an intention to shift its nuclear weapons enterprise away from the Yongbyon site.

The EU Should Tackle Iran’s Ballistic Missile Program

Emma Scott, Research Assistant (emma.l.scott@kcl.ac.uk)

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The EU Should Tackle Iran’s Ballistic Missile Program

The EU has stated that it is leading a “dialogue” with Iran to address regional issues, as well as other issues of concern including the ballistic missile program. The question is how the EU is framing the negotiating agenda on Iran’s ballistic missile program. Is its position similar to the US position or does it diverge? The EU has maintained that it shares “most of the concerns expressed by the US regarding the status of Iran’s nuclear program after 2025, ‘Iran’s ballistic missiles program’ and its destabilising actions in the region.” However, it has failed to address or expand on these concerns. While the E3 has been willing to discuss missiles with the Trump administration—albeit in talks that ended when the US quit the JCPOA in May 2018—the EU has only referred to Iran’s ballistic missile program in public statements focused on preserving the JCPOA. It has yet to address the missile program as a stand-alone issue with implications for European security, the Middle East and the theme of proliferation more broadly.

Russian Sanctions: Are They Working, Workable, and Worth It?

Steve Osborne, Senior Research Associate, (stephen.osborne@kcl.ac.uk)

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Russian Sanctions: Are They Working, Workable, and Worth It?

Russian actions in Ukraine led to sanctions being imposed by the EU, the United States, and several other international partners. There is little evidence to date that these sanctions have had significant effect on Russia’s economy or behaviour. But the question of effectiveness is far from simple. The paper will address why effectiveness has been limited – is it a matter of scope, enforcement or priority? What is meant by effectiveness in this context -what would effectiveness look like? The paper will also look at the design of the sanctions – what effects if any were they meant to have, and were they ever meant to have an economic impact? Is there evidence of sanctions evasion by Russia, or are volumes of affected trade so low as to make enforcement measures insignificant? If there is a political will to increase enforcement, or to use sanctions as part of a policy to restrain Russian aggression, how might such aims be achieved? The paper will engage systematically with existing literature, dealing both with the theory of sanctions, and on studies undertaken on the subject of sanctions effectiveness; trade data and licensing statistics; as well as EU reporting.

Implementation of UN Security Council Resolution 2231 (2015) Three Years On: the UN Secretary General’s Sixth Report

By Emma Scott, Research Assistant

The UN Secretary General has now released his sixth report on the implementation of UN Security Council Resolution 2231 (2015), which governs the Joint Comprehensive Plan of Action (i.e. the nuclear deal with Iran). The UN Secretary General issues a report every six months to assess the implementation of the resolution. Project Alpha has been following these reports. Herein, we provide an analysis of the of this sixth report’s key findings in light of the former reports, and specifically related to the implementation of the nuclear related provisions; the ballistic missile related provisions; and the restrictions on the missile transfers or activities.

 

Key findings of the report include:

  • 5 new proposals submitted through the Procurement Channel, which brings the total number of proposals submitted to 42
  • 2 of the 6 cases of illicit procurement activity set out in the previous report did not meet the criteria set out in the Nuclear Suppliers Group Guidelines of Nuclear Related Dual Use Equipment, therefore did not require advanced approval by the Security Council; enquiries into the other 4 cases are ongoing
  • Component parts of 3 additional ballistic missile launches at Saudi Arabia by the Houthis had features consistent with those of the Iranian Qiam-1 short-range ballistic missile, as previously examined
  • Two container launch units for anti-tank guided missiles recovered by Saudi-led coalition in Yemen had characteristics of an Iranian manufacturer

 

Nuclear-related provisions

Since 12 June 2018, only 5 new proposals have been submitted through the Procurement Channel, bringing the total number of proposals submitted from 37 to 42. This figure is significantly down on the 13 proposals submitted in the previous reporting period 8 December 2017 – 12 June 2018. There has been no increase on the number of proposals approved or disapproved since the last report in June 2018, and there has been a slight increase from 7 to 9 proposals withdrawn since June 2018. Although, the procurement channel was slow to take-off from the beginning, it appears that it is slowing down further and not really functioning as a mechanism on the whole, and particularly, in the aftermath of the Trump withdrawal from the JCPOA.

Status of the Procurement Channel
Reporting Period No. of proposals submitted in the reporting period No. of proposals submitted since implementation day (16 January) No. of proposals approved No. of proposals not approved since implementation day No. of proposals withdrawn implementation day No. of Proposals under review
16 January 2016 – 12 July 2016 1 1 0 0 1 0
13 July 2016 – 30 December 2016 5 6 3 0 1 2
31 December 2016 – 20 June 2017 10 16 10 0 2 4
21 June 2017 – 8 December 2017 8 24 16 3 5 0
9 December 2017 – 12 June 2018 13 37 24 3 7 3
13 June 2018 – 6 December 2018 5 42 28 4 9 1

 

Ballistic Missile-related activities by Iran

In early January 2017, approximately, one year following implementation day of the JCPOA, and in the weeks following President Trump assuming office, reports started to emerge of Iran testing a range of ballistic missiles. The UN Secretary General’s reports have indicated approximately 20 tests conducted in the last two years, the details of which are briefly outlined in the table below.

Ballistic Missile launches or tests by Iran since 16 January 2016
Date of Launch/Test Type of missile/SLV Type/Reason for Launch Reporting State/outlet
15 November 2016 Qiam Flight test Israel
29 January 2017 Khorramshahr medium range ballistic missile Flight test Confirmed by Iran
18 June 2017 Ballistic missiles Retaliation against targets in Syria Israel
19 June 2017
4 July 2017 Medium range ballistic missile medium range ballistic missile Flight test US + E3
27 July 2017 Simorgh SLV Not mentioned US + E3
2 January 2018 Shahab-3 variant Flight test Israel
5 January 2018 Scud variant Flight test Israel
February 2018 Zolfaghar Flight test Israel
April 2018 Khorramshahr Flight test Israel
May 2018 Zolfaghar Flight test Israel
May 2018 Shahab-3 variant Flight test Israel
June 2018 Shahab-3 variant Flight test Israel
August 2018 Qiam Flight test Israel
August 2018 Zolfaghar Flight test Israel
30 September Unknown (x 5) Retaliation against targets in Syria Israel (reported in Iranian media)
1 October
1 December 2018 Medium range ballistic missile Test firing United States

 

While Iran has not categorically confirmed all of these tests, it has not denied all of them either with the exception of those reported by Israel between January and August 2018. Iran explicitly confirmed the 2017 test of the Khorramshahr missile maintaining that the test did not contradict the JCPOA nor resolution 2231. Paragraph 3 of resolution 2231 “calls” upon Iran “not to undertake any activity related to ballistic missiles designed to be capable of delivering nuclear weapons, including launches using ballistic missile technology […]”.[1] The phrase “calls” is not the affirmative “decides” language of the Security Council as specified in resolution 1929 (2010) prior to the signing of the JCPOA. Consequently, the Security Council is blocked over the continuation of the program and the interpretation of 2231.

The US, alongside the United Kingdom, and France, as well as Germany have jointly reacted to the recent launches. These states maintain that they are “destabilising and provocative” and conducted in defiance of resolution 2231.[2] They, alongside Israel, further maintain that the phrase “ballistic missiles designed to be capable of carrying nuclear weapons” includes all Missile Technology Control Regime (MTCR) Category I systems, defined as those capable of delivering at least a 500kg payload to a range of at least 300km. Consequently, they say, as the missiles can be categorised as such, they are inherently capable of delivering nuclear weapons.[3]

Within the context of Security Council reporting, China has been silent on the issue, while Russia has been coming to Iran’s aid. Russia maintains firstly that there is no legal prohibition through resolution 2231 on the development by Iran of missile and space programs and secondly there is no information that Iran’s ballistic missiles are designed to be capable of carrying nuclear weapons. In line with Iran, Russia also maintains that the Category I parameters of the MTCR (of which Russia is a member) were never intended to be used in the context of the resolution.[4]

Iran’s position is threefold. Firstly, it maintains that its ballistic missiles have not been designed to be capable of carrying nuclear weapons, and are thus outside the purview of resolution 2231. Secondly, Iran’s missile activities are part of its conventional deterrence and defensive capabilities, and nothing in resolution 2231 prohibits conventional missile activity.[5] Thirdly, Iran argues the definition of the MTCR is not an internationally agreed upon definition, and there is no reference to MTCR criteria in paragraph 3 of annex B to resolution 2231, therefore MTCR criteria is not applicable.[6]

Iran’s most recent test on 1 December 2018 caused further cause for complaint by the US and key European member states, but in the closed-door Security Council meeting which followed there was no consensus. Taking advantage of the blockage, Iran has said it will continue to develop and test ballistic missiles and is unwilling to engage in dialogue on the issue.[7] Consequently, despite the growing frequency, range and performance of the missiles, the status quo seems unlikely to change.

 

Ballistic Missile-related transfers or activities with Iran

Beyond the question of missile development and testing, the issue of ballistic-missile related transfers to and from Iran also remains. The question is whether Iran has transferred the missiles, parts thereof, or related technology to the Houthis in Yemen. Any such transfer post 16 January 2016 would constitute a violation of annex B to resolution 2231, which requires states to obtain prior approval from the Security Council for the supply, sale or transfer to or ‘from’ Iran of all items set out in the Missile Technology Control Regime list.

The Houthis could not apply for such authorisation because they are not a recognised UN member state, but rather a non-state actor, and such authorisation if requested by Iran would in any case never be granted because UN Security Council resolution 2216 (2015) on Yemen established an arms embargo on the Houthis. Therefore, the transfer of weaponry by Iran to the Houthis would also constitute a violation of 2216.

Launches of missiles by the Houthis in Yemen at Saudi territory began in July 2017. Since, there has been 14 launches in total. According to assessments by UN authorities, the missiles launched shared key design features with a known type of missile manufactured in Iran – the Qiam 1 short range ballistic missile.[8] Putting the question of regional stability aside, the overarching problem is the proliferation of ballistic missile technology in the Middle East, and the spread of such technology to non-state actors. Iran’s categorical denials of these transfers illustrate that it is not the Iranian government’s official position to support the Houthis and proliferate ballistic technology, probably because the views in Tehran are unlikely to be united on these issues. However, Iranian denials are questionable in view of the evidence presented by the Secretary General, leaving a certain amount of responsibility for proliferation in the region with Iran.

 

Launches by the Houthis at the Territory of Saudi Arabia
Date of Launch Number of Missiles Launches Name/Type of Missile Launched
22 July 2017 1 Qiam-1 (a Scud variant)
4 November 2017 1 Qiam-1
19 November 2017 1 Qiam-1
5 January 2018 1 Qiam-1
30 January 2018 1 Qiam-1
25 March 2018 3 Qiam-1
11 April 2018 1 Qiam-1
9 May 2018 2 Not mentioned
5 June 2018 1 Not mentioned
24 June 2018 2 Qiam-1

 

Arms-related provisions

Since the first report, the Secretary General has reported extensively on arms shipments to and from Iran. Resolution 2231 has two main provisions related to conventional arms. The first provision, paragraph 5 of annex B requires states to obtain prior approval from the Security Council on a case-by-case basis for supplying, selling, or transferring ‘to’ Iran the seven categories of arms defined by the United Nations Register of Conventional Arms.[9] In the three-year period since implementation day of the JCPOA, the UN Secretary General has only reported on one proposal to the Security Council,[10] the outcome of which has not been publicly divulged thus far. In addition, there have been another three instances of attempted unauthorised shipments to Iran – two of which were prevented by Ukrainian authorities, and one by Turkish authorities.

In the second provision concerning paragraph 6 (b) of resolution 2231, the Security Council decided to prevent, unless decided otherwise on a case-by-case basis, the supply, sale or transfer of arms ‘from’ Iran. No reports exist of Iran trying to use this mechanism and it seems unlikely in view of political circumstances, that any such request would be authorised. Instead, approximately 14 cases have been mentioned in the Secretary General’s reports where arms and related materials assessed to be of Iranian origin have been seized or recovered by fellow UN member states’ authorities. Iran has not responded to the accusations.

Finally, Iran has also been found to be displaying defence equipment in international defence exhibitions on 5 occasions, in Iraq (x 3), in Turkey (x1), and in Azerbaijan (x1). Iran’s justification for not asking for prior Security Council authorisation was that no prior approval was required because Iran retained ownership of the items exhibited. The Secretary General has requested to the Security Council to clarify whether paragraph 6 also includes temporary transfers, but the Security Council has yet to respond.

Although, the evidence from member states seems to indicate that Iran is not respecting the arms embargo imposed upon it, the Secretary General and the Secretariat continue to examine much of the evidence submitted by them. To determine a violation of resolution 2231, the transfers emanating from Iran must have taken place after implementation day on 16 January 2016.

 

Conclusion

Three years on Iran’s nuclear, ballistic missile, and arms programs are as divisive as ever, both in the region and further afield. So far, Iran is implementing its nuclear related commitments under the JCPOA. In the author’s opinion, the possibility of US military action aside, Iran will continue to do so until the easing of restrictions begin on the nuclear program in 2025. The question here is in view of President Trump’s withdrawal from the current deal, will Iran be willing to sign up to an agreement covering the period post 2025?

Restrictions will be lifted of the ballistic missile activity in 2023. However, at present, Iran seems determined to continue its ballistic activities and ballistic proliferation in the region in defiance of Western calls of condemnation and concern. The ballistic programme already high on the U.S. agenda is also rising on political agendas in Europe, so the question for another article is how should Europe respond?

The embargo on conventional arms will be lifted in 2020, but even for now, it is proving difficult to impose. In this case, the question is whether and which states will be publicly willing to engage in conventional arms transfers with Iran in the post-2020 period – only two years from now.

 

[1] UN Security Council, Resolution 2231 (2015), S/RES/2231 ()2015, 20 July 2015.

[2] UN Security Council, Third report of the Secretary General on the implementation of Security Council resolution 2231 (2015), S/2017/515, 20 June 2017.

[3] Ibid.

[4] UN Security Council, Fourth report of the Secretary General on the implementation of Security Council resolution 2231 (2015), S/2017/1030, 8 December 2017.

[5] Op. cit. UN Security Council, Third report of the Secretary General…, S/2017/515, 20 June 2017.

[6] UN Security Council, Fifth report of the Secretary General on the implementation of Security Council resolution 2231 (2015), S/2018/602, 12 June 2018.

[7] Tasnim News Agency, ‘’Iran to Continue Testing Homegrown Missiles: General”, 02 December 2018, https://www.tasnimnews.com/en/news/2018/12/02/1889585/iran-to-continue-testing-homegrown-missiles-general

[8] UN Security Council, Fifth report of the Secretary General…, S/2018/602, 12 June 2018.

[9] The seven categories of arms as defined by the United Nations Register of Conventional Arms include battle tanks, armoured combat vehicles, large-calibre artillery systems, combat aircraft, attack helicopters, warships, missiles, or missile systems.

[10] UN Security Council, Second report of the Secretary General on the implementation of Security Council resolution 2231 (2015), S/2016/1136, 30 December 2016.

Karl Lee, where is he now?

Daniel Liu, Researcher (daniel.liu@kcl.ac.uk)

Click here to access the Report: Karl Lee where is he now ?

  • Internationally sanctioned and alleged nuclear proliferator Li Fangwei (李方伟) a.k.a: Karl Lee, almost certainly remains active in Dalian China, where he continues to attempt to export Graphite and Graphene related goods internationally.
  • Li’s current most likely locations are: Songshuzhen, Wafangdian County, Dalian, Liaoning, China (中国辽宁省大连市瓦房店市松树镇), and 2501-2508 Yuexiu Building, No. 82 Xinkai Road, Xigang District, Dalian Liaoning, China(中国辽宁西岗区新开路82号越秀大厦2501-2508室).
  • Li’s network of shell companies continues to morph in corporate officers and owners to avoid sanctions scrutiny. Yet core individuals, companies’ Chinese name and physical assets remain the same. The current fourth iteration of this proliferation network is probably focused around Sinotech Carbon, a.k.a: TST Carbon, a.k.a: Dalian Zhongchuang Carbon(大连中创炭素有限公司).
  • The network is run by more than just Li Fangwei. Court records, company ownership data and local government tax records show that Li Fangwei’s family and other close associates are actively taking part in the network’s business activity. They act as sales representatives, lawyers and shareholders across many companies in the Li network. Li is also not above committing identity fraud by using the name of a deceased woman believed to be his late mother to register shareholdings.
  • From 2015 to 2016, around the time of US indictment and seizure of Li’s US based financial assets, the network has embarked on a series of highly opportunistic law suits in Chinese civil courts. This was possible done to recoup their losses. These cases typically involved using loopholes in Chinese commercial caselaw to compel Chinese companies to complete a sale to Li network companies despite their objects of proliferation risk, or intervention by local export control authorities, then requesting further damages for lost profits.
  • Yet after years of international sanctions and asset freezes, the Li network may be under strain and local government tolerance may be waning. As of September 2018, local government bodies have issued a cease and desist order on Sinotech Carbon due to environmental protection concerns.

Iran and the FATF: More Efforts Needed

Emma Scott and Jean-Annet de Saint Rapt

Public Statement Issued by the Plenary

The FATF plenary which took place on 17-19 October 2018 decided to continue the suspension of counter-measures against Iran. The Plenary said it was disappointed with the pace of Iran’s AML/CFT reforms. Iran now has until February 2019 to bring the necessary legislation into force, in line with international standards or risk a call for counter-measures.

Iran has been categorised as a high-risk jurisdiction and is one of only two countries on the FATF ‘call for action’ list (or blacklist), together with the DPRK. A call for action requests all countries to impose countermeasures against the jurisdiction. Countermeasures include, but are not limited to 1) the application of enhanced due diligence, 2) refusing the establishment of subsidiaries, branches or representative offices of financial institutions, 3) limiting business relationships or financial transactions with the identified country or persons in that country, and 4) requiring financial institutions to review and amend, or even terminate, correspondent relationships with financial institutions in the country concerned.[1] Since the FATF implemented its new monitoring system in 2008, Iran has been permanently on the black list. Although, the FATF has recognised that Iran made some efforts to comply, the risk of terrorism financing emanating from Iran remains a significant obstacle.

 

Iran Tries to Ease its Relationship with the FATF

In 2016, Tehran agreed to cooperate with the FATF financial body. Tehran’s motivation was that it wanted to escape the FATF blacklist to help it better integrate into the world economy after the signing of the Joint Comprehensive Plan of Action (JCPOA). Simultaneously, President Hassan Rouhani initiated major banking sector reforms, which aimed to contribute to the development of the economy and attract foreign investment. Transparency and regulation are key to such reforms as these would bring Iran into compliance with international norms such as the Basel Standards, International Accounting Standards (IFRS) and FATF recommendations.

To address its AML/CFT deficiencies, in 2016, the FATF set an Action Plan which Iran had to complete. Iran agreed to follow this Action Plan,[2] and in response the FATF suspended the call for countermeasures for a 12-month period but left Iran on its public statement. The FATF pubic statement currently includes a short summary of the recent actions taken by Iran in accordance with its Action Plan, and lists the remaining deficiencies, that still need to be addressed, in its ani-money laundering and combating the financing of terrorism regime. Only when all the action points are complete will Iran be in full compliance with the FATF requirements. In 2017, “In light of Iran’s demonstration of its political commitment and the relevant steps it has taken in line with its Action Plan”,[3] the FATF decided to continue its suspension.

Outstanding Issues of the FATF Action Plan on Iran
1) Criminalise terrorist financing (including removing exemptions)
2) Freeze terrorist assets
3) Ensure a customer due diligence regime
4) An independent Financial Intelligence Unit
5) Identify and sanction unlicensed money/value transfer service providers
6) Implement the Palermo and TF Conventions  
7) Verify wire transfers contain complete information
8) Establish a range of penalties for ML offense
9) Ensure legislation to provide for confiscation of property of corresponding value

In February 2018, for the same reason, the FATF prolonged again the suspension of counter-measures,[4] but in June 2018, in its public statement, the FATF expressed its disappointment with Iran for failing to implement the Action Plan. However, it maintained the suspension “Given the Iranian government’s continued efforts to finalize and pass amendments to its AML and CFT laws[5].

By this stage, the need for Iran to cooperate with the FATF became even more pressing. The U.S., under the Trump Presidency, had withdrawn from the JCPOA and decided to re-impose sanctions. Consequently, Iran’s economy witnessed a withdrawal of foreign investment and a depreciation of the rial. By complying with the FATF recommendations, Iran hopes to resolve its economic problems and minimise its differences with the remainder of the international community.

A number of pieces of legislation were sent to the Iran’s Parliament. The Parliament had already approved the Bill of Amendment to the Countering Financing of Terrorism Act, which amongst other things, lays out a legal basis for the confiscation of assets or funds to commit terrorism financing, and a Bill of Amendment to the Anti-Money Laundering Act. In September it passed a bill to join the UN Convention Against Transnational Organised Crime (i.e. the Palermo Convention), and finally, Sunday 7 October saw the Parliament pass a bill to join the 1999 International Convention for the Suppression of the Financing of Terrorism, albeit with a number of exemptions.

 

Iran’s Definition of Terrorism

The FATF Action Plan for Iran requires it to criminalise terrorist financing, “including by removing the exemption for designated groups “attempting to end foreign occupation, colonialism and racism””.[6] In Iran’s domestic legislation bringing into force the 1999 Convention for the Suppression of the Financing of Terrorism, Iran’s lawmakers carved out an exemption to article 2(b) of the Convention by stating that struggle against colonial domination and foreign occupation does not apply to the country’s definition of terrorism. The Parliamentarians further carved out an exemption to Article 6, maintaining that it doesn’t apply to the right of legitimate struggle.

That said, a number of other Middle Eastern regional states including Egypt, Jordan, and Yemen, issued reservations when joining the 1999 Convention, stating that they do not consider acts of national liberation as terrorism, and they are not on the FATF blacklist. So, that should not be an impediment to Iran’s implementation of the FATF’s standards. While the FATF may overlook Iran’s non-compliance with action point 1 if it complies with the other action points, so far, this is not been the case. The difficulty for Rouhani’s government will be to take concrete steps in freezing assets and implementing the laws passed, which is what the FATF expects.

 

Iran’s Banking Problems: Get in the Way

A broader problem for Iran is the implementation of the banking sector reform. Last March, the International Monetary Fund pointed out that the Iranian banking system had been in “distress” now for a number of years.[7] The IMF called for urgent comprehensive restructuring and recapitalisation of the banks. Since that report, the economic situation in the country has deteriorated due to the U.S. withdrawal from the JCPOA and the re-imposition of sanctions. Thus, reform has become even more critical as the monetary crisis and inflation have worsened.

The problem with Iran’s economy is that for decades, the Iranian financial sector consists not only of regulated but also unregulated financial actors, which is one of the issues the FATF has with Iran. Some of these unlicensed actors, usually affiliated with politico-religious groups, have very limited due diligence procedures on their clients and transactions. Additionally, such unregulated actors  can promise to pay high interest rates on deposits to fund credit activities, and subsequently go bankrupt resulting in significant losses for Iranian businesses and individuals. This situation also acts as a deterrent to foreign investors willing to take a risk to invest in Iran. Furthermore, international standards on credit analysis and capital requirements are not often met.

Rouhani’s reforms need to restructure the banking system in a way that will help the economy recover. The intension is to place all credit and financial institutions under Central Bank supervision, while the Central Bank intends to comply with the Basel Standards, which, for instance, set capital requirements for credit activities. For starters, in 2017, the latter issued new policies to be implemented by financial institutions.

Thus, as part of the banking reforms, Rouhani and his administration have decided to implement the FATF recommendations. The implementation of these international standards will make Iran more likely to be accepted into the international finance system. As a senior member of the Iranian government put it: “there is no guarantee all our problems would be solved if we comply […with the FATF] but I am sure that not complying would give the U.S. more excuses to increase our problems.”

 

Reaching a Consensus at the FATF: A Long Process

The decision to remove Iran from the blacklist is a FATF Plenary consensus decision. However, the U.S., holding the influential position of Chair for a one-year period, is likely to continue to push for Iran to remain on the list. The other countries may not want to keep Iran on the list if it continues its efforts to comply with the recommendations.

An on-site inspection team needs to deploy to Tehran, and report back to the Plenary on the implementation of the Action Plan, before Iran is removed from the list. The improvement of Iran’s relationship with the FATF will continue to be a gradual process as Iran slowly attempts to improve and implement a more stringent regulatory environment and reform its banking system.

Ultimately, even if Iran complies with the FATF recommendations and takes action against designated individuals or entities on UN sanctions lists, the issue of U.S. sanctions lists will remain. As a result, even with Iranian reforms, there remains the risk that any entity trading with Iran will be accused by the U.S. of sanctions evasion, and henceforth could become the target of secondary sanctions.

 

[1] The FATF Recommendations: International standards on combating money laundering and the financing of terrorism and proliferation, updated February 2018,available at http://www.fatf-gafi.org/publications/fatfrecommendations/documents/fatf-recommendations.html

[2] Outcomes of the Plenary meeting of the FATF, Busan Korea, 22–24 June 2016, available at http://www.fatf-gafi.org/countries/a-c/austria/documents/plenary-outcomes-june-2016.html#iran

[3] FATF Public Statement, 23 June 2017, available at http://www.fatf-gafi.org/publications/high-riskandnon-cooperativejurisdictions/documents/public-statement-june-2017.html

[4] FATF Public Statement, 23 February 2018, available at http://www.fatf-gafi.org/publications/high-riskandnon-cooperativejurisdictions/documents/public-statement-february-2018.html

[5] FATF Public Statement, 29 June 2018, available at http://www.fatf-gafi.org/publications/high-riskandnon-cooperativejurisdictions/documents/public-statement-june-2018.html

[6] FATF Public Statement, 19 October 2018, http://www.fatf-gafi.org/publications/high-riskandnon-cooperativejurisdictions/documents/public-statement-october-2018.html

[7] International Monetary Fund, Islamic Republic of Iran, IMF Country Report Mo. 18/93, March 2018 available at https://www.imf.org/~/media/Files/Publications/CR/2018/cr1893.ashx

Internship Opportunity

Project Alpha works to understand and counter procurement of technologies with a use in UN-restricted nuclear and missile programmes, as pursued by Iran, North Korea, and others. The Project has numerous strands that contribute to this objective, including educating industry on export controls and proliferation risks, researching the techniques used by proliferators to acquire goods illicitly, and conducting international outreach to improve the implementation of trade controls in third countries. Alpha also actively supports the work of UN organisations, the IAEA, and national governments.

The Alpha team are looking for one or more interns to work with the project for the next three to six months. The focus of the internship will be split between analytical research and administrative support to the team. Interns may also have the opportunity to conduct and publish research on issues related to non-proliferation and sanctions. Duties are as follows:

  • To conduct open source research under the direction of the project staff into illicit WMD procurement
  • To assist the project staff in maintaining the project’s online platform
  • To assist Alpha’s staff in the preparation of articles and other briefing material on proliferation-related procurement by conducting open source research and analysis
  • To work closely with Alpha staff in the preparation and running of a series of workshops

Candidates should be able to commit to working in the office for at least two half days per week, should have excellent analytical and organisational skills (with experience of event organisation and management), and should have impeccable writing skills. Additional language skills and knowledge of open source analytical trade-craft are a plus.

Interested parties should send CVs and cover letters to Emma Scott (emma.l.scott@kcl.ac.uk)

Latest Report of the UN Secretary General on Security Council Resolution 2231: Its nuclear- and ballistic missile-related provisions

On 12 June 2018 and following the United States withdrawal from the Joint Comprehensive Plan of Action (Iran Nuclear Deal) on 8 May 2018, the UN Secretary General released his fifth report on the implementation of Security Council Resolution 2231 (2015). The UN Secretary General is required to report to the Security Council on the implementation of the resolution every six months. Therefore, this 5th report provides an assessment on the implementation of the resolution since the issuance of the 4th report on 8 December 2017.

 

Key Findings included:

  • 13 new proposals submitted through the Procurement Channel bringing the total number of submissions to 37
  • 6 cases of illicit procurement activity, which would have required advanced approval by the UN Security Council
  • Component parts of missile launches fired by the Houthis at Saudi territory were manufactured in Iran, and features of the missiles were consistent with the Qiam-1

 

Usage of the Procurement Channel

There were 13 proposals submitted through the Procurement Channel to participate in or permit activities with Iran for nuclear or non-nuclear civilian end uses. This figure is up from 8 proposals submitted in the previous reporting period and brings the total number of proposals submitted since Implementation Day (16 January 2016) to 37. Of these 37, 24 proposals have been approved by the Council, 3 have been disapproved, 7 have been withdrawn by the proposing state, and 3 are currently under review.

While more frequently used than in the first year, the number of submissions demonstrates that activity in the procurement channel remains quite low in comparison to expectations, and this is partly due to a lack of awareness by sellers, and in some cases national authorities of its existence.[1]

 

Procurement of Nuclear-related Dual Use Items

Information was submitted from 2 member states (the United Arab Emirates (UAE) and the United States of America about attempts by Iran to procure apparently-controlled dual-use items outside of the authorised channels Notably four shipments were seized by the UAE while in transit to Iran. The items involved 40 cylindrical segments of tungsten, 1 inductively coupled plasma mass spectrometer, 10 capacitors, and 1 titanium rod. As these materials are control list items governed by the Nuclear Supplier Group Guidelines of Nuclear Related Dual-Use Equipment, they would have required advanced approval by the Security Council in line with the provisions of paragraph 2 of Annex B of resolution 2231 (2015).

U.S. authorities informed the Secretariat that two commodities – carbon fibre and aluminium alloys again governed by the Nuclear Supplier Group Guidelines of Nuclear Related Dual-Use Equipment had been transferred to Iran over the last year without prior approval of the Security Council as would have been required for such items.

Iran responded to the accusation by stating that it was the responsibility of the exporting state to seek approval through the procurement channel. While this is true, the response negates the fact that Iran is required to issue end user certificates for all such items before they are imported to the country so that the Iranian government cannot claim that it was not aware of the imports. As such, the statements in the UNSGs report assert that Iran has violated UNSCR2231 and the JCPOA, albeit in a relatively narrow and technical way.

 

Ballistic Missile related transfers

In examining 5 of 11 ballistic missile launches (22 July and 4 November 2017, and 19 December 2017 and 5 and 30 January 2018) by Yemen’s Houthi rebels at Saudi territory, the Secretariat found that some component parts in the debris of launches had been manufactured in Iran. Specifically, the Secretariat found that the features of the 5 missiles examined are consistent with those of the Iranian Qiam-1 short-range ballistic missile.

This latter finding supports that of the UN Panel of Experts on Yemen in January 2018, which reported that the Borkan-2H short-range ballistic missile fired at King Khaled International Airport in Riyadh, Saudi Arabia, in November 2017 “was a derived lighter version, designed specifically by the manufacturers of the Qiam-1” missile.

The Secretariat further assessed that the logo on the jet vane actuators matches that of the Iranian entity Shahid Bagheri Industries (S.B.I.), an Iranian entity linked to composite rocket fuel and missile technology.[2] The Secretariat also observed that a printed circuit board was marked with SHIG 6081, where SHIG is an abbreviation for the Shahid Hemmat Industrial Group, reportedly responsible for Iran’s liquid fuelled ballistic missiles.

 

To read the full report, please click here. The next report of the Secretary General will be issued in December 2018.

[1] Paulina Izewicz, Assessing the JCPOA Procurement Channel, The International Institute of Strategic Studies, 29 March 2018, https://www.iiss.org/blogs/analysis/2018/03/jcpoa-procurement-channel

[2] Iran Watch, Shahid Bagheri Industrial Group, last modified 1 January 2009, https://www.iranwatch.org/iranian-entities/shahid-bagheri-industrial-group

Can Europe save the JCPOA?

Ian J Stewart, Director of Project Alpha

Click here to access the full article: Bulletin of the Atomic Scientists

On May 8, President Trump “withdrew” the United States from a deal agreed by his predecessor to prevent Iran from obtaining nuclear weapons. US withdrawal was not foreseen when the agreement was drafted, nor was the possibility that the United States might stand in isolation from its closest international partners. Withdrawal also did not mean that the deal ended, but US actions have caused a crisis and could well result in the deal coming to an end. Some have argued that the European states might be able to save the JCPOA. It is important for them to bolster the agreement to the extent that they can, even if the tools available to salvage it are limited.

There appears to be three broad scenarios for what might happen next. The first is that Iran decides to stay in the JCPOA. The immediate response of Iranian officials has been to say that the country will remain in the agreement if the Europeans—and the other parties—can assure Iran receives the benefits it expected when the deal was concluded. A second foreseeable scenario would have Iran withdraw from the JCPOA and resume its nuclear program. There are a couple of different ways this could happen. The third path forward could see the US trigger a snapback of UN sanctions. The re-imposition of UN sanctions would put the EU in the impossible situation of having to decide between complying with the UN Charter or complying with a legally non-binding nuclear agreement with Iran. Ultimately, it will be for Iran to decide whether to continue with the JCPOA or to terminate the agreement.

Preventing the Proliferation of WMDs: Measuring the Success of UN Security Council Resolution 1540

Editors: Daniel Salisbury, Ian J. Stewart, Andrea Viski

Click here to access the book_Preventing the Proliferation of WMDs: Measuring the Success of UN Security Council Resolution 1540

 

This edited volume provides a fresh analysis for researcher and practitioners regarding United Nations Security Council resolution 1540, the status of its implementation, and its future by providing an original evaluation of progress in implementation and challenges faced during the resolution’s first decade. In doing so, the book will consider the resolution’s utility as a non-proliferation tool with a view to identifying what further actions are required for the objectives and goals embodied by UNSCR 1540 to be achieved and sustained.  The book progresses by exploring the history of the resolution, implementation trends, implementation from a regional perspective, challenges, and future ways forward. The book appeals to a wide readership of scholars, policymakers, and other stakeholders of the 1540 process.