Despite a new report by the UN's nuclear "watchdog" agency stating that Iran is in compliance with its legal obligations to the agency under the nuclear non-proliferation treaty (NPT), the UN Security Council voted on March 3 to punish Iran with a third round of financial sanctions.
The new sanctions resolution was adopted 10 days after Mohammed ElBaradei, director-general of the Vienna-based International Atomic Energy Agency, reported to the IAEA's 35-member policy-making board that Iran had "provided the required nuclear material accountancy reports in connection with declared nuclear material and activities".
He also reported that his agency "has been able to conclude that answers provided by Iran, in accordance with the work plan" on "outstanding issues" agreed between Tehran and the IAEA last August, "are consistent" with his inspectors' findings and therefore he "considers those questions no longer as outstanding", with one exception.
The "outstanding issues" relate to activities involving potentially fissionable material undertaken over the previous two decades that Iran was not legally obliged to declare to the IAEA under its 1974 NPT safeguards agreement but which, in November 2003, Iran agreed to provide full information on.
The one exception was alleged "weaponisation" studies by Iran, including machining of uranium metal into the shape of missile warheads. US officials claim the alleged studies were obtained by them from a laptop that they say was smuggled out of Iran in 2005. They only provided this "intelligence" to the IAEA secretariat late last year, and only allowed ElBaradei to show it to Iranian officials a week before he was due to present his latest report.
ElBaradei reported to the IAEA board that his agency "has not detected the use of nuclear material in connection with the alleged studies, nor does it have credible information in this regard".
Following ElBaradei's report, the US and its European Union allies Britain, France and Germany abandoned the presentation of a draft resolution — the first in two years — implying that Iran was not "fully" co-operating with the IAEA.
The proposed resolution ran up against stiff resistance from Third World members of the IAEA board. Cuban ambassador Norma Goiochea Estenoz told reporters after the meeting that any IAEA board resolution against Iran would "ruin the existing atmosphere of cooperation and mutual trust between Iran and the IAEA" secretariat.
Reuters reported on March 9 that Israeli cabinet minister Ze'ev Boim called for ElBaradei's sacking. "When you examine his behaviour you cannot but reach the conclusion that he is a sort of planted agent ... who has served well the interests of Iran", Boim said in an Israeli Channel One TV interview.
Israel, while a member of the IAEA, has refused to sign the NPT or allow IAEA inspections of its nuclear facilities. The Pentagon's Defense Intelligence Agency estimated in July 1999 that Israel had secretly made 60-80 nuclear weapons since 1968. An August 1974 CIA report, declassified only this January 13, said that France had secretly helped Israel produce nuclear weapons.
Seizing on Iran's past undeclared nuclear-related activities, Washington pressured the IAEA board in August 2005 to request that Iran suspend its uranium enrichment activities as a "confidence-building measure" until the "outstanding issues" over its nuclear program were clarified by ElBaradei.
Uranium enrichment is not a violation of Iran's or any other non-nuclear weapons state's NPT safeguards agreement with the IAEA, unless the enriched uranium is used "in furtherance of any military purpose". ElBaradei has repeatedly reported that his agency's inspectors have found no evidence that Iran's enrichment activities have been used for such a purpose.
When US officials made it clear that they intended to use the August 2005 IAEA board resolution to demand Iran permanently abandon uranium enrichment, Tehran rejected the board's request. The following February, under heavy US pressure, the IAEA board voted to refer Iran's nuclear program to the UN Security Council, which called on Iran to suspend enrichment, again as a "confidence-building measure".
Since then, Washington has pressured the Security Council, in December 2006 and March 2007, to impose two rounds of limited financial sanctions against Iran for refusing to suspend uranium enrichment.
The adoption on March 3 of a third sanctions resolution — coming after ElBaradei had reported that all the earlier "outstanding issues" with Iran had been resolved — clearly shows that, as South African IAEA envoy Abdul Minty told the IAEA board on March 4, "the verification work of the agency and the important progress that has been made is virtually irrelevant to the co-sponsors of the resolution".
The third sanctions resolution was co-sponsored by the five veto-wielding permanent members of the Security Council (Britain, China, France, Russia and the US), plus Germany.
Associated Press reported on March 5 that the foreign ministers of these six powers "issued a joint statement after Monday's council vote reaffirming their dual-track approach: They would sweeten a package of economic incentives and political rewards offered in June 2006 if Iran suspends enrichment, but would push for even more sanctions if Tehran continued its defiance."
Russian UN ambassador Vitaly Churkin told reporters that Washington had dropped its past objections to Russia assisting Iran build nuclear power plants and supplying them with Russian-made nuclear fuel. He said this was "an indication of the goodwill of the international community".
Iran wants to master enrichment technology so that it can produce nuclear fuel from its own uranium ore deposits, rather than having to spend billions on imported nuclear fuel. Moscow however has a major financial interest in ensuring that Iran has to import Russian-made nuclear fuel.
Furthermore, the Security Council's financial sanctions have created big new business opportunities in Iran for Russian and Chinese firms by discouraging Western firms from providing loans to Iran to develop its huge oil and gas resources.
On February 19, for example, Reuters reported that the Iranian government had signed a deal with Russia's majority government-owned Gazprom gas export monopoly to form a joint company for developing new Iranian oil and gas projects. Cash-flushed Gazprom — by market capitalisation, the world's third biggest company (after ExxonMobil and General Electric)— already accounts for 20% of world gas output. After Russia, Iran has the world's largest gas reserves but only accounts for 1% of world output.
A February 26 Reuters analysis article on the Tehran-Gazprom deal observed that the European Union's "dependence on Gazprom would limit the effectiveness of any reprisal action from the United States". Gazprom accounts for 45% of the EU's gas imports. "If you put sanctions on Gazprom you are basically threatening Europe's energy security", said Teymur Huseynov, head of the Eurasia department at the London-based risk consultancy Exclusive Analysis.
In December, Sinopec, China's top oil refiner, signed a deal to invest $2 billion in Iran's big Yadavaran oilfield. Sinopec has also agreed to triple its imports of Iranian crude oil this year. Iran, the world's fourth largest oil exporter, was China's third-biggest source of imported crude oil in 2007, with shipments of 20.5 million tonnes.
On March 1, United Press International reported: "In yet another striking piece of news that will have American oil producers weeping into their martinis, the director of the Iran Contemporary Studies Center in Russia, Rajab Safarov, said that in the coming months, Iran wants to privatize its oil companies, a development, which if it occurs, will see American companies effectively locked out from the bidding by Washington's sanctions regime against Iran."