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US Ambassador Gregory L. Schulte on Iran, January 31, 2008

Remarks by Ambassador Gregory L. Schulte U.S. Permanent Representative to the International Atomic Energy Agency and the United Nations Office in Vienna, Aspen Institute Berlin, Germany January 31, 2008.

Iran's Nuclear Program: Necessary Steps to Build Confidence

Ladies and gentlemen, I am pleased to be in Berlin at the Aspen Institute where I know you are tackling important transatlantic issues. Without a doubt, Iran's pursuit of dangerous nuclear technologies and defiance of IAEA and UN Security Council resolutions is one such issue. Both Berlin and Washington agree that transatlantic cooperation is critical to confronting this challenge and Berlin is one of our closest partners in this quest.

Last week, after the EU3+3 agreed on the elements of a third Security Council sanctions resolution, your Foreign Minister reiterated the six nations' continued concern about Iran's nuclear activities and nuclear programs. He emphasized that "we need to work in unison and with determination, and we intend to do so to avoid a situation where Iran provides nuclear arms for itself."

Today I'd like to exchange views on two important topics: The first is how we must continue to work "in unison and with determination" on Iran. The second is how countries true to their nonproliferation commitments can make peaceful use of nuclear technology while reducing the risk of proliferating weapons.

The Implications of the National Intelligence Estimate

Last month, the United States made public a summary of the key judgments from the recent National Intelligence Estimate on Iran's nuclear program and intentions. The first half of the first sentence states: "We [the U.S. Intelligence Community] judge with high confidence that in fall 2003, Tehran halted its nuclear weapons program...."

A casual reader might be tempted to sigh with relief and move to the next topic. But a serious reader will read the footnote and the rest of the judgment and realize that the world has been right to be worried about Iran's nuclear activities -- and that Iran's behavior still poses a threat to international peace and security.

I have carefully read the NIE and drawn three important conclusions.

First, we have new evidence and are more confident than ever that Iran until 2003 had a nuclear weapons program. The program included work on nuclear weapons design, weaponization, and covert uranium conversion and enrichment. Iran only halted this work just over four years ago, when it found itself under increasing international scrutiny and pressure.

This was no hobby or academic pursuit. This was a concerted, covert program, conducted by military entities, under the direction of Iran's senior leaders.

Even before the NIE's release, the IAEA had indications of recent activities with a military nuclear dimension. Repeated reports by Mohammed ElBaradei, the Director General, have asked Iran to address work on an undeclared uranium conversion project, high explosive testing, and the design of a missile re-entry vehicle, as well as administrative connections between these activities.

Second, Iran's leaders could choose to restart those weapons-related activities. Let's recall recent history.

In the fall of 2003, Iran was under increasing international pressure. The IAEA had learned -- not from Iran's authorities but from a dissident group -- that Iran was building facilities for uranium conversion and enrichment at Esfahan and Natanz. It was constructing a heavy water reactor well configured for producing plutonium at Arak. The IAEA ultimately learned that Iran was doing so in violation of its safeguards obligations and with the support of the A.Q. Khan network.

The A.Q. Khan network was not a legitimate purveyor of civil technologies. It was an illicit supplier of nuclear weapons technology to countries like North Korea and Libya, before Libya renounced its nuclear weapons program. Countries turned to Khan and his associates if they wanted a bomb.

Under increasing pressure, Tehran publicly suspended uranium-enrichment activities. We now know that Tehran also halted the covert work on weapon design and weaponization in the same timeframe.

Despite continued international pressure, Iran broke the IAEA seals at Esfahan and then at Natanz and restarted enrichment-related activities. It could also choose, now or later, to restart work on weapons design and weaponization. Indeed, while the Intelligence Community has high confidence that these activities stopped in 2003, it has only moderate confidence that they have not since restarted.

The Director General has twice warned us that the IAEA's knowledge of Iran's current activities is diminishing. Thus there is no certainty that the IAEA would know that Iran had restarted nuclear weapons design and weaponization activities or covert efforts toward uranium conversion and enrichment. This is a matter of grave concern.

Third, Iran continues working to master uranium enrichment, which could be readily applied to building a bomb.

Producing fissile material -- whether highly-enriched uranium or weapons-grade plutonium -- is the most time-consuming part of building a nuclear weapon. The enrichment technology being mastered at Natanz, or the advanced centrifuges being developed outside the view of regular IAEA inspections, could be replicated at a covert facility. In fact, just last year, in further violation of its obligations to the IAEA, Iran started refusing to provide advance information on new nuclear facilities.

Because producing fissile material is the most time-consuming part of building a nuclear weapon, our Intelligence Community still assesses that Iran could produce enough highly-enriched uranium for a nuclear bomb sometime between 2010 and 2015.

Iran claims that it is developing an enrichment capability to produce nuclear fuel for power reactors. But Iran has no power reactors. The one reactor under construction, at Bushehr, is receiving fuel from Russia, which has already delivered much of the necessary fuel.

The U.S. Intelligence Community judges that Iran is deliberately keeping open the option to develop nuclear weapons -- and that its ongoing enrichment program, now in violation of Security Council resolutions, is part of maintaining that option.

In summary, the NIE tells us that:

• Iran, only a short time ago, was pursuing work on nuclear weapon design and weaponization, as well as covert uranium conversion and enrichment;

• Iran's leaders could choose to restart those activities, and IAEA inspectors might not even know;

• the enrichment-related activities now declared to the IAEA, but conducted in violation of IAEA and Security Council requirements, are part of Iran's deliberate effort to keep open the option to build nuclear weapons.

These conclusions have three important implications for policy and our collective approach to confronting this challenge.

The Continued Need for Full Disclosure

First, Iran owes the IAEA a full disclosure of its past nuclear activities.

A full disclosure of past activities is important for two reasons. First, it will help clear up mistrust about Iran's past activities. Second, it will put the IAEA in a better position to understand Iran's current activities and monitor their compliance with safeguards obligations.

It is troubling that Iran's leaders, including the Supreme Leader, continue to deny past work toward nuclear weapons -- despite increasing evidence to the contrary. The leaders in Tehran say they want to "close the file" on their country's nuclear activities. But the file can only be closed if Iran's leaders come clean, including by admitting and explaining their recent weaponization activities and the involvement of Iran's military.

Iran's continued cover-up of its past program, and its refusal to allow the IAEA to verify its halt would be further indication, as the NIE concludes, that Iran has not made the strategic decision to abandon its nuclear weapons program and is actively keeping its options open to build nuclear weapons.

Full disclosure is a true test of whether Iran is serious about cooperation or just buying time.

Second, Iran must provide a full disclosure of its current nuclear activities.

Dr. ElBaradei has repeatedly called on Iran's leaders to implement the IAEA's Additional Protocol and other transparency measures. The IAEA Board and the UN Security Council have made similar calls. The Additional Protocol is already implemented by countries around the world to give Agency inspectors additional access and information to help them verify the peaceful nature of nuclear activities.

Without the Additional Protocol and additional transparency measures, the IAEA can no longer monitor the production of centrifuges, watch for their diversion to covert locations, or look for other undeclared activities.

Iran must also meet its obligation under its Safeguards Agreement to provide early information on new nuclear facilities. Iran has no right to develop nuclear facilities covertly, then inform the IAEA only shortly before they go into operation.

Full disclosure of current activities is necessary to verify the exclusively peaceful nature of Iran's activities. Full disclosure is necessary to ensure that Iran's leaders do not restart the covert weaponization activities that the NIE judges were halted just over four years ago.

The Continued Requirement for Full Suspension

A third implication of the NIE is that it remains imperative for Iran to suspend Iran's enrichment-related and other proliferation-sensitive nuclear activities. Suspension remains imperative because producing fissile material is the most time-consuming part of building a weapon. Suspension remains imperative because of the NIE's judgment that Iran's effort to master enrichment technology, not necessary for a civil program, is part of its deliberate effort to keep open the option to develop nuclear weapons. Suspension remains imperative because the IAEA Board and the UN Security Council have lost confidence that the nature of Iran's nuclear activities and the intentions of its leadership are exclusively peaceful.

Some might argue that keeping open the option to develop nuclear weapons is less dangerous than the pursuit of nuclear weapons. But imagine a neighbor living in a house next to yours. Imagine that this neighbor wants to dominate the community and interfere in your household. Imagine that this neighbor pays and trains neighborhood thugs. Imagine that this neighbor tries to sabotage efforts to end local conflicts. Now imagine that neighbor, even when trying to charm you, is stockpiling canisters of propane that could be used to blow up your house. That is a dangerous neighbor.

A country that is defiant and dangerous can readily change the option to develop nuclear weapons into actual nuclear weapons. And even deliberately leaving open the option -- while continuing to develop nuclear weapons-relevant technologies -- can spur other countries to pursue similar capabilities, introducing new dangerous instabilities in a region already wrought with violence.

Iran's "Work Plan" and its Slippery Deadlines

Earlier this month, Dr. ElBaradei went to Tehran to meet with its highest officials. He went to urge them to provide a full disclosure of the past and the present and to suspend their enrichment-related activities. We supported him in this endeavor.

Unfortunately, Iran's leaders did not. They did not provide the transparency requested by Dr. ElBaradei. They did not agree to his requests to implement the Additional Protocol or suspend proliferation-sensitive nuclear activities.

Instead, they provided some additional information on their advanced centrifuge work and pushed past another deadline to resolve outstanding issues. This fits past practice: Using selective cooperation to try to delay international action.

In June of last year, Dr. ElBaradei and Dr. Larijani, who has since been relieved of his nuclear responsibilities, agreed to implement a "work plan" to resolve outstanding issues about Iran's nuclear program. In September, Dr. ElBaradei called on Iran's leaders to complete the work plan by November. They didn't. In November, Dr. ElBaradei called on Iran's leaders to complete the work plan by the end of December. They didn't. During this month's visit to Tehran, Iran's leaders agreed to complete the work plan by mid-February. Let's see if they do…

As Foreign Minister Steinmeier said last week, "we continue to expect from Iran that… in the next few days and weeks Iran is going to settle these outstanding issues in cooperation with the IAEA in Vienna. Only if that is to be the case will it be possible for Iran to regain the confidence lost over many years."

We support Dr. ElBaradei and his inspectors in trying to resolve outstanding issues. We understand that their success depends fundamentally on Iran's cooperation. But Iran's cooperation remains incomplete, and it is increasingly hard to take seriously these slippery deadlines. Many on the IAEA Board were worried from the outset that the work plan was an effort by Iran to draw out cooperation, to remove attention from illegal enrichment activities, and to stave off further sanctions. Those worries seem justified.

Continuing Our Dual-Track Strategy Toward Peaceful Resolution

The EU3+3 Ministers met last week and agreed to reinforce our dual-track strategy toward a peaceful resolution. That strategy remains valid and imperative in light of Iran's continued efforts to stall and delay cooperation while building an enrichment capability.

The first track of the strategy is a negotiating track. In June 2006, the Foreign Ministers of the six countries made an important offer, one that would help Iran's leaders to advance their stated desire for civil nuclear energy while also addressing other economic and security concerns.

That offer, endorsed by the Security Council, would help Iran attain what its leaders claim they want from their nuclear program: international recognition; economic benefit; advanced technologies; and a new source of electricity with a guaranteed supply of fuel that would reserve more oil and gas for sale on the world market.

The six-country offer remains on the table. Moreover, the Security Council announced that all sanctions would be suspended if Iran suspends enrichment-related activities and allows negotiations between the six countries and Iran to begin. And Secretary Rice announced that she would be prepared to join those negotiations, anytime, anywhere.

The second track of the dual-track strategy involves diplomatic pressure and targeted sanctions to convince Iran's leaders to choose serious negotiation over continued defiance.

The EU3+3 Ministers have reinforced that track by agreeing on the elements of a third sanctions resolution, which are now under consideration in New York. A third sanctions resolution is necessary -- in fact, well overdue -- to convince Iran's leadership to change course and comply with Security Council resolutions. In addition, we welcome steps taken by countries across the world, including in Europe, to strengthen implementation of existing sanctions, to ensure that Iran is not abusing the world's financial markets, and to bring other diplomatic and economic pressure to bear.

The goal is not to penalize the Iranian people. The goal is to change the strategic calculus of their leaders. If Iran's leaders want respect, if Iran's leaders want security, if Iran's leaders want civil nuclear power, they should consider the options before them and choose negotiation and civil nuclear benefits over further sanctions and isolation.

Iran's leaders should follow the example of other countries that admitted and terminated illicit nuclear weapons programs:

• Romania, which in 1992 opened its facilities to IAEA inspections and then destroyed equipment associated with a Communist-era nuclear weapons program.

• South Africa, which in 1993 disclosed that it had constructed then dismantled several nuclear weapons and then opened its secret facilities to IAEA inspectors.

• Libya, which in 2003 terminated a nuclear weapons program supplied by the A.Q. Khan network, allowing IAEA inspections and the removal of documents, components, and dual-use machinery that were part of its nuclear program.

All of those countries admitted their programs. All signed and implemented the Additional Protocol. All stopped activities of international concern. All are now in good standing with the IAEA and the world community.

All of those countries are a model for Iran. But Iran's leaders will only choose that model if they see an international community that is united and determined and if they clearly understand that the consequences for defiance are not in their interest.

In this week's State of the Union Address, President Bush reiterated that Iran's activities remain dangerous and continue to cause the United States and others concern. He reminded us that Tehran is "developing ballistic missiles of increasing range, and continues to develop its capability to enrich uranium, which could be used to create a nuclear weapon." President Bush also repeated his message to Iran's leaders: "Verifiably suspend your nuclear enrichment, so negotiations can begin. And to rejoin the community of nations, come clean about your nuclear intentions and past actions, stop your oppression at home, cease your support for terror abroad."

Peaceful Nuclear Pursuits with Reduced Proliferation Risks

Iran's leaders often argue that our diplomatic efforts disguise a malicious effort to deprive them and other countries of their legitimate rights. This is far from the case.

The United States recognizes that an increasing number of countries -- from Europe to Asia, from the Middle East to Africa, and in the Americas -- are looking to nuclear energy as a way to preserve existing energy supplies, diversify energy sources, and protect the environment. Many nations also look to nuclear technologies for other peaceful benefits, whether combating the tsetse fly in east Africa, managing clean water sources in the desert, or treating the growing prevalence of cancer in the developing world.

The United States encourages and supports these and many more peaceful uses of nuclear energy provided NPT and IAEA obligations are fully met, and international standards regulating safety, nonproliferation, export controls, and physical security are strictly followed. To that end, we are working with other Member States to bring the many benefits of nuclear technology to all who will use it responsibly.

Nuclear power reactors typically run on low enriched uranium. Unfortunately, the same technology used for the enrichment of uranium -- a necessary step in the production of the fuel that powers many of the world's civilian nuclear reactors -- can also be employed in the development of nuclear weapons.

Most countries that have nuclear power today do not produce nuclear fuel. Indeed, building enrichment facilities is costly and time-consuming -- not a sound economic choice for most. Advanced countries with sophisticated nuclear programs, such as Sweden and South Korea, enjoy the benefits of nuclear power without uranium enrichment, as do 18 others. They rely on the commercial market, which is diversified, reliable, and functions well. The commercial market has proven to be a cost-effective way to support the expansion of nuclear energy while reducing proliferation risks. By supporting the commercial market, and by backing it with an assured supply of nuclear fuel for all countries using nuclear technology responsibly, we can reduce and even eliminate the need for countries to develop expensive, potentially dangerous, and unnecessary enrichment capabilities.

In June of last year, the Director General produced a report describing a multilateral framework for supply assurances. This framework can accommodate a variety of concepts, from IAEA-administered supply arrangements, to actual "fuel banks" under IAEA or national control. These arrangements would not interfere with, but would serve only to back up existing commercial markets, thereby providing an additional layer of security for consumers.

The UK has been working with the URENCO partner countries and others on a proposal involving the concept of enrichment bonds for services at URENCO's existing facilities. Germany has put forward a concept for a multilateral enrichment facility under IAEA auspices. We welcome the initiative taken by your government in this area and we look forward to discussing these and other proposals noted in the Director General's report.

Russia has made a proposal that could be put in place even earlier: the stockpiling under IAEA auspices of two reactor-loads of low enriched uranium at an existing Russian enrichment facility at Angarsk. Russia and the IAEA Secretariat are currently negotiating arrangements to make low enriched uranium available to the IAEA. The IAEA could provide this fuel to member states under specified criteria. Depending on the details, we hope that such an arrangement could be brought to the IAEA Board in the coming months.

The United States stands ready to support this effort. Our Department of Energy has begun down-blending 17 metric tons of highly enriched uranium to commercial fuel for use in a low enriched uranium reserve. The U.S. Congress plans to contribute to the creation of an international fuel bank, and the Nuclear Threat Initiative, a U.S.-based nongovernmental organization, has pledged $50 million dollars to this effort.

None of these proposals is intended to disrupt the well-functioning market. Participation would be a voluntary decision on the part of sovereign governments. No country would be denied its right to develop peaceful nuclear energy programs. Instead, the goal is to provide a "viable alternative" to the acquisition of sensitive technologies while still allowing countries to meet growing energy needs.

U.S.-German Cooperation

I have come to Berlin to exchange views with you but also to consult with your government. Our countries have a common interest in close cooperation, whether in confronting the challenge posed by Iran or promoting the responsible development of nuclear power. Only through close cooperation and a unified strategy can we find success.

Source: US Mission in Vienna, http://vienna.usmission.gov.

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