(Panel focuses on China, Russia, European allies)
By Rick Marshall USIA Staff Writer - 06 May 1997

Washington -- Three specialists on trade in military and dual-use
technology to Iran spoke before the Senate Foreign Relations
subcommittee on Near East and South Asian affairs May 6 and shared
their views on Chinese, Russian and European sales in support of
Iran's weapons of mass destruction programs.

"There is no doubt that Iran is aggressively trying to develop nuclear
weapons and the missiles to deliver them," Gary Milhollin, director of
the Wisconsin Project on Nuclear Arms Control, said in his prepared
remarks. "There is also no doubt that Iran has already built chemical
weapons. Iran's progress in all these efforts has depended almost
entirely on outside help, and will continue to depend on it in the

Milhollin pointed to four recent Chinese technology transfers to Iran
-- involving anti-ship missiles; air surveillance radars; a fusion
reactor; and a uranium prospecting operation -- as examples of the
commerce which links the two nations.

In some instances, deals such as these use American technology,
particularly computers, to be exported, Milhollin testified.

Milhollin then turned to Russia, calling Moscow "Iran's other main
nuclear supplier." He referred specifically to a 1995 Russian deal "to
supply Iran two light water power reactors plus a string of
'sweeteners.'" Among these sweeteners were "a centrifuge plant to
enrich uranium, a 30 - 50 megawatt research reactor, 2,000 tons of
natural uranium, and training," he stated.

While the centrifuge plant was canceled and the training is going
forward, "the status of the research reactor and the uranium is
unclear," he noted.

"The enrichment plant would only serve to make nuclear weapons," he
added, "and the same is true of the natural uranium. The research
reactor would have been ideal, like the Chinese one, for making a bomb
or two per year."

He then described how equipment like supercomputers can be purchased
by Iranian companies in countries like Dubai. "Because Dubai has no
effective export control system, there is nothing to prevent these
supercomputers from going on to Iran ... Iran now imports more goods
through Dubai than through its own ports."

Milhollin also focused on Europe where certain "allies are also
following this same policy of constructive engagement toward Iran."

While he refrained from naming specific European nations in his
prepared remarks, when asked directly by subcommittee chairman Sam
Brownback (Republican, Kansas), Milhollin noted that German, and to a
lesser extent Swiss and British companies, appeared to be the most
eager to trade with Iran.

Asked to identify the worst violators of the trade sanctions which
have been set up to keep sensitive technology out of Iranian hands,
Seth Carus, a visiting fellow at the National Defense University, said
that Russia, China, and North Korea "are the most egregious." However,
he added, "the Iranians are capable of operating internationally,"
pointing to Iran's large acquisition arm in Europe and a Swiss turnkey
biological weapons facility that was recently exposed.

Both Milhollin and Carus felt that U.S. programs to restrict the sale
of advanced technology with military uses to Iran have been
successful. However, pressure from U.S. firms to export has tended to
undercut even the American position, both men felt. Still, the
commercial pressure to sell was even greater in Europe, they agreed.

Senator Diane Feinstein (Democrat, California), noting that her state
was a major technology and computer exporter, said that she found it
"greatly troubling" that U.S. allies are failing to "provide the kind
of support we need."

Sen. Brownback asked Milhollin his views on the best way to thwart
Iran's quest for the technology to run their WMD programs. Milhollin
said that he opposed policies such as withholding Most Favored Nation
Status from China or Russia, as that could easily undermine U.S.
efforts to work on non-proliferation and a range of other issues with
them. The best approach is to target specific companies that trade
illegally with Iran. To this effect, he agreed to supply Brownback a
list of companies which continue to trade illegally with Iran.

Gary Bertsch, a professor at the University of Georgia's Center for
International Trade and Security, took a more optimistic view than the
other panelists that China could be induced to improve its export
controls. The United States has done a pretty good job in educating
Russia and Ukraine about the perils of helping Iran build up its WMD
programs, he said. Now, he added, "it's time to bring China in."