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Background

While Iran’s centrifuge enrichment programme is often the element of Iran’s nuclear work which generates the most attention in the press, there are also concerns surrounding the country’s work on a heavy water reactor at Arak. This research reactor is intended to produce radioactive isotopes for medical uses. However, once complete it could also be used by Iran to produce plutonium, which when reprocessed from the spent fuel could be used in the manufacture of nuclear weapons.

Modern Industries Technique Company (MITEC) is an entity that was listed by the UN Security Council in UNSCR1929, with the resolution detailing that the entity is ‘responsible for design and construction of the IR-40 heavy water reactor in Arak’ and has ‘spearheaded procurement for the construction’.[1] A US Treasury document indicates that MITEC is ‘owned or controlled’ by the Atomic Energy Organisation of Iran (AEOI), and has been involved in the Arak project since 2001.[2]

MITEC’s Procurement Activities

MITEC is alleged to have attempted to procure 1,767 valves for the heavy water research reactor under construction at Arak between 2007 and 2011.[3] 1,163 valves are alleged to have reached MITEC during the period. This number of valves is believed to be sufficient to equip the entire Arak facility in orders worth $7.7 million.[4]

MITEC is alleged to have contacted Hossein Tanideh, alleged to be an owner of a number of companies in Germany, to request the procurement of valves of three types.[5] T in turn contacted Rudolf M, a Weimar-based company owner, and successful negotiation led to a first shipment of valves being made in October 2010 via Turkey to Iran. Two other individuals, Gholamali and Kianzad K., are also alleged to have been involved in setting up following deals. The two Ks, Rudolf M and another individual, Hamid Kh, were arrested by German police in August 2012.[6] Tanideh was arrested in Turkey in June 2012.[7]

The table below provides a summary of the alleged shipments of valves derived from open sources (an incomplete account is currently available in open sources):

2013 UN Panel Report

The June 2013 UN Panel of Experts on Iran sanctions Final Report provides some more details regarding the case. This includes the technical specifications of the valves, the methods used to procure the goods and entities involved.

Technology

In terms of the valves procured, the Panel report notes that ‘One group of 856 valves had a number of features consistent with use in the context of a heavy water reactor. These included the material specified for valve body construction, welded, bellows-sealed valves, the valve stem packing material, valve actuators specified according to standard IEEE 382 (for nuclear power generating stations), and actuators with an IP rating of 67’.[10] IEEE 382 standard is particularly notable given that products meeting this specification are able to operate in a radiation environment.[11]

Methods

The report notes that ‘this procurement involved the use of front companies in other third countries and false end user documentation’.[12] Press reports highlight the use of front companies based in Turkey, and particularly one company, IDI which was owned by Tanideh. Reports from earlier this year indicate that Tanideh was arrested in Turkey and three other linked individuals were being sought by Turkish authorities.[13]

Entities

The report also notes the involvement of the entity ‘Pentane Chemistry’.[14] The technical details above were derived from correspondence between MITEC and Pentane. It is not the first time that Pentane has been involved in illicit procurement activities. Pentane Chemistry Industries was linked to an Iranian individual listed as the consignee on a shipment of phosphor bronze wire mesh which was intercepted at Seoul International Airport during transhipment between Tianjin, China and Turkey. The Panel investigated the interdiction and included findings in its 2011 report that this constituted a breach of sanctions.[15]

The 2013 Panel report includes a recommendation that Pentane should be designated following ‘documentary and factual evidence’ of violation of paragraph 12 of resolution 1929.[16]