International Trade News and Notes for June 30, 2010

• Iran Sanctions - At 6:15 pm EDT tomorrow, July 1st, President Obama will sign into law H.R. 2194, the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010. 

• Export Control Reform - In a speech today before the Senate Aerospace Caucus General James L. Jones announced, that as part of the export reform process, the Obama Administration intends to propose a new, single and independent agency that will merge export licensing activities at the State and Commerce departments under a board of directors reporting to the president. Under the proposal, the new agency’s board of directors would be consist of the secretaries of the departments of Defense, State, Commerce, Treasury and Homeland Security. However, the online DoD Buzz published a story this afternoon noting Congressional opposition to the idea of a single licensing agency. Nobody said that export control reform would be easy.

• Antidumping - The AP published an interesting story on the use of "honey-laundering" to evade antidumping duties on U.S. imports of Chinese honey. 

• The Bureau of Industry and Industry and Security published in today's Federal Register a proposed rule to amend the Export Administration Regulations by adding Export Control Classification Number (ECCN) 6A981 to the Commerce Control List to control passive infrasound sensors because of their military and commercial utility. If finalized, items under this new ECCN would be controlled for Regional Stability (RS) and Anti-Terrorism (AT) reasons. BIS also proposes to control technology and software for the development, production, or use of these items for RS and AT reasons under revised ECCNs 6D991 and 6E991. Comments on this proposed rule must be submitted by August 30, 2010.

• The Directorate of Defense Trade Controls has posted the agenda for the July 7, 2010 Defense Trade Advisory Group (DTAG) meeting. 

• This afternoon the House Committee on Agriculture will mark up H.R. 4645, the Travel Restriction Reform and Export Enhancement Act, which would: 

1. lift the restrictions on U.S. citizens traveling to Cuba, 
2. require agricultural exports to Cuba to have same payment requirements as exports to other countries (i.e., lift cash in advance requirement);
3. eliminate current requirement that payments to U.S. agricultural exporters must pass through banks in third countries. 

[Update: The House Agriculture Committee voted this afternoon to report H.R. 4645 to the House floor with a favorable recommendation by a vote of 25 in favor and 20 against. Prospects for final passage of this bill in this term of Congress remain slim. House Foreign Affairs Chairman Howard Berman (D-CA) released a statement indicating his support for the bill and noting that the "travel ban to Cuba simply has not worked to help the Cuban people in any way. It has not hurt the Castros as it was intended to do, but it has hurt U.S. citizens.]

• National Export Initiative - The Obama Administration, through the interagency Trade Promotion Coordinating Committee (TPCC), published an announcement today seeking comments from exporters, other private businesses, trade associations, academia, labor organizations, non-governmental organizations on export programs and other information as part of the National Export Initiative. Comments are due on July 26, 2010,
  

• SNAP-R Maintenance - BIS will be performing updates that will affect SNAP-R this weekend. SNAP-R users will continue to be able to submit their applications via the SNAP-R system. However applications received after midnight on Friday, July 2, 2010 until midnight Monday July 5, 2010 will not be processed until Tuesday July 6, 2010. In addition, the STELA Web application will be unavailable during this time. 

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BIS Press Release on Revised Encryption Regulation

The Bureau of Industry and Security (BIS) issued the following press release this afternoon regarding the changes made to U.S. export controls on certain encryption items. A summary of the changes made by the new regulation and a link to the text of the Federal Register notice are found below.

BIS Updates Encryption Export Rule;
Revised Rule Streamlines Review Process, Enhances National Security

WASHINGTON - The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) today revised its rules regarding the export of most mass market electronic products that contain encryption functions and other encryption products.

“This revised rule enhances our national security and cuts red tape by eliminating the review of readily available encryption items, like cell phones and household appliances, and allows the Government to focus its resources on more sensitive encryption items,” Assistant Secretary of Commerce for Export Administration Kevin Wolf said.

The new rule ends the U.S. government’s 30-day technical review requirement to export most mass market and other types of encryption products. “Mass market” electronic products containing encryption include cell phones, laptops, and disk drives. Exporters and manufacturers of the encryption products may now self-classify the products and then export them without a license if they register on-line with BIS. BIS also requires that they submit an annual self-classification report. This rule is expected to decrease technical reviews by approximately 70 percent and semi-annual reporting by up to 85 percent.

The rule also extends the scope of License Exception ENC authorizations to most encryption technology exports, following a technical review. In addition, it adds a decontrol note for items that perform “ancillary” cryptography, which covers items such as games, robotics, business process automation, and other products that contain encryption capabilities but do not have communication, computing, networking or information security as a primary function.

“This rule is the first step in the President’s effort to fundamentally reform U.S. encryption export controls,” Assistant Secretary Wolf said. “The Administration will continue to review the encryption rules to further enhance national security and ensure the continued competitiveness of U.S. encryption products. This effort will include a review of the current controls on publicly available encryption software, integrated circuits with encryption functionality, high-speed routers, and other types of restricted encryption products.”

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BIS Issues Regulation Reforming Encryption Export Controls

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) took the first step in the export control reform process by publishing an interim final rule in today's Federal Register making significant changes to the Export Administration Regulations (EAR) governing the export of hardware and software containing encryption algorithms and functions.

This interim final rule, which goes into effect today, June 25, 2010, implements the President's statement in a speech at the Export-Import Bank's annual conference in March 2010 that the current review-and-wait and semi-annual sales reporting requirements would be replaced with a "more efficient" one-time notification-and-ship process. While today's regulation eliminates the 30 day technical review and waiting requirement for most software and hardware containing encryption functionality eligible for license exception ENC and qualifying for "mass market" treatment, the new regulation establishes a new company registration requirement and an annual self-classification reporting requirement.


Today's interim final rule also implements the significant change to encryption export controls made at the Wassenaar Arrangement's December 2009 Plenary by revising note 4 to Category 5, Part 2 of the Commerce Control List (CCL) to exclude from the scope of encryption controls items where the cryptography's primary function is not related to communications, networking, computing or “information security.”

According to BIS, the changes made in this regulation are intended to enhance national security allowing BIS and other government agencies to focus their resources on more sensitive encryption items. This effort is also intended to enhance U.S. exports by reducing interruptions to business cycles and enhancing product development efforts, manufacturing, and product rollout.

While today's regulation is the first step in the reform of export controls on software and hardware containing encryption, BIS has indicated that it will continue to review encryption export controls to ensure the continued competitiveness of U.S. encryption products. This effort will include a review of the current controls on publicly available encryption software, integrated circuits with encryption functionality, high-speed routers and other types of restricted encryption products.

The following is a summary of the significant aspects of the reforms made today to U.S. export controls on software and hardware containing software and hardware:

A. Changes Made to Encryption Review and Reporting Requirements

Under current encryption controls, three types of items are subject to a 30-day technical review by BIS and the ENC Encryption Request Coordinator at the National Security Agency in Fort Meade:

(1) mass market encryption software (classified as ECCN 5D992.c);
(2) certain less sensitive encryption items (ECCNs 5A992 and 5D992) that can be exported pursuant to License Exception ENC to government and non-government end-users in destinations other than the designated terrorism-supporting countries (License Exception ENC unrestricted - current 15 C.F.R. §740.17(b)(3)); and
(3) sensitive encryption items (ECCNs 5A002 and 5D002) that are made eligible for License Exception ENC to non-government end-users in destinations other than the designated terrorism-supporting countries after review, but for which a license is required for export to government end-users in many countries (License Exception ENC restricted - current 15 C.F.R. § 740.17(b)(2)).

Today's rule removes the review requirement for most mass market and license exception ENC unrestricted items. The items removed from the review requirement include Local Area Network (LAN) products small routers, and most items that meet the multilateral Wassenaar Arrangement “mass market” criteria. Exporters may now self-classify these items and export them following the submission of a company registration with BIS, answering seven questions using a new submission screen in SNAP-R, BIS’s online system (see screenshot of new registration page below). Upon submission of its registration to BIS the exporter will receive an “encryption registration number” (ERN). Upon receipt of the ERN, the export under license exception ENC will be authorized for certain ECCNs and the exporter or reexporter will not be required to submit a separate encryption registration, classification request or self-classification report to BIS. However, the party submitting the company registration to BIS will be required to file a report on an annual basis listing the items it has self-classified and exported.

Certain mass market and unrestricted items remain subject to 30-day technical review requirements. These items include:
(1) encryption components;
(2) items that provide or perform non-standard cryptography;
(3) certain items providing or performing vulnerability analysis, network forensics or computer forensics; and
(4) cryptographic enabling commodities and software.

Certain restricted items, such as network infrastructure items that exceed certain technical performance parameters, such as routers and 3G wireless base stations, remain subject to a 30-day technical review requirements and require semi-annual sales reporting.

This rule also extends the scope of License Exception ENC eligibility to most encryption technology necessary for manufacturing, development or testing of encryption items to all countries, except those of national security concern or subject to anti-terrorism controls, after the submission of a 30-day review.

The new rule eliminates the 30-day technical review requirement to export most "mass market" products containing encryption functionality. Mass market encryption products are those that are sold in large quantities and are generally available to the public through common retail methods. Exporters and manufacturers of mass market encryption products may now self-classify their products and export them without a license after submission of a company registration via SNAP-R. An annual self-classification report will be required to be submitted.

BIS estimates that the changes made by today's regulation should decrease technical review submissions by approximately 70% and semi-annual reporting by up to 85%. While technical review submissions will decrease, the submission of exporter registration and annual reporting will not completely eliminate the export control burdens associated with encryption items.

B. Changes Made to Items Incorporating "Ancillary Cryptography”

In December 2009, the Wassenaar Arrangement's member countries agreed to decontrol items meeting the “ancillary cryptography” criteria. This rule implements this decontrol by adding Note 4 to Category 5, part 2, of the Commerce Control List and by removing all references to "ancillary cryptography" from the EAR. The new note 4 to Category 5 part 2, reads as follows:

Note 4: Category 5, Part 2 does not apply to items incorporating or using “cryptography” and meeting all of the following:

a. The primary function or set of functions is not any of the following:
1. “Information security”;
2. A computer, including operating systems, parts and components therefor;
3. Sending, receiving or storing information (except in support of entertainment, mass commercial broadcasts, digital rights management or medical records management); or
4. Networking (includes operation, administration, management and provisioning);
b. The cryptographic functionality is limited to supporting their primary function or set of functions; and
c. When necessary, details of the items are accessible and will be provided, upon request, to the appropriate authority in the exporter’s country in order to ascertain compliance with conditions described in paragraphs a. and b. above.

As a result, items incorporating or using “cryptography” will no longer be classified under Category 5, part 2 if their primary function is not communications, networking, computing or “information security” and the cryptographic functionality is limited to supporting the primary function. Examples of such items include robotics, household appliances, fire alarm systems, inventory management software and transportation systems. Such items may be classified under another category of the Commerce Control List or as EAR99.

C. Other Changes to Encryption Export Controls

The interim final rule contains a provision grandfathering most items previously reviewed and classified by BIS for export. As a result, such items will not be subject to the new encryption registration or reporting requirements, as long as the encryption functionality has not changed.

This regulation also makes a number of other important changes to encryption export controls and review and reporting requirements. As a result, manufacturers, developers and exporters of software and hardware containing encryption algorithms and code should carefully review today's regulation to review the specific requirements applicable to the export of such products.

SNAP-R Encryption Registration Screen Shot

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Pre-Registration Now Open for BIS Export Controls Update Conference to be Held in Washington, DC From August 31-September 2, 2010

The Bureau of Industry and Security will hold its 23nd annual Update Conference on Export Controls and Policy from August 31, to September 2, 2009 at the Grand Hyatt Hotel. in Washington, DC. Note that this year's Update is being held a month earlier than in previous years and BIS expects the conference to move to July in coming years.

Because the expected number of attendees will likely exceed the number of persons interested in attending, BIS is again holding a registration lottery. Persons interested in attending the conference must first complete and submit the online “Interest Form” between June 15 and June 28 (be sure to click the green button on the lower right hand side to access the interest form).

If there are more potential participants than there is space available, BIS will grant registration through a random selection from the entire list of respondents, regardless of when received during the period. Those selected will be notified and given registration instructions in early July. They must register and submit payment by the designated date or their place will be forfeited and given to someone on the waiting list.

More information on the program agenda will be available in the coming weeks.

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Census Bureau Unveils New and Improved Schedule B Search Tool

The Census Bureau's Foreign Trade Division recently unveiled a new search tool to help exporters determine the correct Schedule B number for purposes of filing Electronic Export Information.

Schedule B numbers, officially known as the Statistical Classification of Domestic and Foreign Commodities Exported from the United States, are 10-digit commodity classification numbers administered by the Census Bureau and based on the Harmonized Tariff System of the United States (HTSUS). The Census Bureau's Foreign Trade Regulations state that the HTSUS number "may be reported in lieu of the Schedule B commodity classification number except as noted in the headnotes" of the HTSUS.

According to the software developer 3CE (Commodity Code Classification Engine), the search engine tool uses artificial intelligence to read and understand product descriptions to generate the proper numerical codes

A test of the 3CE Schedule B search engine found the system to be intuitive and easy to navigate. Based on the product description entered the system walks the user through a series of questions, which ultimately leads to a HTS description. Once at that description the user then clicks a button at the bottom of the screen to find the corresponding Schedule B number.

Like any automated tariff schedule tool, the final result is only as good as the information provided by the user. While useful for determining Schedule B numbers for exports and determining a range of possible HTS numbers for imports, U.S. importers should be careful on over relying on the search engine tool for determining HTS numbers for customs classification purposes since the system may not conform to the General Rules of Interpretation set forth in the tariff schedule for determining HTS numbers.

The new search tool is available at http://uscensus.prod.3ceonline.com.

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U.S. Department of Commerce Creates Pilot Program for Electronic Filing of Documents in Antidumping and Countervailing Duty Cases

The U.S. Department of Commerce published a notice and request for comment in the Federal Register earlier this week announcing that Import Administration, the agency that conducts antidumping and countervailing duty investigations and administrative reviews, is creating a three-month pilot program to test an electronic document filing and access system in certain antidumping and countervailing duty proceedings.

The system, known as Import Administration's Antidumping and Countervailing Duty Centralized Electronic Service System or IA ACCESS, will allow parties to electronically file documents in the antidumping and countervailing duty proceedings as well as allowing public access to public versions of such submissions. Currently, six paper copies of each submission must be filed with Import Administration and such documents are only available to the public by visiting the Central Records Unit at the Commerce Department in Washington, DC.

Import Administration has selected 14 cases (see the notice for a complete list) to serve as the test cases for the IA ACCESS e-filing system. Participants in those cases will be contacted concerning their participation in the pilot project prior to the program's commencement. Participants will also be requested to provide feedback and suggestions for the improvement of IA ACCESS after completion of the pilot program.

The implementation of an electronic filing will be extremely useful to interested parties in antidumping and countervailing duty cases as well as the members of the trade community that want to conduct research on previous cases. It will certainly reduce the volume of paper generated in such cases. However, given that antidumping and countervailing duty filings are extremely voluminous (sometimes involving hundreds of pages per filing), this program will only be successful if the system offers the ability to upload and view very large files.

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Canada Establishes Export Controls Advisory Opinions Process

Thanks to Canadian international trade and export controls lawyer John Boscariol for alerting International Trade Law News that the Canadian Government's Export Controls Division recently published guidelines for applying for and obtaining Advisory Opinions on whether certain goods or technology are controlled for export or transfer from Canada.

One of the stated purposes of the Advisory Opinion process is for exporters to gain greater certainty regarding the control status of their goods and technology. 

The Advisory Opinion guidelines provide information on what specific information should be contained in the Advisory Opinion request, such as specifications of the product and whether a product is subject to the ITAR or not; the procedures for submitting Advisory Opinion requests; and the limitation on the scope of such Advisory Opinions, including that the decisions are not binding. Among other things, the guidelines emphasize that where legal certainty is required or the matter is urgent, the exporter or manufacturer should submit a formal application for an export permit.

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U.N. Security Council Enacts Resolution Imposing Additional Sanctions on Iran

Today the U.N. Security Council passed a resolution imposing additional sanctions on Iran as a result of Iran's failure to comply with previous resolutions calling for a suspension of the country's uranium enrichment program. According to the U.S., these sanctions were designed to target those individuals and entities that are most responsible for Iran's nuclear program and "are not intended to hurt the people of Iran."  

Security Council Resolution 1929 (2010), the text of which is below, was passed by a vote of 12 to 2 (Turkey and Brazil dissented and Lebanon abstained) and imposes the following sanctions on Iran: 

• Prohibits Iran from from investing in sensitive nuclear activities abroad, such as uranium mining, enrichment and reprocessing activities.
• U.N. Member States are prohibited from selling or transferring to Iran eight categories of heavy weapons (battle tanks, armored combat vehicles, large caliber artillery systems, combat aircraft, attack helicopters, warships, missiles or missile systems). 
• Iran is prohibited from undertaking activities related to ballistic missiles capable of carrying nuclear weapons and U.N. Member States are required to take all necessary measure to prevent the transfer of related technology or technical assistance to Iran.
• The resolution updates and adds to the list of technical items related to nuclear and missile proliferation that are banned for transfer to and from Iran.
• Establishes new cargo inspection framework providing for inspection of any vessel suspected of carrying prohibited cargo, including banned conventional arms or sensitive nuclear or missile items. 
• Once prohibited items are found, Member States are now obligated to seize and dispose of the items.
• Prohibits countries from providing support services (e.g., fuel, water) to ships suspected of carrying prohibited cargo.
• Imposes sanctions on Islamic Republic of Iran Shipping Lines (IRISL) and Iran Air's cargo division including asset freezes. 
• Member States are called upon to prevent any financial service, including insurance or reinsurance, and freeze any asset that could contribute to Iran's proliferation. 
• States are required to ensure their nationals exercise vigilance when doing business with any Iranian firm, including the Islamic Revolutionary Guard Corps (IRGC) and IRISL, to make sure such business does not contribute to Iran's proliferation.
• Member States are called upon to prohibit on their territories new banking relationships with Iran, including the opening of any new branches of Iranian banks, joint ventures and correspondent banking relationships, if there is a suspected link to proliferation. 
• The resolution highlights the IRGC's role in proliferation activities and requires Member States to mandate that businesses exercise vigilance over all transactions involving the IRGC.  Requires asset freeze of 15 IRGC-related companies linked to proliferation.
• Forty Iranian companies and one individual will be subject to an asset freeze.  The individual, who is the head of the Atomic Energy Organization of Iran, will also be subject to a travel ban.  Thirty-five additional individuals previously subject to "travel vigilance" will now be subject to a travel ban.
• Establishes a U.N. "Panel of Experts" to monitor Member States' implementation of the sanctions, report on sanctions violations and recommend ways to continually improve enforcement. 

While the U.S. already imposes comprehensive sanctions on Iran, U.N. member states that currently do not impose these sanctions on Iran will have to enact measures to implement these sanctions, including the freezing of assets of the companies and individual named in the Annexes to the resolution. As a result, financial institutions and exporters should closely monitor them implementation of sanctions in the countries where they do business to ensure they are in compliance with local law.

The full text of resolution 1929 (2010) reads as follows:

“The Security Council,

“Recalling the Statement of its President, S/PRST/2006/15, and its resolutions 1696 (2006), 1737 (2006), 1747 (2007), 1803 (2008), 1835 (2008), and 1887 (2009) and reaffirming their provisions,

“Reaffirming its commitment to the Treaty on the Non-Proliferation of Nuclear Weapons, the need for all States Party to that Treaty to comply fully with all their obligations, and recalling the right of States Party, in conformity with Articles I and II of that Treaty, to develop research, production and use of nuclear energy for peaceful purposes without discrimination,

“Recalling the resolution of the IAEA Board of Governors (GOV/2006/14), which states that a solution to the Iranian nuclear issue would contribute to global non-proliferation efforts and to realizing the objective of a Middle East free of weapons of mass destruction, including their means of delivery,

“Noting with serious concern that, as confirmed by the reports of 27 February 2006 (GOV/2006/15), 8 June 2006 (GOV/2006/38), 31 August 2006 (GOV/2006/53), 14 November 2006 (GOV/2006/64), 22 February 2007 (GOV/2007/8), 23 May 2007 (GOV/2007/122), 30 August 2007 (GOV/2007/48), 15 November 2007 (GOV/2007/58), 22 February 2008 (GOV/2008/4), 26 May 2008 (GOV/2008/115), 15 September 2008 (GOV/2008/38), 19 November 2008 (GOV/2008/59), 19 February 2009 (GOV/2009/8), 5 June 2009 (GOV/2009/35), 28 August 2009 (GOV/2009/55), 16 November 2009 (GOV/2009/74), 18 February 2010 (GOV/2010/10) and 31 May 2010 (GOV/2010/28) of the Director General of the International Atomic Energy Agency (IAEA), Iran has not established full and sustained suspension of all enrichment-related and reprocessing activities and heavy-water-related projects as set out in resolutions 1696 (2006), 1737 (2006), 1747 (2007) and 1803 (2008) nor resumed its cooperation with the IAEA under the Additional Protocol, nor cooperated with the IAEA in connection with the remaining issues of concern, which need to be clarified to exclude the possibility of military dimensions of Iran’s nuclear programme, nor taken the other steps required by the IAEA Board of Governors, nor complied with the provisions of Security Council resolutions 1696 (2006), 1737 (2006), 1747 (2007) and 1803 (2008) and which are essential to build confidence, and deploring Iran’s refusal to take these steps,

“Reaffirming that outstanding issues can be best resolved and confidence built in the exclusively peaceful nature of Iran’s nuclear programme by Iran responding positively to all the calls which the Council and the IAEA Board of Governors have made on Iran,

“Noting with serious concern the role of elements of the Islamic Revolutionary Guard Corps (IRGC, also known as “Army of the Guardians of the Islamic Revolution”), including those specified in Annex D and E of resolution 1737 (2006), Annex I of resolution 1747 (2007) and Annex II of this resolution, in Iran’s proliferation sensitive nuclear activities and the development of nuclear weapon delivery systems,

“Noting with serious concern that Iran has constructed an enrichment facility at Qom in breach of its obligations to suspend all enrichment-related activities, and that Iran failed to notify it to the IAEA until September 2009, which is inconsistent with its obligations under the Subsidiary Arrangements to its Safeguards Agreement,

“Also noting the resolution of the IAEA Board of Governors (GOV/2009/82), which urges Iran to suspend immediately construction at Qom, and to clarify the facility’s purpose, chronology of design and construction, and calls upon Iran to confirm, as requested by the IAEA, that it has not taken a decision to construct, or authorize construction of, any other nuclear facility which has as yet not been declared to the IAEA,

“Noting with serious concern that Iran has enriched uranium to 20 per cent, and did so without notifying the IAEA with sufficient time for it to adjust the existing safeguards procedures,

“Noting with concern that Iran has taken issue with the IAEA’s right to verify design information which had been provided by Iran pursuant to the modified Code 3.1, and emphasizing that in accordance with Article 39 of Iran’s Safeguards Agreement Code 3.1 cannot be modified nor suspended unilaterally and that the IAEA’s right to verify design information provided to it is a continuing right, which is not dependent on the stage of construction of, or the presence of nuclear material at, a facility,

“Reiterating its determination to reinforce the authority of the IAEA, strongly supporting the role of the IAEA Board of Governors, and commending the IAEA for its efforts to resolve outstanding issues relating to Iran’s nuclear programme,

“Expressing the conviction that the suspension set out in paragraph 2 of resolution 1737 (2006) as well as full, verified Iranian compliance with the requirements set out by the IAEA Board of Governors would contribute to a diplomatic, negotiated solution that guarantees Iran’s nuclear programme is for exclusively peaceful purposes,

“Emphasizing the importance of political and diplomatic efforts to find a negotiated solution guaranteeing that Iran’s nuclear programme is exclusively for peaceful purposes and noting in this regard the efforts of Turkey and Brazil towards an agreement with Iran on the Tehran Research Reactor that could serve as a confidence-building measure,

“Emphasizing also, however, in the context of these efforts, the importance of Iran addressing the core issues related to its nuclear programme,

“Stressing that China, France, Germany, the Russian Federation, the United Kingdom and the United States are willing to take further concrete measures on exploring an overall strategy of resolving the Iranian nuclear issue through negotiation on the basis of their June 2006 proposals (S/2006/521) and their June 2008 proposals (INFCIRC/730), and noting the confirmation by these countries that once the confidence of the international community in the exclusively peaceful nature of Iran’s nuclear programme is restored it will be treated in the same manner as that of any Non-Nuclear Weapon State Party to the Treaty on the Non‑Proliferation of Nuclear Weapons,

“Welcoming the guidance issued by the Financial Action Task Force (FATF) to assist States in implementing their financial obligations under resolutions 1737 (2006) and 1803 (2008), and recalling in particular the need to exercise vigilance over transactions involving Iranian banks, including the Central Bank of Iran, so as to prevent such transactions contributing to proliferation-sensitive nuclear activities, or to the development of nuclear weapon delivery systems,

“Recognizing that access to diverse, reliable energy is critical for sustainable growth and development, while noting the potential connection between Iran’s revenues derived from its energy sector and the funding of Iran’s proliferation-sensitive nuclear activities, and further noting that chemical process equipment and materials required for the petrochemical industry have much in common with those required for certain sensitive nuclear fuel cycle activities,

“Having regard to States’ rights and obligations relating to international trade,

“Recalling that the law of the sea, as reflected in the United Nations Convention on the Law of the Sea (1982), sets out the legal framework applicable to ocean activities,

“Calling for the ratification of the Comprehensive Nuclear-Test-Ban Treaty by Iran at an early date,

“Determined to give effect to its decisions by adopting appropriate measures to persuade Iran to comply with resolutions 1696 (2006), 1737 (2006), 1747 (2007) and 1803 (2008) and with the requirements of the IAEA, and also to constrain Iran’s development of sensitive technologies in support of its nuclear and missile programmes, until such time as the Security Council determines that the objectives of these resolutions have been met,

“Concerned by the proliferation risks presented by the Iranian nuclear programme and mindful of its primary responsibility under the Charter of the United Nations for the maintenance of international peace and security,

“Stressing that nothing in this resolution compels States to take measures or actions exceeding the scope of this resolution, including the use of force or the threat of force,

“Acting under Article 41 of Chapter VII of the Charter of the United Nations,

“1.   Affirms that Iran has so far failed to meet the requirements of the IAEA Board of Governors and to comply with resolutions 1696 (2006), 1737 (2006), 1747 (2007) and 1803 (2008);

“2.   Affirms that Iran shall without further delay take the steps required by the IAEA Board of Governors in its resolutions GOV/2006/14 and GOV/2009/82, which are essential to build confidence in the exclusively peaceful purpose of its nuclear programme, to resolve outstanding questions and to address the serious concerns raised by the construction of an enrichment facility at Qom in breach of its obligations to suspend all enrichment-related activities, and, in this context, further affirms its decision that Iran shall without delay take the steps required in paragraph 2 of resolution 1737 (2006);

“3.   Reaffirms that Iran shall cooperate fully with the IAEA on all outstanding issues, particularly those which give rise to concerns about the possible military dimensions of the Iranian nuclear programme, including by providing access without delay to all sites, equipment, persons and documents requested by the IAEA, and stresses the importance of ensuring that the IAEA have all necessary resources and authority for the fulfilment of its work in Iran;

“4.   Requests the Director General of the IAEA to communicate to the Security Council all his reports on the application of safeguards in Iran;

“5.   Decides that Iran shall without delay comply fully and without qualification with its IAEA Safeguards Agreement, including through the application of modified Code 3.1 of the Subsidiary Arrangement to its Safeguards Agreement, calls upon Iran to act strictly in accordance with the provisions of the Additional Protocol to its IAEA Safeguards Agreement that it signed on 18 December 2003, calls upon Iran to ratify promptly the Additional Protocol, and reaffirms that, in accordance with Articles 24 and 39 of Iran’s Safeguards Agreement, Iran’s Safeguards Agreement and its Subsidiary Arrangement, including modified Code 3.1, cannot be amended or changed unilaterally by Iran, and notes that there is no mechanism in the Agreement for the suspension of any of the provisions in the Subsidiary Arrangement

“6.   Reaffirms that, in accordance with Iran’s obligations under previous resolutions to suspend all reprocessing, heavy water-related and enrichment-related activities, Iran shall not begin construction on any new uranium-enrichment, reprocessing, or heavy water-related facility and shall discontinue any ongoing construction of any uranium-enrichment, reprocessing, or heavy water-related facility;

“7.   Decides that Iran shall not acquire an interest in any commercial activity in another State involving uranium mining, production or use of nuclear materials and technology as listed in INFCIRC/254/Rev.9/Part 1, in particular uranium-enrichment and reprocessing activities, all heavy-water activities or technology-related to ballistic missiles capable of delivering nuclear weapons, and further decides that all States shall prohibit such investment in territories under their jurisdiction by Iran, its nationals, and entities incorporated in Iran or subject to its jurisdiction, or by persons or entities acting on their behalf or at their direction, or by entities owned or controlled by them;

“8.   Decides that all States shall prevent the direct or indirect supply, sale or transfer to Iran, from or through their territories or by their nationals or individuals subject to their jurisdiction, or using their flag vessels or aircraft, and whether or not originating in their territories, of any battle tanks, armoured combat vehicles, large calibre artillery systems, combat aircraft, attack helicopters, warships, missiles or missile systems as defined for the purpose of the United Nations Register of Conventional Arms, or related materiel, including spare parts, or items as determined by the Security Council or the Committee established pursuant to resolution 1737 (2006) (“the Committee”), decides further that all States shall prevent the provision to Iran by their nationals or from or through their territories of technical training, financial resources or services, advice, other services or assistance related to the supply, sale, transfer, provision, manufacture, maintenance or use of such arms and related materiel, and, in this context, calls upon all States to exercise vigilance and restraint over the supply, sale, transfer, provision, manufacture and use of all other arms and related materiel;

“9.   Decides that Iran shall not undertake any activity related to ballistic missiles capable of delivering nuclear weapons, including launches using ballistic missile technology, and that States shall take all necessary measures to prevent the transfer of technology or technical assistance to Iran related to such activities;

“10.  Decides that all States shall take the necessary measures to prevent the entry into or transit through their territories of individuals designated in Annex C, D and E of resolution 1737 (2006), Annex I of resolution 1747 (2007), Annex I of resolution 1803 (2008) and Annexes I and II of this resolution, or by the Security Council or the Committee pursuant to paragraph 10 of resolution 1737 (2006), except where such entry or transit is for activities directly related to the provision to Iran of items in subparagraphs 3(b)(i) and (ii) of resolution 1737 (2006) in accordance with paragraph 3 of resolution 1737 (2006), underlines that nothing in this paragraph shall oblige a State to refuse its own nationals entry into its territory, and decides that the measures imposed in this paragraph shall not apply when the Committee determines on a case-by-case basis that such travel is justified on the grounds of humanitarian need, including religious obligations, or where the Committee concludes that an exemption would otherwise further the objectives of this resolution, including where Article XV of the IAEA Statute is engaged;

“11.  Decides that the measures specified in paragraphs 12, 13, 14 and 15 of resolution 1737 (2006) shall apply also to the individuals and entities listed in Annex I of this resolution and to any individuals or entities acting on their behalf or at their direction, and to entities owned or controlled by them, including through illicit means, and to any individuals and entities determined by the Council or the Committee to have assisted designated individuals or entities in evading sanctions of, or in violating the provisions of, resolutions 1737 (2006), 1747 (2007), 1803 (2008) or this resolution;

“12.  Decides that the measures specified in paragraphs 12, 13, 14 and 15 of resolution 1737 (2006) shall apply also to the Islamic Revolutionary Guard Corps (IRGC, also known as “Army of the Guardians of the Islamic Revolution”) individuals and entities specified in Annex II, and to any individuals or entities acting on their behalf or at their direction, and to entities owned or controlled by them, including through illicit means, and calls upon all States to exercise vigilance over those transactions involving the IRGC that could contribute to Iran’s proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems;

“13.  Decides that for the purposes of the measures specified in paragraphs 3, 4, 5, 6 and 7 of resolution 1737 (2006), the list of items in S/2006/814 shall be superseded by the list of items in INFCIRC/254/Rev.9/Part 1 and INFCIRC/254/Rev.7/Part 2, and any further items if the State determines that they could contribute to enrichment-related, reprocessing or heavy water-related activities or to the development of nuclear weapon delivery systems, and further decides that for the purposes of the measures specified in paragraphs 3, 4, 5, 6 and 7 of resolution 1737 (2006), the list of items contained in S/2006/815 shall be superseded by the list of items contained in S/2010/263;

“14.  Calls upon all States to inspect, in accordance with their national authorities and legislation and consistent with international law, in particular the law of the sea and relevant international civil aviation agreements, all cargo to and from Iran, in their territory, including seaports and airports, if the State concerned has information that provides reasonable grounds to believe the cargo contains items the supply, sale, transfer, or export of which is prohibited by paragraphs 3, 4 or 7 of resolution 1737 (2006), paragraph 5 of resolution 1747 (2007), paragraph 8 of resolution 1803 (2008) or paragraphs 8 or 9 of this resolution, for the purpose of ensuring strict implementation of those provisions;

“15.  Notes that States, consistent with international law, in particular the law of the sea, may request inspections of vessels on the high seas with the consent of the flag State, and calls upon all States to cooperate in such inspections if there is information that provides reasonable grounds to believe the vessel is carrying items the supply, sale, transfer, or export of which is prohibited by paragraphs 3, 4 or 7 of resolution 1737 (2006), paragraph 5 of resolution 1747 (2007), paragraph 8 of resolution 1803 (2008) or paragraphs 8 or 9 of this resolution, for the purpose of ensuring strict implementation of those provisions;

“16.  Decides to authorize all States to, and that all States shall, seize and dispose of (such as through destruction, rendering inoperable, storage or transferring to a State other than the originating or destination States for disposal) items the supply, sale, transfer, or export of which is prohibited by paragraphs 3, 4 or 7 of resolution 1737 (2006), paragraph 5 of resolution 1747 (2007), paragraph 8 of resolution 1803 (2008) or paragraphs 8 or 9 of this resolution that are identified in inspections pursuant to paragraphs 14 or 15 of this resolution, in a manner that is not inconsistent with their obligations under applicable Security Council resolutions, including resolution 1540 (2004), as well as any obligations of parties to the NPT, and decides further that all States shall cooperate in such efforts;

“17.  Requires any State, when it undertakes an inspection pursuant to paragraphs 14 or 15 above to submit to the Committee within five working days an initial written report containing, in particular, explanation of the grounds for the inspections, the results of such inspections and whether or not cooperation was provided, and, if items prohibited for transfer are found, further requires such States to submit to the Committee, at a later stage, a subsequent written report containing relevant details on the inspection, seizure and disposal, and relevant details of the transfer, including a description of the items, their origin and intended destination, if this information is not in the initial report;

“18.  Decides that all States shall prohibit the provision by their nationals or from their territory of bunkering services, such as provision of fuel or supplies, or other servicing of vessels, to Iranian-owned or -contracted vessels, including chartered vessels, if they have information that provides reasonable grounds to believe they are carrying items the supply, sale, transfer, or export of which is prohibited by paragraphs 3, 4 or 7 of resolution 1737 (2006), paragraph 5 of resolution 1747 (2007), paragraph 8 of resolution 1803 (2008) or paragraphs 8 or 9 of this resolution, unless provision of such services is necessary for humanitarian purposes or until such time as the cargo has been inspected, and seized and disposed of if necessary, and underlines that this paragraph is not intended to affect legal economic activities;

“19.  Decides that the measures specified in paragraphs 12, 13, 14 and 15 of resolution 1737 (2006) shall also apply to the entities of the Islamic Republic of Iran Shipping Lines (IRISL) as specified in Annex III and to any person or entity acting on their behalf or at their direction, and to entities owned or controlled by them, including through illicit means, or determined by the Council or the Committee to have assisted them in evading the sanctions of, or in violating the provisions of, resolutions 1737 (2006), 1747 (2007), 1803 (2008) or this resolution;

“20.  Requests all Member States to communicate to the Committee any information available on transfers or activity by Iran Air’s cargo division or vessels owned or operated by the Islamic Republic of Iran Shipping Lines (IRISL) to other companies that may have been undertaken in order to evade the sanctions of, or in violation of the provisions of, resolutions 1737 (2006), 1747 (2007), 1803 (2008) or this resolution, including renaming or re-registering of aircraft, vessels or ships, and requests the Committee to make that information widely available;

“21.  Calls upon all States, in addition to implementing their obligations pursuant to resolutions 1737 (2006), 1747 (2007), 1803 (2008) and this resolution, to prevent the provision of financial services, including insurance or re-insurance, or the transfer to, through, or from their territory, or to or by their nationals or entities organized under their laws (including branches abroad), or persons or financial institutions in their territory, of any financial or other assets or resources if they have information that provides reasonable grounds to believe that such services, assets or resources could contribute to Iran’s proliferation-sensitive nuclear activities, or the development of nuclear weapon delivery systems, including by freezing any financial or other assets or resources on their territories or that hereafter come within their territories, or that are subject to their jurisdiction or that hereafter become subject to their jurisdiction, that are related to such programmes or activities and applying enhanced monitoring to prevent all such transactions in accordance with their national authorities and legislation;

“22.  Decides that all States shall require their nationals, persons subject to their jurisdiction and firms incorporated in their territory or subject to their jurisdiction to exercise vigilance when doing business with entities incorporated in Iran or subject to Iran’s jurisdiction, including those of the IRGC and IRISL, and any individuals or entities acting on their behalf or at their direction, and entities owned or controlled by them, including through illicit means, if they have information that provides reasonable grounds to believe that such business could contribute to Iran’s proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems or to violations of resolutions 1737 (2006), 1747 (2007), 1803 (2008) or this resolution;

“23.  Calls upon States to take appropriate measures that prohibit in their territories the opening of new branches, subsidiaries, or representative offices of Iranian banks, and also that prohibit Iranian banks from establishing new joint ventures, taking an ownership interest in or establishing or maintaining correspondent relationships with banks in their jurisdiction to prevent the provision of financial services if they have information that provides reasonable grounds to believe that these activities could contribute to Iran’s proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems;

“24.  Calls upon States to take appropriate measures that prohibit financial institutions within their territories or under their jurisdiction from opening representative offices or subsidiaries or banking accounts in Iran if they have information that provides reasonable grounds to believe that such financial services could contribute to Iran’s proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems;

“25.  Deplores the violations of the prohibitions of paragraph 5 of resolution 1747 (2007) that have been reported to the Committee since the adoption of resolution 1747 (2007), and commends States that have taken action to respond to these violations and report them to the Committee;

“26.  Directs the Committee to respond effectively to violations of the measures decided in resolutions 1737 (2006), 1747 (2007), 1803 (2008) and this resolution, and recalls that the Committee may designate individuals and entities who have assisted designated persons or entities in evading sanctions of, or in violating the provisions of, these resolutions;

“27.  Decides that the Committee shall intensify its efforts to promote the full implementation of resolutions 1737 (2006), 1747 (2007), 1803 (2008) and this resolution, including through a work programme covering compliance, investigations, outreach, dialogue, assistance and cooperation, to be submitted to the Council within forty-five days of the adoption of this resolution;

“28.  Decides that the mandate of the Committee as set out in paragraph 18 of resolution 1737 (2006), as amended by paragraph 14 of resolution 1803 (2008), shall also apply to the measures decided in this resolution, including to receive reports from States submitted pursuant to paragraph 17 above;

“29.  Requests the Secretary-General to create for an initial period of one year, in consultation with the Committee, a group of up to eight experts (“Panel of Experts”), under the direction of the Committee, to carry out the following tasks: (a) assist the Committee in carrying out its mandate as specified in paragraph 18 of resolution 1737 (2006) and paragraph 28 of this resolution; (b) gather, examine and analyse information from States, relevant United Nations bodies and other interested parties regarding the implementation of the measures decided in resolutions 1737 (2006), 1747 (2007), 1803 (2008) and this resolution, in particular incidents of non‑compliance; (c) make recommendations on actions the Council, or the Committee or State, may consider to improve implementation of the relevant measures; and (d) provide to the Council an interim report on its work no later than 90 days after the Panel’s appointment, and a final report to the Council no later than 30 days prior to the termination of its mandate with its findings and recommendations;

“30.  Urges all States, relevant United Nations bodies and other interested parties, to cooperate fully with the Committee and the Panel of Experts, in particular by supplying any information at their disposal on the implementation of the measures decided in resolutions 1737 (2006), 1747 (2007), 1803 (2008) and this resolution, in particular incidents of non-compliance;

“31.  Calls upon all States to report to the Committee within 60 days of the adoption of this resolution on the steps they have taken with a view to implementing effectively paragraphs 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 21, 22, 23 and 24;

“32.  Stresses the willingness of China, France, Germany, the Russian Federation, the United Kingdom and the United States to further enhance diplomatic efforts to promote dialogue and consultations, including to resume dialogue with Iran on the nuclear issue without preconditions, most recently in their meeting with Iran in Geneva on 1 October 2009, with a view to seeking a comprehensive, long-term and proper solution of this issue on the basis of the proposal made by China, France, Germany, the Russian Federation, the United Kingdom and the United States on 14 June 2008, which would allow for the development of relations and wider cooperation with Iran based on mutual respect and the establishment of international confidence in the exclusively peaceful nature of Iran’s nuclear programme and, inter alia, starting formal negotiations with Iran on the basis of the June 2008 proposal, and acknowledges with appreciation that the June 2008 proposal, as attached in Annex IV to this resolution, remains on the table;

“33.  Encourages the High Representative of the European Union for Foreign Affairs and Security Policy to continue communication with Iran in support of political and diplomatic efforts to find a negotiated solution, including relevant proposals by China, France, Germany, the Russian Federation, the United Kingdom and the United States with a view to create necessary conditions for resuming talks, and encourages Iran to respond positively to such proposals;

“34.  Commends the Director General of the IAEA for his 21 October 2009 proposal of a draft Agreement between the IAEA and the Governments of the Republic of France, the Islamic Republic of Iran and the Russian Federation for Assistance in Securing Nuclear Fuel for a Research Reactor in Iran for the Supply of Nuclear Fuel to the Tehran Research Reactor, regrets that Iran has not responded constructively to the 21 October 2009 proposal, and encourages the IAEA to continue exploring such measures to build confidence consistent with and in furtherance of the Council’s resolutions;

“35.  Emphasizes the importance of all States, including Iran, taking the necessary measures to ensure that no claim shall lie at the instance of the Government of Iran, or of any person or entity in Iran, or of persons or entities designated pursuant to resolution 1737 (2006) and related resolutions, or any person claiming through or for the benefit of any such person or entity, in connection with any contract or other transaction where its performance was prevented by reason of the measures imposed by resolutions 1737 (2006), 1747 (2007), 1803 (2008) and this resolution;

“36.  Requests within 90 days a report from the Director General of the IAEA on whether Iran has established full and sustained suspension of all activities mentioned in resolution 1737 (2006), as well as on the process of Iranian compliance with all the steps required by the IAEA Board of Governors and with other provisions of resolutions 1737 (2006), 1747 (2007), 1803 (2008) and of this resolution, to the IAEA Board of Governors and in parallel to the Security Council for its consideration;

“37.  Affirms that it shall review Iran’s actions in light of the report referred to in paragraph 36 above, to be submitted within 90 days, and: (a) that it shall suspend the implementation of measures if and for so long as Iran suspends all enrichment-related and reprocessing activities, including research and development, as verified by the IAEA, to allow for negotiations in good faith in order to reach an early and mutually acceptable outcome; (b) that it shall terminate the measures specified in paragraphs 3, 4, 5, 6, 7 and 12 of resolution 1737 (2006), as well as in paragraphs 2, 4, 5, 6 and 7 of resolution 1747 (2007), paragraphs 3, 5, 7, 8, 9, 10 and 11 of resolution 1803 (2008), and in paragraphs 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 21, 22, 23 and 24 above, as soon as it determines, following receipt of the report referred to in the paragraph above, that Iran has fully complied with its obligations under the relevant resolutions of the Security Council and met the requirements of the IAEA Board of Governors, as confirmed by the IAEA Board of Governors; (c) that it shall, in the event that the report shows that Iran has not complied with resolutions 1737 (2006), 1747 (2007), 1803 (2008) and this resolution, adopt further appropriate measures under Article 41 of Chapter VII of the Charter of the United Nations to persuade Iran to comply with these resolutions and the requirements of the IAEA, and underlines that further decisions will be required should such additional measures be necessary;

“38.  Decides to remain seized of the matter.”

Resolution Annex I

Individuals and entities involved in nuclear or ballistic missile activities

Entities

1.    Amin Industrial Complex: Amin Industrial Complex sought temperature controllers which may be used in nuclear research and operational/production facilities. Amin Industrial Complex is owned or controlled by, or acts on behalf of, the Defense Industries Organization (DIO), which was designated in resolution 1737 (2006).

Location: P.O. Box 91735-549, Mashad, Iran; Amin Industrial Estate, Khalage Rd., Seyedi District, Mashad, Iran; Kaveh Complex, Khalaj Rd., Seyedi St., Mashad, Iran

A.K.A.: Amin Industrial Compound and Amin Industrial Company

2.    Armament Industries Group: Armament Industries Group (AIG) manufacturers and services a variety of small arms and light weapons, including large- and medium-calibre guns and related technology. AIG conducts the majority of its procurement activity through Hadid Industries Complex.

Location: Sepah Islam Road, Karaj Special Road Km 10, Iran; Pasdaran Ave., P.O. Box 19585/777, Tehran, Iran

3.    Defense Technology and Science Research Center: Defense Technology and Science Research Center (DTSRC) is owned or controlled by, or acts on behalf of, Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), which oversees Iran’s defence R&D, production, maintenance, exports, and procurement.

Location: Pasdaran Ave, PO Box 19585/777, Tehran, Iran

4.    Doostan International Company: Doostan International Company (DICO) supplies elements to Iran’s ballistic missile program.

5.    Farasakht Industries: Farasakht Industries is owned or controlled by, or act on behalf of, the Iran Aircraft Manufacturing Company, which in turn is owned or controlled by MODAFL.

Location: P.O. Box 83145-311, Kilometer 28, Esfahan-Tehran Freeway, Shahin Shahr, Esfahan, Iran

6.    First East Export Bank, P.L.C.: First East Export Bank, PLC is owned or controlled by, or acts on behalf of, Bank Mellat. Over the last seven years, Bank Mellat has facilitated hundreds of millions of dollars in transactions for Iranian nuclear, missile, and defense entities.

Location: Unit Level 10 (B1), Main Office Tower, Financial Park Labuan, Jalan Merdeka, 87000 WP Labuan, Malaysia; Business Registration Number LL06889 (Malaysia)

7.    Kaveh Cutting Tools Company: Kaveh Cutting Tools Company is owned or controlled by, or acts on behalf of, the DIO.

Location: 3rd Km of Khalaj Road, Seyyedi Street, Mashad 91638, Iran; Km 4 of Khalaj Road, End of Seyedi Street, Mashad, Iran; P.O. Box 91735-549, Mashad, Iran; Khalaj Rd., End of Seyyedi Alley, Mashad, Iran; Moqan St., Pasdaran St., Pasdaran Cross Rd., Tehran, Iran

8.    M. Babaie Industries: M. Babaie Industries is subordinate to Shahid Ahmad Kazemi Industries Group (formally the Air Defense Missile Industries Group) of Iran’s Aerospace Industries Organization (AIO). AIO controls the missile organizations Shahid Hemmat Industrial Group (SHIG) and the Shahid Bakeri Industrial Group (SBIG), both of which were designated in resolution 1737 (2006).

Location: P.O. Box 16535-76, Tehran, 16548, Iran

9.    Malek Ashtar University: A subordinate of the DTRSC within MODAFL. This includes research groups previously falling under the Physics Research Center (PHRC). IAEA inspectors have not been allowed to interview staff or see documents under the control of this organization to resolve the outstanding issue of the possible military dimension to Iran’s nuclear program.

Location: Corner of Imam Ali Highway and Babaei Highway, Tehran, Iran

10.   Ministry of Defense Logistics Export: Ministry of Defense Logistics Export (MODLEX) sells Iranian-produced arms to customers around the world in contravention of resolution 1747 (2007), which prohibits Iran from selling arms or related materiel.

Location: PO Box 16315-189, Tehran, Iran; located on the west side of Dabestan Street, Abbas Abad District, Tehran, Iran

11.   Mizan Machinery Manufacturing: Mizan Machinery Manufacturing (3M) is owned or controlled by, or acts on behalf of, SHIG.

Location: P.O. Box 16595-365, Tehran, Iran

A.K.A.: 3MG

12.   Modern Industries Technique Company: Modern Industries Technique Company (MITEC) is responsible for design and construction of the IR-40 heavy water reactor in Arak. MITEC has spearheaded procurement for the construction of the IR-40 heavy water reactor.

Location: Arak, Iran

A.K.A.: Rahkar Company, Rahkar Industries, Rahkar Sanaye Company, Rahkar Sanaye Novin

13.   Nuclear Research Center for Agriculture and Medicine: The Nuclear Research Center for Agriculture and Medicine (NFRPC) is a large research component of the Atomic Energy Organization of Iran (AEOI), which was designated in resolution 1737 (2006).  The NFRPC is AEOI’s center for the development of nuclear fuel and is involved in enrichment-related activities.

Location: P.O. Box 31585-4395, Karaj, Iran

A.K.A.: Center for Agricultural Research and Nuclear Medicine; Karaji Agricultural and Medical Research Center

14.   Pejman Industrial Services Corporation: Pejman Industrial Services Corporation is owned or controlled by, or acts on behalf of, SBIG.

Location: P.O. Box 16785-195, Tehran, Iran

15.   Sabalan Company: Sabalan is a cover name for SHIG.

Location: Damavand Tehran Highway, Tehran, Iran

16.   Sahand Aluminum Parts Industrial Company (SAPICO): SAPICO is a cover name for SHIG.

Location: Damavand Tehran Highway, Tehran, Iran

17.   Shahid Karrazi Industries: Shahid Karrazi Industries is owned or controlled by, or act on behalf of, SBIG.

Location: Tehran, Iran

18.   Shahid Satarri Industries: Shahid Sattari Industries is owned or controlled by, or acts on behalf of, SBIG.

Location: Southeast Tehran, Iran

A.K.A.: Shahid Sattari Group Equipment Industries

19.   Shahid Sayyade Shirazi Industries: Shahid Sayyade Shirazi Industries (SSSI) is owned or controlled by, or acts on behalf of, the DIO.

Location: Next To Nirou Battery Mfg. Co, Shahid Babaii Expressway, Nobonyad Square, Tehran, Iran; Pasdaran St., P.O. Box 16765, Tehran 1835, Iran; Babaei Highway — Next to Niru M.F.G, Tehran, Iran

20.   Special Industries Group: Special Industries Group (SIG) is a subordinate of DIO.

Location: Pasdaran Avenue, PO Box 19585/777, Tehran, Iran

21.   Tiz Pars: Tiz Pars is a cover name for SHIG. Between April and July 2007, Tiz Pars attempted to procure a five axis laser welding and cutting machine, which could make a material contribution to Iran’s missile program, on behalf of SHIG.

Location: Damavand Tehran Highway, Tehran, Iran

22.   Yazd Metallurgy Industries: Yazd Metallurgy Industries (YMI) is a subordinate of DIO.

Location: Pasdaran Avenue, Next To Telecommunication Industry, Tehran 16588, Iran; Postal Box 89195/878, Yazd, Iran; P.O. Box 89195-678, Yazd, Iran; Km 5 of Taft Road, Yazd, Iran

A.K.A.: Yazd Ammunition Manufacturing and Metallurgy Industries, Directorate of Yazd Ammunition and Metallurgy Industries

Individuals

Javad Rahiqi: Head of the Atomic Energy Organization of Iran (AEOI) Esfahan Nuclear Technology Center (additional information: DOB: 24 April 1954; POB: Marshad).

Resolution Annex II

Entities owned, controlled, or acting on behalf of the Islamic Revolutionary Guard Corps

1.    Fater (or Faater) Institute: Khatam al-Anbiya (KAA) subsidiary. Fater has worked with foreign suppliers, likely on behalf of other KAA companies on IRGC projects in Iran.

2.    Gharagahe Sazandegi Ghaem: Gharagahe Sazandegi Ghaem is owned or controlled by KAA.

3.    Ghorb Karbala: Ghorb Karbala is owned or controlled by KAA.

4.    Ghorb Nooh: Ghorb Nooh is owned or controlled by KAA

5.    Hara Company: Owned or controlled by Ghorb Nooh.

6.    Imensazan Consultant Engineers Institute: Owned or controlled by, or acts on behalf of, KAA.

7.    Khatam al-Anbiya Construction Headquarters: Khatam al-Anbiya Construction Headquarters (KAA) is an IRGC-owned company involved in large scale civil and military construction projects and other engineering activities. It undertakes a significant amount of work on Passive Defense Organization projects. In particular, KAA subsidiaries were heavily involved in the construction of the uranium enrichment site at Qom/Fordow.

8.    Makin: Makin is owned or controlled by or acting on behalf of KAA, and is a subsidiary of KAA.

9.    Omran Sahel: Owned or controlled by Ghorb Nooh.

10.   Oriental Oil Kish: Oriental Oil Kish is owned or controlled by or acting on behalf of KAA.

11.   Rah Sahel: Rah Sahel is owned or controlled by or acting on behalf of KAA.

12.   Rahab Engineering Institute: Rahab is owned or controlled by or acting on behalf of KAA, and is a subsidiary of KAA.

13.   Sahel Consultant Engineers: Owned or controlled by Ghorb Nooh.

14.   Sepanir: Sepanir is owned or controlled by or acting on behalf of KAA.

15.   Sepasad Engineering Company: Sepasad Engineering Company is owned or controlled by or acting on behalf of KAA.

Resolution Annex III

Entities owned, controlled, or acting on behalf of the Islamic Republic of Iran Shipping Lines (IRISL)

1.    Irano Hind Shipping Company

Location: 18 Mehrshad Street, Sadaghat Street, Opposite of Park Mellat, Vali-e-Asr Ave., Tehran, Iran; 265, Next to Mehrshad, Sedaghat St., Opposite of Mellat Park, Vali Asr Ave., Tehran 1A001, Iran

2.    IRISL Benelux NV

Location: Noorderlaan 139, B-2030, Antwerp, Belgium; V.A.T. Number BE480224531 (Belgium)

3.    South Shipping Line Iran (SSL)

Location: Apt. No. 7, 3rd Floor, No. 2, 4th Alley, Gandi Ave., Tehran, Iran; Qaem Magham Farahani St., Tehran, Iran

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U.S. Businessman and Five Iranian Nationals Indicted for Conspiring to Violate U.S. Sanctions on Iran for Activities Involving Launch of Iran's First Satellite

The U.S. Attorney for the District of Maryland announced yesterday that a federal grand jury in Maryland has indicted an American businessman and five Iranian nationals on charges of conspiring to illegally provide satellite hardware and technology to Iran resulting in the launch of Iran's first satellite, the Sinah-1, in 2005.

Charged in the indictment are Nader Modanlo of Potomac, Maryland and five Iranian nationals: Hamid Malmirian; Reza Heidari; Mohammad Modares; Abdol Reza Mehrdad; and Sirous Naseri.

Mr. Nader Modanlo, is a naturalized U.S. citizen born in Iran and according to the Washington Post is a former NASA scientist. Mr. Modanlo was arrested yesterday and was scheduled to appear in court today. The five Iranian nationals remain at large.

Mr. Modanlo was the principal owner, chairman and president of Maryland-based Final Analysis, Inc. (FAI). Beginning in 1994, FAI contracted with Polyot, an aerospace enterprise company owned by the government of the Russian Federation, to provide launch services for satellites for purposes of providing data and non-voice communications that had been licensed by the FCC.

According to the indictment, beginning in 2000 Modanlo brokered an agreement between Polyot and a customer in Iran to construct and launch satellites and a ground station. The indictment charges that Modanlo met with Malmirian, who held himself out as an Iranian government representative, and Polyot officials to discuss a Russian-Iranian satellite agreement, reaching an agreement for the design, development, assembly, integration, test and launch of a small low-earth orbiting spacecraft and the installation of a ground station in December 2001.

According to the U.S., in 2001 and 2002, Modanlo, Naseri, Heidari and Malmirian traveled to a third country to seek an intermediary to form a company called Prospect Telecom in order to conceal Iranian participation as an investor/lender in Modanlo's satellite telecommunications activities.

The indictment further alleges that Heidari, Modares, Naseri, and Mehrdad caused $10 million to be wired from Prospect Telecom's bank account overseas to a bank account in Maryland, in consideration for Modanlo's assistance to Iran and the Iranians in brokering the satellite agreement with Russia and for Modanlo's company providing telecommunications services in support of that agreement.

In October 2005, Iran's first satellite, the Sinah-1 was launched into orbit from Russia. According to the Iranian Government, the satellite was launched for telecommunications and research purposes. The satellite is still in orbit.

The indictment also seeks the forfeiture of $10 million from each of the defendants, which is alleged to be the proceeds of the offense.

The five defendants face a maximum sentence of five years in prison for the conspiracy. Mr. Modanlo also faces a maximum penalty of 20 years in prison on each of three counts of violating the U.S. embargo on Iran. Messrs. Modanlo, Heidari, Modares and Mehrdad each face a maximum penalty of 20 years in prison for alleged money laundering.

It is not clear at this time why the indictment was being brought at this time, given that the alleged activities involving Iran took place several years ago. 

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