Iran Agrees to Halt All Uranium Enrichment Activities

The United Nations nuclear watchdog
said that Iran has agreed to suspend all uranium enrichment
activities, according to a resolution passed by the International
Atomic Energy Agency in Vienna.
The accord was reached after Iran sent a letter yesterday
withdrawing its request to exempt 20 nuclear centrifuges and
allowing them to be put under surveillance, said Hossein
Mousavian, head of the Iranian delegation to the IAEA. He added
that Iran was co-operating ``in full transparency.''
The IAEA ``welcomes the fact that Iran has decided to
continue and extend its suspension of all enrichment-related and
reprocessing activities,'' according to a copy of the resolution
obtained by Bloomberg News. The agency emphasized that although
the suspension is voluntary, ``it is essential for confidence-
building'' in the international community.
The resolution, drafted by negotiators from Britain, France,
and Germany, was adopted today by consensus by the IAEA board of
directors. The accord may lead to Iran having more trade with the
European Union. The U.S. has accused the Islamic republic of
running a clandestine nuclear weapons program and says it should
be subject to UN sanctions.
Iran, the second-largest oil exporter in the Middle East,
has said it wants to enrich uranium only for nuclear energy.
Centrifuges spin at supersonic speeds and can enrich uranium
hexaflouride gas, which can be used in atomic weapons.

U.S. Reaction

White House spokesman Scott McClellan said the IAEA ``will
need to remain vigilant'' and continue to verify Iran's
compliance.
Jackie Sanders, President George W. Bush's envoy on nuclear
non-proliferation, told the IAEA board that the U.S. maintains
that Iran has a nuclear weapons program which ``poses a growing
threat to international peace and security.'' The U.S. also
retains the right to bring Iran before the UN Security Council
for possible sanctions without the IAEA's backing, she said.
The resolution also asks the IAEA's director general Mohamed
ElBaradei to report on Iran ``as appropriate'' and drops the
country from the agency's mandatory agenda at its next meeting in
March.
``This is a positive step in the right direction that
mitigates international concern and builds confidence,'' said
ElBaradei, adding that the disputed centrifuges are now under
camera surveillance.
The IAEA will make sure ``that there are no undeclared
nuclear materials or activities in Iran,'' the resolution said.
Iran will start talks with the EU on trade and technology
Dec. 15, said Mousavian, who expects results in three months.
Iran's suspension of enrichment-related activities will last
as long as progress in talks with the EU is being made, said
Sirius Naseri, a member of Iran's delegation to the IAEA.
Negotiations with the Europeans were ``excruciating but
friendly,'' he said.

Iran's Suspension of Uranium Enrichment Incomplete


The United Nations nuclear watchdog
said Iran's suspension of its uranium enrichment program isn't
yet complete and that it hoped to resolve Iran's request
regarding 20 centrifuges in the next day.
``We have completed our work with regard to verification of
the suspension with one exception, and that's a request by Iran
to exempt 20 centrifuges for research and development without
using nuclear fuel,'' said Mohamed ElBaradei, director general of
the International Atomic Energy Agency in Vienna.
The U.S. has accused Iran of running a clandestine nuclear
weapons program. Iran, the second largest oil exporter in the
Middle East, says it wants to enrich uranium for nuclear energy.
The Islamic Republic told the IAEA that it would stop activities
like producing uranium hexaflouride gas and making centrifuges to
build international confidence.
The use of centrifuges, which are needed to enrich uranium,
is prohibited under the terms of an agreement with the European
Union. Iran negotiated a halt to uranium ``enrichment-related''
activities with French, German and U.K. diplomats last week.
Iranian President Mohammad Khatami today criticized the IAEA
and said the EU accord was ``not good,'' Agence France- Presse
reported, citing Iranian state television.
``Intense negotiations are currently under way between non-
aligned states and the Europeans to change the draft,'' AFP cited
Khatami as saying.

`Ambiguous'

Gary Saymore, director at London's International Institute
for Strategic Studies, said that Iranians ``in the near term''
want to leave the uranium enrichment issue ``ambiguous.''
``The Iranians have already laid down some markers that in
the future they will resume these activities,'' said Saymore, who
served as a security advisor to two U.S. presidents, Ronald
Reagan and Bill Clinton.
Iran's diplomats have in the past dismissed requests to
permanently suspend uranium enrichment, citing rights under the
Nuclear Non-Proliferation Treaty. All signatories of the 1968 NPT
are allowed to enrich uranium as long as the activities are for
producing energy and declared to the IAEA. Iran ratified the
treaty in 1970.
The EU accord with Iran isn't ``a legal obligation,'' said
IAEA spokesman Mark Gwozdecky in an interview with the Cable News
Network. Iran needs to ``build confidence'' in the international
community after hiding its nuclear program for 20 years,
Gwozdecky said.

Washington's View

``The European Union has some cards to play,'' Saymore said,
referring to the ongoing negotiations to increase trade between
the EU and Iran. ``But at some point Washington will have to make
a decision whether it endorses or supports the agreement.''
Last week President George W. Bush said that the U.S. is
concerned that Iran is speeding up efforts to produce fuel for a
nuclear weapon.
``The world knows it's a serious matter and we're working
together to solve it,'' Bush said.
The IAEA can safely say that none of Iran's ``declared
materials'' have been diverted to a nuclear weapons program,
ElBaradei told reporters today. ``But we still have a lot to do
with regards to possible undeclared material,'' he said.
The IAEA will continue verifying the nature of Iran's
nuclear activities for ``many years,'' ElBaradei said.
The IAEA's board of governors is meeting in Vienna to
discuss Iran's nuclear program.

Iran Promises UN It Will Suspend Uranium Enrichment

Iran told the United Nations nuclear
watchdog that it agreed to a European Union proposal to
voluntarily stop uranium conversion starting Nov. 22, to ward off
U.S. calls that the Islamic government be subjected to sanctions
by the UN Security Council.
Iran ``decided on a voluntary basis and as further
confidence-building measures, to continue and extend its
suspension to include all enrichment-related and reprocessing
activities,'' the International Atomic Energy Agency said in a 28-
page report obtained by Bloomberg News and to be presented to the
agency's governors Nov. 25 in Vienna. ``Iran invited the Agency
to verify this suspension starting from Nov. 22, 2004.''
Iranian officials have been negotiating with diplomats from
France, Germany and the U.K. for more than a year. The U.S. says
Iran is converting uranium as part of a clandestine nuclear
weapons program. Iran, the second-largest oil producer in the
Organization of Petroleum Exporting Countries, says it needs to
process the uranium for nuclear fuel to generate electricity.
Iran has made ``good progress'' since opening negotiations
with the EU in letting IAEA inspectors verify the extent of its
nuclear program, the agency said in the report. Before 2003, Iran
was guilty of ``many breaches'' of its IAEA treaty obligations,
according to the report.
The IAEA report, to be presented by Director General Mohamed
ElBaradei, isn't the end of the agency's investigation. The IAEA
is ``not yet in a position to conclude that there are no
undeclared nuclear materials or activities in Iran,'' the
document said. ElBaradei will continue to report to the board of
governors about Iran.

EU Deal

Under the terms of its EU deal, Iran agreed to suspend ``any
activity for undertaking plutonium separation,'' the IAEA said.
Iran also said it will stop making and importing gas centrifuges
and all conversion tests.
`'We want a durable, cooperative and long-term partnership
with Iran,'' Javier Solana, EU high representative for the common
foreign and security policy, said in a statement released in
Brussels. ``This agreement opens the way.''
Solana called the agreement a ``first step, and that is very
important.''

Within `Red Lines'

Iran's suspension falls short of a total halt to uranium
enrichment. That means the issue may resurface, analysts said.
``We stayed within our red lines, and this red line meant we
could suspend enrichment but not stop it,'' Iran's Foreign
Ministry spokesman Hamid Reza Asefi told reporters in Tehran
today, Agence France-Presse reported earlier.
``There'll probably be further crises focusing on Iran's
nuclear program in future, but investors know it's part of doing
business here,'' Albrecht Frischenschlager, a partner at Atieh
Bahar Consulting, who has been advising companies such as British-
American Tobacco and Rolls Royce since 1998, said in a telephone
interview from Tehran. ``They know that tensions are often
diffused at the last minute.''
The Iranian government said in September there were
applications for $8.2 billion of foreign investment so far this
year, roughly equal to the total figure in Iran since 1997. The
fact that investments, both foreign and domestic, continue to
rise shows companies ``have learnt to cope with'' uncertainty,
Frischenschlager said.

Trade Barriers

Iran's deal with the EU could strengthen trade ties between
the regions worth $16 billion euros ($20.7 billion). In exchange
for stopping uranium enrichment, the EU had been offering Iran
civilian nuclear reactor technology and the removal of trade
barriers.
``We appreciate any deal which is clear and accepted by the
IAEA,'' said Klaus Friedrich, spokesman on export controls and
the Middle East for Germany's machinery and engineering trade
group, VDMA, in a telephone interview from Frankfurt. ``We hope
that the threat of embargo is past us.''
Europe, Iran's main trading partner, had a 2.3 billion-euro
trade surplus with Iran at the end of 2003, according to EU
statistics. Exports to Iran averaged 25 percent annual growth in
the last four years. Machinery and mechanical appliances
represent about half of all EU exports to Iran, or around 4.5
billion euros last year.
``From a machinery point of view, Iran absorbs more German
trade than India and is on the same level as Brazil, Canada and
Mexico,'' Friedrich said.

U.S. Stance

Iran hasn't run a trade surplus with the EU since 2001, when
it exported 186.3 million euros more goods than it absorbed. Oil
and oil products last year represented almost 90 percent of
Iran's exports to the EU, or around 6 billion euros.
The EU and the U.S. have differed over policy toward Iran.
The Europeans have favored more diplomacy, while the U.S. cut off
relations after its Tehran embassy staff was taken hostage for
444 days in 1979.
Unlike the EU, the U.S. prohibits most trade with the Iran
because of its alleged support of Middle East terrorist groups
such as Hezbollah. The U.S. also forbids its companies from
investing in Iran or selling high-technology goods such as
computers or aircraft there because it says the Islamic
government gives support to terrorist groups. Iran denies the
accusations.
Iran's deal with the EU may be a strategic move by the
government in Tehran to ease U.S. unilateral sanctions, according
to Atieh Bahar. Iran has regularly accused the U.S., which it
labels ``The Great Satan,'' of only using a stick while European
governments use both incentives and threats.

Jobless Rate

``The Iranians want the EU to convince the U.S. to change
its attitude toward them, and they'll use today's voluntary
suspension as a means of pressure,'' Frischenschlager said. U.S.
economic sanctions have slowed Iran's economic progress. While
the country is the second-largest oil producer in the Middle
East, it has an official unemployment rate of 16 percent. More
than four-fifths of the $110 billion economy is state-run.
``Iran's trade links are pretty undeveloped,'' said Fitch
Ratings analyst James McCormack, who rates Iran ``B+ positive.''
Fitch also rates Indonesia and Turkey B+. ``An agreement might
help at the margin but they still need a lot of investment to
increase economic output,'' he said.

S. Korea Nuclear Inspections Yield No Weapons Program

There's no evidence South Korea was
trying to make nuclear weapons when 14 of its scientists
secretly produced enriched uranium and plutonium without
government approval, the United Nations nuclear watchdog said.
The nuclear experiments yielded only small amounts of the
materials, the International Atomic Energy Agency said in an
eight-page report to be presented to the IAEA's governors later
this month and obtained by Bloomberg News. Enriched uranium and
plutonium can be used to fuel nuclear reactors or for weapons.
``The experiments were laboratory-scale,'' according to
the report. South Korea ``provided active cooperation to the
agency in providing timely information and access to personnel
and locations,'' the IAEA said. The head of the government's
nuclear research agency in Daejon was the top South Korean
official aware of the experiments, the IAEA said.
The report followed South Korea's voluntary statement to
the Vienna-based IAEA in August that the scientists enriched
uranium in 2000 without government knowledge. North Korea's
government said the South Korean revelations and a hostile U.S.
policy toward the communist nation are preventing the six-
nation talks on North Korea's nuclear program from resuming.

Laser Technologies

South Korea enriched uranium to concentrations just shy of
what would be needed to build a nuclear weapon, the IAEA said
in the report. The agency is still investigating where the
South Korean government bought the laser technologies its
scientists used for enrichment.
The enrichment took ``place in the context of a broader
experimental effort'' to apply laser technology to non-nuclear
materials, the IAEA said. The enriched uranium came from 154
kilograms (340 pounds) of uranium metal that scientists
converted from the raw version of the material during the
1980s, the report said.
Talks between the U.S., North Korea, South Korea, China,
Japan and Russia have been stalled since North Korea failed to
participate in a scheduled fourth round in September.
U.S. Secretary of State Colin Powell said last month the
forum should discuss South Korea's nuclear experiments.
``We can't say for certain when the next six-nation talks
will be held,'' South Korean Foreign Minister Ban Ki Moon said
in September. ``With recent comments from North Korea, we can't
be sure.''