Category Archives: IAEA International Atomic Energy Agency

Boeing Secret Deals with Iran, Skirting Sanctions

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Why Boeing kept Iran dealings under the radar

Author: Saam Borhani

alMonitor: Barely a week after the Jan. 16 lifting of nuclear-related sanctions on Iran, Tehran hosted its first international business summit in years. The event, sponsored by the Centre for Aviation (CAPA), brought together 400 executives of the global aviation industry to re-establish links with their Iranian counterparts after a decades-long estrangement. What raised eyebrows in Tehran and Washington, however, was the conspicuous absence of Boeing, the world’s largest aircraft manufacturer. Boeing’s curious decision to skip the CAPA event raised questions about the United States’ commitment to the sanctions relief mandated under the July 14, 2015, Joint Comprehensive Plan of Action (JCPOA). The decision Boeing made to stay home, likely prompted by unease as to the confusing web of remaining US sanctions, is a harbinger of things to come for the delicate dance between Iran and American business.

It turns out that Boeing, while skipping the high-profile CAPA event in Tehran, has actually been unofficially negotiating behind the scenes with Iranian civil aviation officials for a considerable time. Indeed, weeks after European rival Airbus signed a multibillion dollar deal for 118 passenger jets with Iran, Washington finally gave the go-ahead for Boeing to begin official negotiations and to apply for special licenses to sell aircraft to the Iranians.

As the world cashes in on an Iran ready to do business, the United States risks being late to the game because of a mixture of political sensitivities, confusion about the remaining American sanctions and structural impediments that make trading with Iran prohibitively risky for all but the most adept American companies.

American trade with Iran is known to attract seething headlines in both countries. A simple form on McDonald’s website about franchise opportunities in Iran last year prompted warnings of an impending cultural invasion of the country in the Iranian right-wing media. Similarly, US companies risk the wrath of special interest groups devoted to inflicting reputational damage because of trade with Iran. Halliburton and Hewlett-Packard are prominent examples of companies that have been attacked in the American media for previous legal business relations with Iran.

Groups such as United Against a Nuclear Iran have also been successful in convincing around half of the state legislatures to pass measures punishing companies operating in Iran. These local laws have directed state pension funds with billions of dollars in assets to divest from targeted companies and sometimes have barred these companies from public contracts. The impact of these state “sanctions” on the JCPOA is not clear and may yet prompt a political and legal battle between the federal government and state officials. Indeed, the harm to the reputations of US companies by such local punitive measures is a strong deterrent to engaging with the Iranian consumer. It is also an issue that is likely to continue, as long as Iran remains listed as a state sponsor of terrorism by the State Department.

For American companies large enough to weather bad publicity, the remaining and now largely unilateral US sanctions on Iran represent a potentially costly minefield. The JCPOA allows for licensed sales of American airliners to Iran and the legal importation of Iranian foodstuffs and rugs. Besides these specific carve-outs, US companies may trade with Iran under the general licenses that were available before the JCPOA and under specific licenses granted by the Office of Foreign Assets Control (OFAC), the Treasury Department’s sanctions administrator. In addition, foreign subsidiaries of US companies that are not under the control and direction of US persons may trade directly with Iran. Maintaining a robust compliance system and routinely checking company interactions with Iran to make sure that they do not run afoul of OFAC regulations is a costly and time-consuming endeavor. Indeed, any American company that trades with Iran under the terms of the JCPOA, and especially under the complicated foreign subsidiary clause, must be large enough to support sufficiently adept legal compliance teams. Small and medium-size US businesses are thus effectively shut out of a presence in Iran for this very reason.

For the large multinational American companies that may be able to gain a foothold in Iran, there remain structural constraints that residual US sanctions place on legal trade with Iran. The United States has made it clear that no payments linked to Iran may be processed through its financial system. This means that profits made by American businesses in Iran will likely not be able to be directly repatriated and probably will remain offshore in segregated foreign accounts. American companies must also contend with strict bars on doing business with any Iranian entities that remain on OFAC’s “specially designated nationals” list, the Iranian government and the Islamic Revolutionary Guard Corps. Each of these barred entities took over vast parts of the Iranian economy as a result of the international sanctions that have now been lifted.

The JCPOA has opened small opportunities for trade between American and Iranian firms. However, the remaining labyrinth of hard-to-understand restrictions will likely spook most Americans.

Both the Iranian and US governments have a vital interest in seeing that the JCPOA is an enduring agreement — and this partly depends on sanctions relief benefiting Iranian and American private sectors in a way that would effectuate the “buy-in” of JCPOA skeptics. A mutually beneficial trading arrangement that connects the private sectors of the United States and Iran — despite political differences — would strengthen the nuclear deal by attaching a direct economic cost to nonadherence. The limited avenues for legal trade, if quickly institutionalized, can be insulated from the historically volatile political relationship between Iran and the United States.

In this vein, a quiet Iranian commitment to protect American investors in Iran and to tone down the harshest anti-US rhetoric, at least with respect to American business, would give space for Wall Street to influence a change in Washington’s largely monolithic view of a hostile Iran. More importantly, a quiet US commitment to actively support legal trade with Iran — with the same zeal that it uses to enforce sanctions — would give the Iranians space to consider future negotiated compromises.

 

North Korea Nukes are Ready, Angered by Sanctions

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Report: North Korea readying nukes

AP: North Korean leader Kim Jong-un has ordered his country’s nuclear weapons made ready for use at a moment’s notice, the official state news agency reported Friday.

Kim also said his country will ready its military so it is prepared to carry out pre-emptive attacks, calling the current situation very precarious, according to KCNA.

On Thursday, North Korea fired six short-range projectiles into the sea off its east coast, South Korean officials said, just hours after the U.N. Security Council approved the toughest sanctions on the North in two decades for its recent nuclear test and long-range rocket launch.

The firings also came shortly after South Korea’s National Assembly passed its first legislation on human rights in North Korea.

The North Korean projectiles, fired from the eastern coastal town of Wonsan, flew about 100 to 150 kilometers (60 to 90 miles) before landing in the sea, South Korea’s Joint Chiefs of Staff said in a statement.

It wasn’t immediately known exactly what North Korea fired, and the projectiles could be missiles, artillery or rockets, South Korea’s Defense Ministry said.

North Korea routinely test-fires missiles and rockets, but often conducts weapons launches when angered at international condemnation.

Thursday’s firings were seen as a “low-level” response to the U.N. sanctions, with North Korea unlikely to launch any major provocation until its landmark ruling Workers’ Party convention in May, according to Yang Moo-jin, a professor at the University of North Korean Studies in Seoul.

North Korea has not issued an official reaction to the new U.N. sanctions. But citizens in its capital, Pyongyang, interviewed by The Associated Press said Thursday they believe their country can fight off any sanctions.

“No kind of sanctions will ever work on us, because we’ve lived under U.S. sanctions for more than half a century,” said Pyongyang resident Song Hyo Il. “And in the future, we’re going to build a powerful and prosperous country here, relying on our own development.”

North Korean state media earlier warned that the imposition of new sanctions would be a “grave provocation” that shows “extreme” U.S. hostility against the country. It said the sanctions would not result in the country’s collapse or prevent it from launching more rockets.

The U.N. sanctions include mandatory inspections of cargo leaving and entering North Korea by land, sea or air; a ban on all sales or transfers of small arms and light weapons to the North; and the expulsion of North Korean diplomats who engage in “illicit activities.”

In Beijing, Foreign Ministry spokesman Hong Lei said China, North Korea’s closest ally, hoped the U.N. sanctions would be implemented “comprehensively and seriously,” while harm to ordinary North Korean citizens would be avoided.

At the United Nations, Russia’s ambassador, Vitaly Churkin, asked about the North’s firing of short-range projectiles, said, “It means that they’re not drawing the proper conclusions yet.”

Japan’s U.N. ambassador, Motohide Yoshikawa, said, “That’s their way of reacting to what we have decided.”

“They may do something more,” Yoshikawa said. “So we will see.”

In January, North Korea conducted its fourth nuclear test, which it claimed was a hydrogen bomb. Last month, it put a satellite into orbit with a long-range rocket that the United Nations and others saw as a cover for a test of banned ballistic missile technology.

Just before the U.N. sanctions were unanimously adopted, South Korea’s National Assembly passed a bill that would establish a center tasked with collecting, archiving and publishing information about human rights in North Korea. It is required to transfer that information to the Justice Ministry, a step parliamentary officials say would provide legal grounds to punish rights violators in North Korea when the two Koreas eventually reunify.

North Korea, which views any criticism of its rights situation as part of a U.S.-led plot to overthrow its government, had warned that enactment of the law would result in “miserable ruin.”

In 2014, a U.N. commission of inquiry on North Korea published a report laying out abuses such as a harsh system of political prison camps holding up to 120,000 people. The commission urged the Security Council to refer North Korea to the International Criminal Court over its human rights record.

Chronology of U.S.-North Korean Nuclear and Missile Diplomacy

North Korea’s Efforts to Acquire Nuclear Technology and Nuclear Weapons: Evidence from Russian and Hungarian Archives

North Korea’s Congressional Report on Nuclear Weapons

Russia aided North Korea’s and Iran ’s Nuclear Weapons Program, begin page 61

  

 

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Branch by branch, a Look at N. Korea’s Massive Military

By ERIC TALMADGE – Associated Press –

TOKYO (AP) – With tensions high and the United States and South Korea ready to hold their massive annual war games next week, which North Korea sees as a dress rehearsal for invasion, Pyongyang is warning it will respond to any violations of its territory with “merciless” retaliation, including strikes on Seoul and the U.S. mainland.

“Military First” is the national motto of North Korea, which is ever wary of threats to its ruling regime and still technically at war with Washington and Seoul. Nuclear-armed and boasting the world’s fourth-largest military, it is persistently seen as the biggest challenge to the security status quo in East Asia, an image it loves to promote and showcased in an elaborate military parade last October.

The joint South Korea-U.S. military exercises are to begin March 7 and last more than a month. Tensions always go up when they do.

Pyongyang has poured huge resources into developing its nuclear and missile arsenals and maintaining its conventional forces. About 5 percent of its 24 million people are on active military duty, and another 25-30 percent are in paramilitary or reserve units, ready for mobilization.

But just how strong is Kim Jong Un’s army?

Here’s a look, based on what AP reporters and photographers have seen on the ground and the latest report to the U.S. Congress by the Office of the Secretary of Defense:

ON THE GROUND:

BY THE NUMBERS: 950,000 troops, 4,200 tanks, 2,200 armored vehicles, 8,600 pieces of field artillery, 5,500 multiple rocket launchers.

BEHIND THE NUMBERS: This is, and always has been, North Korea’s real ace in the hole. While its threat to launch a nuclear attack on the U.S. mainland appears to be well beyond its current capabilities, turning the South Korean capital into a “sea of fire” is not.

The ground forces of the Korean People’s Army form the largest segment of the military, by far. Seventy percent of them are forward-positioned around the Demilitarized Zone for quick mobilization in a contingency with South Korea; they are extremely well dug-in with several thousand fortified underground facilities.

Their arms are mostly “legacy equipment,” produced or based on Chinese and Russian designs dating back as far as the 1950s. But they have in recent years unveiled new tanks, artillery and infantry weapons. In the October parade, the KPA displayed a new 240 mm multiple rocket launcher with eight tubes on a wheeled chassis. Kim Jong Un was recently shown by state media observing a new, longer-range anti-tank weapon.

“Despite resource shortages and aging equipment, North Korea’s large, forward-positioned military can initiate an attack on the ROK (South Korea) with little or no warning,” the U.S. report concluded. “The military retains the capability to inflict significant damage on the ROK, especially in the region from the DMZ to Seoul.”

AT SEA:

BY THE NUMBERS: 60,000 sailors, 430 patrol combatant ships, 260 amphibious landing craft, 20 mine warfare vessels, about 70 submarines, 40 support ships.

BEHIND THE NUMBERS: Divided into east and west fleets with about a dozen main bases, the navy is the smallest branch of the North Korean military. But it has some significant strengths, including hovercraft for amphibious landings and one of the largest submarine forces in the world. An estimated 70 attack, coastal or midget-type subs provide stealth and strongly bolster coastal defenses and possible special operations. It has no “blue water” – or long-range – naval forces and relies heavily on a large but aging armada of small coastal patrol craft. But it, too, is upgrading some of its surface ships and has made a show of its efforts to domestically develop a submarine capable of launching a ballistic missile.

IN THE AIR:

BY THE NUMBERS: 110,000 troops, over 800 combat aircraft, 300 helicopters, more than 300 transport planes.

BEHIND THE NUMBERS: Here’s where the “legacy” aspect of the North Korean military really kicks in. North Korea hasn’t acquired any new fighter aircraft for decades. Its best fighters are 1980s-era MiG-29s bought from the Soviet Union, the MiG-23 and SU-25 ground attack aircraft. They all suffer chronic fuel shortages and pilots get little training time in the air. Its air-defense systems are aging and it continues to maintain lots of 1940s-era An-2 COLT aircraft, a single-engine, 10-passenger biplane, which would probably be most useful for the insertion of special forces troops behind enemy lines. Interestingly enough, it also has some U.S.-made MD-500 helicopters, which it is believed to have acquired by bypassing international sanctions. They were shown off during a parade in 2013.

SPECIAL FORCES:

BY THE NUMBERS: Not specified in report to Congress. Somewhere around 180,000 troops. Estimates vary.

BEHIND THE NUMBERS: North Korea is fully aware that it is outgunned, technologically inferior and logistically light years behind its adversaries. But it also knows how to shift the equation through asymmetric tactics that involve stealth, surprise and focusing on cheap and achievable measures with an outsized impact. Special forces operations are among them – and the North’s special forces are the “most highly trained, well-equipped, best-fed and highly motivated” units in the KPA. Commandos can be inserted into the South by air or sea, and possibly on foot through tunnels across the DMZ. The North is working hard on its cyberwarfare capabilities, another key asymmetric military tactic. It is believed to have a growing number of drones.

NUKES AND MISSILES:

BY THE NUMBERS: Number of nuclear weapons not specified in report to Congress. Possibly more than a dozen, outside sources estimate. 50 ballistic missiles with 800-mile range, 6 KN08 missiles with a range of 3,400-plus miles, unknown number of Taepodong-2 missiles with roughly same or longer range. Possibly one submarine-launched ballistic missile. Various shorter-range ballistic missiles.

BEHIND THE NUMBERS: North Korea claims to have tested its first hydrogen bomb on Jan. 6, the day after the Department of Defense report came out. That claim has been disputed, but there is no doubt it has nuclear weapons and its technicians are hard at work boosting their quantity and quality. Major caveat here: The operational readiness of its nuclear weapons and many of its ballistic missiles is debatable.

Pyongyang’s main hurdles are making nuclear warheads small enough to fit on its missiles, testing re-entry vehicles required to deliver them to their targets on an intercontinental ballistic missile and improving and testing the arsenal for reliability and accuracy. Its Taepodong-2 ballistic missile is the militarized version of the rocket it launched on Feb. 8 with a satellite payload. North Korea has yet to demonstrate that it has a functioning ICBM, generally defined as having a range of over 3,418 miles.

CHEMICAL, BIOLOGICAL:

This one is a question mark. The U.S. Defense Department claims Pyongyang is continuing research and development into both, and could use them, but offered no details on biologicals in its recent assessment. It said Pyongyang “likely” has a stockpile of “nerve, blister, blood and choking agents” that could be delivered by artillery shells or ballistic missiles. The North is not a signatory of the Chemical Weapons Convention and its troops train to fight in a contaminated environment.

 

 

Iran Denies U.S. Travel Visas

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Oh, but wait to whom exactly? Investors? Nah…to members of Congress…..uh huh But we normalized relations right?

Iran Denies Travel Visas to U.S. Lawmakers

Congressman sought to observe Iranian elections

FreeBeacon: Iran has denied travel documents to three U.S. lawmakers who sought to observe the country’s Friday elections and ensure that they were carried out fairly, according to information provided to the Washington Free Beacon.

The Iranian regime delayed for weeks and ultimately ignored multiple visa requests by three House lawmakers who sought permission to travel to the country in order to monitor the elections held last Friday. Observers say the elections ushered in another crop of hardline, anti-American officials.

The congressmen, including Reps. Mike Pompeo (R., Kan.), Lee Zeldin (R., N.Y.), and Frank LoBiondo (R., N.J.), personally delivered their visa applications to the Iranian Interests Section of the Pakistani embassy in Washington, D.C., several weeks ago.

The lawmakers sought to observe the recent elections, as well as visit the country’s nuclear sites and meet with American hostages currently being held in Iran. While at the embassy, they provided Iranian diplomats with a list of their priorities for the visit.

The Iranian government failed to respond to these requests despite assurances from officials that the matter would be dealt with in a timely fashion. Iran has yet to explain why it did not respond to the congressmen.

Pompeo and the other lawmakers said Iran’s behavior indicates that it has something to hide from the United States and that the country cannot be trusted to uphold promises made under the recent nuclear agreement. They also criticized the Obama administration for not advocating on their behalf.

“Our straightforward and sincere visa applications have been met with mockery and delay from Iran, revealing this regime’s desire to hide from the American public,” Pompeo, a member of the House Permanent Select Committee of Intelligence, told the Free Beacon on Monday. “I am hopeful that the next U.S. president will critically examine the utility of President Obama’s nuclear deal and put America’s interests ahead of political legacy.”

Pompeo further described Friday’s election in Iran as a “sham” that served to enable the country’s hardline government.

“Because the fanatical Ayatollah holds ultimate power, February 26 was more of a selection of the next group of radicals by the current radicals, than a true election by the people,” he said. “Iranian state television has declared a national victory for the hardliners—politicians who declared that Israelis ‘aren’t human’ and who called for the execution of the pro-democracy Green Movement leaders were selected.”

Early election results indicate the hardliner candidates dominated the election, in part because most moderates were disqualified from participating in advance.

Iran’s Guardian Council, which is controlled by the Supreme Leader, is believed to have disqualified around 60 percent of the potential candidates, including around 99 percent of those viewed as reformists.

“The bulk of the disqualified candidates represent comparatively pragmatic elements of the ruling elite,” Saeed Ghasseminejad, an Iran expert at the Foundation for Defense of Democracies, explained in a policy briefing last week. “On the other hand, most of the approved contenders are radical revolutionaries—devotees of the supreme leader with close ties to the Islamic Revolutionary Guard Corps (IRGC). It is mathematically impossible for the less-hardline factions to win at the ballot box.”

“As a result, those supposed ‘moderates’ who were approved have been forced to round off their party lists with hardline candidates,” Ghasseminejad said.

LoBiondo and Zelden said that Iran’s refusal to grant them travel documents is a sign that the country is not seeking to boost ties with the U.S. as a result of the nuclear deal.

“In this supposed ‘new era of openness and cooperation,’ it is disappointing—but not surprising—that our request to visit Iran and monitor these elections was met with a closed door,” said LoBiondo, chair of the House’s CIA subcommittee.

“Furthermore, with the implementation of the nuclear deal and with Americans still detained in Tehran, it is perplexing why the Obama administration refuses to advocate on behalf of our official Congressional visit to Iran on such critical national security issues.”

“It’s unfortunate that Iran has not yet granted our request for visas to observe Iran’s election and for other productive purposes. The American people and rest of the free world still deserve first hand confirmation of what present day reality is in Iran. I look forward to Iran showing that it is a partner in peace by issuing our visas so that we can meet with Iranian leadership, visit nuclear sites, and meet with American hostages,” said Zeldin, a member of the House Foreign Affairs Committee.

*** Western corporations have been doing business in Iran for decades despite sanctions, especially so since 2013;

US-listed companies doing business in Iran: $540 million in revenue and counting

QZ: Economic sanctions on Iran have been getting tougher in recent years, and the United States tightened the screws a little more last summer with the Iran Threat Reduction and Syria Human Rights Act (PDF).
One unusual aspect of that law is that it started requiring companies traded on US stock exchanges to disclose more about the business they’re doing with Iran, and the Securities and Exchange Commission created the clunkily named IRANNOTICE filing to help them do it.
Companies were already beginning to disclose more about their ties to Iran, Syria, Cuba and other countries non grata (at least in US eyes) under pressure from the SEC. Now they must be systematic about it—and disclose gross revenue and net profits wherever possible.
Quartz’s partial tally: more than $540 million in gross revenue and $15.5 million in profits for US-listed companies from their business with Iran in 2012—and that’s just from 30 or so large companies that have made the disclosures since mid-February.
The numbers underscore the difficulty of maintaining tight sanctions in a global economy. But they also hide a lot of nuance and variation.
Companies based outside the US accounted for 99% of the revenue and three-quarters of the profit. (They made the disclosures because they list shares or American Depository Receipts on US markets.)
In fact, a big chunk of the total came from one company: $414 million in revenue for Statoil ASA, the Norwegian oil and gas company, from Statoil’s contracts with the National Iranian Oil Co.
Statoil also said it has terminated its agreements with Iran, abandoned it licenses there, and “will not make any investments in Iran under present circumstances.”
That’s a common refrain in the disclosures we saw: Many, though not all, of the disclosed transactions reflected companies wrapping up old business en route to cutting most or all ties with the Islamic republic. Typically, the transactions hadn’t been prohibited before the new rules kicked in.
Among the other noteworthy disclosures:
ING Groep said it collected €58 million in revenue and €395,000 in profits from repayment of old loans and a collection of frozen Iranian bank accounts. (Of course, in June, ING also settled allegations by the US Treasury and federal prosecutors that it hid transactions with Cuba and helped finance some sales to Iran, by agreeing to pay $619 million in penalties. It if keeps its nose clean for 18 months, the prosecutors will drop their charges.)
The biggest disclosure by a US company came from auto-parts maker TRW Automotive Holdings, which said it collected $8.3 million in revenue and $377,000 in profits from non-US subsidiaries that “sold products to customers that could be affiliated with, or deemed to be acting on behalf of, the Industrial Development and Renovation Organization” — one of the Iranian entities on the federal government’s massive list.
Under broad rules defining corporate “affiliates,” TRW’s transactions forced investor Blackstone Group to file its own disclosure. And Carlyle Group disclosed that a European portfolio company, Applus Servicios Technologicos, collected €1.19 million in revenue (and €200,000 in profits) from Iranian customers “that could be affiliated with the Industrial Development and Renovation Organization.” Similarly, Hertz had to report that a French affiliate of investor Clayton, Dubilier & Rice had received €2.5 million in payments from Iranian interests to an account at Bank Melli last year. And Apollo Global Management disclosed that portfolio company LyondellBasell Industries (Apollo funds owned 19.6%) reported collecting €4.2 million in revenue and €2.4 million in profit last year from Iranian entities.
Thomson Reuters reported $2.4 million in revenue and $426,000 in profits from selling news and intellectual-property and financial data to Iran-linked entities.


Other big Iran-related disclosures included GlaxoSmithKline at £19.7 million in revenue and £2.8 million in profits, and AstraZeneca at $14 million in revenue and $6 million in profits, both through distributors. Glaxo said that, after a review of the business, it “intends to supply only products of high medical/public health need (as determined using criteria set by the World Health Organization) from its Pharmaceuticals and Vaccines businesses.” AstraZeneca says it has a US license to do some business with Iran, but so far has sold only drugs from outside the US to distributors there.
Amusingly, at least for observers, there doesn’t seem to be a lower threshold to the disclosure requirement. So Dell, the Texas computer company, disclosed a whopping £106.13 ($169.90 at the time) in revenue from Iran, collected by a United Kingdom subsidiary to Quest Software, which Dell said last year it would acquire. The fees were paid by a unit of Bank Melli, which the US government links to Iran’s nuclear and missile programs, for maintenance licenses on software that helps search email and other communications. Drafting Dell’s 374-word disclosure probably cost the company more than the licenses brought in. (Dell says it canceled the service contract and won’t do further business with Bank Melli.)
Other picayune disclosures include Hyatt Hotels, which said the Park Hyatt Hamburg collected $9,300 for 33 room nights under a preferred-rate arrangement with Europaeisch-Iranische Handelsbank, which is on the US Treasury’s Blocked Persons List. And CME Group said it received $3,150 in revenue for selling market data to Iran’s Government Trading Group and a European subsidiary of the National Iranian Oil Company.

Israel Seeing Future with Bigger Weapons

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Israel Requests US Bunker-Busting Bombs with Increased Power The visit of US Vice President to Israel is crucial for the future US defense aid to Israel.

IDF: On Monday, Joe Biden will land at Ben Gurion Airport, for his last visit as Vice President of the United States. Ostensibly, this is one of the more boring visits: current Democratic administration is in his last year, and Biden himself had decided not to run for the Democratic presidential nomination, as many vice presidents have done before him.  

Still, the visit arouses huge interest, especially in the Israeli defense establishment. The reason: the discussions with the United States regarding a new framework agreement for defense aid entered the final straight, and Biden might bring about some news on the matter, or at least a hint. Anyway, shortly after Biden’s visit, the defense minister will visit Washington, after which Prime Minister Benjamin Netanyahu will also visit the United States. Therefore, the aid agreement is expected to be signed by the end of March, at the latest. Israel is counting on the American administration to be generous towards Israel’s defense needs at this time, in order to win the support of the Jewish vote (and mostly the Jewish donors) prior to the presidential elections.  

Aid or “Compensation”?  

To understand how the coming month will be crucial in terms of the Israeli defense ministry, we need to understand the context: the US elections will be held in November 2016, whereas the previous defense aid agreement between Israel and the United States will expire in 2017. The 10-years-long agreement set the extent of the defense aid back in 2007. According to the soon to be expired agreement, Israel received each year $ 3.1 billion. This is a huge sum, which constitutes more than 20 percent of Israel’s defense budget. Under the terms of the aid, the Ministry of Defense has received permission to convert half a billion dollars each year into NIS, to use the money for local acquisitions. The remainder is used as the primary budget source, to finance IDF equipment of central combat platforms such as fighter jets and helicopters.  

Beyond the generous annual aid, Israel receives additional aid from the United States for special projects. For example, the US has funded the equipping of seven of the nine Iron Dome batteries. In addition, the US DoD had collaborated with the Israeli defense establishments in the development and funding of other major missile defense projects – “Arrow 3” and “David’s Sling”.  

It was recently reported that the Americans will also deliver funds for projects that will assist the fight against underground tunnels built by Hamas in the Gaza Strip. Furthermore, the IDF and the US military has an agreement in which Israel could use American military equipment, kept in storages in Israel, in emergencies. To top that, the US Army also operates an innovative and classified radar system in the Har-keren mountaintop in the Negev region. Israelis are not allowed to see it firsthand (the closed US area on Israeli soil generates considerable resentment in the defense establishments).  

Harming the Israeli national honor or not, the new aid agreement on the agenda is also considered as compensation for the nuclear deal with Iran in summer 2015. The truth is that the compensation is not for the nuclear deal, but for the massive arms sales of American companies in the Persian Gulf.  

Not many are aware, but the entire region is in an intense arms race, as Iran plans to spend no less than $ 20 billion of its funds, which were frozen during the economic sanctions, in order to finance the procurement of advanced weapons systems, primarily from Russia. Iran’s neighboring countries fear its massive procurement and its transformation to a nuclear power, sooner or later (no leader in the Persian Gulf believes that the agreement will prevent Iran from attaining a nuclear bomb). For this reason, they also acquire weapons, mainly from France and the United States (including many squadrons of modern fighter aircraft, made by the two countries).  

This massive equipping is a great celebration for the US defense companies, but these weapons may one day be directed against Israel. Because the United States is committed to maintaining Israel’s qualitative edge (under a law passed years ago in Congress) – Israel is expected to receive increased aid, to allegedly ensure this advantage.  

Aid Talks  

Sources very involved in the defense and diplomatic relations between Israel and the United States, are confident that Israel had already missed an excellent opportunity to boost the “compensation”. It was near the time the agreement with Iran was signed. “Before signing the agreement, the American government was willing to give Israel almost everything it had wanted, to “silence” the criticism of the agreement. But because the Prime Minister has decided to fight Obama, the Americans have taught him a lesson and did not promise any compensation,” said a source close the subject.  

Now, as mentioned, Israel hopes that the Democrats’ electoral considerations prevail over the US administration’s hostility towards the current Israeli government. But what Israel really wants and what would be the extent of the new aid? Talks over the subject between Israeli and American teams began last fall, as part of negotiations between the Israeli Defense Ministry and the Pentagon. During those conversations, Head of the IDF Planning Directorate, Maj. Gen. Amikam Norkin, presented the IDF’s needs to his US colleagues.  

During the past few weeks, the aid negotiations was intensified and the reins were passed to PM Netanyahu’s hands, who deals with the issue closely.

The person who coordinates for the subject is the acting Head of the National Security Council, Ya’akov Nagel, who works regularly with the head of the US National Security Council, Dr. Susan Rice. Originally, Nagel started in the Administration for the Development of Weapons and Technological Infrastructure (MAFAT) in IMOD, and is currently a candidate for Heading MAFAT. Other major candidates mentioned, were Brig. Gen. (Res.) Dr. Danny Gold, who is considered as the father of “Iron Dome”; Maj. Gen.

(Res.) Ami Shafran; and Brig. Gen. (Ret.) Eytan Eshel and Brig. Gen. (Res.) Shmuel Yachin. The four of them served as Heads of the IDF’s R&D department.  

Meanwhile, a new Head of the National Security Council was appointed this week, instead of Yossi Cohen, who has been appointed as Head of Mossad in early January: Brig. Gen. (Ret.) Avriel Bar-Yosef, originally a Navy officer, received the prestigious appointment.  

Back to the US aid: the two main questions on the agenda are concerning the sum of the annual aid, in the decade between 2017 and 2027, and the quality of weapons that Israel will receive. Israel expects a significant boost in the annual aid, as part of “compensation” for the nuclear deal. Sums of even

4 and 5 billion dollars were heard. The second question, which depends on the actual sum of the defense aid, is what weapons systems Israel could purchase with that money.  

Israel is already planning on at least two squadrons of the future F-35 fighter (the first aircraft of this model will land on Israeli soil this December), but in the Air Force they fantasize about no less than four squadrons by the end of the next decade. In addition, they desire an additional F-15 squadron, a modern array of transport helicopters and refueling aircraft, as well as an aircraft which is half helicopter and half fighter, the V-22.  

In addition to aircraft, Israel-US talks involve advanced air-to-ground missiles and much-needed weapons, should it turn out that Iran has been fooling the world and continues to strive for a nuclear bomb. These weapons include, mainly, bunker-busting bombs, more advanced and heavier than the “Lite” version of bunker-busting bombs that the air force received five years ago.  

Some of the systems discussed between Israel and the United States are highly classified. In many cases, it is expected that the Americans would agree to include such systems in the weapons arsenal supplied to Israel, only if they know that Israeli defense industries are already developing similar systems in parallel.  

Not all interests of Israel and the US are overlapping, but from Israel’s perspective, the aid agreement shall determine Israel’s military power for many decades. Thus, this month will bring about crucial decisions, and all negotiation tricks will come into play, by both sides.

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The curious relationship between Israel and Saudi Arabia and why

IRGC Forms Base Near Saudi Border

LONDON [MENL] — Iran has established a military base in Iraq near the border with Saudi Arabia.

An Iraqi military source said Iran’s Islamic Revolutionary Guard Corps was operating a base in Naqib, along the Saudi border. The unidentified source said IRGC was storing weapons as well as training Hizbullah.

“They want to create a foothold for IRGC’s Quds Force along the Saudi border,” the source said.

The source, identified as an Iraq Army colonel, told the Saudi-owned A-Sharq Al Awsat that IRGC was working with its Shi’ite proxy, Abbas Brigade. The brigade was said to have expelled the residents of Naqib, also off-limits to the Iraq Army.

“They also want to secure a safe land route to transport IRGC fighters and weapons into Syria and Lebanon,” the Iraqi officer said.

In 2015, Saudi Arabia came under mortar attack from alleged Iranian-sponsored militias in southern Iraq. As a result, Saudi Arabia has bolstered its military presence along the Iraqi border.

Other Iraqi sources confirmed that IRGC held large areas of southern Iraq, particularly around Basra. They said Teheran was controlling much of the south through such proxies as Hizbullah-Iraq and Shi’ite militias funded by the Quds Force.

“When armed militias seized control of the town [Naqib], Sunni and Shi’ite Arabs were expelled under the pretext that they want to protect Karbala from Islamic State of Iraq and Levant fighters,” the Iraqi colonel said.

Genocide Label for ISIS? Kerry Unsure

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What happened to Bashir al Assad and the genocide happening to Syrians?

Kerry weighs ‘genocide’ label for Islamic State

Secretary of State John Kerry signaled today that he plans to decide soon whether to formally accuse the Islamic State of genocide amid what sources describe as an intense debate within the Obama administration about how such a declaration should be worded and what it might mean for U.S. strategy against the terrorist group.

“None of us have ever seen anything like it in our lifetimes,” Kerry said during a House subcommittee hearing Wednesday about beheadings and atrocities committed by the Islamic State.

But in response to questioning by Rep. Jeff Fortenberry, a Nebraska Republican who has been spearheading a resolution in Congress demanding the administration invoke an international treaty against genocide, Kerry was careful not to tip his hand on what has turned into a thorny internal legal debate with political and potentially military consequences.

Saying the department was reviewing “very carefully the legal standards and precedents” for a declaration of genocide against the Islamic State, Kerry added that he had received “initial recommendations” on the issue but had then asked for “further evaluations.”

In his first public comments on the issue, Kerry said he “will make a decision on this” as soon as he receives those evaluations. He didn’t elaborate on when that might occur.

The administration’s plans to invoke the powerfully evocative genocide label — an extremely rare move — was first reported by Yahoo News last November. But at the time, the State Department was focused on restricting the designation to the Islamic State’s mass killings, beheadings and enslavement of the Yazidis — a relatively small minority group of about 500,000 in northern Iraq that the terrorist group has vowed to wipe out on the grounds they are “devil worshipers.”

The disclosure set off a strong backlash among members of Congress and Christian groups who argued that Islamic State atrocities against Iraqi and Syrian Christians and other smaller minority groups also deserved the genocide label. Some conservatives even chastised the administration for displaying a “politically correct bias that views Christians … never as victims but always as Inquisition-style oppressors.”

The issue has since made its way into the presidential campaign; Sen. Marco Rubio has signed a Senate version of a House resolution, co-sponsored by Fortenberry and Rep. Anna Eshoo, for a broader genocide designation that incorporates Christians, Turkmen, Kurds and other groups. Hillary Clinton has also endorsed such as move. In response to a question from a voter at a New Hampshire town hall last December about whether she believes Christians as well as Yazidis should be declared victims of genocide, she said, “I will, because we now have enough evidence.”

A Iraqi Yazidi woman and her children took refuge at the Bajid Kandala camp in Dohuk, Iraq, after fleeing Islamic State jihadists. (Photo: Ahmad Al-Rubaye/AFP)

But administration sources and others intimately familiar with the internal debate say the issue has proven more complicated. While ISIS has openly declared its intention of destroying the Yazidis, they argue, the terrorist group’s leaders have not made equally explicit statements about Christians even while committing killings, kidnappings, forced removals and the confiscation and destruction of churches aimed at Christian groups. As a result, administration officials and State Department lawyers have weighed labeling those acts “crimes against humanity” — a step that critics have said doesn’t go far enough. “We’ve been trying to tell them, crimes against humanity are not a bronze medal,” said one administration official, contending that it should not be viewed as a less serious designation.

Kerry seemed to hint as much in his responses to Fortenberry at Wednesday’s hearing, noting that Christians in Syria “and other places” have been forcibly removed from their homes. “There have been increased, forced evacuations,” he said. “No, its not — they are killing them in that case — but it’s a removal and a cleansing, ethnically and religiously, that is equally disturbing.”

At the same time, two sources familiar with the debate said, Pentagon officials have expressed concerns that a genocide designation would morally obligate the U.S. military to take steps — such as protecting endangered populations or using drones to identify enslaved women — that could divert resources from the campaign to defeat the Islamic State. (An administration official told Yahoo News Wednesday that any such concerns have not been raised in “interagency” discussions over the genocide issue. “There is no resource issue,” the official said.)

In fact, many legal scholars say, there is considerable debate about just what practical impact a genocide designation would have. It would be made under a loosely worded 1948 international treaty that compels signatory nations, including the United States, “to prevent and to punish” the “odious scourge” of genocide defined as acts “committed with intent to destroy, in whole or in part, a national, ethnical (sic), racial or religious group.” As documented by Samantha Power, now the U.S. ambassador to the United Nations, in her 2002 book, “A Problem from Hell,” President Clinton’s Secretary of State Warren Christopher, resisted labeling the mass murder of the Tutsis in Rwanda in 1994 as genocide for fear, as one State Department memo put it at the time, “it could commit [the U.S. government] to actually do something.”

But 10 years later, Secretary of State Colin Powell declared the killings of non-Arab people in Darfur to be genocide — the first time the U.S. invoked such a declaration during an ongoing conflict. But he did so only after receiving a secret State Department memo concluding the designation “has no immediate legal — as opposed to moral, political or policy consequences for the United States.”

Administration officials have argued they are already taking extraordinary steps to protect threatened minorities in Iraq, pointing to, for example, the 2014 evacuation of Yazidis from Mount Sinjar — and that a genocide designation wouldn’t change that. White House press secretary Josh Earnest said as much when he was pressed on the issue during a recent White House briefing during which he said a genocide designation is “an open question that continues to be considered by administration lawyers.”

“The decision to apply this term to this situation is an important one,” Earnest said during a Feb. 4 briefing. “It has significant consequences, and it matters for a whole variety of reasons, both legal and moral. But it doesn’t change our response. And the fact is that this administration has been aggressive, even though that term has not been applied, in trying to protect religious minorities who are victims or potential victims of violence.”