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  • Iran Threatens U.S. Interests In The South Caucasus

    IRAN THREATENS U.S. INTERESTS IN THE SOUTH CAUCASUS

    Heritage.org
    Dec 5 2012

    By Ariel Cohen, Ph.D.

    Testimony before the Subcommittee on Europe and Eurasia, Committee
    on Foreign Affairs, U.S. House of Representatives December 5, 2012

    Chairman Burton, Members of Congress, Ladies and Gentlemen:

    My name is Ariel Cohen. I am the Senior Research Fellow in Russian
    and Eurasian Studies and International Energy Policy at The Heritage
    Foundation. The views I express in this testimony are my own, and
    should not be construed as representing any official position of The
    Heritage Foundation.

    Thank you for inviting me to testify before you today on the Iranian
    threats to U.S. interests in the South Caucasus.

    The Islamic Republic of Iran (IRI or Iran), has emerged as a major
    anti-status quo actor in the Middle East, threatening American Sunni
    Arab allies along the so-called Shi'a Crescent from Lebanon, via Syria
    and Iraq, to the Persian Gulf. Iran's implacable hatred of Israel and
    its threats to wipe the Jewish State off the map are widely reported.

    What is less well known is the destabilizing influence of the Islamic
    Republic in the South Caucasus.

    The South Caucasus is located between the Black Sea and the Caspian
    Sea, neighboring Central Asia to the east, the Middle East (Iran and
    Turkey) to the south, and Eastern Europe to the west, hence connecting
    Europe and Asia. It also plays a key role in connecting Central Asia to
    the world via the Black Sea and Mediterranean ports. Home to ancient
    civilizations and populated by Christians, Muslims, and Jews, the
    South Caucasus is also the area where Russia, Iran, and Turkey meet.

    The United States has worked hard over the last twenty years to
    encourage development of this strategically important region. American
    interests in the South Caucasus include security, energy and economic
    development, and democratization. Thus far, our track record in
    achieving these goals is decidedly mixed.

    Security in the region is threatened by Iranian attempts to export
    terrorism, destabilize neighboring Azerbaijan, and bypass U.N. and
    E.U. sanctions. Since the launch of the Baku-Tbilisi-Ceyhan Main
    Oil Export Pipeline in 2006, no gas export pipeline from the Caspian
    has been completed; no Turkmen or Kazakhstani gas is transiting the
    region for exports; and the level of democratization leaves much to
    be desired.

    Since the collapse of the USSR, Washington has sought to prevent
    Russia and Iran from re-establishing dominance in this region,
    especially as the importance of Caspian energy resources - oil and
    gas - is increasing. "Given that the region involves the Russians,
    Iranians and Turks, it is inevitable that the global power [the U.S. -
    A.C.] would have an interest as well," U.S. Secretary of State Hillary
    Clinton remarked during her visit to the region in July 2010. The U.S.

    long-term strategy has been to ensure the independence of Azerbaijan,
    Armenia, and Georgia, allowing for markets to develop and the rule
    of law to thrive, while sustaining democratization and promoting
    regional integration.[1] Since the era of bipartisanship on South
    Caucasus during the Clinton and Bush Administrations, there is a
    reversal in U.S. attention to and achievements of these policy goals.

    Importantly, Iran is endangering the U.S. strategy through the
    export of terrorism, sanction busting, subversion through soft power
    application, and cultivating close relations with Armenia while
    posing a threat to the stability and development of the pro-Western
    and pro-American country of Azerbaijan.

    Iran, the Prime Exporter of Terrorism. Iranians are responsible for at
    least two recent (2012) and documented terrorist attacks on U.S. and
    Israeli targets in Azerbaijan, and one in Georgia. Iranian networks
    and agents targeted the U.S. Embassy in Azerbaijan and "iconic"
    locations such as McDonalds.

    They also targeted the Israeli Ambassador to Baku, the Israeli embassy
    building, a rabbi, and a number of prominent members of the Azerbaijani
    Jewish community leaders and their center in Baku.

    Georgian security services have disarmed a bomb, apparently planted
    by Iranian agents, targeting an Israeli diplomat. Georgia is allowing
    Iranians to travel to their country visa-free. These attacks are a
    part of a global wave of terror, which includes planned or executed
    attacks on the Saudi and Israeli Embassies in Washington, D.C., New
    Delhi, Bangkok in Thailand, and Burgas in Bulgaria, as well as Kenya
    and Cyprus.

    The Qods (or "Jerusalem") Force, an Iranian elite paramilitary
    organization of the Islamic Revolutionary Guard Corps (IRGC),
    is exporting the Islamic revolution by fostering militant Shiite
    movements, creating deterrence and retaliatory networks, and
    destabilizing unfriendly regimes. Officially, the Qods Force is a
    part of the IRGC's five known branches, alongside the ground forces,
    the navy, the air force (in parallel with the regular tri-services),
    and the brutish Basij street militia.[2] In reality, the Force enjoys
    a great degree of autonomy and is directed by the Supreme Leader.

    Iranian student activists compared IRGC to the Soviet KGB and the
    Nazi SS, calling it "the agent of order for a harsh ideological regime
    and its agent of oppression".[3]

    A 2010 U.S. Department of Defense report indicates that the Qods Force
    "clandestinely [exerts] military, political, and economic power to
    advance Iranian national interests abroad," making the Force the
    spearhead of Iran's foreign policy.

    The Qods Force has been accused of masterminding or supporting some
    of the most prominent attacks against Western and Israeli targets over
    the past three decades. Its role was decisive in launching Hezbollah,
    the Shiite militant group that is responsible for the death of over
    240 American Marines and numerous American diplomats and intelligence
    officers in Lebanon in the 1980s, and attained notoriety for its
    massive rocket attacks on Israeli civilians in the Second Lebanon
    War of the summer of 2006.

    Little wonder, then, that international attention has in recent years
    focused on Qods Force Major General Qassem Soleimani, the enigmatic
    operator who runs the "handpicked elite of an already elite ideological
    army." Ali Alfoneh, an Iran scholar specializing in the IRGC at the
    American Enterprise Institute, wrote that although lacking formal
    qualifications, Soleimani rose through the ranks due to his reputation
    for gutsiness during tough times.

    In his current role, Soleimani replaced Ahmad Vahidi in the late
    1990s. Vahidi went on to become Iran's defense minister. Soleimani's
    personal connection to Supreme Leader Khamenei, which dates back to
    before the 1979 revolution, may have facilitated his ascendancy.

    It is no wonder that Iran's leaders, who believe that independent
    Azerbaijan belongs within the Persian orbit, turned to Soleimani and
    the Qods Force. The Iranian intelligence services have been operating
    on Azeri soil as far back as the mid-1990s.

    In 1997, members of the Islamic Party of Azerbaijan were tried for
    spying on behalf of Iran. In 2007, Said Dadasbeyli, an Azeri cleric
    and alleged leader of a group known as the "Northern Mahdi Army" was
    accused of receiving assistance from the Qods Force and plotting to
    overthrow the secular government. The Azerbaijani authorities believed
    he had provided Iran with sensitive intelligence on the American and
    Israeli embassies in Baku.

    In October 2009, two Lebanese Hezbollah operatives and their four
    local Azerbaijani assets were charged with plotting to attack the U.S.

    and Israeli embassies. In January 2012, three men were accused of
    planning to assassinate a rabbi and a teacher working at a Baku
    Jewish school.

    Iran's Anti-Israel Agenda. The fact that the Iranian intelligence
    services have prioritized Israeli and Jewish targets inside Azerbaijan
    may be interpreted as a signal to the Azerbaijani government that
    Tehran is upset by the close Azerbaijani-Israeli cooperation. In the
    past, Iran undertook a number of diplomatic steps to signal its ire to
    Baku about the relationship with Israel. For the Iranian Islamist Shi'a
    dictatorship, neighboring, predominantly Shi'a Azerbaijan is far too
    secular, too pro-Western, and too pro-Israel. Secular Azerbaijan is
    not the model Iran wants to see at its northern border: a prosperous,
    energy-exporting, Western-oriented and Israel-friendly, majority-Muslim
    country. Iranian-Azerbaijani relations are further complicated by
    rising Azerbaijani nationalism inside Iran, where over 25 percent
    of the population is ethnic Azeri.Unconstitutional discrimination
    against the Azerbaijani language as a language of public discourse
    and education in Iran continues to poison Azeri-Persian ties.

    It is no wonder that Iranian policies are making Azerbaijan's
    leadership feel threatened. I believe that they should also engender
    greater concern among U.S. foreign policy makers.

    Sanction Busting. Iranian attempts to circumvent the sanctions regimes
    imposed by the U.N., the U.S., and the E.U. in an attempt to pressure
    Tehran away from developing nuclear weapons target the South Caucasus.

    These include illegal banking operations and the proliferation of
    "front" companies engaged in the acquisition of sensitive, dual use,
    or outright military technology. All three South Caucasus countries
    are involved in trade with Iran, but Armenia, the closest to Tehran,
    is the principal concern for U.S. policymakers, law enforcement,
    and the intelligence community.

    According to Armenian press reports, Iranians use Yerevan real estate
    to launder money and achieve liquidity outside of the country.[4]An
    additional aspect of the Iranian-Armenian cooperation, which may
    violate the sanctions, is the Meghri hydroelectric plant along the
    Arax River between the two countries. On November 8, 2012, Armenia
    broke ground for the long-planned US$330 million 130-megawatt plant,
    which will be built by an Iranian company, and Iran will use the
    electricity generated by the project for the next 15 years.

    Afterwards, ownership of the plant will be transferred to Armenia. In
    2011, Armenia and Iran also agreed to an oil product pipeline planned
    to run from the city of Tebriz to the Armenian border, to supply
    Armenia with Iranian fuels.

    Bypassing Banking Sanctions and Acquiring Technology. Last August,
    news agencies reported that the Iranian regime was attempting to expand
    its banking relationships in Armenia as a convenient location to avoid
    international sanctions. Mellat Bank, an Iranian financial organization
    sanctioned by the U.S. Treasury for helping to finance imports for
    Iran's nuclear proliferation activities and suspected by the British
    Treasury of violating international sanctions, operates in Yerevan.[5]
    Other Iranian banks connected to illicit military-industrial, economic,
    and financial activities by the regime also attempt to operate in
    Armenia in order to bypass international law enforcement. While the
    Government of Armenia has denied these reports, according to the
    Armenian press, their adherence to international banking sanctions
    against Iran has been questioned by Western officials.

    Richard Giragosian, director of the Yerevan-based Regional Studies
    Centre (RSC) says that Iran looks at the South Caucasus as a region
    where it can procure "critical elements" for its nuclear effort that
    the sanctions have restricted: "Many [Iranian] Revolutionary Guard
    units have pursued over the past several years setting up joint
    ventures with foreign partners -- front companies -- designed to
    pursue technical spare parts for military use and nuclear centrifuge
    development." Front companies of this type were closed in recent years
    in Dubai and Kuala Lumpur. "There is new concern that Armenia, Georgia,
    and other countries may become attractive for such a pursuit."[6]

    The Iranian Drug Trade Threatens the South Caucasus. The South
    Caucasus is increasingly becoming a prime drug transit destination
    for the Iranian drug trade, directed and protected by the Quds Force
    and Hezbollah.

    Drug dealers using high-speed motorboats, night goggles, grenades,
    automatic assault rifles, and machine guns are breaching the borders
    of Azerbaijan, and may be laundering their ill-gotten gains in the
    casinos of the region. Iranian producers of methamphetamines use
    industrial chemical production lines supervised by professional
    pharmacists and chemists to produce ultra-pure meth for export.

    Hezbollah's ratlines through the Bekaa Valley in Lebanon, Syria,
    Turkey, Europe, and South America make it a drug pushing terrorist
    organization with global reach, busy opening the doors to cooperation
    with drug cartels for distribution deals. The porous borders and
    corrupt customs officers of the Caucasus have created an additional
    trafficking route via the Black Sea and air routes to Western
    Europe.[7]

    Caspian Sea Delimitation. Iran is subverting the delineation of
    the Caspian Sea, causing significant delays in off-shore energy
    development there. The Soviet-Iranian Treaties of 1921 and 1940 did
    not provide marine boundaries or delineation lines, and therefore,
    these treaties do not apply to today's situation, especially after
    the demise of the Soviet Union.

    By resisting the partition of the Caspian Sea and construction of a
    modern hydrocarbon pipeline infrastructure, as proposed in the past
    by American government and international energy companies as well
    as Azerbaijan, Iran is blocking the ability of land-locked Newly
    Independent States such as Azerbaijan, Kazakhstan, and Turkmenistan
    to gain revenue and develop properly.

    To put it simply, Iran's leaders don't care about the well-being
    of the peoples of the neighboring states. It has bountiful oil and
    gas resources to the south and ample access to the Persian Gulf and
    the Arabian Sea/Indian Ocean. Applying their zero-sum approach, the
    Iranians believe that it is in their interest to limit the Caspian
    oil and gas supply to European and Western markets.

    In July 1998, Russia and Kazakhstan signed an agreement on the
    delimitation of the northern part of the Caspian Sea in order to
    exercise their sovereign rights to subsoil use. On November 29, 2001,
    and February 27, 2003, Kazakhstan and Azerbaijan signed an agreement
    on the delimitation of the Caspian Sea. Kazakhstan, Azerbaijan and
    Russia signed an agreement on the delimitation of adjacent sections
    of the Caspian Sea on May 14, 2003.[8] Thus, Kazakhstan, Azerbaijan,
    and Russia recognize the national sector regime in the Caspian,
    while Iran resists the partition.

    Turkmenistan, intimidated by Iran, has also not signed the national
    sector regime. The lack of this regime makes it difficult to build
    underwater pipelines for oil and gas. Turkmenistan could be sending
    its gas west via Azerbaijan's rapidly developing export pipeline
    system for sale in Turkey and Europe. However, as a result of Iran's
    intransigence, almost all of Turkmenistan's gas is sent to China,
    and Kazakhstan is equally unwilling to commit to an oil or gas
    cross-Caspian pipeline as long as Iran resists the settlement of the
    Caspian Sea's legal regime.

    Iranian claims to the Azerbaijani national sector in the Caspian have
    already led to dangerous incidents that had the potential to escalate.

    In 2001, Iran--a known sponsor of terrorism--began an aggressive
    campaign to claim a greater portion of the Caspian Sea and its
    resources. Its leaders asserted that Iran has territorial and treaty
    rights to as much as 20 percent of the Caspian Sea surface area and
    seabed, significantly more than its long-recognized sector comprising
    about 12 to 14 percent.[9]

    Tehran's use of air and naval forces to threaten a seismic research
    ship working for a Western company in Azerbaijan's Caspian Sea sector
    has jeopardized, in addition to energy production, Western investments
    and the economic development of the post-Soviet states in that region.

    Iran's use of military force to assert its claim to part of
    Azerbaijan's sector of the Caspian Sea undermines security and the
    future of Caspian oil and gas development. Iran not only has violated
    its neighbor's air space and territorial waters, but on one occasion
    even massed ground troops on the border.

    These aggressive actions were a blatant violation of international
    law. On July 23, 2001, an Iranian warship and two jets forced a
    research vessel working on behalf of BP in the Araz-Alov-Sharg field
    out of that sector. That field lies 100 kilometers (60 miles) north of
    Iranian waters. Due to that pressure, BP immediately announced that
    it would cease exploring that field, which it did by withdrawing the
    research vessels. This aggressive policy has not changed since.

    Soft Power Competition. Finally, Iran is concerned about Western
    pop culture influence, which is palpable in neighboring Azerbaijan,
    as well as with the easy reach of casinos and beaches in the resort
    of Batumi, Georgia, on the Black Sea. Azerbaijan's victory in the
    2011 Eurovision song contest; hosting Eurovision in 2012 as well as
    concerts by Jennifer Lopez; Rihanna; and Shakira; and hosting the
    under-17 Women's World Cup Soccer Tournament may all be interpreted as
    points scored in the soft power competition with the Islamic Republic.

    It is no accident that Iranians come in droves to relax in Baku,
    and not vice versa.

    The payback is harsh: Iranian-trained and -paid mullahs are
    indoctrinating Azerbaijanis living in the villages and towns along the
    Iranian border. One of the main complaints: they convince families
    to pull their daughters from the state-run, co-ed education system
    and encourage early marriages for girls--as early as 12 or13As part of
    putting forward the argument for a more militant, severe interpretation
    of Islam and more rigorous adherence to Sharia, these mullahs preach
    polygamy, forbidden by Azerbaijani law. Azeri government officials
    justifiably complain that the barrage of propaganda is undermining
    the secular regime in the country.

    Conclusion. On the bilateral level, the U.S. has strong economic and
    strategic interests in the Caspian and the South Caucasus. Without
    Georgia and Azerbaijan, the Northern Distribution Network,
    which supplies the U.S. and NATO troops in Afghanistan, would
    lack its Caucasus leg. An American partnership with Azerbaijan
    answers Washington's need to consolidate its presence in the South
    Caucasus-Caspian Sea region and isolate Iran.

    As Professor Stephen Blank of the U.S. Army War College recently wrote,

    The administration has hitherto treated the South Caucasus as an
    afterthought or as an overflight issue on the road to Afghanistan.

    Such neglect is dangerous and misconceived. The mounting threats in
    the Middle East, Iran, and the Caucasus show how vital it is that
    the U.S. strengthen pro-Western regimes.... For if we continue to
    neglect the Caucasus, this neglect will quickly become malign. And
    malign neglect invariably generates not only instability but also
    protracted violence.[10] Around the region, the U.S. needs to:

    â- Expand anti-terrorism and drug trafficking cooperation between
    the U.S. and the three South Caucasus states, neutralizing Iranian
    subversive activities in the region; â- Focus intelligence community
    efforts on collecting and neutralizing Iranian sanction-busting
    activities in financial and technology transfer sectors; â- Uphold
    the interests of small Southern Caucasian countries when attempting
    to construct an effective Iran policy which leads to elimination of
    Tehran's nuclear weapons program; â- Sustain energy projects and
    help European countries in diversifying their energy supplies by
    connecting them to the energy resources of the Caspian Sea-Central
    Asia region. Specifically, the U.S. should help Turkey and Europe to
    finalize the TANAP and Nabucco pipeline projects;[11] â- Develop a
    comprehensive interagency soft power strategy to powerfully support
    the Iranian opposition, including that of Iranian Azerbaijanis,
    and leading to a victory of democratic forces in Iran.

    By its aggressive actions, Iran is endangering the fragile equilibrium
    in the strategically sensitive region, which is important for the U.S.

    interests. America should remain vigilant and deter the violence,
    extremism and terrorism practiced by the Islamic Republic against
    America's friends and allies.

    Ariel Cohen, Ph.D.

    Senior Research Fellow for Russian and Eurasian Studies and
    International Energy Policy, The Kathryn and Shelby Cullom Davis
    Institute for International Studies

    http://www.heritage.org/research/testimony/2012/12/iran-threatens-us-interests-in-the-south-caucasus


    From: Baghdasarian
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