Exclusive: Iran flouts U.N. sanctions, sends arms to Syria: panel

UNITED NATIONS (Reuters) - Syria remains the top destination for Iranian arms shipments in violation of a U.N. Security Council ban on weapons exports by the Islamic Republic, according to a confidential report on Iran sanctions-busting seen by Reuters on Wednesday.

Iran, like Russia, is one of Syria's few allies as it presses ahead with a 14-month old assault on opposition forces determined to oust Syrian President Bashar al-Assad.

News of the panel's report came as Tehran and the U.N. International Atomic Energy Agency try narrow their differences on how to tackle concerns over Iran's atomic program, and as Iran prepares for talks with the five permanent council members and Germany in Iraq next week.

The new report, submitted by a panel of sanctions-monitoring experts to the Security Council's Iran sanctions committee, said the panel investigated three large illegal shipments of Iranian weapons over the past year.

"Iran has continued to defy the international community through illegal arms shipments," it said. "Two of these cases involved (Syria), as were the majority of cases inspected by the Panel during its previous mandate, underscoring that Syria continues to be the central party to illicit Iranian arms transfers."

The third shipment involved rockets which Britain said last year were headed for Taliban fighters in Afghanistan.

"The Panel recommends the designation (blacklisting) of two entities related to these interdictions," it said. "The report also takes note of information concerning arms shipments by Iran to other destinations."

Diplomats told Reuters that the panel's draft report may be changed by the Security Council's Iran sanctions committee before it is submitted to the council itself for consideration.

It was unclear how long it would take the committee to pass the report to the Security Council. Last year's expert panel report on Iran was never made public because Russia blocked its publication.

The report also discusses Iran's attempts to circumvent sanctions on its nuclear program but notes that the four rounds of punitive measures the 15-nation Security Council imposed on Iran between 2006 and 2010 are having an impact.

"Sanctions are slowing Iran's procurement of some critical items required for its prohibited nuclear program," it said. "At the same time prohibited activities continue, including uranium enrichment."

IRAN SEEKS 'CRITICAL ITEMS'

Among the items Iran has attempted to procure for its nuclear program, the panel said, were nuclear-grade graphite, high-strength aluminum, aluminum, powder, specialized alloys, maraging steel, carbon fiber, magnets, vacuum pumps, turbines, electrical switchboards and helium gas detectors.

"The Panel identifies the acquisition of high-grade carbon fiber as one of a number of critical items Iran requires for the development of more advanced centrifuges," the report said, adding that states should be on alert for illicit attempts to acquire such critical items.

Iran rejects allegations by Western nations and their allies that it is secretly developing the capability to produce nuclear weapons. It has refused to suspend its enrichment program as demanded by the Security Council, despite being hit with increasingly draconian U.N. and various national sanctions.

The report talked at length about Islamic Republic of Iran Shipping Lines, known as IRISL. While IRISL itself is not formally under U.N. sanctions, three of its subsidiaries are, and the council has warned U.N. member states to be vigilant regarding potential sanctions violations by IRISL.

The panel report said that Irano Hind Shipping Company, one of the IRISL subsidiaries subject to sanctions, continues to operate vessels. IRISL is a difficult company to monitor because it is constantly changing the ownership, names and national flags of its ships, the report said.

"Iran's ballistic missile program continues to develop with additional launches, which are prohibited under resolution 1929," adopted in June 2010, the report said.

"The Panel takes note of the recent designations (U.N. Security Council blacklisting) ... of two (North Korean) entities and their links to Iran's ballistic missile program."

The two North Korean companies linked to Iran's missile program are the Green Pine Associated Corp and the Korea Heungjin Trading Company. The council's North Korea sanctions committee blacklisted them on May 2.

(Editing by Anthony Boadle and Mohammad Zargham)

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