UK Army Angry as Afghan Role Cut by Michael Smith

British troops in Afghanistan will hand over combat operations to the Americans later this year, then concentrate on training the Afghan forces.

In the wake of the government’s refusal to deploy an extra 2,000 permanent troops and ministers’ failure to give commanders in Iraq the resources they need, army chiefs are said to be angry at Gordon Brown’s decision to wind down the fighting. They believe it has been made in order to save costs.

Although Brown touched on the subject in the Commons last week, this was overshadowed by news that 700 more British troops will be boosting security for the summer’s presidential election.

The prime minister said: “As resources are freed from the south and the US moves in, we will shift operations away from front-line combat towards training the Afghanistan army and police.”

British special forces will continue to mount offensive operations alongside the Americans, mainly on the Pakistan border. A senior defence source said: “We will concentrate on training and we can then train more Afghans more quickly.”

About 9,000 US troops will be deployed in Helmand province, southern Afghanistan, by the autumn, eclipsing the 5,500 British soldiers based there. Senior British officers are said to be furious at the plan, which they believe is solely about saving money.

Military commanders had asked for up to 3,500 more troops to create secure zones, but vehicle shortages made that unrealistic. General Sir Richard Dannatt, head of the army, was preparing to send an extra 2,000 men before the Treasury vetoed it.

Two British infantry battalions will be focused on training the Afghans, with the third at Camp Bastion as a rapid reaction reserve force if the Afghan forces get into trouble.

Britain has a total of 8,300 troops in Afghanistan - 5,500 in Helmand - but the figure will temporarily rise to 9,000 to provide more security for the presidential elections in August.

Iraq Wild Car: Personalities VS. Checks and Balances

The greatest wildcard is 78-year-old Iranian-born Grand Ayatollah Ali Sistani. He is Iraq's leading religious figure and possesses significant implicit political clout. Like many traditional Shia clerics, Sistani sees his role as an indirect guide rather than an active political leader. While he advocates Shia empowerment, he tempers populist anger, discourages Iranian-style clerical political control and eschews violence. When he dies, it is unclear who might fill his role. Najaf is home to other Grand Ayatollahs – Afghan-born Muhammad Ishaq Fayadh and India-born Bashir Najafi – but neither has a large enough following to replace Sistani.

Many senior Shia leaders live in Iran but to prevent even passive challenge to Iranian Supreme Leader Ali Khamenei, the most prominent traditional clerics in Iran – Hossein Ali Montazeri and Hossein Kazemeyni Boroujerdi – remain under house arrest or in prison. At best, should Sistani die in the near future, there will be no clear marja at-taqlid (source of emulation), to represent the Shia voice. In such a situation, firebrands such as al-Sadr may find little impediment to religious demagoguery.

Alternatively, 73-year-old Iraqi-born Grand Ayatollah Muhammad Hussein Fadlallah may return from Lebanon. While scholars debate whether or not Fadlallah is a patron for Lebanese Hizbullah, they do not debate either his long association with the group nor his support for their actions. Should Fadlallah return, no cleric is likely to be able to challenge him as the pre-eminent Shia religious authority in Iraq. As much as Sistani has been a voice for calm, his successor could become a force for discord.

As long as Iraqi security is dominated by personalities rather than checks and balances, stability in the country will be a mirage. The situation in Baghdad has improved greatly since 2007, but while success rests upon the longevity of old men and unwillingness to acknowledge the prime minister's mortality, any gains could fast reverse.

Disrupting Tehran's Export of Technology and Weapons by Matthew Levitt

Earlier this year, Cyprus impounded the Iranian-chartered freighter Monchegorsk, a vessel laden with war materiel bound for Syria (and perhaps beyond). This episode highlights the shortcomings of current UN and European Union sanctions on Iran, and underscores the need for a more systematic approach for dealing with Tehran's efforts to transfer technology and arms to radical allies in the Middle East and elsewhere, even as Washington seeks to engage Iran.

The Monchegorsk and its Cargo

In January, the U.S. Navy stopped Monchegorsk while it was transiting the Red Sea en route to Syria, on the basis of intelligence that the freighter was carrying Iranian arms exports in violation of UN Security Council Resolution 1747. According to UN documents, the Monchegorsk, a Russian-owned, Cypriot-flagged vessel, was chartered by Islamic Republic of Iran Shipping Lines (IRISL). In September 2008, the Treasury Department designated IRISL for its proliferation activities, stating that "Not only does IRISL facilitate the transport of cargo for UN designated proliferators, it also falsifies documents and uses deceptive schemes to shroud its involvement in illicit commerce."

A U.S. Navy boarding party confirmed the arms embargo suspicions and ordered the ship to Cyprus. There, according to the Wall Street Journal, the Cypriot authorities found components for mortars and thousands of cases of powder, propellant, and shell casings for 125mm and 130mm guns. The cargo was then unloaded and impounded by Cypriot authorities.

U.S. and Cypriot authorities acted upon the legal guidelines set forth by a series of EU and UN resolutions pertaining to Iran. In February and April 2007, the EU imposed a number of sanctions on Iran in order to implement UN Security Council decisions, including a ban on Iranian transfers of military materiel, arms, and missile technology. Similarly, Resolution 1747, adopted in March 2007, prohibited the transfer of "any arms or related materiel" by Iran, and urged UN member states not to facilitate such efforts. In addition, Resolution 1803, passed in March 2008, calls upon all states, "in accordance with their national legal authorities and legislation and consistent with international law," to inspect IRISL cargoes to and from Iran transiting their airports and seaports," provided there are reasonable grounds to believe that the aircraft or vessel is transporting [prohibited] goods."

Not a New Problem

Problems relating to interdicting destabilizing technology and arms transfers on the high seas, or those proscribed by UN resolutions, are not new. In October 1991, the North Korean freighter Mupo, carrying Scud missiles and related equipment to Syria, returned to North Korea after Egypt denied it transit through the Suez Canal amid concerns that Israel might try to interdict the shipment. The cargo was subsequently delivered to Iran in March 1992 by North Korean freighters Dae Hung Ho and Dae Hung Dan, which were shadowed by U.S. Navy vessels during the transit. (The navy was unable to stop the transfers because they were not illegal under international law.) The shipments are believed to have subsequently been flown to Syria.

In August 1993, the Chinese freighter Yinhe, which was believed to be carrying chemical warfare agent precursors bound for Iran, was forced to dock in Saudi Arabia, but was found not to be carrying any banned items. And in December 2002, a North Korean freighter carrying Scud missiles believed to be for Iraq was stopped and inspected by Spanish warships, but was set free when it turned out that the Scuds were intended for Yemen.

These episodes demonstrate the need to ensure that efforts to interdict destabilizing or proscribed shipments are backed up by reliable intelligence and appropriate legal authorities, and highlight the risks of acting without one or the other.

Iran Arming U.S. Foes

A number of similar incidents in recent years have involved Iranian efforts to transport military materiel and arms by sea, land, and air to allies and surrogates. During the second Palestinian intifada, Iran helped facilitate arms shipments to Gaza through Hizballah and the Popular Front for the Liberation of Palestine to Gaza (by means of floating waterproof containers) by using two civilian vessels, the Santorini, seized by Israel in May 2001, and the Calypso 2. In December 2001, Iran attempted to deliver fifty tons of weapons to the Palestinian Authority aboard the Karine A, whose shipment was seized by the Israeli Navy in the Red Sea.

During the 2006 Hizballah-Israel war, Israeli intelligence claimed that Iran was resupplying the Shiite movement via Turkey. Such claims gained credibility in May 2007, when a train derailed by PKK terrorists in southeastern Turkey was found to be carrying undeclared Iranian rockets and small arms destined for Syria -- probably for transshipment to Hizballah.

More recently, Iran has emerged as a major arms supplier for Hamas in Gaza, as well as for anti-American governments in South America. In January and February 2009, the Israeli Air Force bombed two vehicle convoys reportedly carrying Iranian arms destined for Hamas fighters in Gaza. (There are also reports that the Israeli Navy sunk an Iranian ship carrying arms for Hamas off the coast of Sudan at this time.) Also in January 2009, Turkish customs officials in the port of Mersin discovered a shipment with equipment capable of producing explosives. The shipment, which originated in Iran, had entered Turkey by truck and was destined for Venezuela.

These recent episodes underscore Iran's growing emergence as a supplier of military materiel, equipment, and arms for radical Islamist and anti-American allies and surrogates in the Middle East and beyond. For that reason, it is increasingly important to establish a comprehensive regime to constrain Iran's ability to transfer military materiel and arms to its allies and surrogates by sea, land, and air, especially if Iran were to market its nuclear technology abroad.

Enhancing Leverage over Tehran

These past incidents indicate that intelligence must be timely and reliable to avoid embarrassing incidents that undermine U.S. credibility. They also highlight the gaps in the available policy tools to deal with Iranian arms transfers to its allies and surrogates. To close these gaps, the United States should work with its allies and the international community to:

• encourage the UN sanctions committee to issue a Security Council communique to the UN General Assembly, emphasizing the obligation of all member states, including Iran and Syria, to fully abide by the UN ban on arms transfers;

• work with the EU to expand its current policy banning the sale or transfer to Iran of "all arms and related material, as well as the provision of related assistance, investment and services" to include a ban on the purchase or transfer from Iran of the same;

• work with UN and EU member states to adopt legislation pertaining to Iranian arms and technology transfers, to enable them to fulfill their UN and EU obligations. Encourage regional organizations in South America and South and East Asia to adopt similar resolutions;

• work with the EU and Turkey (the de facto eastern gateway to Europe) to develop an enhanced customs and border security regime to prevent Iranian arms and technology transfers through Turkey;

• engage the private sector to draw attention to the risk of doing business with IRISL, its subsidiaries, and other banned entities. As the U.S. Treasury noted when it designated IRISL: "Countries and firms, including customers, business partners, and maritime insurers doing business with IRISL, may be unwittingly helping the shipping line facilitate Iran's proliferation activities." Indeed, given Iran's history of deceptive financial and trade activity, extra scrutiny should be given to any ship that has recently paid a call to an Iranian port;

• encourage countries to require ports and/or authorities to collect detailed, accurate, and complete data regarding all cargo being shipped to or through their countries (especially from risk-prone jurisdictions like Iran), to conduct rigorous risk assessments, and to proceed with actual inspections as necessary;

• encourage implementation of the World Customs Organization's (WCO) draft Framework of Standards to Secure and Facilitate Global Trade. The WCO represents 174 Customs administrations across the globe (including Iran) that collectively process approximately 98 percent of world trade. Under the proposed framework, a risk management approach would be implemented for all cargo to identify high-risk shipments at the earliest possible time. Participating members would benefit from enhanced security and efficiency, and could benefit from lower insurance premiums.

Policy Implications

Recent events show that even as the Obama administration seeks to engage Tehran, the Islamic Republic has continued to work to undermine U.S. interests and to support anti-American elements around the world, as demonstrated by its ongoing efforts to resupply Hamas, support Hizballah's efforts to destabilize Egypt, and assist Iraqi insurgents. For this reason, the United States needs to better constrain Tehran's ability to arm allies and surrogates hostile to U.S. interests. Doing so would enhance Washington's leverage in possible negotiations with Tehran, contain Iran should such diplomatic efforts fail, and prevent Iran from contributing to the proliferation of nuclear weapons in the Middle East and beyond.

Throwing the Book at Tehran by Michael Jacobson

On April 7, 2009, the U.S. Treasury Department designated as a proliferator Li Fangwei, the commercial manager for the Chinese company Limmt, for providing support for Iran's missile program. Treasury also blacklisted eight aliases of Limmt, which was originally designated in 2006, in addition to six other Iranian entities. The same day, the Manhattan district attorney's office, acting in coordination with Treasury, unsealed a 118-count indictment against Li and his company for attempting to conceal transactions that transited the U.S. financial system. While the Treasury action was hardly surprising -- given the number of Iran-related designations over the past several years -- the role of other law enforcement agencies in the Iran effort is a fairly recent trend, one that the Obama administration should encourage as negotiations with Tehran move forward.

Law Enforcement Actions

In announcing the indictment, Manhattan district attorney (DA) Robert Morgenthau made clear that his office was becoming actively involved in the broader effort against Iran, noting that he would "make every effort to prosecute [Limmt], which is perhaps the largest supplier of weapons of mass destruction to the Iranian government." Morgenthau added that one of the purposes of the action was to "let people know that the Iranians are deadly serious about acquiring materials for long-range missiles and for atom bombs." Like Treasury, Morgenthau emphasized that the Iranians are attempting to acquire this technology through deceptive conduct -- in this case, through Limmt's aggressive use of front companies to hide the blacklisted company's involvement in the transaction.

This was not Morgenthau's first strike against Iran's illicit activities. In January, the Manhattan DA's office was part of a settlement agreement reached with the Justice Department regarding the violation of U.S. sanctions laws by British bank Lloyds TSB. Lloyds acknowledged that from 1995 to 2007, it had falsified information on wire transfers involving sanctioned countries, such as Iran, so transactions could pass through the U.S. financial system unnoticed. Under the agreement, Lloyds admitted responsibility for the criminal conduct and paid $350 million, split evenly between New York county and the federal government.

U.S. federal law enforcement agencies have also been stepping up efforts over the past year. On April 3, Baktash Fattahi, an Iranian national residing in the United States, was indicted for attempting to export restricted military aircraft parts to Iran. Ten others were also charged, including a number of Iranian businessmen operating out of Dubai. The investigation was a team effort involving agents from various agencies, including Immigration and Customs Enforcement, and the Departments of Defense, Commerce, and State.

In March 2009, an Iranian citizen and a Tehran business were charged with violating U.S. sanctions laws for illegally exporting helicopter engines and advanced aerial cameras for military aircraft from the United States. The Iranians worked through companies based in Malaysia, Ireland, and the Netherlands to obtain the needed technology, some of which was delivered to the blacklisted Iran Aircraft Manufacturing Industrial Company. The Iranians once again tried to hide their tracks, explicitly instructing the Dutch company not to inform their U.S. counterpart that the goods were destined for Iran. That same month, a U.S. citizen pleaded guilty to exporting dual-use items to Iran, falsely listing Singapore and Malaysia as the ultimate destination for military and commercial aircraft parts.

A number of law enforcement actions were also taken against Iran in the final months of the Bush administration. In September 2008, eight individuals and eight companies were charged for sending dual-use computer software to Iran. According to the U.S. government, the technology had potential military applications in the construction of improvised explosive devices. Once again, a number of federal agencies were involved in the investigation.

Treasury and Justice also coordinated closely in a December 2008 joint action that targeted the Assa Corporation, a U.S.-based company acting as a front for Bank Melli. In addition to designating Assa for its ties to Bank Melli, the Justice Department also moved to forfeit a building on Fifth Avenue in New York, in which Assa had an ownership stake. The infamous Alavi Foundation also owned a portion of this building, and the organization's president, Farshid Jahedi, was charged with obstructing the investigation into the ties between Alavi and Bank Melli.

Why the Uptick?

Several factors are most likely behind the increase in the number and scale of the law enforcement investigations targeting Iran's illicit activities. The first is undoubtedly related to the growing prioritization of Iran by all arms of the U.S. government. As the Bush administration highlighted the growing threat posed by Iran, all of the relevant government agencies -- including law enforcement entities -- began exploring what they could bring to this effort. A second factor was the appointment of a national export control coordinator at the Justice Department in October 2007. The coordinator, career prosecutor Steven Pelak, has helped raise the profile of export control cases among prosecutors throughout the United States. He has also helped educate these prosecutors on how to bring successful cases in this complicated area. The U.S. attorneys are likely feeling some pressure to act, given that Pelak solicits regular reports on each office's export control cases.

A third factor is the expanded U.S. government authority in this area, courtesy of the October 2007 International Emergency Economic Powers (IEEPA) Enhancement Act. The act increased penalties for violating sanctions, raising the possible civil fines from $50,000 to $250,000 or twice the value of the transaction (whichever is higher), and the criminal penalties from $50,000 to $1 million. IEEPA remains the primary statutory basis for U.S. sanctions regimes, including those targeting Iran. The act also increased the U.S. government's jurisdiction over foreign entities, allowing for civil penalties in cases where a person conspires or causes a violation to occur in the United States.

Limitations of Enforcement Regimes

To this point, the United States has been largely alone in ramping up its enforcement activities against Iran (although Canada's first-ever prosecution earlier this month of an export control violation case, against an Iranian-Canadian who attempted to send sensitive technology to Iran, is a promising exception).

The European Union, whose member states remain major trading partners of Iran, has only a limited ability to monitor sanctions compliance. The EU has oversight jurisdiction over its member states but not individual European companies. The EU also does not have the resources necessary to conduct audits or to bring enforcement actions. As a result, the EU will generally only take action in this area when an obvious violation by a member state is brought to their attention.

Resource constraints and a lack of political will are also affecting individual European countries' efforts to crack down on illicit trade with Iran. For example, Italy has less than fifteen people working in its export control office, and only eight of these are investigators. Given the country's status as one of Iran's most important European trading partners, this represents a glaring deficiency -- one that could be easily remedied. While Germany devotes far more resources to investigating these types of violations, one of its public prosecutors has stated that they have only uncovered "the tip of the iceberg" of the black market activity involving Iran's nuclear program.

The Way Forward

During the campaign, President Obama spoke of the need to employ "bigger carrots and bigger sticks" when dealing with Iran. As the United States begins to reach out to Tehran, however, it may become politically complicated to put additional sanctions in place, which will be deemed contrary to the spirit of engagement. Putting pressure on Iran through enhanced enforcement of existing laws, on the other hand, will not raise the same level of pushback, particularly from our allies.

In addition, although the newly stepped-up U.S. enforcement efforts are a positive step, there are limits to what the United States can accomplish on its own in this area. To make a broader impact, the Obama administration must persuade other key countries involved in trade with Iran to adopt a similarly aggressive approach.

In Major Shift, Apple Builds Its Own Team to Design Chips by Yukari Iwatani and Don Clark

Apple Inc. is building a significant capability to design its own computer chips, a strategy shift that the company hopes will create exclusive features for its gadgets and shield Apple's work from rivals.

The Silicon Valley trend-setter has been hiring people from many different segments of the semiconductor industry, including engineers to create multifunction chips that are used in cellphones to run software and carry out other chores.

Apple could use the internally developed chips to sharply reduce the power consumption of its hit iPhone and iPod touch devices, and possibly add graphics circuitry to help its hardware play realistic game software and high-definition videos, people familiar with its plans say.

In one sign of the new focus, Apple recently hired Raja Koduri, who was formerly the chief technology officer of the graphics products group at chip maker Advanced Micro Devices Inc. Mr. Koduri started at Apple this week, following in the footsteps of Bob Drebin, who had held the same title at AMD and is also now working for Apple. Online job postings from Apple describe dozens of chip-related positions it is trying to fill, some with partial descriptions like "testing the functional correctness of Apple developed silicon."

Besides a desire to beat rivals to market with new features, Apple's shift is also an effort to share fewer details about its technology plans with external chip suppliers, say people familiar with the moves.

An Apple spokesman declined to comment.

The new effort faces plenty of hurdles, and people familiar with Apple's plans don't expect internally designed chips to emerge until next year at the earliest. Still, Apple's aggressive hiring is another sign of how the company's recent success has allowed it to expand while other tech giants have trimmed their work forces in the recession.

Apple's strategy also marks a break from a long-term trend among most big electronics companies to outsource the development of chips and other components to external suppliers.

Last spring, Apple Chief Executive Steve Jobs explained the purchase of Silicon Valley start-up P.A. Semi as a way to acquire expertise and technology to help run increasingly sophisticated software on iPhones and iPods. "You can't just go out and buy the chips off the shelf to do that," said Mr. Jobs in an interview.

Most cellphones are based on chip designs licensed by ARM Holdings PLC to others. For the iPhone, Samsung Electronics Co. supplies an ARM-based microprocessor with custom features developed by Apple, analysts say.

People familiar with Apple's thinking say executives have expressed concern that some information shared with outside vendors could find its way into chips sold to Apple competitors. A Samsung spokeswoman declined comment.

People familiar with the situation say Mr. Jobs told P.A. Semi engineers last April that he wanted to develop chips internally and didn't want knowledge about the technology to leave Apple. Mr. Jobs is on medical leave and was unavailable for comment.

People familiar with Apple's plans expect former P.A. Semi engineers to help create ARM-based chips that could improve the performance and battery life of future iPhones.

Apple's hiring spree in semiconductors started well before the acquisition and has continued through the past few months, according to postings on the networking site LinkedIn. The site contains more than 100 people listing current Apple job titles and past expertise in chips, including veterans of Intel Corp., Samsung and Qualcomm Inc.

Apple's own job postings, some aggregated by the site Indeed.com, provide clues about possible features to come. Two recent postings involve handwriting recognition technology; several others seek expertise in chips for managing displays.

Apple participated in a job fair earlier this month for soon-to-be-unemployed engineers at memory chip company Spansion Inc., which sought bankruptcy protection in March, people familiar with the situation said.