HOUSE FOREIGN AFFAIRS SUBCOMMITTEE ON EUROPE AND EURASIA HEARING
Congressional Documents and Publications
December 5, 2012
“Iranian Influence in the South Caucasus and the Surrounding Region.”
Testimony by Ariel Cohen, Senior Research Fellow, The Kathryn and
Shelby Cullom Davis Institute for International Studies, The Heritage
Foundation
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. n1 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. n2 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”. n3
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. n4
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. n5
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.” n6
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.
n7
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. n8 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. n9
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. n10
Around the region, the U.S. needs to:
. Expand anti-terrorism and drug trafficking cooperation between
the U.S. and the three South Caucasus states, neutralizing Iranian
subversive activities in the region;
. Focus intelligence community efforts on collecting and neutralizing
Iranian sanction-busting activities in financial and technology
transfer sectors;
. 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;
. 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; n11
. 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.
n1 Inessa Baban and Zaur Shiriyev, “The U.S. South Caucasus Strategy
and Azerbaijan,” Turkish Policy Quarterly, Vol. 9 No. 2, pp. 94-95,
(accessed
December 2, 2012).
n2 Kevjn Lim, “Iran’s Secret Weapon,” The National Interest,
(accessed December 2, 2012).
n3 Sarah Akrami and Saeed Ghasseminejad, “The terrorist organization
behind the power of the mullahs”, Jerusalem Post, May 22, 2012,
terrorist organization behind the power of the mullahs (accessed
December 3, 2012)
n4 Justin Vela, “Iran May Look North to
Skirt US Sanctions,” Hetq, November 25, 2012,
(accessed December 2, 2012).
n5 “Shareholders to intervene in Bank Mellat v HM Treasury Iran
sanctions Supreme Court challenge,” Global Banking and Finance Review,
,
(accessed December, 2, 2012).
n6 Vela, “Iran May Look North to Skirt US Sanctions”.
n7 Joby Warrick, “In Iran, Drug Trafficking Soars as Sanctions Take
Bigger Bite,” The Washington Post, November 1, 2012 (accessed December
2, 2012).
n8 T. Jafarov, “Iran to Consider Determination of
Iranian Part of Caspian Sea,” Trend, November 19, 2012,
, (accessed December
2, 2012)
n9 Ariel Cohen, “Iran’s Claims Over Caspian Sea
Resources Threaten Energy Security,” Heritage
Foundation Backgrounder No. 1582, September 5, 2002,
n10 Stephen P. Blank, “US Should Work to Strengthen
Relations with Azerbaijan,” The Hill, November 2, 2012,
(accessed December 3, 2012).
n11 Baban and Shiriyev, “The U.S. South Caucasus Strategy and
Azerbaijan,” pp. 103-104.
Read this original document at:
http://www.turkishpolicy.com/dosyalar/files/93-103.pdf
http://nationalinterest.org/commentary/irans-secret-weapon-7313?page=1
http://www.jpost.com/LandedPages/PrintArticle.aspx?id=271045The
http://hetq.am/eng/articles/20897/iran-may-look-north-to-skirt-us-sanctions.html
http://www.globalbankingandfinance.com/Investing/Shareholders-to-intervene-in-Bank-Mellat-v-HM-Treasury-Iran-sanctions-Supreme-Court-challenge.html
http://en.trend.az/regions/iran/2089495.html
http://www.heritage.org/research/reports/2002/09/irans-claim-over-caspian-sea-resources-threaten-energy-security.
http://thehill.com/blogs/congress-blog/foreign-policy/265427-us-should-work-to-strengthen-relations-with-azerbaijan
http://foreignaffairs.house.gov/112/HHRG-112-FA14-WState-CohenA-20121205.pdf