Over the past several years, U.S. officials and other observers have expressed concerns about Iran’s increasing activities in Latin America, particularly under the government of President Mahmoud Ahmadinejad. For example, in January 2009 congressional testimony, Secretary of Defense Robert Gates maintained that he was concerned about the level of “subversive activity that the Iranians are carrying on in a number of places in Latin America, particularly South America and Central America.”2
There has been some contention, however, over the level and significance of Iran’s linkages with the region. One view emphasizes that Iran’s relations with several Latin American leaders who have employed strong anti-U.S. rhetoric and its past support for terrorist activities in the region are reasons why its presence should be considered a potential destabilizing threat to the region.
Another school of thought emphasizes that Iran’s domestic politics and strategic orientation toward the Middle East and Persian Gulf region will preclude the country from sustaining a focus on Latin America. Adherents of this view assert that Iran’s promised aid and investment to Latin America have not materialized. Some observers holding both of these views contend that while Iran’s activities in Latin America do not currently constitute a major threat to U.S. national security, there is enough to be concerned about to keep a watchful eye on developments in case it becomes a more serious threat. On October 27, 2009, the House Foreign Affairs Subcommittee on the Western Hemisphere held a hearing on “Iran in the Western Hemisphere” that reflected these range of views.
Iran’s ties to the region precede its recent increased attention.
Venezuela’s relations with Iran have been longstanding because they were both founding members of OPEC in 1960. In the aftermath of the 1979 Iranian revolution, Iran fostered closer relations with Cuba and with Nicaragua (after the 1979 Sandinista revolution). Under the government of President Mohammed Khatami (1997-2005), Iran made efforts to increase its trade with Latin America, particularly Brazil, and there were also efforts to increase cooperation with Venezuela. Venezuelan President Hugo Chávez first visited Iran in 2001 and 2003 which ultimately led to a joint venture agreement to produce tractors in Venezuela.3
Not until President Ahmadinejad’s rule began in 2005, however, did Iran aggressively work to increase its diplomatic and economic linkages with Latin American countries.
A major rationale for this increased focus on Latin America appears to be Iran’s efforts to overcome its international isolation. For some observers, a key reason for Ahmadinejad’s increased interest in the region, especially with countries such as Venezuela, has been to develop leverage against the United States in its own neighborhood, rather than any real economic interest in Latin America.4
The rise of Venezuelan leader Hugo Chávez, a radical populist who has often employed strong anti-U.S. rhetoric and advocated an anti-U.S. agenda, also has been a key factor in the increased ties between Iran and Latin America. In February 2008 testimony before the Senate Select Intelligence Committee, then Director of National Intelligence (DNI) Michael McConnell maintained that most cooperation between Iran and Venezuela has been on the economic and energy fronts, but that military cooperation is growing, and the two nations have discussed cooperation on nuclear energy.5
Iranian President Ahmadinejad has visited Caracas on several occasions since 2006, most recently in November 2009, and President Chávez has visited Iran several times, most recently in September 2009. The personal relationship between the two leaders has driven the strengthening of bilateral ties. The two nations have signed a variety of agreements in agriculture, petrochemicals, oil exploration in the Orinoco region of Venezuela, and the manufacturing of automobiles, bicycles, and tractors. During an April 2009 trip to Tehran, Chávez and Ahmadinejad inaugurated a new development bank for economic projects in both countries, with each country reportedly providing $100 million in initial capital.6
Weekly flights between the two countries began in 2007; the State Department has expressed concern about these flights in its annual terrorism report, maintaining that the flights, which connect Iran and Syria with Caracas, are only subject to cursory immigration and customs controls.
In September 2009, Venezuela and Iran signed three energy sector memorandums of understanding during President Hugo Chávez’s visit to Tehran. As reported in the press, the first of these agreements would provide for Venezuela’s state-owned oil company, Petroleos de Venezuela S.A. (PdVSA), to acquire a 10% stake in Iran’s South Pars gas project valued at some $760 million. The second agreement would provide for Iran’s state oil company, Petropars, to invest $760 million in developing two oil fields in Venezuela.
Under the third agreement, in the case of U.N. or U.S. sanctions against Iran’s gasoline imports, Venezuela would supply Iran with gasoline (reportedly some 20,000 barrels per day) with the money earned from the gasoline sales to be deposited to a fund that would be set up by Iran to finance Venezuelan purchases of Iranian machinery and technology.7
While such gasoline sales to Iran would not currently subject PdVSA to U.S. sanctions under the Iran Sanctions Act (ISA), pending legislation that would amend the ISA (such as House-passed H.R. 2194 and S. 908, the Iran Refined Petroleum Sanctions Act) would change that. A number of observers, however, have raised questions about whether Venezuela would have the ability to provide gasoline to Iran since it needs to import gasoline to help meet its own domestic demand.
Venezuela reportedly has been facing significant refining problems because of mismanagement and a drop in foreign investment.8 Moreover, while Venezuela potentially could use a third-party gasoline supplier close to the Persian Gulf to purchase and resell the gasoline to Iran, finding a third party could prove difficult if U.S. sanctions are imposed against suppliers of gasoline.9
Venezuelan comments about support for Iran’s nuclear program and about potential Iranian support for the development of nuclear energy in Venezuela have raised concerns among U.S. officials and other observers. President Chávez repeatedly has expressed support for Iran’s development of nuclear energy for peaceful purposes, including most recently during a September 2009 visit to Iran.10 President Chávez also announced during the visit that Venezuela is working on a preliminary plan for the construction of a “nuclear village” in Venezuela with Iranian assistance so that “the Venezuelan people can count in the future on this marvelous resource for peaceful purposes.”11 The transfer of Iranian nuclear technology from Iran would be a violation of U.N. Security Council Resolutions – 1737 (2006), 1747 ( 2007), and 1803 (2008) – that imposed restrictions on Iran’s nuclear technology transfers.
In late September 2009, comments by Venezuelan officials offered conflicting information about Iran’s support for Venezuela’s search for uranium deposits. Venezuelan Minister of Basic Industry and Mining Rodolfo Sanz said that Iran was assisting Venezuela in detecting uranium reserves in the west and southwest of Venezuela.12
Subsequently, however, Venezuela’s Minister of Science, Technology, and Intermediary Industry Jesse Chacon denied that Iran was helping Venezuela seek uranium, while Venezuela’s Minister of Energy Rafael Ramirez maintained that Venezuela has yet to develop a plan to explore or exploit its uranium deposits.13
To date, the United States has imposed sanctions on two companies in Venezuela because of connections to Iran’s proliferation activities. In August 2008, the State Department imposed sanctions on the Venezuelan Military Industries Company (CAVIM) pursuant to the Iran, North Korea, and Syria Nonproliferation Act (P.L. 109-353) for allegedly violating a ban on technology that could assist Iran in the development of weapons systems.14
The sanctions prohibit any U.S. government procurement or assistance to the company. In October 2008, the U.S. Treasury Department imposed sanctions on an Iranian-owned bank based in Caracas, the Banco Internacional de Desarollo, C.A., under Executive Order 13382 that allows the President to block the assets of proliferators of weapons of mass destruction and their supporters. The bank is linked to the Export Development Bank of Iran (EDBI), which the Treasury Department asserts has provided or attempted to provide services to Iran’s Ministry of Defense and Armed Forces Logistics.15
Venezuela also has played a key role in the development of Iran’s expanding relations with the region. DNI Dennis Blair maintained in February 2009 congressional testimony that Venezuela “is serving as a bridge to help Iran build relations with other Latin American countries.”16 In recent years, Iran’s relations have grown with Bolivia under President Evo Morales, with Ecuador under President Rafael Correa, and with Nicaragua under President Daniel Ortega. According to the State Department’s Country Reports on Terrorism (issued in April 2009), President Morales announced that Iran would help develop Bolivia’s petrochemical, cement fabrication, and agricultural sectors. While Iran has promised significant assistance and investment to these countries, observers maintain that there has been no evidence that such promises have materialized.17 In Nicaragua for example, Iran has not followed through with its promise to finance the construction of a deep-water port. The only Iranian project that reportedly has gone forward in Nicaragua is the construction of a hospital that began in September 2009.18 Likewise in Bolivia and Ecuador, there is little evidence showing that Iran has followed up with its promises of investment.
Nevertheless, on the diplomatic front, Iran has opened embassies over the past several years in Bolivia, Ecuador, and Nicaragua, as well as in Colombia, Chile, and Uruguay. This is in addition to having existing embassies in Cuba, Argentina, Brazil, Mexico, and Venezuela.19 Reports that Iran was building a large embassy in Managua (which even Secretary of State Hillary Clinton noted in public remarks) turned out to be erroneous.20
As noted above, President Ahmadinejad has visited Venezuela several times, and has also visited Bolivia, Brazil, Nicaragua, and Cuba. In early May 2009, a scheduled first trip by Ahmadinejad to Brazil was unexpectedly postponed until after Iran’s election in June. There had been some protests in Brazil against Ahmadinejad’s visit, but the trip ultimately took place in November 2009. Brazilian President Lula da Silva maintains that the West should not isolate Iran. On the same trip, the Iranian President once again visited Bolivia and Venezuela.21
In 2007, then Assistant Secretary of State for Western Hemisphere Affairs Tom Shannon said that one of the concerns about Iran’s increasing interest in Latin America is that Iran is a major supporter of the radical Lebanese terrorist group Hezbollah.
According to Shannon, “What worries us is Iran’s history of activities in the region and especially its links to Hezbollah and the terrorist attack that took place in Buenos Aires [in 1994].”22
In March 2009 congressional testimony, Admiral James G. Stavridis, then commander of the U.S. Southern Command (Southcom), also asserted that the main concern about Iran’s increased activity in Latin America is its links to Hezbollah. He maintained that there was Hezbollah activity throughout South America, particularly the tri-border area of Argentina, Brazil, and Paraguay as well as parts of Brazil and the Caribbean Basin.23
This article is an edited portion of a longer January 25, 2010 CRS report, Latin America: Terrorism Issues (PDF) prepared by Mark P. Sullivan, Specialist in Latin American Affairs for the Congressional Research Service (CRS).
2 “Senate Armed Services Committee Holds Hearing on Challenges Facing the Defense Department,” CQ Congressional Transcripts, January 27, 2009.
3 Farideh Farhi “Iran in Latin America: Threat or Axis of Annoyance?,” paper presented at conference of the Woodrow Wilson International Center for Scholars, Washington D.C. July 10, 2008; Kavon “Hak” Hakimzadeh, “Iran & Venezuela: The Axis of Annoyance,” Military Review, May 1, 2009.
4 Farideh Farhi, op. cit.
5 J. Michael McConnell, Director of National Intelligence, “Annual Threat Assessment of the Director of National Intelligence for the Senate Select Committee on Intelligence,” February 5, 2008, p. 36.
6 Parisa Hafezi, “Iran and Venezuela Open Joint Bank to Boost Ties,” Reuters News, April 3, 2009.
7 “Venezuela Pledges to Help Iran with Investment, Gasoline Supplies,” The Oil Daily, September 10, 2009.
8 “Iran Sanctions (Special Series), Part 3, Preparing for the Worst,” Stratfor, September 25, 2009; “Venezuelan Oil Expert Questions Viability of Chávez Energy Accords,” BBC Monitoring Americas, September 14, 2009.
9 “Iran, Venezuela: Testing the Mettle of an Alliance,” Stratfor, September 9, 2009.
10 “Visiting Chávez Backs Iran Nuclear Programme,” Tehran Press TV Online, September 5, 2009.
11 “Iran Will Not Back Down on Nuclear Energy: Hugo Chávez” Agence France Presse, September 4, 2009.
12 See the following press reports: “Iran Helps Venezuela Find Uranium Deposits,” BBC Monitoring Caucasus, September 26, 2009; and “Iran Helps Venezuela Find Uranium Deposits,” Tehran Press TV Online, September 26, 2009.
13 “Venezuela Denies Iran is Helping It,” New York Times, September 27, 2009; and Fabian Cambero, “Interview: Venezuela Says No Plans Yet on Exploring Uranium,” Reuters, September 27, 2009.
14 Although the sanction became effective in August 2008, it was not published in the Federal Register until October 2008. See: Federal Register, pp. 63226-63227, October 23, 2008.
15 U.S. Department of the Treasury, Press Release, “Export Development Bank of Iran Designated as a Proliferator,” October 22, 2008.
16 Dennis C. Blair, Director of National Intelligence, “Annual Threat Assessment of the Intelligence Community for the Senate Select Committee on Intelligence,” February 12, 2009.
17 For example, see: Kavon “Hak” Hakimzadeh, “Iran & Venezuela: The Axis of Annoyance,” Military Review, May 1, 2009; and Anne-Marie O’Connor and Mary Beth Sheridan, “Iran’s Invisible Nicaragua Embassy; Feared Stronghold Never Materialized,” Washington Post, July 13, 2009.
18 Steve Stecklow and Farnaz Fassihi, “Iran’s Global Foray Has Mixed Results,” Wall Street Journal, September 28, 2009.
19 Anne-Marie O’Connor and Mary Beth Sheridan, “Iran’s Invisible Nicaragua Embassy; Feared Stronghold Never Materialized,” Washington Post, July 13, 2009.
20 Ibid; and Sylvie Lanteaume, “Iran’s Hand in Latin America Not as U.S. Feared,” Agence France Presse, July 14, 2009.
21 Juan Forero, “Ahmadinejad Boosts Latin American Ties,” Washington Post, November 28, 2009.
22 Andres Oppenheimer, “Beware Iran in Latin America,” Miami Herald, September 30, 2007.
23 “Hearing of the Senate Armed Services Committee; Subject: United States Southern Command, United States Northern Command, United States Africa Command and United States Transportation Command,” Federal News Service, March 17, 2009.