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Credit: Reuters/Khaled al-Hariri By Louis Charbonneau UNITED NATIONS | Thu May 17, 2012 1:10am EDT 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 stated. "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 that 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." The kinds of arms that Iran was attempting to send to Syria before the shipments were seized by Turkish authorities included assault rifles, machine guns, explosives, detonators, 60mm and 120mm mortal shells and other items, the panel said. The most recent incident described in the report was an arms shipment discovered in a truck that Turkey seized on its border with Syria in February. Turkey announced last year that it was imposing an arms embargo on Syria. 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. CIRCUMVENT SANCTIONS 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." 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 nations should be on alert for illicit attempts to acquire such 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 said Iran has been trying to circumvent U.N. and other unilateral sanctions on financial firms by using correspondence banking relationships with institutions not under sanctions, and appears to be relying on Iranians abroad to carry out such transfers. Transfer traffic has risen sharply, it said. The panel said it had received information about a small firm set up abroad by an Iranian national that was involved in funds transfers to various recipients worldwide. The firm, which the report did not identify, had processed transfers amounting to some $11 billion over an 18-month period, it said. The report discussed at length the 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. The panel said that IRISL, as Reuters has previously reported, has set up what appear to be front companies intended to operate vessels and obscure its ownership. Currently IRISL's more than 130 ships are owned by some 75 different companies, which the panel said was unusual for a major shipping line. IRISL and its related companies have also been changing the names of their ships to get the word "Iran" out of them. Before the council passed resolution 1803 in March 2008, which warned all U.N. member states to be "vigilant" about IRISL, most of its vessels' names contained the word "Iran." Now fewer than 10 do, the panel said. Since March 2008, IRISL and its related companies have carried out more than 220 changes in ownership of vessels, the report said. Turning to Iran's ballistic missile program, the report said it "continues to develop with additional launches, which are prohibited under resolution 1929," adopted in June 2010. "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 Mohammad Zargham and Will Dunham) World United Nations Syria Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (6) 1066ad wrote: Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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