The unexpected decision by the United States to impose sanctions on Armenian firms is a sign that Washington is no longer willing to quietly tolerate deepening Armenian-Iranian ties.
The sanctions prohibit the firms from selling their products in America and from receiving any U.S. government assistance.
The Armenian government has moved quickly to investigate the American claims, stressing at the same time that it has not been implicated by the U.S. State Department. But all indications are that the Armenian government will have to review its warm relationship with Iran in order to repair the diplomatic damage.
"The Americans were never happy with our cooperation with Iran," an Armenian official familiar with foreign affairs told our correspondent this week. "But until recently, they were quite cautious in voicing their objections. They are now following Armenian-Iranian contacts more closely and have already narrowed our freedom of action on that front."
According to former Armenian Foreign Minister Alexander Arzumanian, Yerevan risks spoiling its vital relationship with the world's sole superpower unless it addresses American concerns. In an interview with RFE/RL, Arzumanian said, "The atmosphere of mutual trust [in U.S.-Armenian relations] has been undermined, and that could lead to a revision of some aspects of those relations."
The Bush administration has yet to publicize the names of the Armenian firms that the State Department says transferred sensitive technology and equipment to Iran.
State Department spokesman Richard Boucher said the names eventually will appear in the "Federal Register," the official journal of the U.S. government. He said the items in questions are listed on multilateral export control lists that seek to curb the transfer of longer-range missiles and prevent the spread of chemical, biological, and nuclear weapons.
The Armenian Foreign Ministry said later that it has started "an active dialogue" with Washington to try to "find solutions to the resulting problems." It did not deny the U.S. allegations. For his part, Armenian President Robert Kocharian told reporters that if the U.S. charges prove to be true, the authorities in Yerevan "should figure out why that happened."
The nature of the activities for which the Armenian companies are facing sanctions is also unclear. Of all the products made in Armenia, electronic items seem the most likely to attract the attention of U.S. nonproliferation experts. Armenia used to be an important part of the Soviet high-technology defense industry, supplying microchips, semiconductors, computer software, and other electronic components for missile guidance systems.
About two dozen Armenian factories were involved in the sector. All of them now are either partly or fully owned by the state. For this reason, some observers believe it would have been difficult for these firms to have sold sensitive products to Iran without the government's knowledge. Arzumanian agrees: "There is no way any Armenian company engaged in dangerous deals with Iran and our authorities were unaware of that. I rule that out."
So, too, it appears, do the Americans, who imposed the sanctions without warning Armenia beforehand, although Boucher made it clear the Armenian government has been "very helpful" in U.S. efforts to prevent Iran from developing weapons of mass destruction. The move comes amid toughening U.S. policy toward Tehran following President George W. Bush's charge that Iran is part of a global "axis of evil."
Several days before the sanctions announcement, the U.S. ambassador to Armenia, John Ordway, issued what now looks like a veiled warning that Yerevan has gone too far in cementing its links with the Islamic Republic.
In an interview with RFE/RL, Ordway said: "Maintaining solid trade and good neighborly border relations with Iran is critically important for Armenia. We have nothing against that. Our concern has to do with something else. And it's no secret because we've been very, very clear about Iran's desire to acquire weapons of mass destruction and its support for terrorism. And it seems to me that Armenia, as a country which is so close to Iran, should have the very same concerns. So we certainly look to Armenia for support in our efforts to deny Iran the means to acquire weapons of mass destruction, as well as to speak out against Iran's support for terrorism."
Ordway's comments were significant in that a U.S. official was publicly voicing reservations about Armenian-Iranian relations. Ordway was the number-two figure in the U.S. Embassy in Moscow before his posting to Armenia last year and must have closely watched Russia's arms exports to Iran, one of the thorniest issues in the U.S.-Russian relationship.
Some state-controlled Russian entities have previously been subjected to similar U.S. sanctions for allegedly assisting in Iran's nuclear program and for selling weapons to Tehran. That, however, has not deterred Moscow from signing lucrative deals with the Iranians.
Tiny Armenia, by contrast, is not in a position to ignore U.S. worries, and not just because it is a major per capita recipient of American aid. Armenian officials have indicated that global geopolitical changes caused by the 11 September terrorist attacks necessitate a pro-Western tilt in their foreign policy.
In the past, Armenia has succeeded in persuading Washington that its bilateral projects with Iran -- notably the planned construction of a gas pipeline -- do not contradict U.S. interests in the region.
Arzumanian, who headed the Armenian Foreign Ministry from 1996 to 1998, said: "The Americans always presented their concerns regarding Armenia's relations with Iran. But our mutual trust allowed us to first talk about those concerns and then to take steps to dispel them and make sure that there are no doubts that Armenia does not cooperate with Iran to the detriment of any other friendly state."
It may still be possible to carry on with that policy. But that will likely require the Armenian leadership to exercise greater caution toward Iran by tightening export controls and possibly shelving planned military cooperation.