DOE DELEGATION DISCUSSES EXPORT CONTROLS WITH

S E C R E T SECTION 01 OF 04 TEL AVIV 000544

SIPDIS

DOE FOR ADAM SCHEINMAN, RICHARD GOOREVICH, AND TODD PERRY

E.O. 12958: DECL: 01/24/2015
TAGS: KNNP MNUC PARM IS ECONOMY AND FINANCE ENVIRONMENT SCIENCE AND TECHNOLOGY ISRAEL RELATIONS
SUBJECT: DOE DELEGATION DISCUSSES EXPORT CONTROLS WITH
ISRAELI OFFICIALS

REF: 04 UNVIE VIENNA 0699

Classified By: Deputy Chief of Mission Gene A. Cretz; Reasons: 1.4 (B)
and (D).


1. (C) SUMMARY: Israeli officials briefed a visiting DOE
delegation on nuclear export-control measures during meetings
in Tel Aviv on January 18-20. In recognition of their
adherence to the NSG Guidelines and promulgation of new
export control legislation, the Israelis requested U.S. help
in obtaining NSG denials or other sources of information.
They also queried the U.S. delegation on the possibility of
U.S. exports of low-level health and safety equipment for use
at the Soreq Nuclear Research Center. Officials from the
Israel Atomic Energy Commission (IAEC) briefed the U.S. team
on lessons learned from the A.Q. Khan network, proliferation
threats relating to fuel cycle facilities, and ways in which
export controls could be used to improve the efficiency of
safeguards. The Israelis provided a briefing on their new
export-control regulations and requested assistance in
arranging visits by Israeli export control agencies to the
United States for consultations or training. Following the
meeting, the Israelis presented the U.S. delegation with a
written summary of discussions (text in paragraph 15). END
SUMMARY.

--------------
NSG Topics
--------------


2. (S) The DOE delegation briefed the Israelis on new
challenges facing the Nuclear Suppliers Group (NSG),recent
NSG achievements, and the current NSG agenda. In a
subsequent restricted meeting, IAEC Deputy Director for
Policy Eli Levite said that Israel "needs help" from the USG
and NSG to make its export-control order a success. He
maintained that Israel requires access to denials or other
information sources to implement its commitments as an
adherent to the Australia Group and NSG. He urged the USG to
assist Israel in its efforts to establish some sort of formal
status as "adherents" in the NSG; such a step would help
Israel demonstrate its non-proliferation credentials to the
international community, he said. The DOE group replied that
other parts of the USG would be better able to respond to the
request for information sharing. Levite pressed for a point
of contact in Washington; the DOE delegation promised to
relay this request to the State Department.

--------------
Israeli Inquiry About Nuclear Safety Material
--------------


3. (S) Levite urged the USG to reconsider its position on the
export of low-level health and safety equipment to be used at
the Soreq Nuclear Research Center. The DOE delegation
responded that export of even EAR99-type items to nuclear
facilities in non-NPT countries raises serious difficulties,
but reminded Levite that such applications are reviewed on a
case-by-case basis. When the DOE group asked whether the
Israelis had specific items or projects in mind, the Israelis
agreed to pass a list through AmEmbassy Tel Aviv (list faxed
to DOE on January 25).

-------------- --
The A.Q. Khan Network: Israel's Lessons Learned
-------------- --


4. (C) Liran Renert of the IAEC's policy staff briefed the
group on implications drawn from the A.Q. Khan network. He
said the network's activities had loosened long-standing
proliferation taboos, reduced the time needed to acquire
nuclear weapons, negated the requirement for proliferating
states to have their own industrial capability, and increased
the difficulty in intercepting proliferation activities. As
a result, Renert suggested that the international community
develop better intelligence gathering and information
sharing, revise export control regimes, improve tracking of
financial transactions, involve other countries and
government agencies in the non-proliferation effort, tag key
elements during the manufacturing process, expand PSI, and
scrutinize free trade areas and flags of convenience.

--------------
Fuel Cycle Proliferation Risks
--------------


5. (C) After an update by the U.S. delegation on Iranian
efforts to circumvent IAEA controls, IAEC Non-proliferation
Director Gil Reich and Director of Arms Control Merav Zafary
gave presentations on uranium conversion facility (UCF)
proliferation risks and Israeli thinking with regard to
El-Baradei's nuclear fuel cycle task force. Zafary said
Israel's preference is for an international agreement to
offer states that forego further deployment of national fuel
cycle facilities assistance with building light-water
reactors and assured fuel leasing. She added that Israel
would like the IAEA to extend and expand the June moratorium
on new enrichment initiatives in additional states, work on
assuring an adequate fuel supply, and give further thought to
safeguarding spent fuel. She reiterated that Israel supports
President Bush's position on the issue, but also said that
there is "some value" in points raised by France.


6. (C) Reich said the key to limiting proliferation risks is
controlling access to feed material. He noted that uranium
oxide (U3O8) is easily replaceable and therefore unsuitable
for strict controls. Instead, he recommended that the IAEA
focus on enriched uranium oxide (UO2 and UO3) as well as
uranium fluoride (UF4 and UF6).

--------------
Using Export Controls to Improve Safeguards
--------------


7. (C) IAEC Director for International Affairs Chen Zak
suggested a number of areas in which export controls could
improve the efficiency of safeguards. She proposed that
adherence to the Additional Protocol be adopted as a
condition for countries wishing to export any item on the
trigger list and annex II of IAEA information circular
(INFCIRC) 540. She outlined possible steps to tighten export
guidelines, including ensuring that importers are signatories
to the NPT or a nuclear-weapons-free zone, are in good
standing with the IAEA's Board of Governors (i.e., open to
monitoring and not under BOG review or in a state of breach
or non-compliance),and have effective export controls based
on UNSCR 1540 guidelines.


8. (C) Zak also discussed possible limitations on end users.
For example, states could agree that they would not allow
exports unless the end users agreed that any outstanding
issue before the BOG would result in an immediate freeze on
the use of the imported materials; the end users could also
agree to continued safeguards in the case of withdrawal from
the NPT. Zak raised the possibility of granting the IAEA
observer status at NSG meetings, as well as making NSG
denials and approvals available to the IAEA. She urged that
the IAEA provide assistance to states in implementing and
enforcing UNSCR 1540.

--------------
Israeli Report on UNSCR 1540
--------------


9. (C) Anna Getmansky of the IAEC outlined Israel's recent
submission to the UNSC on resolution 1540. She reported that
Israel has implemented its new export-control order,
supported the IAEA guidance on the Export and Import of
Radioactive Sources, ratified the Convention on the Physical
Protection of Nuclear Material, contributed to the IAEA
Nuclear Security Fund, endorsed the IAEA Code of Conduct on
the Safety and Security of Materials, supported U.S.
initiatives such as PSI and GTRI, and increased participation
at international conferences focused on non-proliferation.

--------------
New Israeli Export-Control Order
--------------


10. (C) Ministry of Industry, Trade, and Labor representative
Ohad Ornstein and MFA Deputy Legal Adviser Keren Ben-Ami
briefed the DOE group on Israel's new export-control
legislation. Ben-Ami explained that the export-control
order, which has been in effect since July 2004, covers
chemical, biological, and nuclear material in Israel and the
Palestinian areas. MFA Deputy Director for Security Alon Bar
noted that missile-related goods are not included, and are
subject to Ministry of Defense controls.


11. (C) Ben-Ami said that the order makes it illegal to
export any (even non-listed) items if the supplier knows that
the material is intended for use in a WMD program. Exporters
must apply for a license with the Ministry of Industry,
Trade, and Labor, which sends copies of the applications to
the Ministry of Defense and MFA. An interagency group
advises the exporter of a decision within 20 days; exporters
have 14 days to appeal decisions.


12. (C) Ben-Ami described an exception to the licensing rule
for items on the list that meet four criteria: 1) the end
user is a medical facility or school of higher education; 2)
the items contain no nuclear material; 3) the purpose of the
export is for diagnostic or lab work; and 4) the end user is
located in an Australia Group state. She noted that the GOI
is not subject to the export-control order, but GOI-owned
companies are. According to Ben-Ami, exporters with a
license must report to the GOI once a year (the validity of
the license),while exporters of exempted items must report
every six months. She said that violators of the order are
liable for administrative (license suspension) and criminal
(imprisonment and/or fines of up to three times of the value
of the exported goods) sanctions.


13. (C) Ornstein admitted that the GOI has yet to receive a
single application for an export license and is still "in the
learning stages." He said the GOI is experiencing
difficulties educating exporters, codifying the various lists
of controlled items, and reaching out to academia. Rafael
Harpaz, the MFA's export control coordinator, called the
order "just the beginning" and stressed its political
importance, maintaining that it will benefit Israeli efforts
to increase participation in international fora.


14. (C) The DOE team presented a number of case studies to
illustrate how technical agencies can support the export
control process and an introduction to Commodity
Identification Training (CIT). Officials from Israeli
customs said that their inspectors are "starting from zero"
and need basic training on identifying suspect shipments for
closer scrutiny. IAEC indicated their readiness to receive
NNSA training to assist Israeli customs in this way. Harpaz
noted that the Israeli Embassy in Washington will soon
request assistance in arranging a visit by GOI export-control
personnel to U.S. agencies, including DOE, DHS, and DOC.
Harpaz also asked whether a visit to a customs port could be
arranged so that Israel can see "how it's done." Itschak
Lederman, the senior director for CTBT affairs at the IAEC,
said that recent discussions with DOE on the Megaports
initiative had included training for Israeli customs officers
in Washington State. The DOE team agreed to help make the
Israeli trip to the U.S. a success, and to confer with
Megaports on how customs training efforts might be combined.

--------------
Israeli Summary of Discussion Paper
--------------


15. (SBU) Text of Israeli paper titled "IAEC-DOE Nuclear
Export Control Dialogue, January 19-120, 2005, Summary of
Discussions:"

The third Israel-U.S. technical exchange on nuclear export
controls took place in Israel on January 19-20, 2005. This
meeting was a part of the ongoing dialogue on issues of
mutual interest conducted under the Letter of Intent (LOI)
between the Israel Atomic Energy Commission (IAEC) and the
U.S. Department of Energy (DOE). The meeting was led by the
IAEC and the DOE personnel, with the participation of the
representatives of the Israeli Ministry of Trade, Industry
and Labor, the Ministry of Defense, the Ministry of Foreign
Affairs and the Customs (sic).

The meeting took place after the entry into force of the
Israeli Export Control Order pertaining to nuclear, chemical
and biological items. It focused on the implementation of
nuclear export controls, and specifically on the issues of
license review practices, compliance by industry and
scientific institutes and commodity identification training
to aid enforcement.

During the meeting the sides have exchanged views on
international initiatives and developments in the area of
export controls.

The sides have agreed on the following future steps:

-- The IAEC-DOE nuclear export control meetings will be held
on an annual basis. The IAEC, on behalf of all the relevant
authorities in Israel, expressed Israel's appreciation for
the export control dialogue with the DOE.

-- The IAEC and the DOE will coordinate the public affairs
aspects. The sides have agreed that the attached press
release would be published on the IAEC's website after the
visit. (Embassy note: press release in paragraph 16. End
note).

-- The DOE will provide further information about the
training for the Israeli customs personnel, including the
possibility to coordinate it with the DOE proposal under the
Megaports project.
-- To facilitate the effective implementation of the Israeli
export control legislation, the IAEC requested the DOE's
assistance in establishing channels for exchange of
information on export denials and entities of concern.

-- The IAEC and the DOE will continue their dialogue on
efforts to update the Nuclear Suppliers Group and related
measures to strengthen international nuclear export
controls.

End text of Israeli paper.


16. (U) Begin text of Israeli release posted on the IAEC
website:

Israel and the US continue cooperation on nuclear export
controls.

The third Israel-U.S. technical exchange on nuclear export
controls took place in Israel on January 19-20, 2005. This
meeting was a part of the ongoing dialogue on issues of
mutual interest conducted under the Letter of Intent (LOI)
between the Israel Atomic Energy Commission (IAEC) and the US
Department of Energy (DOE).

The last meeting focused on the implementation of nuclear
export controls, and specifically on the issues of license
review practices, compliance by industry and scientific
institutes, and commodity identification training to aid
enforcement.

In July 2004 Israel has put in place an Export Control Order
pertaining to nuclear, chemical and biological items.

The IAEC and the DOE have agreed to continue their
cooperation in order to promote the implementation of nuclear
export controls and to assist in developing the necessary
implementation and enforcement tools.

During the meeting the sides have also exchanged views on
international initiatives and developments in the area of
export controls.

End text from website.


17. (U) The U.S. delegation consisted of Adam Scheinman,
Richard Goorevich, and Todd Perry from the Department of
Energy's National Nuclear Security Administration, Jeffrey
Bedell from Los Alamos National Laboratory, Basil Picologlou
from Argonne National Laboratory, and an Embassy notetaker.
The Israeli side was led by the IAEC's Director for
Non-proliferation Gil Reich, and included numerous officials
from the IAEC, National Security Council, Ministry of Foreign
Affairs, Ministry of Defense, customs service, Soreq National
Research Center, and Ministry of Industry, Trade, and Labor.
Scheinman and Goorevich also met separately with IAEC Deputy
Director for Policy Eli Levite on January 20.


18. (U) This cable was cleared by the DOE delegation.

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