Discussions of Agreements for the Dalat Reactor

1. (SBU) Summary: On March 13-15, 2006, a DOE-DOS team met
with Vice Minister of Science and Technology Tran Quoc Thang
and other Government of Vietnam (GVN) officials in Hanoi to
discuss the Vietnam's participation in the Russian Research
Reactor Fuel Return (RRRFR) Initiative. The USG delegation
reiterated its offer to: a) provide technical assistance to
license the Dalat research reactor as a low enriched uranium
(LEU) reactor; b) supply an amount of replacement LEU fuel
in an amount equivalent to the 36 fresh highly enriched
uranium (HEU) fuel assemblies currently located at the
reactor site; and c) assist the GVN to repatriate the
Russian-origin spent fuel to the Russian Federation at no
cost to Vietnam. The two sides agreed that negotiations of
the draft Government-to-Government Agreement (GTGA) and
draft Implementing Agreement (IA) should proceed in parallel
to the conversion program work and that the USG will re-
transmit the text of the GTGA and IA officially to the
Ministry of Foreign Affairs. There is some time pressure
with regards to completing the fuel conversion in the
reactor by September 2006. End Summary.



2. (SBU) On March 13-15, 2006, a USG team comprised of
representatives from the Office of Global Nuclear Material
Threat Reduction (GNMTR), Department of Energy (DOE) and the
Bureau of International Security and Nonproliferation,
Office of Nuclear Energy, Safety, and Security (NESS),
Department of State (DOS) met with the Vice Minister of
Science and Technology Tran Quoc Thang and other GVN
officials in Hanoi to discuss Vietnam's participation in the
Trilateral U.S.-Russian Federation-International Atomic
Energy Agency (IAEA) Russian Research Reactor Fuel Return
(RRRFR) Initiative (reftels).



3. (SBU) The USG delegation was led by Ms. Kasia
Mendelsohn, GNMTR Director of the Office of Global Nuclear
Material Threat Reduction, and included three additional DOE
officials, a NESS representative and ESTHOff. The GVN
delegation was led by Vice Minister Thang and included GVN
officials from the Office of the Government's Department of
Science and Education, Ministry of Foreign Affairs (MFA),
Ministry of Science and Technology (MOST), Vietnam Atomic
Energy Commission (VAEC), Vietnam Agency for Radiation and
Nuclear Safety and Control, and the Dalat Nuclear Research
Institute (DNRI).



4. (SBU) The USG delegation reiterated the U.S. offer to
the GVN to: a) provide technical assistance to license the
Dalat research reactor as a low enriched uranium (LEU)
reactor; b) supply an amount of replacement LEU fuel in an
amount equivalent to the 36 fresh highly enriched uranium
(HEU) fuel assemblies currently located at the reactor site;
and c) assist the GVN with the repatriation of Russian-
origin spent fuel to the Russian Federation at no cost to
Vietnam. The USG offer is contingent upon agreement on the
part of the GVN to the return of the existing inventory of
fresh Russian-origin HEU fuel to Russia, also at no cost to
Vietnam, upon delivery of total amount of replacement LE
fuel and loading of the first eight LEU assemblies.



5. (SBU) Vice Minister Thang informed the USG delegation
that MOST fully supports Vietnam's participation in the
RRRFR program and instructed VAEC to draft a proposal to
Prime Minister Phan Van Khai recommending that the Office of
the Government accept the USG offer and instruct MOST to
begin work on the conversion program. It is expected that
the Prime Minister will approve the conversion program.



6. (SBU) The two sides discussed the mechanism for
cooperation under the RRRFR program. The USG delegation
explained that provision of replacement LEU fuel and
repatriation of fresh HEU fuel could be completed through
two standard contracts. The supply of replacement LEU fuel
can be achieved through a three-party fuel fabrication
contract among TVEL (the Russian fuel fabricator), VAEC and
DOE. The removal of the fresh HEU fuel can be achieved
through a contract under the already established IAEA
technical cooperation regional project. This contract would
be among the proposed Russian air freighter, IAEA and VAEC.



7. (SBU) The USG delegation further explained that in order
to proceed with the repatriation of Russian-origin spend HEU
fuel, it would be necessary to negotiate and sign the
"Agreement between the Government of the United States of
America and the Government of the Socialist Republic of
Vietnam to Facilitate the Provision of Assistance for

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Nonproliferation Purposes" (a Government-to-Government
Agreement or GTGA) as well as the "Agreement between the
Department of Energy of the United States of America and the
Ministry of Science and Technology of the Socialist Republic
of Vietnam Concerning Cooperation in the Area of Prevention
of Proliferation of Nuclear Materials and Technologies" (the
Implementing Agreement or IA). Vice Minister Thang
requested that the USG officially transmit the texts of the
GTGA and IA to Vietnam's MFA.



8. (SBU) Representatives from DNRI explained that in order
to ensure uninterrupted operation of the Dalat research
reactor, the reactor will need to refuel in September 2006.
In order to avoid reloading the reactor with fresh HEU fuel
assemblies from the inventory at the reactor site, both
sides agreed to an implementation schedule that calls for
the delivery of replacement LEU fuel in September 2006 to
the reactor and the removal of the fresh HEU inventory
within five days after the LEU fuel has been delivered.
Fuel inspection, loading of eight fuel assemblies, and
testing should be completed within these five days. MOST
representatives indicated that if the replacement LEU fuel
does not meet technical criteria, MOST will retain the fresh
HEU inventory. Both sides agreed to proceed with the
understanding that full implementation of this schedule is
contingent upon approval by the Prime Minister.



9. (SBU) The two sides agreed to begin negotiating the
necessary contracts for fuel supply and removal in advance
of the Prime Minister's decision. The contracts will be
signed once the Prime Minister has accepted the USG
proposal. At the same time, MOST agreed that it would
propose to the Office of the Government that the MFA be
designated the focal point for negotiation of the GTGA and
that MOST be designated for focal point for negotiations of
the IA. Both sides agreed that these negotiations would be
undertaken in parallel to the conversion program activities.
No preparations for spent fuel removal will be undertaken
until after the GTGA and IA are concluded.



10. (SBU) The two sides agreed on the following list of
actions: a) preliminary implementation schedule for supply
of replacement fresh LEU fuel and removal of fresh HEU fuel
has been discussed and agreed providing for delivery of
replacement LEU fuel and removal of fresh HEU fuel in
September 2006; b) conduct a technical meeting in Dalat,
Vietnam in early May 2006; c) the fuel fabrication and
transportation contracts will be negotiated in advance of
the Prime Minister's decision so that they may be signed as
soon as the Prime Minister issues his decision.



11. (SBU) The two sides agreed that negotiations of the
GTGA and IA should proceed in parallel to the conversion
program work and that the USG will re-transmit the text of
the GTGA and IA officially to MFA as soon as possible.

MARINE