IAEA/IRAN: DG'S REPORT: NO SUSPENSION, NO FURTHER

C O N F I D E N T I A L UNVIE VIENNA 000650

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/31/2021
TAGS: AORC IAEA IR KNNP
SUBJECT: IAEA/IRAN: DG'S REPORT: NO SUSPENSION, NO FURTHER
PROGRESS ON VERIFICATION


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Summary
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1. (SBU) The DG, as mandated by UNSCR 1696, reported that as
of August 31 Iran has not suspended uranium enrichment
activities, halted construction of the heavy water research
reactor at Arak, cooperated with the IAEA to resolve the
outstanding issues, voluntarily implemented the Additional
Protocol, or provided the transparency required to confirm
the peaceful nature of Iran's nuclear program. The report
also notes that Iran has recently denied Agency requests to
access some accounting records at the pilot enrichment plant,
to grant one-year, multiple-entry visas, and to access the
underground enrichment halls at Natanz, although Iran
relented at the eleventh hour on the last two issues. As a
result, "the Agency remains unable to make further progress
in its efforts to verify the completeness and correctness of
Iran's declarations with a view to confirming the peaceful
nature of Iran's nuclear program."


2. (SBU) The report details a litany of unfulfilled Agency
requests for access to individuals, documents, and
facilities. There has been no progress on the LEU/HEU
contamination and P1/P2 centrifuge issues. The Iranians have
not allowed the Agency to retain a copy of the HEU metal
casting document and confiscated inspectors' notes. Iranian
"clarifications" have not resolved inconsistencies regarding
their plutonium experiments. Iran began a new round of
uranium conversion in June (expected to produce 160 tons of
UF6),and resumed feeding UF6 into a 164-centrifuge cascade
in late August. A second 164-machine cascade my be
operational in September. The Agency has substantiated
Iranian claims of achieving 5 percent enrichment, but the
Iranians have not provided some information required to
complete the analytic records. The Iranians have denied
access to the former head of the PHRC at Lavizan and
equipment from that site, and have refused to discuss Green
Salt and weaponization issues noted in previous DG reports.
End Summary.

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Developments Since the June Report
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-- Suspension of Enrichment Related Activities


3. (SBU) Iran has continued to test P1 centrifuges at the
Natanz pilot facility, with operation of the single machines
and 10- and 20-machine cascades mostly occurring under
vacuum. Testing of the 164-centrifuge cascade with UF6
occurred between June 23-July 8. Feeding of UF6 into this
cascade resumed August 24.


4. (SBU) June 2006 Iranian claims of 5 percent enrichment
were substantiated by information from the mass spectrometer
that the Iranians provided; however, Iran (time unspecified)
denied access to information regarding product and tails
assays, which are required to complete the analytic records,
but subsequently provided "some" information about product
assays on August 30.


5. (SBU) Installation of a second 164-machine cascade is
nearly complete and the Iranians plan to have it running
under vacuum in September. The Agency has been allowed to
install additional cameras to monitor this area, but the
Iranians have refused Agency requests to install remote
monitoring capabilities.


6. (SBU) The Iranians denied Agency access to the underground
enrichment halls at Natanz from August 11-14, but granted
access to this site between August 26-30 to conduct design
information verification (DIV).

--Suspension of Reprocessing Activities


7. (SBU) The Agency has been monitoring the use of hot cells
at the Tehran Research Reactor and other sites through
inspections, DIV, and satellite imagery, but has not detected
any ongoing reprocessing activities

--Heavy Water Research Reactor


8. (SBU) Construction of the heavy water reactor at Arak
continues.

--Outstanding Issues


9. (SBU) Iran still has not provided a time table for
resolving the litany of outstanding issues, despite its
assurances in April to provide one "within three weeks."

--Contamination


10. (SBU) There has been no further progress on this issue,
and the report notes that a full understanding of the scope
and chronology of Iran's enrichment program, as well as full
implementation of the Additional Protocol, is necessary for
the Agency to provide credible assurances regarding the
absence of undeclared nuclear materials and activities in
Iran.

-- Acquisition of P1 and P2 Centrifuge Technology


11. (SBU) Iran has provided no new information on this issue.
The Agency submitted a letter to the Iranians on April 24
seeking clarifications about senior Iranian leader's comments
about P2 progress, and the Iranians responded on June 16
saying they were studying different types of machines and
that this was "an ongoing and progressing R&D activity
without using nuclear material."

-- The Uranium Metal Document


12. (SBU) The Agency is investigating information and
documents that may have been provided to Iran by foreign
intermediaries. The Iranians are still refusing to provide a
copy to the Agency, and in August, they would not allow
inspectors to retain notes they had made while reviewing the
document.

-- Plutonium Experiments


13. (SBU) Since June, the Agency has evaluated explanations
provided by Iran and examined the copy of the notebook kept
by the researcher responsible for the experiments, and has
concluded that they did not provide sufficient clarification
of the outstanding issue. The Agency in July met with a
reactor operator and the researcher, who also did not provide
the data necessary to clarify the issues. The Agency sent an
August 10 letter to Iran indicating that the outstanding
issues could not be resolved unless Iran provided additional
information. Iran has also been asked to provide information
about the presence of HEU particles detected on a container
sampled in August 2005 at the Karaj Waste Storage Facility.

-- Other Implementation Issues


14. (SBU) The Agency has concluded that the Physical
Inventory Verification of nuclear material at the uranium
conversion facility (UCF),concluded in May, was within the
measurement uncertainties normally associated with similar
size conversion plants. It also notes that in April 2006,
the Iranians removed a UF6 cylinder from the UF6 withdrawal
station without prior notification to the Agency, which
resulted "in a loss of continuity of knowledge of nuclear
material in the process." However, "in light of the PIV, the
Agency will continue to follow up on this question as a
routine part of its verification" work.


15. (SBU) In June, Iran began a new round of conversion at
the uranium conversion facility (UCF) that is expected to
produce about 160 tons of UF6. This campaign had produced
about 26 tons of UF6 and is expected to end January 2007.
Iran in July informed the Agency of plans to build at the UCF
a "standby" process line for converting ammonium uranyl
carbonate into UO2.

--Other Matters


16. (SBU) During a July 2006 DIV at the Fuel Manufacturing
Plant at Esfahan, Iran told inspectors that full
commissioning of the plant is scheduled for 2007. Civil
engineering is about 80 percent complete and equipment is
being installed.


17. (SBU) From late July until August 29, the Iranians
refused to issue one-year, multiple-entry visas to designated
inspectors as agreed to by Iran in the Subsidiary
Arrangements to its Safeguards Agreement; however, Iran on
August 30 provided such visas for two inspectors, and on
August 31 informed the Agency that "following the normal
administration process the multiple- entry, one-year visa for
remaining designated inspectors will be issued by September
10."

--Transparency Measures


18. (SBU) Iran has not responded to Agency requests for
clarifications concerning, and access to carry out
environmental sampling of, equipment and materials related to
the Physics Research Center (PHRC). Iran has also not
provided access to the former head of the PHRC.


19. (SBU) Iran "has not expressed any readiness" to discuss
Green Salt, high explosives testing, and the redesign of a
re-entry vehicle mentioned in previous reports.

-- Summary


20. (SBU) The summary notes specifically that Iran has not
suspended enrichment activities or acted in accordance with
the Additional Protocol. While Iran has been providing the
Agency access to nuclear material and facilities, and has
provided the required reports, Iran continues to deny access
to "certain operating records" at the Natanz Pilot Plant.
Iran also has not addressed the outstanding issues or
provided the transparency required to remove "uncertainties
associated with some of its activities." The report concludes
by noting that the Agency remains unable to make further
progress in its efforts to verify the correctness and
completeness of Iran's declarations with a view to confirming
the peaceful nature of its nuclear program.


21. (C) The report, in our judgment, could have been even
harder hitting. It did not for example, explicitly state that
Iran had failed to comply with UNSC or Board of Governor
requests. Nor did it recite past statements that the IAEA
could not certify the peaceful nature of Iran's nuclear
actions, making this point only indirectly. That said, the
report clearly demonstrates Iran's failure to suspend its
activities at Natanz and Arak and to cooperate with the IAEA
across a series of issues, providing ample basis for further
action in the Security Council.


22. (C) We suspect that the DG played a role in toning down
the report, though he could not escape the facts of Iran's
behavior. We also suspect that the DG is disappointed that
Iran resumed introducing UF6 into the 164-centrifuge cascade
on August 24. He undoubtedly hoped that the Iranians would be
spinning the cascade on a vacuum, so he could argue this was
some form of suspension.
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