GERMANY OPTIMISTIC ABOUT IAEA-INDIA SAFEGUARDS

C O N F I D E N T I A L BERLIN 000942 SIPDIS STATE FOR ISN RICHARD STRATFORD STATE FOR ISN/RA TADD KOCA STATE FOR SCA/RA JASON MCCLELLAN E.O. 12958: DECL: 07/16/2033 TAGS: PARM PREL IAEA KNNP ENRG ETTC IN GM SUBJECT: GERMANY OPTIMISTIC ABOUT IAEA-INDIA SAFEGUARDS AGREEMENT BUT QUESTIONS REMAIN REF: STATE 74896 Classified By: Global Affairs Unit Chief Don L. Brown for reasons 1.4 (b) and (d). ¶1. (C) On July 15, Global Affairs officer delivered reftel demarche to German MFA Desk Officer for International Energy and Nuclear Energy Policy Joerg Polster regarding rallying support for the India-International Atomic Energy Agency (IAEA) safeguards agreement. Polster said that although he is optimistic that Germany will support the August 1 IAEA-India safeguards agreement, elements within the MFA are concerned about language in the agreement's preamble and an annex void of listed facilities to be placed under IAEA safeguards. In addition, Polster expressed pessimism that a Nuclear Suppliers Group (NSG) exceptions agreement could be reached before the U.S. Congress adjourns on September 26. ¶2. (C) Polster explained that three separate MFA offices have equities in this issue. Of the three, he said the MFA's Department of Disarmament and Arms Control (Division 2A) expressed the deepest reservations regarding the safeguards agreement. Polster specifically pointed to the phrase in the preamble, "India may take corrective measures to ensure uninterrupted operation of its civilian nuclear reactors in the event of the disruption of foreign fuel supplies", as a potential Indian out-clause to IAEA safeguards. Polster hypothetically asked if India were to resume nuclear weapons testing and its access to international nuclear fuel supply were hindered, does this "out-clause" imply that they could back out of all IAEA safeguards? ¶3. (C) According to Polster, Germany feels that the fact that the facilities annex is currently empty could weaken the whole process of international civil nuclear cooperation with India. Polster explained that Germany's concern is about India potentially providing a facilities list not meeting the expectations of the international community. ¶4. (C) Polster said the goal of the U.S. securing its desired U.S./India "123 Agreement" before the U.S. Congress adjourns on September 26 is not realistic and commented that it would be "unfortunate" for the U.S. to have put so much work into international civil nuclear cooperation with India only for France and Russia to reap the economic benefits. From a timing perspective, he said the proposed August 1 IAEA safeguards decision might be wishful thinking, given that it is summer holiday season and that key decision makers might be unavailable. Furthermore, Polster said that he does not expect the NSG to be ready for an exceptions agreement decision until at least mid-October. TIMKEN JR