U.S.-UKRAINE COOPERATION ON SCUD MISSILE

C O N F I D E N T I A L KYIV 002339

SIPDIS

E.O. 12958: DECL: 11/25/2018
TAGS: PARM MASS PREL UP
SUBJECT: U.S.-UKRAINE COOPERATION ON SCUD MISSILE
DESTRUCTION

REF: STATE 111716

Classified By: Political Counselor Colin Cleary; reasons 1.4 (b/d).

Summary
--------------


1. (C) Following up on proposals made by the U.S.
delegation at the July 30-August 1 U.S.-Ukraine
Non-Proliferation Working Group discussions (reftel),a State
Department delegation met with Ukrainian Ministry of Defense
and National Security and Defense Council officials in Kyiv
on November 18. The purpose was to further discuss the
elimination of Ukraine's SCUD missiles pursuant to the 1998
confidential bilateral Memorandum of Understanding (MOU) on
issues related to Ukraine's membership in the Missile
Technology Control Regime. The two sides agreed to move
forward on next steps in advance of the next U.S.-Ukraine
Bilateral Non-Proliferation discussions, which could be held
in Washington as early as February. End Summary.

Delegations
--------------



2. (SBU) On November 18, a State delegation including
ISN/NDF Senior Negotiator Paul B. van Son, ISN/MTR Deputy
Director Ralph Palmiero, ISN/MTR Greg Richard, and EUR/PRA
Matt Hardiman participated in discussions on eliminating
Ukraine's SCUD missiles with Ukrainian Ministry of Defense
and National Security and Defense Council officials. The
Ukrainian side included MOD Acting Chief of the Department of
Economy Sergiy Novosiolov, MOD Chief of the Department of
Ammunition and Missile Disposal Anotoliy Sosnovskiy, and
other MOD officials, and Aleksandr Dotsenko of the National
Security and Defense Council of Ukraine (NSDC).

How to get the ball rolling
--------------


3. (C) After introductions and agreement on the agenda,
Palmiero provided a brief overview of the 1998 MOU and a
summary of previous discussions/actions related to the SCUD
elimination project. Van Son then provided an overview of
the Nonproliferation and Disarmament Fund and provided a
detailed briefing on how to move forward based on proposals
made by the U.S. during July 30, 2008 non-proliferation
working group meetings in Kyiv. The U.S. proposal is to use
the Agreement Between the United States and Ukraine
Concerning Assistance to Ukraine In the Elimination of
Strategic Nuclear Arms, and the Prevention of Proliferation
of Weapons of Mass Destruction, dated 25 October 1993, as
Amended and Extended (the 1993 CTR Umbrella Agreement) as the
basis for eliminating Ukraine's SCUD missiles and associated
equipment.


4. (C) As part of this approach, the U.S. proposed an
exchange of diplomatic notes to add the Department of State
as an executive agent to the CTR Umbrella Agreement, in much
the same way as the Department of Energy was also added as an
executive agent to that agreement. Following that exchange
of notes, an agreement/MoU between the U.S. Department of
State and the Ministry of Defense of Ukraine would be
concluded to detail logistical and administrative SCUD
elimination procedures, and a contract would be concluded
between the service provider (NDF contractor) and the MoD for
labor and support services. There will be a separate
contract between the NDF and the service provider for the
overall cost to the NDF for the work.


5. (C) Ukrainian reaction to this proposal was mixed but
positive; both Dotsenko and Novosiolov flagged procedural
issues of concern. Dotsenko urged that the project be
carried out by one of the four licensed U.S. companies
currently working on DTRA projects in Ukraine, as this would
cut down on the administrative processing time required to
register and license a new U.S. company; furthermore, Ukraine
would want to ensure the process would allow local companies
to bid on the project as well. He also warned that any new
bilateral agreements would need Rada ratification.


6. (C) Van Son clarified that there is precedent for the
addition of an Executive Agent to the Umbrella Agreement via
exchange of diplomatic notes, as was done for the Department
of Energy in 2004; the Agreement itself was amended in 2003
to allow other executive agents. The agreement/MoU between
State and MoD would therefore be only an implementing
agreement, and would not require Rada ratification. Van Son
also explained that in the U.S. view, this would be a small
project; the amount of equipment brought in would be small

(thus VAT exemption issues minimized),and as was the case in
our SCUD elimination projects in Bulgaria and elsewhere in
the region. All or nearly all contracted labor would be from
the Ministry of Defense, with little or no need to hire local
companies or bring in any non-Ukrainian subcontractors. This
would keep costs and overhead low as well, making most
efficient use of funds available. The first step would be to
bring in the NDF contractor and conduct the site visits and
inventory the SC
UD missiles and associated equipment.


7. (C) Novsiolov noted that there have been procedural
problems with other arms destruction projects recently, most
notably the destruction of small and light weapons under the
NATO Partnership for Peace (PfP) Trust Fund. This project
has been stopped for over a year by the Ministry of Economy
and the Ministry of Finance, which maintain that some items
may still be salable or have novelty value. Palmiero noted
that the annexes to the agreement/MoU clearly categorize the
SCUD system components into items requiring elimination,
demilitarization, or those not requiring demilitarization.
The categorization provides a clear picture of the items that
would be retained by the Government of Ukraine at the end of
the project. Furthermore, he noted, few countries maintain
SCUD missile programs, and hopefully these are not countries
to which Ukraine would consider selling SCUD-related missile
items (e.g., Syria, Iran, and North Korea.) Hardiman also
sought to clarify whether the MoD concerns about potential
problems with the Finance and Economy ministries as in the
case of the PfP Trust Fund project. In response, the MoD
indicated they would have to demonstrate the SCUD-related
items to be destroyed have no value, but thought the Annexes
would help mitigate any problems. Novosiolov indicated this
aspect could require additional time to work out, and
promised to have details available before the next bilateral
Non-Proliferation meetings.

Melange
--------------


8. (C) Sosnovskiy raised the question of melange (starter
fuel) destruction, seconded by Dotsenko. Palmiero clarified
that we are willing to discuss destruction of fuel related to
SCUDs, but discussion of any potential U.S. assistance would
be limited to an amount commensurate with the number of SCUDs
to be destroyed. He noted that the Ukrainian estimate of
sixteen thousand metric tons of melange certainly includes
more than just SCUD missile fuel. Sosnovskiy admitted
Palmiero was correct that the sixteen thousand tons of
melange was not all SCUD fuel, and took note of the U.S.
position. He also clarified that any discussion of melange
destruction associated with this project would be specific to
nitric acid-based fuel.


9. (C) Sosnovskiy informed the group that the OSCE will be
assisting with destruction of 3,000 metric tons of melange
starting in 2009, and that an earlier partnership with Poland
had been completed with the destruction of 215 metric tons of
melange. He explained that Ukraine has developed a
processing center in Western Ukraine, near the Polish border,
and that initial processing takes place in Ukraine and final
processing in Poland. Dotsenko said the Polish government
has guaranteed to take more Ukrainian melange for final
processing. Van Son noted that processing and disposing of
melange is very expensive, and that location, condition, and
volume would impact the project budget. Thus it is even more
important to get an on site inventory of the scope of this
project as soon as possible.

Warheads
--------------


10. (C) Van Son and Palmiero both asked on two separate
occasions whether Ukraine had any high explosive SCUD
warheads. Van Son pointed out that destruction of these
raises the cost of the project considerably. Smiling,
Dotsenko repeated that there were no high explosive warheads
in the Ukraine SCUD inventory.

Next Steps
--------------


11. (C) U.S. and Ukrainian officials agreed that a
discussion on the margins of the next regularly scheduled
U.S.-Ukraine nonproliferation discussions (normally held
twice a year in February and July),would offer a convenient
opportunity to meet again and for Ukraine to respond with any
detailed comments to the draft U.S. agreement and diplomatic
note and to discuss a possible date in the Spring for an
on-site inventory. They agreed to proceed with the exchange

of diplomatic notes between the State Department and Ukraine
Ministry of Foreign Affairs to add the State Department as an
Executive Agent to the CTR Umbrella Agreement. Van Son
stated that NDF may send the NDF's contractor (Controlled
Demolition, Inc.) on a familiarization mission to Ukraine to
consult with MOD and DTRO on the process of proper
registration and, hopefully, begin that process. Nosiolov
promised to obtain approval from MOD leadership on the MOU,
and to try to facilitate the on-site inventory so that it
could take place as soon as possible. Van Son stated that
the delegation would meet with the Ukrainian Embassy upon
their return to Washington and give them a debrief on this
meeting. (Note: This meeting took place in EUR/PRA on
11/25.)

Comment
--------------


12. (C) The November 18 meeting was a step in the right
direction, and valuable particularly for the opportunity it
afforded MoD to understand how State and the NDF would move
forward on SCUD destruction. Challenges lie ahead in getting
the inventory performed in a reasonable time frame and with
the participation of the NDF contractor that will perform the
work; in getting registration accomplished; and in
particular, in dealing with the Ministry of Economy on
registration and destruction issues. The Ministry of Economy
has proven problematic recently on both of these issues. It
has repeatedly refused to recognize the proper registration
of a DTRO-contracted company operating legally in Ukraine.
It has also held up the implementation of the NATO PfP Trust
Fund Small and Light Weapons destruction commitments approved
by Ukraine's Cabinet of Ministers in 2005, although it may
soon (following repeated US demarches) lift that hold.


13. (U) The U.S. delegation cleared this cable.
TAYLOR