ROSATOM STATE CORPORATION - REORGANIZATION

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 002333

SIPDIS

E.O. 12958: DECL: 08/12/2018
TAGS: KNNP PREL PINR ENRG ETTC IR IN RS
SUBJECT: ROSATOM STATE CORPORATION - REORGANIZATION
CONTINUES, NEW PLAYERS ON U.S. ACCOUNT

REF: MOSCOW 2119

Classified By: EST A/Counselor Kristina Kvien for reasons 1.4 (b/d)


1. (C) Summary: The Rosatom State Corporation's new U.S./EU
Section Head reports that the reorganization of the
Corporation and its subdivisions is still underway. Although
no longer a Federal Agency, Rosatom will retain some of its
export control functions. Rosatom will continue to pursue
contracts to build nuclear power plants overseas, and
suggested U.S.-Russia cooperation in this enterprise. End
Summary.

Rosatom Reorganization Continues
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2. (C) On July 25, we met with Yurii Nikolaevich Bassurin,
the new Head of the U.S./EU section of the Rosatom State
Corporation's International Department. Bassurin was
previously assigned to the Russian Mission to the IAEA. He
said he had also served in the Federal Atomic Energy Agency
(Rosatom) and Ministry of Atomic Energy. Bassurin reported
that Rosatom's reorganization continues apace, and that many
new people are being brought in. He noted that
Atomenergoprom, Rosatom's largest subdivision, is just
beginning the process. The main goal of the reorganization,
according to Bassurin, is to achieve the GOR's goal of
developing its nuclear energy sector. Bassurin predicted
that President Medvedev would continue Former-President
Putin's policies on nuclear energy. He reported that
Medvedev visited the Moscow Engineering and Physics Institute
(the top training institute for Russia's nuclear scientists)
on July 24 and that Putin would visit the nuclear machine
building factory "Electrosal" on July 28. (Note: Putin did
visit, and announced that the GOR would increase its spending
on nuclear energy programs to over one trillion rubles over
the next 7 years. End note.)

Export Controls Explained
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3. (C) Marina Belyaeva, Rosatom's expert on nonproliferation
and export controls, and Russian representative to the
Nuclear Suppliers Group (NSG) for the last 14 years,
explained that although no longer a federal agency, Rosatom
State Corporation has retained some of its export control
functions. She stated that Russia's export controls are
managed through an interagency process, chaired by Deputy
Prime Minister Sergei Ivanov. Rosatom will continue as a
member of the interagency commission on export controls, but
overall responsibility lies with the Federal Service for
Technical and Export Controls (FSTEK). Belyaeva underscored
that the GOR requires end use verification from all potential
buyers of controlled items. She explained that the GOR
handles export controls differently for known customers
versus new or suspect ones. For a known customer, the
intelligence community does not participate in the
decision-making process. For any other customer, the Federal
Security Service (FSB) is involved, especially in cases with
military or WMD-related items. She elaborated that exports
of dual-use and military equipment and technology are
regulated under different laws, which are clarified by
various government and presidential orders and decrees, and
included in a GOR website for technical and export materials.
She said RF Government Order 973 specifically governs
nuclear exports.


India and Iran
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4. (C) When asked about Russia's nuclear projects in India
(reftel),Bassurin said that additional nuclear reactors at
Kudankulam would depend on many factors, including financial
ones. He noted that India is a huge market, far more that
Russia alone could fill. Belyaeva concurred, saying India is
a place "with room for all the players". When asked about
selling additional reactors to Iran, Bassurin's reply was
"why not?" He continued, "if Russian companies want to bid
on nuclear project tenders in Iran, there are no
restrictions." However, he added, there are "no direct
negotiations (for additional reactors) at the moment."
Bassurin said that Iran is a signatory to the NPT and Russia
sees it as "just another market."

The Future

MOSCOW 00002333 002 OF 002


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5. (C) Regarding Russia's goal for a nuclear energy
"renaissance", Bassurin was confident that it can be
achieved, but perhaps not as quickly as originally planned.
He said that construction capacity for certain key equipment,
such as reactor vessels, is a problem, but that efforts to
increase production capacity both domestically and overseas
could resolve this issue. He noted the importance of
developing skilled and trained personnel to build the
facilities. Bassurin suggested the possibility of U. S. -
Russia cooperation in providing nuclear energy services to
developing countries. He suggested that the "two main
players" in the world market could establish a dialog on
nuclear power with the aim of providing small and medium
sized nuclear power plants to developing countries on a
service basis.
RUBIN