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 -------------- ¶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 -------------- ¶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 -------------- ¶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 -------------- ¶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