S E C R E T UNVIE VIENNA 000283

SIPDIS

DEPT FOR ISN/RA, IO/T

E.O. 12958: DECL: 05/18/2018
TAGS: PARM AORC KNPP IAEA IR
SUBJECT: IAEA/IRAN: ACTING U/S ROOD DISCUSSIONS WITH DG AND
HEINONEN

REF: UNVIE 240 AND PREVIOUS

Classified By: Ambassador Gregory L. Schulte for reasons 1.4 b,d,h

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


1. (S) Acting U/S for Arms Control and International Security
John Rood discussed the state-of-play on Iran May 6 with IAEA
Director General ElBaradei and Safeguards DDG Olli Heinonen.
ElBaradei stressed the need for a face saving measure on
suspension and said the P5 1, minus the U.S., should deliver
the updated offer in Tehran, if it is to have any chance of
success. He counseled against using Solana as the "mailman"
because the Iranians do not want to deal with him. ElBaradei
made his usual pitch for direct U.S. engagement with Iran as
the only way to ultimately resolve the Iran issue. Turning
to the Safeguards investigation, the DG did not expect Iran
to be fully transparent on weaponization but the Secretariat
would continue seeking to "clear the deck" of past issues.
Acting U/S Rood underscored that Iran's ability to re-start
weaponization efforts was a present concern and urged the DG
to push for the AP, points which ElBaradei acknowledged. The
DG expressed frustration with the opacity of the Iranian
leadership and figuring out who was in charge of nuclear
issues.


2. (S) Separately, DDG Heinonen recounted his most recent
trip to Tehran during which the Iranians reviewed the
"alleged studies" documents. He also posed questions related
to procurements and "loose ends" on military involvement.
Heinonen did not expect Iran would admit weapons-related work
when it provided its "final assessment" this month. Although
deployment of the new generation centrifuges was slow, and
none had been connected to cascades, he acknowledged there
was also no sign of suspension or readiness to implement the
AP. Routine inspections were proceeding unobstructed and he
did not see much of a practical problem with DIV information
at Arak, though Iran was not complying with the revised Code
3.1.

DG's Prognosis
--------------

3.(S) Acting U/S Rood solicited the DG's prognosis of recent
developments on Iran. ElBaradei acknowledged a difference of

"perception" on Iran, arguing that the P5 1 strategy should
have been adjusted three years ago to prevent Iran from
acquiring industrial-scale enrichment. Although this was now
"water under the bridge," he remained of the view that a
full, robust verification regime was more important than
suspension. It was almost impossible for Iran to suspend
enrichment, he offered, given that Iran sees this as a
security issue and wants respect from the United States as a
regional player. All sides of the Iranian political spectrum
share this perspective, he added. ElBaradei remained
convinced that UNSC sanctions only reinforce hard-liners in
Iran as this had become an issue of national pride and
sacrifice. The DG made his usual pitch for full U.S.
engagement in direct negotiations with Iran. Rood pointed to
Iran's complicated role in the region, and the unhappy
experience of trilateral talks on Iraq.


4. (S) On the P5 1 package, the DG argued that the question
was not the content but of offering Iran a "face saving"
measure on suspension. As he had told German FM Steinmeier,
it was a good package but "delivery" would be a problem if
the P5 1 sent it "by mail" via Solana. Iran would "return to
sender" saying they are "not for sale." The Iranians did not
want to work with Solana. He advised that the best way to
get a fair hearing would be for the "five" (P5 1 minus the
U.S.) to engage in preliminary talks with Iran. Rood said
that he would take this suggestion back to the P5 1. He
noted that the Iranian leadership did not appear to be set up
for making strategic decisions and pressure would be needed.
ElBaradei agreed that pressure was necessary but so too was
"an opening valve."


5. (S) Turning to the status of the Safeguards investigation,
the DG saw the "alleged studies" as the major issue. He
referred in passing to the recent agreement by Iran to
address this issue in May, as a "work plan" or "timeline."
The DG did not expect Iran would be completely transparent
and answer all questions, and would only be prepared to do so
as part of a "package" deal (presumably with the U.S.) in the
future, at which time unresolved issues could be
"grandfathered" in. ElBaradei clearly saw the "alleged
studies" as a past issue, and referred to the NIE's
conclusion that Iran had stopped weaponization work in 2003.
It was now a matter of confidence building, he said, leaving
future risk assessment to the UN Security Council. For its
part, the IAEA would push to "clear the deck," of past
issues. Rood underlined the critical importance of the
weaponization investigation and the need for Iran to proffer
convincing explanations. He reminded the DG that the NIE
could not conclude with confidence that that Iran had not
re-started weaponization efforts, and that this was a matter
not just of the past but of the present. He also noted the
need to press for more tools, including the Additional
Protocol. The DG said that he pushes the AP at every
opportunity and acknowledged that these issues were past and
present concerns.


6. (S) The DG also expressed frustration with the difficulty
of figuring out who was "in charge" in Iran given the many
divisions in the Iranian leadership. He noted that even the
Supreme Leader had to work to build consensus among factions.
In the nuclear field, it was not clear whether the AEOI or
the Foreign Ministry was in charge at different junctures,
and the ball seems to have been passed from former nuclear
negotiator Larijiani to Jalili back to AEOI head Aghazadeh.
ElBaradei observed that when he met with the Supreme Leader
in January, only Aghazadeh and Velayati (advisor to Khamenei)
were present. They seem to have emerged as significant
players while nuclear negotiator Jalili is not a player in
the DG's view. Although Aghazadeh seemed to be on the
ascendant, it was still not clear to the DG who had the
policy lead on nuclear issues.

Olli's Diagnosis
--------------


7. (S) In a separate briefing with EXPO, Safeguards DDG
Heinonen (who was also present in the DG meeting) provided a
status report of his discussions with Iran on the so-called
"alleged studies." He said he presented the "studies" along
with information from multiple sources in Tehran during his
last trip. The Iranians spent two and a half days reading
the information and offered to provide their "final
assessment" in May. In addition to the "studies," there were
quite a few unanswered questions which Heinonen posed on
procurement efforts with possible nuclear ties, as well as
loose ends on military ties to the centrifuge program. It
was too early to predict what Iran's "final" answers would
be, he said. The mid-May timeframe for assessing the
military nature of Iran's program was short, he added, not
sounding optimistic. Rood inquired whether there was any
indication of departure from the "baseless fabrications"
party-line. Heinonen noted that the Iranians were at least
studying the information but said he would be surprised if
they completely changed tune. The Iranians knew they had to
provide substantive explanations for these activities.
However, it was unclear whether they would acknowledge that
they were nuclear-related or even conducted in Iran. Asked
about providing access to people, Heinonen explained that
requests for interviews would happen in the "next phase," in
clarifying the answers Iran provided, and observed that there
were others in the Iranian nuclear establishment equally or
more important than Fakhrizadeh.

8.(S) Heinonen commented on Iran's April 8 "Nuclear Day"
announcement of centrifuge expansion and reported that the
goal of an additional 3,000 or 6,000 centrifuges had not yet
happened with IR-1 (formerly known as P1) centrifuges. He
also said Iran had not provided inspectors with a firm time
schedule for their deployment. A few IR-2 and IR-3
centrifuges had been installed at the pilot facility Natanz,
mainly he surmised "for demonstration purposes." (Note: The
IR-3, in addition to the IR-2, is one of the four versions of
the "new generation centrifuges" that were reported in the
February DG's report. End note) Heinonen clarified that only
a small number, maybe one or two, of the IR-2 and IR-3
centrifuges were running on UF6 gas and that these were all
single machines not connected to a cascade. He underlined
that there was no sign of suspension and Iran had not agreed
to implement the AP. Meanwhile, routine inspection
activities continued unobstructed, including timely
unannounced inspections, as the Iranians seemed to be doing
their utmost to appear cooperative on that score. By his
estimation, the Uranium Conversion Facility had produced
roughly 400 tons of UF6. Construction of the Arak
heavy-water reactor continued slowly, he noted. Asked by
Rood about DIV issues at Arak, Heinonen noted that Iran was
not adhering to the early DIV requirements of the revised
Code 3.1 but had reverted to an earlier version. From a
practical standpoint, this was not a problem as the IAEA
already had seals and surveillance measures in place at Arak,
yet Iran was not complying with the letter of its agreement.


9. (U) Acting U/S Rood did not have an opportunity to clear
this message.
SCHULTE