SCENESETTER FOR VISIT TO VIENNA FOR A/S HILL AND

S E C R E T UNVIE VIENNA 000411


SINGAPORE, PLEASE PASS TO YKIM FOR A/S HILL; ISN FOR KANG
AND MAHAFFEY FOR MCNERNEY; IO FOR VON BEHREN

E.O. 12958: DECL: 07/22/2033
TAGS: AORC IAEA KN KNNP

SUBJECT: SCENESETTER FOR VISIT TO VIENNA FOR A/S HILL AND
ACTING A/S MCNERNEY

REF: A. UNVIE 00395

B. SECSTATE 77866

C. UNVIE 00339

D. UNVIE 00373

Classified By: AMBASSADOR GREGORY L. SCHULTE FOR REASONS 1.4 (B) AND (D
)

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Overview
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1. (S) The forthcoming visits by A/S Hill on July 25 and
Acting ISN A/S McNerney on July 27 provide an opportunity to
lay to rest concerns expressed by Director General ElBaradei
and the Secretariat on the IAEA's role in the upcoming
verification work in the DPRK (ref A). The IAEA has a
considerable body of historical knowledge on the DPRK nuclear
program and sees its role in verification as essential to its
institutional credibility. Other issues we expect to surface
in these visits include funding for IAEA verification
activities in DPRK, developments on the Syria issue in the
Six-Party Talks, and possibly a discussion on the legal
status of the DPRK with regard to the NPT.

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IAEA Role in Verification
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2. (S) Your respective visits will provide an opportunity
to plan for the IAEA's future role in the upcoming
verification of DPRK's nuclear declaration and lay to rest
the Secretariat's anxiety. Following the July 12 Six-Party
Press Communique, DG ElBaradei twice insisted to Ambassador
Schulte that the IAEA must have the lead role in verification
or no role at all, and not be relegated to a mere
"consultancy" (ref A). As he did in his July 14 meeting with
the Ambassador, the DG may again point to the IAEA's leading
role in verification of Libya's nuclear program as an
example, although Mission notes that verification of
dismantlement in Libya was a shared responsibility with the
U.S. and the UK. As in the negotiations that John Bolton and
the UK's William Ehrman conducted in early 2004, ElBaradei
will expect clarification of the verification role envisaged
for the IAEA in DPRK.


3. (SBU) A/S Hill's visit will also be an opportunity to
communicate to key Missions and publicly our support for
IAEA involvement in the verification process and to promote
our continued close collaboration with the IAEA Secretariat.


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Financing the IAEA's Work
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4. (SBU) Given the tight budget situation, ElBaradei and
Secretariat officials may also raise financing the IAEA's
role in DPRK verification. The regular IAEA budget is
currently set through the end of 2009, and all
extra-budgetary contributions for DPRK have already been
expended or earmarked for the IAEA's ongoing work in
monitoring the shutdown of facilities at Yongbyon and
Taechon. Funding for additional IAEA activities, such as
verifying the declaration, must come from additional
voluntary contributions. Per ref B, we note that Japan
indicates it will make additional funds available to support
IAEA activities in the DPRK.


5. (SBU) For your background, we have included the
voluntary contributions provided to the Secretariat since the
February 2007 Initial Actions Agreement to support IAEA
monitoring and verification of the shutdown of nuclear
facilities. The United States agreed to the IAEA use of USD
513,000 from IAEA's DPRK fund and provided the IAEA USD
1,800,000 in September 2007. In June 2008, we provided an
additional USD 1,500,000 for continued IAEA monitoring work.
Japan contributed USD 500,000 in September 2007, and the EU
provided Euro 1,800,000 for DPRK monitoring and verification
in March 2008.

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Syria
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6. (S) With the Syria investigation ongoing, the
Secretariat remains interested in what has been learned from
the DPRK regarding any past assistance provided for
construction of the nuclear reactor at Al Kibar. DDG
Heinonen has cited the press reports that the DPRK addressed
its proliferation activities with regard to Syria and uranium

enrichment to the United States in a separate confidential
declaration. We anticipate DG ElBaradei and DDG Heinonen
will use the opportunity to request additional details on any
admissions by the DPRK regarding proliferation-sensitive
activities in Syria.

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Clarifying the Legal Status of DPRK
--------------


7. (S) In his opening remarks to the June Board of
Governors meeting Director General ElBaradei cited the need
for clarification of the DPRK's the legal status with regard
to the NPT. He noted that if the DPRK is still considered a
party to the NPT then its comprehensive safeguards agreement
remains in force, and the IAEA should resume verification of
DPRK's declarations. If the DPRK is no longer party to the
NPT, then the IAEA would need to implement its INFCIRC/66
agreement with North Korea per ref C, as it does with other
non-NPT parties. In a June 23 meeting, the DG confided to
Ambassador Schulte that he agreed with the US position on
DPRK's withdrawal from the NPT, saying that the European
stance that the DPRK had not withdrawn was based on a
political judgment rather than legal views, per ref D. He
seemed comfortable at that time with a more informal, ad hoc
role in North Korea, but we should be alert to future
indications of the DG pressing for clarification on these
legal issues.
SCHULTE


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