DOE DEPUTY SECRETARY PONEMAN'S MEETING WITH

C O N F I D E N T I A L SECTION 01 OF 04 MOSCOW 001611

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E.O. 12958: DECL: 06/16/2019
TAGS: PREL RS PARM ENRG
SUBJECT: DOE DEPUTY SECRETARY PONEMAN'S MEETING WITH
RUSSIAN MFA DEPUTY FOREIGN MINISTER RYABKOV ON
NONPROLIFERATION SUMMIT DELIVERABLES

Classified By: Ambassador John R. Beyrle. Reasons 1.4(b),(c) and (d)


1. (C) Summary. DOE Deputy Secretary Daniel Poneman met with
Russian Federation Deputy Foreign Minister Sergey Ryabkov on
June 10, 2009 in Moscow to discuss nonproliferation
Presidential Summit deliverables, including the Joint
Statement on Nuclear Security, the Protocol to amend the
Plutonium Management and Disposition Agreement (PMDA
Protocol),and the Material Consolidation and Conversion
Agreement (MCC). Poneman and Ryabkov agreed the Joint
Statement was on "sound footing" and tasked their experts to
work further. Ryabkov indicated that there were unresolved
financial and technical problems with the PMDA Protocol and
stressed that the situation had changed since PMDA was
signed. That said, he noted the conversation had been
helpful and MFA would take another look at the PMDA Protocol.
On MCC, Ryabkov was most pessimistic, noting there were huge
"conceptual issues." He added that it "could hardly be
imagined" that the overall purpose of the MCC was for
anything other than to counter risks emanating from Russian
territory, and without having a purpose which "fits into the
current political environment here," he stressed, it would be
"difficult for us to develop a text." Poneman explained the
main principles of MCC: that nuclear materials were safer in
fewer sites and converted to less sensitive forms, which is
not a U.S. or Russian issue, but inherent in the nature of
nuclear materials; that MCC could be expressed in a form that
is symmetrical; and that the U.S. and Russia could partner in
helping third countries. Poneman offered to try to make the
Agreement as symmetrical as possible, and to deliver a
revised text as soon as possible. End Summary.


2. (C) DOE Deputy Secretary Daniel Poneman told Russian
Deputy Foreign Minister Sergey Ryabkov on June 10 that the
U.S. hoped to reach agreement on practical joint
non-proliferation efforts which would set the basis for work
between the two countries in the future. Given that the U.S.
and Russia had the vast majority of nuclear weapons, we had a
mutual responsibility and opportunity to work together on
important issues. These efforts were not intended as
"favors" to the other country, but were in each of our
respective mutual self-interests. Poneman stressed that he
had been asked by the National Security Council to travel to
Russia, and noted that if we could reach agreement on the
Joint Statement on Nuclear Security, Protocol to amend the
Plutonium Management and Disposition Agreement (PMDA
Protocol),and Material Consolidation and Conversion
Agreement (MCC),the U.S. would be prepared to re-submit the
"123" Agreement on Peaceful Uses of Atomic Energy to the U.S.
Congress for ratification. He added that it was important
for the U.S. and Russia to have concrete agreements with real
content; to partner together, not in isolation; and to start
now to make the 2010 Non-Proliferation Treaty (NPT) Review
Conference successful.


3. (C) Ryabkov responded that U.S.-Russian cooperation on
non-proliferation issues in the past had been "unparalleled"
and had a record of an "almost problem-free relationship,"
and Moscow believed there was a "great future" in continuing
the cooperation. He pointed to the excellent joint work
between the U.S. and Russia on highly enriched uranium (HEU)
fuel repatriation from third countries to Russia. He
explained that Russia was also interested in attaining
practical results for the visit of the two Presidents in
July, which would show the rest of the world that the U.S.
and Russia did not just talk, but achieved palpable results.
But, he noted, there were a number of "considerably difficult
issues before us" and that the Russian position on these
difficult issues was "well-known."

--------------
A "Broader Context"
--------------


4. (C) Ryabkov stressed that the three non-proliferation
issues Poneman raised (Joint Statement, PMDA Protocol, MCC

MOSCOW 00001611 002 OF 004


Agreement) had to be considered in the "broader, global,
political context," and not "overshadow everything else." He
stressed that they were not the only items for the
Presidential Summit, noting the efforts to establish an
intergovernmental umbrella structure, reach agreement on
lethal transit for Afghanistan ("we are deadly serious about
reaching an agreement"),make further progress on WTO, and
negotiate a START follow-on accord, while addressing the
relationship between defensive and offensive weapons.


5. (C) Ryabkov said that Russia's cooperation was important
not just for the U.S., but to demonstrate U.S. and Russian
joint leadership to impress other countries who might be
opposed to or reluctant to engage in non-proliferation
efforts. He commented that he had been "embarrassed" that
the French had stated their opposition to a world free from
nuclear weapons, and this showed why it was so important to
move forward. He stressed that the P5 should discuss what
needed to be done to ensure that the 2010 NPT Review
Conference did not fail, as that would be a huge setback.

--------------
Joint Statement on Nuclear Security
--------------


6. (C) Poneman said the Joint Statement on Nuclear Security
was close to agreement; U.S. experts had provided input based
on the revisions Russian experts had suggested. Agreeing
that the Statement seemed to be on a "sound footing," Ryabkov
concurred with Poneman's suggestion that the experts meet to
work on the text further. He said he thought it would
possible to conclude the Statement, which should be
"substantive, shaped in the right way and send the right
message." (Note: Experts met later that day at MFA to
discuss the Joint Statement. The remaining substantive
issues are related to language on the PMDA Protocol, MCC
Agreement, research reactor conversion in the U.S. and
Russia, and the 123 Agreement. The ball is NOW in MFA,s
court to provide comments to the updated text. End Note).

--------------
PMDA Protocol
--------------


7. (C) Poneman noted his understanding that there were no
problems within the "four corners" of the PMDA Protocol based
on conversations with Ambassador Kislyak, Under Secretary
Burns, and Rosatom interlocutors. However, he understood
there was an issue on the Russian side related to funding.
He added that there was clear language in the PMDA stating
that agreement was "subject to the availability of funds,"
and added that in his view and that of U.S. experts, this was
not a fatal impediment as a legal matter.


8. (C) Ryabkov said he could not confirm whether the text of
the PMDA Protocol was fine "within its four corners," noting
that he believed there were technical problems related to
fuel development and the balance between the different types
of isotopes, which would have to be resolved before the PMDA
Protocol could be completed. He also acknowledged that in the
broader context, there was an issue of financing that had
been raised by the Ministry of Finance. Ryabkov stressed
that while there had been developments in technologies and
approaches over the years, the economic situation today was
different from when the Agreement was signed nine years ago.
But his main point was that the political situation had
changed since the PMD Agreement was signed. Likening it to
the Joint Data Exchange Center (JDEC) situation, Ryabkov said
that when the PMDA was signed, it had been aimed at a
particular effort, which may still be relevant, but that it
needed to be re-evaluated to determine the impact on Russia,
especially given "changing moods in the State Duma on such
issues, especially nuclear security and fissile material."
He acknowledged that the overall objective of the PMDA was
understandable, and that it and the PMDA Protocol added to
the political sense that the U.S. and Russia were acting in

MOSCOW 00001611 003 OF 004


accordance with their obligations under the NPT Treaty. He
promised that these issues would be taken into account.
Ryabkov stressed, however, that the PMDA Protocol needed a
"further look," but noted that the discussion had been
helpful.


9. (C) Poneman agreed that the situation had changed
fundamentally since the PMDA was originally signed. He noted
that initially both countries had been planning to burn MOX
fuel in thermal reactors. Later, the programs had been
decoupled, and the Russian side was pursuing fast reactors
while the U.S. side was continuing to pursue use of MOX fuel
in thermal reactors. Poneman said that the U.S. program had
been funded originally for reasons of symmetry, but that,
after the decoupling of the US MOX and Russian fast reactor
programs, and that the U.S. program was proceeding and could
continue even if the Russians decided to delay funding their
program. Poneman emphasized that competing budget demands
have NOW put the $400 million offered by the USG under
pressure, and that without concluding the PMDA Protocol by
the summit, those funds could be directed to other
priorities. He stressed that Rosatom Director Kiriyenko had
said there was no problem with the text of the Agreement, and
if there was a "technical" problem, as Ryabkov had noted, it
had not been brought to the U.S.'s attention. He added that
if there were such issues, he would make his experts
available to resolve them.

--------------
MCC - No Return to '90's
--------------


10. (C) Emphasizing that there were no differences between
what Rosatom officials were saying and what he or other
Russian officials were saying, Ryabkov said Moscow had the
biggest problem with the Material Consolidation and
Conversion Agreement (MCC). It could hardly be imagined that
the overall purpose of the MCC was for anything other than to
counter risks emanating from Russian territory, Ryabkov
claimed. Without having a purpose which "fits into the
current political environment here," he stressed, it would be
"difficult for us to develop a text." Saying that "one could
not but interpret the text as showing Russia as a source of
proliferation to be guarded against," Ryabkov said Moscow did
not see real sources of concern the way the U.S. did. Russia
had received years of assistance and help from the U.S., and
had made many changes and adaptations, not only in this area,
but economically, socially, and politically. Thanks to this
support, he added, Russia had managed to keep this part of
its heritage safe, sound, and secure. Moscow had not seen
any concrete examples that these efforts had been a failure.
Therefore, to "step back with this kind of work with a legal
framework inherited from the past" was problematic for
Moscow. (Comment: MCC negotiations have been ongoing for
the past two years between DOE and Rosatom, involving
high-level participation by Rosatom Deputy Director Ivan
Kamenskikh and working-level participation by MFA
representatives. At no point during these negotiations did
the Russian side assert that the agreement was one-sided.
Moreover, during summit preparatory meetings as recently as
the end of April 2009, Rosatom Deputy Directors Kamenskikh
and Spasskiy indicated there were only four issues in the
agreement still in need of resolution. The U.S. attempted to
address these issues in the latest version of the draft
agreement. End Comment). Ryabkov added that Russia saw the
main concerns coming from HEU located in third countries.


11. (C) Turning to the text, Ryabkov said Moscow had "huge
conceptual differences" and did not see how these could be
bridged given the logic he had just explained. He added that
the Russian side had major issues with the formulation of
articles one and two, and noted he was not sure revised
language would bridge the gap. He insisted that MFA had
never sent a coherent signal that it was satisfied with the
Agreement, but had merely sent "exploratory messages." He
stressed that Moscow was not "in a rejective mood;" they saw

MOSCOW 00001611 004 OF 004


the value of the Agreement, and said they would review the
issue "at a very high pace."


12. (C) Poneman stressed that the purpose of the MCC was a
matter of mathematics and physics; it simply made more sense
to have fewer sites with nuclear materials: the fewer the
sites, the easier they were to protect and the lower the
costs. He explained that when the U.S. addressed its own
system, it was not a confession of weakness or deficiency.
Both countries have vast complexes and it is simply a matter
of statistics. He added that he had invited Rosatom Director
Kiriyenko to the U.S. to see what the DOE complex was doing
in the areas of consolidation and conversion. Additionally
he noted that the U.S. and Russia could work in partnership
in third countries on consolidation and conversion. He
welcomed Ryabkov's suggestion that the MCC be considered in
the context of the broader U.S.-Russia non-proliferation
relationship and the 2010 NPT Review Conference, and
suggested that the U.S. put the broader context into the
chapeau of the Agreement. Taking up Rybakov,s theme
regarding the 2010 NPT Review Conference, he stressed that
the U.S. did not want to have to defend a double standard
there: how can we urge other countries to consolidate and
convert if we did not do so ourselves? He stressed that
the U.S. was not seeking to return to an "assistance-based"
approach, but to move forward in our cooperation. He offered
to try to make the Agreement as symmetrical as possible and
to deliver a revised text as soon as possible (Note: a
revised text was provided to the MFA on June 11. End Note).


--------------
123 Agreement
--------------


13. (C) Poneman emphasized that the U.S. did not view the 123
Agreement as a "gift" to Russia, but as a gate to open up
many new areas of civil nuclear energy cooperation, including
helping us both to build a civil nuclear framework
internationally, and to expand on ideas such as the Angarsk
Enrichment Center and others. He stressed that we were very
close to achieving this Agreement and if we let it slip away,
he did not know when or if we could get it back. And if we
let it slip away, Poneman said he feared others would see it
as an opportunity to do things neither the U.S. or Moscow
wanted.


14. (C) Ryabkov agreed that achievement of a "123 Agreement"
was not an end in itself, but an opportunity for additional
cooperation. Moscow recognized that it was not a "gift" to
Russia or an incentive to make progress in other areas. He
said Moscow understood the U.S. was having difficulties with
the ratification process, and noted he would welcome any
specifics on this. He agreed that it would be "a huge
setback" if the agreement were to be submitted for
ratification and then failed.


15. (C) Ambassador Beyrle noted that we had talked about a
reset in the relationship, but both sides needed to get back
in the habit of doing productive work. He stressed that this
is a period in the relationship where we could make progress,
but it was unclear how long the period would last, and we
needed to take maximum advantage and move forward.


16. (SBU) Deputy Secretary Poneman has cleared on this cable.
BEYRLE