DOE DEPUTY SECRETARY PONEMAN'S MEETING WITH

C O N F I D E N T I A L MOSCOW 001616

SIPDIS

STATE FOR JTIMBIE
DOE FOR S-1: SCHU
DOE FOR S-2: DPONEMAN
DOE FOR NA-20: KBAKER/SBLACK/HLOONEY
DOE FOR NA-21: ABIENIAWSKI/KSHEELY
DOE FOR NA-24: JWHITNEY
DOE FOR NA-25: DHUIZENGA/JGERRARD
DOE FOR NA-26: KBROMBERG/GLUNSFORD

E.O. 12958: DECL: 06/10/2019
TAGS: KNNP PARM PREL KTIA IR RS ENRG
SUBJECT: DOE DEPUTY SECRETARY PONEMAN'S MEETING WITH
ROSATOM DIRECTOR GENERAL KIRIYENKO ON NONPROLIFERATION
COOPERATION, SUMMIT DELIVERABLES

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


1. (C) SUMMARY. DOE Deputy Secretary Daniel Poneman,
Ambassador Beyrle, and Senior Advisor to Under Secretary of
State for Arms Control and International Security Jim Timbie
met with Rosatom Director General Sergey Kiriyenko and his
Deputy Nikolai Spasskiy on June 9, 2009 in Moscow to develop
a path forward on nonproliferation deliverables for the July
2009 Presidential Summit, including the Joint Statement on
Nuclear Security, the Material Consolidation and Conversion
(MCC) Agreement, and the Protocol to amend the Plutonium
Management and Disposition Agreement (PMDA Protocol).
Poneman noted that if the U.S. and Russia could come to
agreement on these three documents, the Administration would
be prepared to resubmit the 123 Agreement for Peaceful
Nuclear Cooperation to Congress.


2. (C) While Kiriyenko indicated that he saw no problems with
the Joint Statement, he noted that the MCC text provided by
the United States had been perceived as imbalanced, and in
its current form, was rejected by the Russian interagency.
On the PMDA Protocol, Kiriyenko said that although the
substance was agreed, concerns existed regarding availability
of funding given the current economic crisis. END SUMMARY.

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MATERIAL CONSOLIDATION AND CONVERSION AGREEMENT
-------------- --

3. (C) On the MCC Agreement, Poneman noted that in meetings
in Washington on June 5, Russian Ambassador Kislyak had told
him that the agreement was so one-sided that it could not be
considered for the Summit. Poneman added that he had
reviewed the draft text with fresh eyes, having not been
involved in earlier negotiations, and could see the source of
the Russian concern that the agreement appeared to be
asymmetrical. Poneman said that he therefore tried to go
back to the first principles regarding what we were trying to
accomplish. The key point was that nuclear weapon-usable
materials were safer when they were confined to fewer
locations and in less sensitive forms. This was not a
Russian point or an American point, he stressed, but a
nuclear point. Indeed, the United States has decided to
consolidate its own nuclear materials to fewer sites in the
DOE complex.


4. (C) Poneman added that there was no reason that this
principle could not be reflected in a document that addressed
both sides, concerns. He proposed, therefore, to proceed on
the basis of the following principles: nuclear material
consolidation into fewer locations and conversion to less
sensitive forms was in our individual and mutual interest.
He stressed that this was a matter of partnership; and
efforts could be pursued symmetrically. In the same spirit,
he noted, our two governments could also work with third
countries to help consolidate materials in fewer locations
and reduce their sensitivity.


5. (C) Kiriyenko responded that it was too bad this meeting
had come so late, and added that if these principles had been
incorporated into the text of the agreement from the outset,
we would not have the problem we were discussing today.
According to Kiriyenko, Rosatom as a state corporation was
not involved in the negotiations, but could only comment on
certain issues. He noted that Poneman would also be meeting
with Ryabkov, who was responsible for preparation of
documents for the Summit. (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)


6. (C) On MCC, Kiriyenko asserted that Russia was positive on
consolidation of nuclear materials, including the work under
Bratislava on repatriation of highly enriched uranium (HEU).


However, the MCC text that was negotiated is now perceived
negatively in Russia. According to Kiriyenko, the current
draft of the Agreement made it look like this is a Russian
problem which has nothing to do with the U.S. (Comment: While
the agreement focuses on conversion and consolidation of
Russian nuclear materials, the U.S. has already begun to
consolidate nuclear materials at fewer sites within the DOE
complex. End Comment) Kiriyenko added that President Obama
had stated that there are nuclear materials at risk, and then
Russia received the draft agreement devoted to conversion of
HEU to low enriched uranium (LEU) in Russia. In this
respect, he said, if Russia signed the agreement, it means
Russia agreed that materials are located in badly-secured
locations in Russia. Kiriyenko noted that MFA had sent the
text to other agencies for clearance, and it was rejected by
all of them. He went on to say that the agreement should
deal with all countries, not just one or two, adding that
there is no problem with security in Russia. Kiriyenko did,
however, agree that fewer locations for nuclear materials
would be better, and that conversion to less sensitive
material would be better.


7. (C) Kiriyenko expressed doubts on whether a new agreement
could be drafted before the Summit. He reiterated that
Russia was very disappointed with the first text and
indicated that we could either try to develop a new text in
the small amount of time remaining, or aim to say something
in the joint statement that we are working and developing an
agreement. (Comment: This statement is an exaggeration. The
current draft agreement reflects a collaborative U.S.-Russian
effort following a lengthy negotiation period of about two
years. It appears that MCC came under additional scrutiny
within the Russian interagency, possibly at very high levels,
once it was proposed as a Presidential Summit deliverable.
Although both Rosatom and MFA participated in negotiations,
both organizations are now distancing themselves from the
Agreement. End Comment). Poneman agreed to provide the
Russian side with a more symmetrical MCC text quickly, and
urged the two sides to complete a new draft for rapid review
and approval, so that it could be signed at the Presidential
Summit. (Note: A new draft text was presented to Rosatom and
MFA on June 11. End Note). Poneman then invited Kiriyenko to
visit a U.S. site where materials have been consolidated, and
Kiriyenko replied that he would like to make such a visit
this fall.

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PROTOCOL TO AMEND THE PMDA
--------------

8. (C) Kiriyenko said the PMDA Protocol is currently hostage
to MCC. (Comment: It is unclear what Kiriyenko meant by this
statement. End Comment). Kiriyenko noted that the substance
was agreed, the text was very good, and the document had been
well-prepared. The task now was to clear it with other
Russian Federation agencies. Kiriyenko went on to say that
when the agreement was signed many years ago, the idea was
that the seven big countries would provide funding. He noted
that the situation has since changed, and some argued that
Russia had its own money. He added that while the United
States allocated $400 million, the rest was to come from
Russia. The cost grew to $2-2.5 billion, and Russia could
not come up with $2 billion, and therefore decided to combine
plutonium disposition with other programs, and take funding
from them. He noted that the U.S. and Russia have worked for
a year on a modified agreement, and are happy with the
amendments, which allow for disposition in thermal reactors,
fast reactors, and high-temperature reactors. According to
Kiriyenko, it was still possible to implement the agreement.


9. (C) However, Kiriyenko added that the Russian Federation
Ministry of Finance was asking whether this project is still
a priority, given the economic crisis, and wondered why they
couldn,t delay completion from 2030 to 2033. Kiriyenko also
noted that he is developing a three-year budget and would do
his best to get the money, although he was unsure whether he
would be successful given the crisis. So, he suggested, the
problem was time, how soon the project could go forward.
Poneman called Kiriyenko,s attention to the language in the
underlying agreement that makes clear that program activities
of both sides are subject to appropriation of funds. The
agreement was written in a way that it could be signed now


and activities would proceed as funds became available.

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JULY SUMMIT PREPARATION, NEXT STEPS
--------------

10. (C) As a personal idea, Kiriyenko suggested that the
Summit discussion could be broadened to include other topics,
including assured fuel supply, construction of an enrichment
plant in the United States with Russian technology, and
cooperation in the development of small and medium size
reactors suitable for small countries. Poneman noted that
President Obama in Prague had proposed a new international
architecture for civil nuclear cooperation, and DOE welcomed
further discussion of this subject.

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NEXT STEPS
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11.(C) Poneman, Kiriyenko, and Spasskiy agreed on the
following course in the context of the meeting scheduled the
next day, June 10, with DFM Ryabkov: 1) experts would meet to
work through the Joint Statement; 2) the United States would
provide Russia with a symmetrized MCC text, and both sides
would aim to complete the agreement for the Summit; and 3)
Russia would see if the Plutonium Disposition Agreement
already had flexibility built in to deal with potential
funding problems, and proceed with the interagency review and
approval process for the protocol to the Plutonium
Disposition Agreement, recognizing that time is of the
essence.


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