IAEA/IRAN: DG REPORTS MORE OF THE SAME

C O N F I D E N T I A L SECTION 01 OF 03 UNVIE VIENNA 000265

SIPDIS

E.O. 12958: DECL: 06/08/2024
TAGS: KNNP AORC IAEA IR
SUBJECT: IAEA/IRAN: DG REPORTS MORE OF THE SAME

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Classified By: Ambassador Gregory L. Schulte for reasons 1.4(b) and (d)

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Summary
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1. (C) The IAEA Director General's (DG) June 5 report on
Iran, which confirms a lack of continuing cooperation that
seems to have become the "status quo," again identifies
Tehran's failures to abide by UN Security Council and Board
requirements. Conveying a "matter of fact" tone, the report
describes Iran's continued enrichment- and heavy
water-related activities, refusal to implement the Additional
Protocol (AP) and Code 3.1, denial of access to some declared
nuclear facilities and the stalled investigation on possible
military dimensions (PMD) issues. The report notes Iran has
increased its centrifuge activities, by operating
approximately an additional 1,000 machines and installing an
additional 900 machines since February. The press continues
to highlight this "exponential increase in centrifuge
activities" as the most striking "new element" of the DG's
report, since it brings Iran within threshold capacity of
weapons material were it to further enrich its uranium
stockpile to weapons grade. The report is more direct about
Iran's failure to abide by Code 3.1, noting that Iran is the
only country with significant nuclear facilities that refuses
to implement the standard. While clarifying that Iran has
been provided sufficient access to the documentation related
to possible military dimensions (PMD),the DG injects his
view that it is up to the Member States that provided the
IAEA with information to do more in order to facilitate the
IAEA's verification. The fact that both the Iran and Syria
reports conclude by pointing fingers at Member States other
than Iran and Syria is extremely unhelpful and can be
directly attributed to the Director General's influence.
Asked by DCM why the IAEA continues to introduce such
distractions into the reports, the DG's chef de cabinet
acknowledged a deepening problem of credibility arising from
Iran's unchallenged defiance of the IAEA.


2. (SBU) Although the report's conclusions highlight Iran's
lack of cooperation and failure to meet UN Security Council
requirements, it is unlikely to provoke much discussion in
the Board room beyond what has become a stilted presentation
of national statements, especially as many Board members
await the Iranian presidential elections and Tehran's
response to the E3 3 offer of talks. Iran and its allies
will undoubtedly focus on the DG's call to Member States to
provide copies, or even originals, of the PMD documentation
to Tehran, but will ignore the fact that Iran has had
sufficient access to study this documentation. Mission
recommends that the U.S. statement hew to the technical basis
of the report, while acknowledging broader political
considerations /opportunity for engagement. Mission
recommends that in urging Iran to take advantage of this
critical opportunity for engagement, the U.S. statement call
upon Iran to demonstrate its willingness to cooperate with
the IAEA to restore the international community's confidence.


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Continued Enrichment- and Heavy
Water-Related Activities
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3. (SBU) The IAEA DG's June 5, 2009, report on
Implementation of the NPT Safeguards Agreement and relevant
provisions of Security Council resolutions 1737 (2006),1747
(2007),1803 (2008) and 1835 (2008) in the Islamic Republic
of Iran states that Iran continues to build and expand its
enrichment- and heavy water-related activities despite
numerous calls by the IAEA Board of Governors, the UNSC, and
the E3 3 to suspend such activities. Since the February 19
DG's report, Iran has completed installation of at least ten
additional centrifuge cascades, six of which are operating
with uranium hexafluoride (UF6) gas. The report explains
that Iran, as of May 31, has estimated its total production
of approximately 1339 kilograms of low enriched uranium (LEU)
in the form of UF6 gas. Because of Iran's expanding
centrifuge activities, the IAEA informed Iran that
improvements to the containment and surveillance measures at
the FEP are required to meet safeguards objectives. The
report also notes Iran's continued work on its "new
generation" centrifuges-the IR-2, IR-3, and IR-4-at the pilot
FEP at Natanz. In addition, the report mentions for the
first time, that Iran is working with an IR-2 modified
centrifuge at the pilot FEP. Iran's progress in the "new
generation" centrifuge area seems to remain at the research
and development stage. The report also provides an
update-from satellite imagery-of Iran's uranium mining and
milling activities in Bandar Abbas and Saghand. This is the
first update given to the Board on this topic in several

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years.


4. (SBU) Highlighting Tehran's continued failure to abide
by Code 3.1 of its Subsidary Arrangement by not allowing the
IAEA access to the IR-40 Heavy Water Research Reactor and not
providing design information related to the planned nuclear
plant at Darkhovin, the report identifies Iran is the only
State with significant nuclear activities and a comprehensive
safeguards agreement in force not to implement Code 3.1.
The DG repeats his statement from the February report that
Iran's refusal to allow access to the IR-40 could "adversely
impact the IAEA's ability to carry out effective safeguards"
at the reactor, and that it is now impossible for the IAEA to
use satellite imagery to monitor the reactor's construction
since the domed containment structure has been completed.
The report also indicates that one fuel assembly has been
completed using the fuel rods Iran produced at its Fuel
Manufacturing Plant at Esfahan.

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Again, Absolutely No Progress on Possible
Military Dimensions
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5. (C) The report briefly points out that there remain a
number of outstanding issues-without enumerating them-which
give rise to concern, and which need to be clarified
regarding the existence of possible military dimensions (PMD)
to Iran's nuclear program. The IAEA simply notes, again, in
a matter-of-fact tone that it has "still not received a
positive reply from Iran" regarding its request for access to
relevant "information, documentation, locations or
individuals." Consequently, "the Agency has not made any
substantive progress on these issues." While the DG urges
Iran to cooperate and provide clarifications on the PMD
issues and notes that Iran has been provided with sufficient
access to documentation related to PMD, he unfortunately
also turns the onus on the Member States who provided the
IAEA with information to do more in order to facilitate the
IAEA's verification. Ending on a low note, the final
sentence of the report states, "...the Director General
urges Member States which have provided documentation to the
Agency to work out new modalities with the Agency so that it
could share further information with Iran since the Agency's
inability to share additional information with Iran, and to
provide copies or, if possible, originals, is making it
difficult for the Agency to progress further in its
verification." Speaking privately on June 8 with DCM,
ElBaradei's chief of staff, Antoine Van Dongen, acknowledged
the unhelpful distraction from the Iran case posed by the
DG's inclusion of language putting an onus on Member States
for the conditions under which they provide information to
the Agency. Van Dongen also expressed concern that Iran's
continued defiance of the agency was doing lasting damage to
the IAEA's credibility and acknowledged the need for the DG
to avoid placing any further political gloss on Iran's
defiance of the UN Security Council resolutions.

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Comment and Recommendation
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6. (SBU) The most striking "new element" of the DG's
report, which the press continues to highlight, is the
exponential increase in centrifuge installation at Natanz
since March, bringing Iran within threshold capacity of
weapons material were it to enrich its LEU UF6 stockpile
further to weapons grade. In so doing, Iran may be trying to
undercut the incentive for a "freeze for freeze" or
CDb-6 @LQfX~Zalternatively may be seeking to increase its leverage before
engaging with the E3 3. Mission recommends that in addition
to urging Iran to take advantage of this critical opportunity
for engagement, the U.S. statement call upon Iran to
demonstrate its willingness to cooperate with the IAEA and UN
to help restore the international community's confidence. As
with previous reports, the DG's June report catalogues Iran's
continued failure to cooperate with the IAEA or implement UN
Security Council and Board resolutions. Coupled with the
continued lack of substantive progress on PMD and continued
failure to implement Code 3.1 and the AP, the report paints a
bleak picture; there has been no attempt on Iran's part to
restore confidence.


7. (SBU) Mission recommends that the U.S. statement
highlight the report's conclusion that Iran is an outlier
among states with significant nuclear activities in not
implementing revised Code 3.1; while no one is denying Iran's
right to nuclear energy, we expect Iran to play by the same
rules as everyone else. We should also highlight the final
para of the report, which for the first time states
categorically that Iran has had sufficient access to
documentation to enable it to respond substantively to the

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IAEA questions. The U.S. statement could note that Iran is
thus responsible for the current stalemate of the
investigation. Undoubtedly the NAM will focus on the
following sentence concerning the need for Member States to
provide access to documentation/information for the
investigation to progress; thus deflecting from Iran's lack
of cooperation. To help dispel the negative impression left
by this final sentence, the U.S. statement could underline
that the Iran must first respond to the questions already
before it, which the IAEA has made clear are within Iran's
capacity to answer or clarify.


8. (SBU) Overall, Mission recommends that the U.S.
statement hew to the technical basis of the report, while
acknowledging broader political considerations /opportunity
for engagement. We expect that Russia and China will
soft-peddle the report, given the timing of the Iranian
election and their desire to encourage Iran to engage the
E3 3, thus making a strong E3 statement especially important.
SCHULTE