IAEA: CHARGE TALKS FUEL ASSURANCES AND BUDGET WITH

C O N F I D E N T I A L UNVIE VIENNA 000357 SIPDIS E.O. 12958: DECL: 07/24/2034 TAGS: AORC ENRG PREL TRGY IR IAEA KNNP SUBJECT: IAEA: CHARGE TALKS FUEL ASSURANCES AND BUDGET WITH DIRECTOR GENERAL-ELECT AMANO Classified By: CHARGE D'AFFAIRES: GEOFFREY PYATT for reasons 1.4(d) and (e) -------------- Summary -------------- ¶1. (C) Charge d'Affaires and MsnOff met with Director General-Elect Amano and two officers from the Japanese mission on July 24 to update Amano on U.S. positions on Fuel Assurances and the ongoing negotiations regarding the IAEA budget. The atmosphere of the meeting was warm throughout, with Amano articulating his support for the U.S. stance on resolving the budget impasse. On Iran, Amano reiterated his view that the IAEA should not be an "intermediary" between Iran and the P5 1, but rather is an independent technical agency that needs to apply objective criteria. The meeting concluded with Amano advising Charge that while he appreciates the recent invitations he has received to travel to Washington, he feels that doing so at the present time would run counter to his interests of appearing to be an impartial DG. End Summary. -------------- Fuel Assurances -------------- ¶2. (C) Charge informed Director General-Elect Amano that following senior level discussions in Washington on the Fuel Assurances issue, the U.S. has informed the IAEA Secretariat of our desire to keep the conversation moving forward with the IAEA Board. Washington is realistic about the near term prognosis for this issue and does not expect that a Board of Governors decision on an IAEA-administered fuel bank should be sought in September. However, Charge advised Amano that Washington will continue its advocacy for refining the concept and that this approach has been communicated to Vilmos Cserveny, director of the IAEA's Office of External Relations and Policy Coordination. -------------- Mutual Interest in Resolving the Budget Prior to the IAEA's Summer Pause -------------- ¶3. (C) Changing topics, Charge then mentioned that he had informed DDG Management David Waller on July 23 that the U.S. will commit to provide the IAEA with $5.5 million in extra-budgetary funding for the Safeguards Analytical Lab (SAL) project and will push for an outcome on the regular budget increase for 2010 above the 5.5 percent that some in Vienna are recommending. Senior U.S. officials have contacted counterparts in the French, British, and German 
governments to advocate for their support of the increase, and we now believe that the French and British governments agree in principal to this proposal. Charge acknowledged that the German government will continue to be a tough sell due its opposition to the precedent an increase in the budget would set. Charge reiterated that this matter is of keen importance to high levels of the U.S. Government and mentioned that the U.S. is seeking to conclude negotiations regarding the IAEA's 2010 budget the week of July 27-31 so as to close the book on this matter before the summer pause. Doing so would remove this contentious issue from debate long before Amano assumes his responsibilities as Director General. ¶4. (C) Amano noted that Board Chairperson Ferouki is inclined to seek a pause on further discussions regarding the budget, but that it is Amano's desire to close the matter before the summer break. Amano's staff has so communicated this to the Secretariat. On a related note, Amano informed Charge that just prior to our July 24 meeting he had received word from Tokyo that Japan will commit to an extra-budgetary contribution for SAL of 2 million Euros. Although this information has not yet been passed to the IAEA, Amano believed it would provide additional momentum to the goal of concluding discussions on the budget next week. (Comment: Indeed, the Japanese and U.S. commitments of this past week fulfill crucial "assumptions" in the Romanian Vice Chairman's scenario for bringing down the regular budget to a sellable number. End Comment.) ¶5. (C) Amano welcomed the opportunity earlier to speak with Under Secretary Tauscher, who had requested that he provide her talking points that might be helpful for her planned discussions with German counterparts. Amano informed Charge that he planned to respond with these talking points on the budget and his management reform agenda in an email. Amano was careful to mention his caution with entering into this debate on the budget, given that it was centered on a proposal by current Director General ElBaradei. That said, while he does not want to be too vocal about it at the moment and while he wants to strike a balance, he agrees that Agency needs are increasing and management must be strengthened. His general plan for the talking points is to emphasize the need to modernize and further develop human infrastructure within nuclear security; increase human resources and the IAEA's science and technology with regards to Technical Cooperation; increase the IAEA's partnerships with other countries and other international organizations; increase efficiencies through the introduction of integrated safeguards; and improve management efficiencies. Charge agreed that these talking points will be helpful to our discussions with the Europeans. ¶6. (C) Charge relayed his July 23 conversation with the Malaysian Ambassador and specifically mentioned that Malaysia believes Iran to be "a New York issue." Charge expressed the U.S. position that given the current situation regarding Iran's nuclear program, we need to use every avenue available to advance diplomacy--with the IAEA playing an important role. Amano said he knows AEOI Director Salehi from Tokyo, but arrived in Vienna after Salehi's departure as Ambassador. He noted that the results of Iran's recent presidential election were "not encouraging." He also stated that while the work of the EU-3 1 was important and would help matters, it will not replace the work of the IAEA. Under his leadership, Amano will continue to apply the safeguards. "If Iran does not comply, I will make note of that." -------------- Amano Expresses Reluctance to Visit Washington in the Near Future -------------- ¶7. (C) Amano then mentioned that he has heard from various quarters that there is an interest in Washington that he come for a visit prior to December. Amano informed Charge that while doing so would undoubtedly be of high value from a substantive point of view, he is nevertheless cautious of doing so given the feeling of many that he is already too close to the U.S. and will only carry out U.S. policies once becoming Director General. Given that perception and given requests of him to visit other countries as well, Amano plans to make his first trips to other countries in an effort to show the Board of Governors that he will carry out his duties as Director General evenly and fairly. After this initial outreach, Amano would like to meet with U.S. officials either in Vienna or in Tokyo, but he reiterated his belief that visiting the U.S. now would not be helpful from a perception standpoint. PYATT