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)


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Summary
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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.

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Fuel Assurances
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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.

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Mutual Interest in Resolving the Budget
Prior to the IAEA's Summer Pause
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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."

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Amano Expresses Reluctance to Visit
Washington in the Near Future
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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