NUCLEAR FUEL BANKS - CAPITALIZING ON THE JUNE 2009

C O N F I D E N T I A L SECTION 01 OF 02 UNVIE VIENNA 000364 SENSITIVE SIPDIS STATE FOR T - TIMBIE, DESAULTES; ISN/NESS - BURKART, CARNAHAN, HUMPHREY; IO/T - DETEMPLE DOE FOR NA-243 GOOREVICH, OEHLBERT NRC FOR OIP DOANE, SCHWARTZMAN NSC FOR SCHEINMAN, CONNERY, HOLGATE E.O. 12958: DECL: 07/29/2014 TAGS: KNNP AORC ENRG TRGY IAEA RU SUBJECT: NUCLEAR FUEL BANKS - CAPITALIZING ON THE JUNE 2009 BOG REQUIRES PRAGMATISM FROM SKEPTICAL CAPITALS REF: A. UNVIE 301 ¶B. STATE 76708 (NOTAL) ¶C. UNVIE 095 (NOTAL) Classified By: CDA Geoffrey R. Pyatt, reasons 1.4 (b) and (d) ¶1. (SBU) Summary: The IAEA Secretariat remains under instruction from DG ElBaradei to work on arrangements for assuring last-resort access to nuclear fuel supply for countries facing a politically motivated cut-off. Specifically, the Secretariat is assembling technical responses to issues raised during the June 2009 Board of Governors debate (ref A),with the intent to release a discussion paper. ElBaradei warned EU representatives earlier in July that he feared the political atmosphere had worsened with the June debate and he opposed putting the issue on the Board's agenda for September lest a flare-up of distrust set the issue back even more. The DG separately counseled the UK mission to circulate HMG's paper on its guaranteed export license concept as a "GOV/INF" document for discussion under Any Other Business rather than seek the prominence of an agenda item. Nevertheless, the IAEA point man on the issue takes the view that a constructive discussion without intention to decide anything in September can be brought about with enough diplomatic ground work and that ElBaradei could be persuaded to put the issue on the agenda. Whether Russia's draft agreements with the Agency for its Angarsk LEU fuel reserve would be released by that time remains unclear, according to the Russian Mission here. End Summary. ¶2. (SBU) ADCM met July 30 with Tariq Rauf in the IAEA External Relations and Policy Coordination (EXPO) office for a discussion as instructed in ref B. Mission had provided ref B para 13 points to Rauf a week earlier. Rauf stated that Director General (DG) ElBaradei had directed the EXPO-led team working on the international nuclear fuel bank concept to continue development of the arrangements to be proposed. In this connection EXPO was assembling a nonpaper responding to questions and issues raised in the group and national inventions made in the June Board meeting under the "Assurance of Supply" agenda item (ref A). Rauf said he was authorized to consult Member States in advance of the September Board meeting and was inclined to try to issue his paper and convene an informal session before the end of August. ¶3. (SBU) ADCM welcomed Rauf's information and confirmed the U.S. desire that a paper from the Secretariat provide the basis for an extension of the practical engagement seen in June. ADCM shared some of the constructive U.S.-Argentine exchange alluded to ref b para 9 and reaffirmed U.S. view that Member States supplying material to a fuel bank need to be able to do so consistent with their own laws. He also informed Rauf of Washington's intention to engage skeptical states and draw them out on their concerns, with a view toward designing a fuel assurance mechanism that meets Member States' perceived requirements. ¶4. (SBU) Rauf shared that the UK Mission had submitted a paper to the Secretariat earlier in the month elaborating on its guaranteed export license concept, previously labeled the "enrichment bond." Rauf said -- and UK Mission First Secretary Creena Lavery confirmed to us in a separate conversation July 30 -- that the UK had originally intended to request an agenda item for discussion of its concept but had taken the Secretariat's/ElBaradei's advice to opt instead for a discussion under "Any Other Business" (AOB). ElBaradei apparently was rather downbeat about the political atmosphere surrounding the issue when he spoke at a heads-of-mission *********************** * Missing Section 002 * ***********************