IRAN/TRR: INITIAL REACTION FROM JUSCANZ AND OTHER

C O N F I D E N T I A L UNVIE VIENNA 000487

SIPDIS

DEPT FOR P, T, IO, ISN, S/SANAC
NSC FOR SAMORE, TALWAR, RYU
DOE FOR S1, S2

E.O. 12958: DECL: 10/22/2019
TAGS: AORC PREL IAEA KNNP IR
SUBJECT: IRAN/TRR: INITIAL REACTION FROM JUSCANZ AND OTHER
INFLUENTIAL BOARD MEMBERS

Classified By: Ambassador Glyn Davies for reasons 1.4 b and d


1. (C) Ambassador Davies reviewed the outcome of the
pentagonal (Iran, Russia, France, U.S.) IAEA-led talks on
refueling the Tehran Research Reactor (TRR) and next steps in
separate briefings with JUSCANZ (Japan, Canada, Australia,
New Zealand plus ROK) October 22 and a subset of influential
IAEA Board members (Brazil, Argentina, South Africa,
Malaysia, Egypt and Pakistan) October 23. With both groups,
and in a bilateral meeting with Israeli Ambassador also on
October 23, Ambassador emphasized the centrality of DG
ElBaradei and institutional IAEA role in brokering the draft
project and supply agreement (PSA) and in the placing the
Iranian LEU under IAEA custody. He characterized TRR
re-supply as a humanitarian and confidence building measure
contingent on export of the full 1200 kg of Natanz LEU within
the proscribed year's end timeframe. Pending acceptance by
Iran and expected agreement by Russia and France, the hope
was to bring the PSA to the November Board for approval. For
our part, Ambassador shared that the U.S. had subscribed to a
political declaration of support, appended to the PSA, to
include IAEA technical assistance on reactor safety upon
implementation of the agreement. With the JUSCANZ he noted
the helpful Russian role in the negotiations and Iran's
failed gambit to split the P5 plus 1 by questioning the
French role. (DCM covered the same ground with Turkish and
Italian counterparts who took a view close to ours.) In a
phone conversation with Sweden's EU Presidency Ambassador
Hans Lundborg, Ambassador Davies provided a report on the TRR
negotiations and asked for his support as the process moves
forward. Lundborg responded positively.


2. (C) JUSCANZ members were broadly supportive but cautious.
Canada noted the self-evident importance of U.S. leadership
and involvement, which Ambassador Davies acknowledged was the
sine qua non for Iran. Japanese Ambassador Nakane raised
reservations about implicitly legitimizing Iran's enrichment
capacity or being seen to reward Iran for non-compliance.
Ambassador Davies explained that this was a CBM limited in
scope to the TRR with no implications as to the need for
Iranian compliance with UNSCRs and Board requirements on
suspension. Australia and Canada agreed that the TRR deal
was a "risk worth taking"; Australian Ambassador Potts
assessed that albeit imperfect, this was a creative potential
way forward for political engagement. South Korea
characterized the deal as a small though insufficient step in
the right direction. Drawing parallels to DPRK behavior, ROK
cautioned as to the potential for backtracking by Iran while
Japan likewise questioned Iran's motivations. (Note: ROK
also reported that Iranian FM Mottaki would soon visit DPRK.
End note.) The JUSCANZ further discussed the problem of
balancing the potential positive news on the TRR deal with
the negative disclosure on Qom both in the context of the
November Board and in public statements on Iran. (Comment:
These would be separate items on the November Board agenda.
We will also have more information as to the conduct of Qom
inspection from which to cue our position in advance of the
Board. End comment). Japan also asked about a UNSCR (given
that UNSCR 1737 prohibits export of nuclear material from
Iran) to effectuate the TRR deal, which Ambassador noted was
probably not needed.


3. (C) Separately, influential NAM and G-77 Board members
(Brazil, Argentina, South Africa, Malaysia, Egypt and
Pakistan) peppered Ambassador Davies with technical questions
on the PSA's conformity with IAEA practice and the follow-on
commercial arrangements. Argentine Ambassador Curia took
particular note of the new element of IAEA custody of the
material at all stages, which Ambassador Davies and DCM
explained was a linchpin of the deal. Curia asked if the
Secretariat had authority to take custody of the material.
Informed that IAEA attorneys had mentioned a precedent
involving Iraq, Curia asked if that case has occurred at a
time "Iraq had a government" or if it had been under
"provisional" authority; we noted our understand that
precedent lay in the 1990s but undertook to confirm.
Argentina and Brazil were interested to hear that Chile could
be another potential supplier of fuel elements, in addition
to France. Curia wanted to understand precisely the
provisions made for France to be party to the PSA. Asked by
Malaysia about any advantage to Iran in getting 19.75 percent
fuel in return for the Natanz 3 percent LEU, Ambassador
Davies explained that proliferation concerns were mitigated
by the technical difficulty of deconstructing silicide fuel
(in order to gassify and further enrich the uranium) and the
fact that it would be under IAEA safeguards with the whole

world watching.


4. (C) Like Japan the day before, South Africa, joined by
Argentina and Egypt, honed in on the issue of legitimizing
Iranian enrichment. Ambassador Davies denied any presumption
that this limited deal reflected a change in the U.S.
position or UNSC/Board requirements on suspension. Asked by
Egypt if such a deal could be repeated, Ambassador noted the
imperative for Iranian compliance and the lack of other
civilian need for enrichment (given that the TRR would be
fueled for 10-15 years and Russia provides fuel for Bushehr).
Egypt also queried whether a UNSCR was needed and the
firmness of the deadline for Iran's response (Friday, October
23). Ambassador explained the DG's insistence on sealing
this deal as a demonstration of good faith, adding that time
was of the essence also from a technical standpoint of
continued operation of the TRR before (as Iran claims it runs
out of fuel end 2010). (Comment: These influential NAM/G-77
Board members seemed to be withholding judgment, waiting to
see if the TRR deal was workable and trying to figure out
what was in it for Iran. In a discussion with DCM, India
also expressed deep skepticism about Iran's intentions and
its willingness to give up the leverage it enjoys from the

Natanz material. End Comment.)


5. (C) Receiving a comparable briefing from Ambassador
Davies, Israel's relatively new Ambassador Ehud Azoulay asked
if the U.S. would "cross-check" that Iran is truly producing
medical isotopes in the research reactor. He noted that 1200
kg of LEU was not a great amount for Iran to have to replace
through the ongoing enrichment at Natanz; the "basic problem"
from the Israeli perspective was only postponed. Ambassador
Davies noted in reply there had been no indication of
diversion of material from the TRR in the past. He agreed
with Azoulay that, were Iran to refuse the deal brokered by
ElBaradei, it would clearly undercut Iran's claim to purely
peaceful intentions and would shift emphasis back to the
sanctions track of our dual-track approach. Ambassador
Davies acknowledged his concern that ElBaradei may receive at
first only a "half-answer" from Tehran that plays for time.
DAVIES