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Nuclear News - 04/06/01
RANSAC Nuclear News, April 6, 2001
Compiled by Terry C. Stevens and Benjamin D. Wampold


A. U.S. - Russian Relations
    1. USA Still Working on its Policy Vis-�-vis Russia, Segodnya (04/06/2001)
    2. Ivanov to Meet U.S.'s Powell in Paris, Reuters (04/05/2001)
B. U.S. Disarmament Budget
    1. Threat-Reduction Aid Needs To Be Increased [Op-Ed], St. Petersburg Times (04/03/2001)
    2. Russia's Record On Proliferation [Op-Ed], Chicago Tribune (03/31/2001)
C. Russian Ministry of Atomic Energy (Minatom)
    1. New nuclear minister backs plan to import spent nuclear fuel, The Russia Journal (04/06/2001)
D. Fissile Material Storage
    1. Russia's "Top Secret" looks into storage of spent nuclear fuel, BBC Monitoring (04/04/2001)
E. Russian - EU Relations
    1. EU Mulls $2Bln For Conversion, The Moscow Times (04/03/2001)
F. Highly Enriched Uranium (HEU) Deal
    1. U.S.-Russian Nuclear Nonproliferation Program Eliminates 4,500 Warheads, USEC Press Release (04/03/2001)
G. Plutonium Disposition
    1. NRC considers plan to convert plutonium to reactor fuel, Scott DiSavino, Reuters (04/03/2001)
H. Russian Nuclear Forces
    1. Moscow: No Nuclear Weapons on Kursk, Los Angeles Times (04/05/2001)
I. Publications
    1. Nuclear Nonproliferation: Security of Russia's Nuclear Material Improving; Further Enhancements Needed, GAO Report (03/2001)
    2. Proliferation Brief: The Business of Russian Cooperation with Iran, Carnegie Non-Proliferation Project (04/06/2001)
    3. Russia's Nuclear and Missile Complex: The Human Factor in Proliferation, Valentin Tikhonov, Carnegie Non-Proliferation Project

A. U.S. - Russian Relations

1.
USA Still Working on its Policy Vis-�-vis Russia
Segodnya
April 6, 2001
(for personal use only)


A delegation of the Council of Foreign and Defence Policy has visited the USA, where it met with US experts and politicians within the framework of traditional dialogue with the Aspen Strategic Group. Our delegates also met with many US officials of the new administration, including national security adviser Condoleezza Rice. Sergei KARAGANOV, president of the council and coordinator of the delegation, shared his impressions of the trip with Segodnya analyst Avtandil TSULADZE.

Question: What is the attitude of the new US administration to Russia?
Answer: The USA wants to have new, possibly partner relations with Russia. It was said during our meetings there that we can collaborate in some spheres and disagree in others. We should resume broad strategic dialogue on the entire range of questions of interest to Russia and the USA. The world is so fragile that the USA simply cannot allow itself to ignore Russia, even despite its relative weakness.

Question: What is the main problem in bilateral relations?
Answer: Russia's relations with Iran. However, in this sphere we can envisage not only rivalry or confrontation, but also collaboration. We should just change the paradigm and launch a broad dialogue on all questions.

Question: Has the USA formulated its policy with regard to Russia?
Answer: The USA does not have a policy vis-a-vis Russia yet. A working group is only being set up to elaborate it and will produce preliminary results by mid-summer. Hence we should keep calm now. We should understand that this policy can be influenced, as initially it does not contain any animosity towards us. We told our interlocutors in the USA that a gloomy impression has developed in Russia about the policy of the new US administration, and that this might throw us into a vortex where the sides would try to respond to all challenges with excessive zeal. These signals were received with attention.

Question: Can Russia snatch the initiative in bilateral dialogue in this situation?
Answer: I don't think so, but we surely should not display the initiative in worsening relations. The new US policy with regard to Russia is being developed so as to be absolutely different than under Clinton. Not opposite to what Clinton did, but different. It is believed there that Clinton failed both in essence and in form.

Question: Why does not George Bush want to meet with Vladimir Putin?
Answer: As far as I know, such meeting will be held only after the USA formulates its policy with regard to Russia.

Question: There are advocates of "facing Europe" to spite the USA in Russia.
Answer: The USA is the world's most powerful country, and hence it would be a senseless expenditure of strength to try to fight it. And bad relations with the USA would only slow down rapprochement with many countries, including in Europe. In addition, we would not have the possibility to tackle many problems. We have quite a few parallel interests with the Americans, although many other interests divide us. Too close relations with USA are harmful, just as hostile relations are.

Question: How adequate is the Russian policy vis-a-vis the USA?
Answer: I think there is hysteria at the level of the public and some public statements. The president is keeping the pause and the few statements he made were highly constructive. As for the spy feud, it appears that this is an internal American problem by half, because there is a struggle on between the FBI and the CIA. At the same time, many people told us that the train had already departed and we should think about the future now.

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2.
Ivanov to Meet U.S.'s Powell in Paris
Reuters
April 5, 2001
(for personal use only)


MOSCOW, Apr 5, 2001 -- (Reuters) Russian Foreign Minister Igor Ivanov is to meet U.S. Secretary of State Colin Powell in Paris next week on the sidelines of an international meeting on Yugoslavia, the Foreign Ministry said on Thursday.

A ministry statement said the two men would "continue discussion of key issues on the Russian-American political agenda".

Relations between Moscow and Washington have been strained by an espionage scandal, with each side threatening to expel dozens of the other's alleged spies.

Moscow has also been upset by U.S. statements suggesting that Russia has encouraged nuclear proliferation and constitutes a threat to security.

Ivanov and Powell first met in Cairo in February.

Further high-level talks were held in Washington last month when Sergei Ivanov, then head of Russia's Security Council, met Powell and other officials.

But Ivanov, now defense minister, was unable to secure an agreement on a when Presidents Vladimir Putin and George W. Bush would meet.

Both Igor Ivanov and Powell are to attend a meeting of the six-nation Contact Group on the Balkans in Paris on April 11-12. Other members of the group are Britain, France, Germany and Italy.
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B. U.S. Disarmament Budget

1.
Threat-Reduction Aid Needs To Be Increased [Op-Ed]
St. Petersburg Times
April 3, 2001
(for personal use only)


Among the most cost-effective defense dollars that America spends are those that pay for reducing Russia's arsenal of leftover Cold-War weapons. The Bush administration began a review of these "threat-reduction" programs last week, saying that it had the intention of making them more efficient.

But there are troubling signs that Bush is planning to reconsider his campaign promise to increase overall funding for these valuable programs and cut them instead. That would be a very serious mistake indeed.

Throughout the Cold War, Washington spent trillions of dollars defending against Russian nuclear, biological and chemical weapons. Over the past decade, for a little less than $6 billion, America has financed - among other things - the deactivation of more than 5,000 Soviet-era nuclear warheads, the conversion of more than 110 metric tons of bomb-grade uranium into commercial reactor fuel, and the safe storage of plutonium that had been removed from Russian weapons.

It has also helped underwrite new jobs for Russian nuclear scientists who might otherwise sell their talents to such countries as Iraq, Iran or Libya.

Last year Congress appropriated nearly $900 million for threat-reduction programs in Russia and other former Soviet republics. In the presidential campaign, Bush expressed strong support for these efforts and promised a substantial increase in their funding.

Earlier this year, a bipartisan task force headed by the former Republican senator Howard Baker called for spending up to $30 billion on them over the next decade.

But just last week, The Wall Street Journal reported that the Bush administration's budget makers were instead preparing to impose substantial cuts.

It is indeed true that not all the programs in Russia have been equally effective. Finding commercial projects to keep nuclear scientists employed has been very difficult, and efforts to dispose of Russian and American weapons-grade plutonium have been slow in getting started.

But one of the programs now in line for big reductions is the highly successful effort to keep track of - and secure - nuclear material at Russian bomb sites before it is removed and rendered harmless.

The administration should conduct a careful review, identifying those programs that need to be strengthened or that should have their funding shifted to more effective efforts.

But overall spending in this area should be increased, and not decreased. It would be a dangerously false economy either to slow down or to halt the dismantling of Russian weapons.
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2.
Russia's Record On Proliferation [Op-Ed]
Chicago Tribune
March 31, 2001
(for personal use only)


The Bush administration's decision to re-examine U.S. programs with Russia to stop the spread of nuclear, biological and chemical weapons is welcome news. Any program sending U.S. aid money to today's Russia, worthy as it may be, ought to be thoroughly monitored and reviewed.

The goal here, which has bipartisan support, is to make sure U.S. funding is spent effectively on programs designed to stop the proliferation of weapons of mass destruction, or the defection of the scientists who run them, to rogue nations who could threaten U.S. interests. This remains arguably our No. 1 strategic concern: Russia's aging nuclear arsenal.

Bush had it right when he declared, "We fully intend to continue to cooperate with the Russians. It's in our nation's best interest to work with Russia to dismantle its nuclear arsenal."

At the start of the second decade since the Cold War ended, the former superpower remains on the edge of political and economic chaos, yet it possesses some 10,500 nuclear weapons that are still operational and a comparable number in reserve or under dismantlement.

Since 1992, the U.S. has spent nearly $6 billion on cooperative nuclear threat reduction programs to try to deal with the proliferation menace from Russia and the nuclear states of the former Soviet Union.

This builds on the Nunn-Lugar program to dismantle nuclear weapons such as missiles and strategic bombers in Russia. Bush noted last week that his review of the programs has the support of former Sen. Sam Nunn, a Democrat from Georgia who now co-chairs the Threat Reduction Initiative, a private foundation.

But Nunn rightly warned that recent budget cuts contemplated by the Bush adminstration for some threat reduction programs with Russia, such as the disposal of weapons grade plutonium, would amount to "heading backward."

The administration review will be completed by July, and at that time, any adjustments in the budget for nuclear programs can be contemplated. If they are underfunded, a supplemental appropriation could deal with any serious shortfall.

As Nunn observed last week, "The most significant clear and present danger to the national security of the United States is the threat posed by nuclear and other weapons of mass destruction. Nothing else comes close."

Doubtless it's important to keep commitments to Russia, especially given the recent chill in relations over spy scandals, the Bush administration's pursuit of a national missile defense and Bush's concerns about Russia's proliferation of technology and weapons to states such as Iran. All the more reason to make sure those commitments are effective.

The review would look at programs such as those dealing with nuclear materials and safety; implementing plans to destroy 50 tons of plutonium that could be made into thousands of weapons; adding to efforts to make Russian fissionable material secure from theft or loss; putting 8,000 Russian scientists to work in the civilian research sector; tightening export controls in Russia, and helping Russia convert from chemical and biological weapons.

At home, there will be competition for those dollars, including a backlog of maintenance deferred at U.S. nuclear weapons facilities of the Department of Energy. Those programs also are important, but Russia's nukes are the greater threat.

It is in the U.S. national security interest to help dismantle Russian nuclear weapons. It is in the national interest to make sure that the dollars committed to achieve that goal are well spent on effective efforts.
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C. Russian Ministry of Atomic Energy (Minatom)

1.
New nuclear minister backs plan to import spent nuclear fuel
The Russia Journal
April 6, 2001
(for personal use only)


MOSCOW - Russia's newly appointed nuclear minister spoke in support of a widely-criticized plan to import spent nuclear fuel for reprocessing that helped cost the job of his predecessor, according to an interview published Friday.

"It will showcase Russia's technological potential and pave the way for new projects," Alexander Rumyantsev, who was appointed nuclear minister late last month, told the daily Izvestia.

He also said a law permitting the imports of nuclear waste is essential for Russia's efforts to exports nuclear fuel. "If we want to sell this product to other countries, we must have a law that allows us to take back spent fuel rods."

The plan foresees importing about 20,000 tons of spent nuclear fuel over 20 years to Russia in special, armored train cars for reprocessing and long-term storage.

Rumyantsev's predecessor, Yevgeny Adamov, strongly advoated the project, saying that Russia stands to earn dlrs 20 billion. He promised to spend dlrs 7 billion of the proceeds to clean up radiation spills in Russia and upgrade safety at existing reactors.

But environmentalists and other critics of the plan warned that it would turn Russia into an international dumping ground for nuclear waste, and accused Adamov of pursuing his own business interests in the deal. Adamov has denied the allegations.

Critics also said that there would be no money left to clean up the environment after funds are spent to build and maintain storage facilities.

Parliament approved the bill in the first of three readings last December, but abruptly cancelled the second reading last month amid the controversy. Several days later, President Vladimir Putin fired Adamov as part of his sweeping Cabinet reshuffle.

Rumyantsev said that the financial aspect of the plan needs more work. He also sought to allay critics' concerns that the ministry earnings from the deal could be misspent, saying that special panels would "track down every single dollar" of the proceeds.

Rumyantsev had served as head of the Kurchatov Institute, Russia's leading nuclear research center.
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D. Fissile Material Storage

1.
Russia's "Top Secret" looks into storage of spent nuclear fuel
BBC Monitoring
April 4, 2001
(for personal use only)


Moscow NTV International's "Top Secret" programme devoted its programme on 4 April to Russia's plans to store spent nuclear fuel from other countries on its territory. Presenter said that some 14,000 tonnes of spent fuel is being stored in Russia and there are plans to bring another 20,000 tonnes from abroad. He said that it is not yet clear where it will be stored.

The programme talked about a plan, approved by the USA, to transport 7,500 tonnes of spent fuel from Taiwan to Russia's Krasnoyarsk -26 waste dump by the year 2007. Speaking about this plan Alisa Nikulina, coordinator of the anti-nuclear campaign of what was identified, as the Socio-Economic Union, described it as an "impudent" act.

In an interview with the programme, Igor Artemyev, from the Yabloko faction, said that the Atomic Energy Ministry makes a profit of about 2bn dollars each year from such deals but the money is being misused. He described Russia's decision to accept spent fuel for storage as a "disgraceful move" and said that this would inflict more damage than the Chernobyl nuclear disaster.

Vladimir Popov, captioned as vice-president of the international organization "Doctors of the World for Preventing a Nuclear War, shared their views and urged a public referendum on the issue and thorough examination of it. He recalled that there were 10 closed towns in Russia which employed 1m people. He said that the ministry's plans to accept nuclear waste from abroad could be explained from "the economic point of view, but not from the ecological point of view". He urged the introduction of "proper monitoring" over spent nuclear fuel that will be stored in Russia and over money that will be paid for storage. Popov also talks about the use of depleted uranium in Yugoslavia.
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E. Russian-EU Relations

1.
EU Mulls $2Bln For Conversion
The Moscow Times
April 3, 2001
(for personal use only)


The European Union and a handful of governments in the Group of Seven industrialized nations are considering giving Russia $2 billion to build and run facilities to convert weapons-grade plutonium into civil-grade uranium, The Wall Street Journal Europe reported Monday.

A discussion of the matter is scheduled for a meeting Wednesday between EU and G-7 officials, the newspaper said, citing unidentified sources close to the talks. The funding is part of a $5.7 billion agreement to destroy 68 tons of weapons-grade plutonium - split between Russia and the United States - signed in September. Russia's portion of the 20-year program was estimated to cost $1.7 billion.

The Nuclear Power Ministry said Monday it was unaware of the planned talks. A disbursement of $2 billion "is too good to be true," said ministry spokesman Yury Bespalko.

"I know that even half of this sum has not been collected yet," he said
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F. Highly Enriched Uranium (HEU) Deal

1.
U.S.-Russian Nuclear Nonproliferation Program Eliminates 4,500 Warheads
USEC Press Release
April 3, 2001
(for personal use only)


Bethesda, MD-In a report to the Senate Foreign Relations Committee, USEC Inc. (NYSE: USU), a private sector company that serves as the U.S. government's executive agent implementing the historic Megatons to Megawatts program, documented the continuing success of the $12 billion, 20-year program that converts Russian nuclear warhead material into fuel for nuclear power plants. The report states that, to date, the equivalent of more than 4,500 nuclear explosives have been eliminated by conversion to nuclear fuel, which is purchased by USEC at no cost to U.S. taxpayers.

Now in the seventh year of the agreement, the governments of the United States and the Russian Federation are 40 percent ahead of the original schedule in converting 500 metric tons of nuclear weapons-derived highly enriched uranium (HEU) into low-enriched uranium (LEU) fuel. USEC purchases the LEU fuel, ships it to the United States and sells it to its utility customers for use in commercial nuclear power plants.

"Since 1994, at the direction of the U.S. government, USEC has successfully implemented the Megatons to Megawatts agreement," said USEC President and CEO William H. Timbers. "To date, approximately 113 metric tons of HEU have been converted into LEU, the equivalent of more than 4,500 nuclear weapons-thus eliminating enough nuclear explosives to destroy every large city in the world.

"The success of this agreement reflects the close cooperation of the U.S. government, the Russian Federation, USEC and Russia's executive agent, Tenex. We are proud to play a pivotal commercial role in reducing the threat of nuclear weapons. USEC's purchases make its program commercially self-sustaining, at no cost to the U.S. government," Timbers added.

The Executive Summary of the report, Implementation of the U.S.-Russian HEU Purchase Program, follows. To access the report through the USEC website, go to www.usec.com, click News Room, then Recent News. To obtain a printed copy of the report, call USEC Corporate Communications, (301) 564-3391.

Implementation of the U.S.-Russian HEU Purchase Program by USEC Inc. Report to the U.S. Senate Committee on Foreign Relations, March 28, 2001

Executive Summary

This marks the seventh successful year for USEC as the U.S. executive agent for the 1993 government-to-government Russian Highly Enriched Uranium (HEU) Purchase Agreement. As called for in this nuclear nonproliferation agreement, USEC and the Russian executive agent, Techsnabexport (Tenex), signed a contract in 1994 that governs the commercial implementation of the 1993 agreement. This 20-year, $12 billion contract facilitates the conversion of 500 metric tons of nuclear weapons-derived HEU into low-enriched uranium (LEU) fuel purchased by USEC for use in commercial nuclear power plants. The program has come to be known as Megatons to Megawatts.

Russian shipments to USEC of weapons-derived LEU commenced in June 1995. Since then, USEC has received 84 shipments of 2,203 cylinders containing 3,303 metric tons of LEU- an amount sufficient to meet U.S. nuclear fuel demand for two years.

These seven years of implementation of the Megatons to Megawatts program clearly demonstrate that both the U.S. and Russian partners have been successful in making this 1993 agreement work. In doing so, the partners have reduced the threat to world stability posed by the proliferation of nuclear weapons and materials. The results are impressive. As of March 2001:

1.Approximately 113 metric tons of Russian warhead HEU have been converted to LEU fuel and purchased by USEC for use by its electric utility customers.

2.The 113 metric tons of HEU is the equivalent of more than 4,500 nuclear weapons-enough nuclear explosives to destroy every large city in the world. The conversion of this material eliminates its potential use as a nuclear explosive.

3.USEC and Tenex are 40 percent ahead of the original 1993, 20-year schedule to convert a total of 500 metric tons of HEU to LEU. This is equivalent to an estimated 20,000 to 25,000 nuclear warheads.

4.No taxpayer dollars are required for this program.USEC pays Russia hundreds of millions of dollars a year for these purchases-a total to date of about $2 billion. Russia vitally needs this hard currency to help offset the falling value of the ruble, to meet the terms and goals of the HEU agreement and for trade purposes.

5.USEC and Tenex have established a strong, flexible, responsive and cooperative working relationship.

6.USEC and Tenex reached agreement in May 2000 on new market-based commercial terms that would begin January 1, 2002, when the current terms expire. The new terms are under review by the respective governments.

These achievements demonstrate that the Megatons to Megawatts program is working. Government nonproliferation and national energy security objectives are being met and sustained by commercial transactions. Implementation of the contact requires continuing interaction and responsiveness. USEC does not act unilaterally in this process. As executive agent for the government, USEC is subject to an ongoing consultative process that includes direction from the Administration before acting on contract matters.

USEC has proven itself to be highly effective as executive agent under sometimes difficult circumstances. In fact, it has not been smooth sailing during the past seven years of implementing this agreement. A number of contentious issues have emerged, ranging from the appropriateness of USEC's privatization to issues of over payment for, and disposition of, the natural uranium portion of the deal.

Still, the agreement has been a success story, and USEC is uniquely positioned to continue as the sole U.S. executive agent. USEC's global customer base, domestic enrichment operations, unique market experience, financial resources and continuing commitment have all contributed to the strong foundation that is essential to support the continuing implementation of this unique and challenging program.

USEC Inc., a global energy company, is the world's leading supplier of enriched uranium fuel for commercial nuclear power plants.
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G. Plutonium Disposition

1.
NRC considers plan to convert plutonium to reactor fuel
Scott DiSavino
Reuters
April 3, 2001
(for personal use only)


NEW YORK, April 3 (Reuters) - The Nuclear Regulatory Commission (NRC) said it was considering an application for construction of a mixed oxide (MOX) fuel fabrication facility at the Department of Energy's Savannah River Site near Aiken, South Carolina.

The MOX facility would convert surplus weapons-grade plutonium, supplied by the Department of Energy, into fuel for use in commercial nuclear reactors.

Such use would render the plutonium essentially inaccessible and unattractive for weapons use. Commercial nuclear power plants in the United States currently use uranium as fuel; the mixed oxide fuel would be a combination of uranium and plutonium.

The agency said in a statement late Monday it will offer an opportunity for a hearing to persons whose interests may be affected by this facility.

The Department of Energy announced plans to construct a MOX fuel plant through a contract with the consortium of construction company Duke Engineering & Services, a unit of energy giant Duke Energy Corp. of Raleigh, N.C., French nuclear measurement company COGEMA Inc., and construction company Stone & Webster. The consortium is known as DCS. DCS submitted an environmental report on the MOX facility last December, and requested authorization to construct the facility in February.

Before deciding whether to authorize construction, the NRC will prepare an environmental impact statement and will conduct a technical evaluation of the application to determine whether it meets NRC requirements.

The NRC said it will publish soon in the Federal Register a notice for a hearing on the construction of the MOX facility.
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H. Russian Nuclear Forces

1.
Moscow: No Nuclear Weapons on Kursk
The Los Angeles Times
April 5, 2001
(for personal use only)


MOSCOW--Russian officials on Thursday denied a Norwegian television report that the Kursk nuclear submarine was carrying nuclear weapons when it exploded and sank last summer, and a lawmaker cited in the TV report said he had been misquoted.

The Kursk sank in the Barents Sea during training exercises on Aug. 12, killing all 118 aboard. Russian officials insisted repeatedly that the submarine, one of Russia's most modern, was carrying only non-nuclear practice weapons. Norway's TV/2 on Wednesday quoted a Russian lawmaker involved in investigating the Kursk disaster, Grigory Tomchin, as saying that in spite of the state's denials, the submarine was carrying nuclear weapons. A Norwegian engineer who has helped plan the raising of the Kursk later this year, Harald Ramfjord, told the television station that he had seen secret documents confirming there were two atomic missiles aboard.

However, Tomchin said Thursday that he had not made the statements attributed to him.

"What was broadcast today about the Kursk and my possible interview with Norwegian TV, that there definitely were two nuclear warheads aboard, it's a lie," Tomchin said. "I did give an interview to Norwegian television, and responding to the question of whether there could be nuclear weapons aboard such a submarine, I answered yes, there could be. But as to that particular submarine, I said there probably would not be," Tomchin said.

He added that the state investigating commission did not discuss the question in his presence.

Russian naval spokesman Igor Dygalo reiterated the Navy's consistent position that no nuclear weapons were aboard the Kursk.

The cause of the Kursk disaster has not been determined. Many experts suspect a torpedo exploded inside the submarine.
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I. Publications

1.
Nuclear Nonproliferation: Security of Russia's Nuclear Material Improving; Further Enhancements Needed
Government Accounting Office (GAO) Report
March 2001
(for personal use only)


The full report, which requires Adobe Acrobat to view, can be found on the RANSAC web site or can be downloaded directly at www.gao.gov/new.items/d01312.pdf.
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2.
Proliferation Brief: The Business of Russian Cooperation with Iran
Carnegie Endowment for International Peace, Non-Proliferation Project
April 6, 2001
(for personal use only)


The following excerpts are from an article by Carnegie Scholar Alexander Pikayev, published in the Winter 2001 edition of the The Monitor, a publication of the University of Georgia's Center for International Trade and Security. Mr. Pikayev directs the Non-Proliferation Project's activities in Russia from the Carnegie Moscow Center. For the entire article and for comprehensive resources on Russia and Iran nuclear and missile programs please visit the Project web site at www.ceip.org/npp

Nuclear Cooperation

Cash-starved Russian industry depends significantly on foreign consumers. Russia's defense industry cannot survive on domestic procurement which, over the last decade, provided for the purchase of a maximum of ten armored vehicles, aircraft and helicopters annually. Russia's primary source of income is foreign arms sales. These sales are a source of ambivalence in Moscow for two reasons.

First, China is the leading market for Russian conventional arms export, yet many decision-makers in Moscow still consider Beijing the primary source of potential traditional aggression against Russian Siberia and the Far East. Second, arms sales generate only an estimated $3 billion per year, clearly insufficient for maintaining and converting the fast-decaying remains of the once mighty Soviet military industrial complex.

The Russian nuclear industry, like Russian arms producers, faces incentives to export. Minatom complains that Western markets remain closed to its goods and services. Moreover, it has recently been squeezed out of its traditional market niche in Central Europe and even Ukraine. The only significant project with the United States - the HEU deal - is of limited duration and not substantial enough to entice Russia to forego the Bushehr reactor project and subsequent deals with Iran.

Iran is a member of the NPT, and accepts IAEA safeguards of its nuclear related facilities. Therefore, Tehran sees itself as having a legitimate claim to the benefits in Article IV of the NPT, which explicitly obliges nuclear powers to assist non-nuclear NPT members in developing peaceful nuclear energy. Although Moscow generally shares this view, in 1995 the Kremlin, under U.S. pressure, withdrew from some of the most controversial aspects of the Bushehr contract.

The United States may be able to increase its influence over subsequent Russo-Iranian nuclear power projects. Minatom is currently seeking to amend Russia's domestic legislation to remove obstacles to the import and storage of spent nuclear fuel within Russian borders. If it succeeds, the nuclear industry stands to make up to $20 billion during the first decade from spent fuel imports. However, since a significant portion of internationally available spent fuel contains U.S.-made components, Washington could, if it so wished, make trade with Iran again an issue and legislate against deliveries to Russia, thus halving Moscow's projected benefits.

Missile Cooperation

The portfolio of existing Russo-Iranian conventional arms sales contracts is estimated at $5 billion. The issue of Russian missile exports is, by far, the most complicated of the lot. The Kremlin consistently denies that there have been any officially approved missile exports to Iran that violate Russia's obligations under the Missile Technology Control Regime (MTCR). In response to U.S. demarches, Moscow has instigated criminal investigations against suspected violators of the national missile export control system, but these investigations have thus far yielded no prosecutions.

Although Moscow entered into consultations with the United States in 1998 to discuss perceived leaks of missile technologies to Iran, these meetings have not resulted in any significant changes in Russian policy.

U.S. observers complain that the Russian missile industry continues its cooperation with Iran despite the significant benefits it has received from cooperation with the United States. The Russians note that the scale of the cooperation has been much more limited than expected and has failed to offset the losses of Russian missile producers caused by the MTCR restrictions. Many enterprises in the missile/aerospace sector have reaped no benefit from U.S./Russian cooperation, and have had to contract with Third World countries in order to survive. Sanctions, imposed by the United States on a few Russian enterprises in 1998 and 1999, have fomented the trend of establishing an 'archipelago' of Russian missile enterprises and universities oriented exclusively toward non-Western markets.

Improving Russia's national law enforcement legislation and execution and clarifying some vague MTCR guidelines may help matters significantly. Another possible solution may be the establishment of an independent international body to monitor MTCR compliance by member countries and mediate the existing disagreements.

Although Moscow insists that it is doing nothing that clearly violates its international nuclear and missile non-proliferation obligations, Russian officials have demonstrated their willingness to at least discuss Washington's security concerns. Wide-spread opinion in Moscow's policy community is that these talks have failed to progress because the United States is not offering adequately attractive incentives to compensate the losses Russian industry would suffer as a result of decreased cooperation with Iran.

Russian exports to Iran are facilitated by the continuing political isolation of that country which makes its conventional arms and nuclear power markets noncompetitive and dependent on few available suppliers. As long as the economic fortunes and national security of these two nations remain intertwined, Western ability to significantly influence Russian-Iranian decisions and activities will be limited.
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3.
Russia's Nuclear and Missile Complex: The Human Factor in Proliferation
Valentin Tikhonov
Carnegie Endowment for International Peace, Non-Proliferation Project
(for personal use only)


A new study commissioned by the Carnegie Endowment for International Peace and funded by the John Merck Fund provides the first detailed statistical glimpse inside the Russian nuclear and missile complexes. Authored by noted Russian social scientist Valentin Tikhonov, the report provides the results of extensive surveys performed in five Russian nuclear cities and three Russian missile enterprises, and paints the most complete picture yet available of the living and working conditions of Russia's weapons experts. The results suggest an increasingly difficult situation, and illustrate the high potential that a significant percentage of Russia's weapons experts might sell their services to would-be proliferators.

The full report, which requires Adobe Acrobat to view, can be accessed at http://www.ceip.org/files/projects/npp/resources/humanfactorflyer.htm
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