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Nuclear News - 1/25/2007
RANSAC Nuclear News, January 25, 2007
Compiled By: Kevin Giles

A.  Nuclear Proliferation
    1. Smuggler�s Plot Highlights Fear over Uranium, Lawrence Scott Sheets & William J. Broad, The New York Times (1/25/2007)
B.  Iran
    1. U.S. Urges Europe to Follow Sanctions on Iran Bank, Mark John, Reuters (1/25/2007)
C.  Russia - India
    1. Russia, India Cement Nuclear Ties, Nirmala George, Associated Press (1/25/2007)
D.  Missile Defense
    1. Russia Criticizes U.S Missile Defense Plan, Vladimir Isachenkov, Associated Press (1/24/2007)
E.  Nuclear Energy
    1. Blix: At Least 10 Years before Egypt and Jordan Can Launch Nuclear Programs, Associated Press (1/25/2007)

A.  Nuclear Proliferation

Smuggler�s Plot Highlights Fear over Uranium
Lawrence Scott Sheets & William J. Broad
The New York Times
(for personal use only)

Last January, a Russian man with sunken cheeks and a wispy mustache crossed into Georgia and traveled to Tbilisi by car along a high mountain road. In two plastic bags in his leather jacket, Georgian authorities say, he carried 100 grams of uranium so refined that it could help fuel an atom bomb.

The Russian, Oleg Khinsagov, had come to meet a buyer who he believed would pay him $1 million and deliver the material to a Muslim man from �a serious organization,� the authorities say.

The uranium was a sample, just under four ounces, and the deal a test: If all went smoothly, he boasted, he would sell a far larger cache stored in his apartment back in Vladikavkaz, two to three kilograms of the rare material, four and a half to six and a half pounds, which in expert hands is enough to make a small bomb.

The buyer, it turned out, was a Georgian agent. Alerted to Mr. Khinsagov�s ambitions by spies in South Ossetia, Georgian officials arrested him and confiscated his merchandise. After a secret trial, the smuggler was sentenced to eight and a half years in prison.

The case has alarmed officials because they had thought that new security precautions had tamped down the nuclear black market that developed in the 1990s, after the Soviet Union collapsed.

Until now, all but the vague outlines of the case have remained secret. But an examination of the episode, and a similar one in 2003, suggests that the region�s political instability and culture of rampant corruption continue to provide a fertile breeding ground for illicit commerce in atomic materials.

Interviews with Georgian and American officials, along with a review of confidential government documents, provide a glimpse into a world of smugglers who slip across poorly policed borders and the agents who try to stop them.

The illicit trade � not just in atomic goods but also in everything from stolen cars to furs to counterfeit $100 bills � thrives especially in Georgia, where tiny separatist regions have broken away to become lawless criminal havens.

This latest uranium seizure, said the American ambassador here, John F. Tefft, �highlights how smuggling and loose border control, associated with Georgia�s separatist conflicts,� pose a threat �not just to Georgia but to all the international community.�

What is most worrisome about the two most recent cases, nuclear experts say, is the material itself: in large enough quantities, it could provide a terrorist with an instant solution to the biggest challenge in making a nuclear weapon, obtaining the fuel.

The uranium seized in both 2003 and 2006 had been enriched to nearly 90 percent U-235, according to Russian and American government analyses obtained by The New York Times. Though the quantities were too small to make a bomb, that level of purity is ideal for doing so.

Both cases appear to fit a broader profile: virtually all of the nuclear materials seized since the Soviet breakup are believed to be Russian in origin, according to American government reports.

In these two episodes, the individuals arrested testified that they had obtained the uranium through a web of Russian contacts and middlemen of various nationalities.

An American government laboratory�s analysis of the 2006 material � which, among other things, disclosed traces of two rare forms of uranium, U-234 and U-236 � provides �a strong case� that it indeed came from Russia, said Thomas B. Cochran, director of the nuclear program at the Natural Resources Defense Council, a private group that monitors atomic arsenals.

However, a confidential memorandum from the Russian intelligence service, the F.S.B., to the Georgian government said a detailed analysis had been unable to pinpoint the material�s origins, though it did not rule out Russian provenance. It also estimated that the uranium had been processed more than a decade ago.

Officials in Georgia, locked in a cold war with Moscow, say the cases underscore their concerns over borders, security and the fate of the breakaway regions.

Georgia�s chief nuclear investigator, Archil Pavlenishvili, said that while Russia cooperated in the early stages of the 2003 investigation, in 2006 it had hardly helped at all, beyond taking a sample of the seized material for analysis. He said the Georgians had informed the Russian Embassy here in Tbilisi of Mr. Khinsagov�s detention, and had offered to let diplomats speak to him. But the Russians, he said, never responded.

The Georgian interior minister, Ivane Merabishvili, said the cases illustrated the grave risk posed by nuclear trafficking, especially in an age of terrorism. The biggest danger, he said, were the people �in Russia and Georgia and everywhere else, even in America, who will sell this radioactive material� for millions of dollars.

The Russian Interior Ministry and the intelligence service did not respond to requests for comment.

Murat Dzhoyev, the foreign minister of South Ossetia, one of the separatist regions in Georgia, denied that any nuclear smuggling had taken place in his region.

�As concerns their claims that contraband, or moreover, the laughable claim that nuclear materials are going through South Ossetia, that�s just funny,� he said in an interview. �I hope not a single serious person in the world takes this seriously.�

On Friday the United Nations International Atomic Energy Agency in Vienna is expected to make the first official announcement with details about the 2006 case.

The old Soviet empire had a vast network of nuclear facilities. After its breakup, as managers abandoned plants and security fell apart, the West grew alarmed as many cases of atomic smuggling came to light.

In 1994 alone, two seizures involved more than five kilos � 11 pounds � of highly enriched uranium. The I.A.E.A. listed more than a dozen cases of illicit trade in highly enriched uranium, along with dozens of seizures of highly radioactive material.

Since 2000, however, the amounts and purity of the seized material has declined as former Soviet republics set up new security precautions, often financed by the United States.

For instance, Washington provided thousands of hand-held devices meant to detect radiation, and planned to spend a total of $570 million to install small and large radiation detectors, according to recent government reports. In short, the threat seemed to recede.

�People said, �Hey, the situation�s improved,� � said William C. Potter, a leading authority on nuclear smuggling at the Monterey Institute of International Studies in California. The seizures in Georgia, he said, suggest something else: that the trade may simply �have gone under the radar.�

The smuggler in the first case, an Armenian named Garik Dadayan, was arrested on June 26, 2003, at Sadakhlo, a muddy village where Georgia meets Armenia and Azerbaijan.

With Armenia and Azerbaijan at war over territory, the village had become neutral ground for the trading of tea and cognac, illicit caviar, cheap light bulbs and smuggled gasoline.

When apprehended, Mr. Dadayan, who described himself simply as a businessman, was carrying a tea box that held 170 grams, about seven ounces, of highly enriched uranium. According to the Georgian officials, he said the uranium had come from Novosibirsk, in Siberia, the site of a major Russian nuclear complex that processes vast quantities of highly enriched uranium.

Mr. Pavlenishvili, the Georgian investigator, said the Russian intelligence agency confirmed that before his trip into Georgia, Mr. Dadayan had twice traveled by railroad from Moscow to Novosibirsk.

The smuggler told the authorities that he intended to sell the material to a Turkish middleman named Teimur Sadik; its ultimate destination, he said Mr. Sadik had told him, was �a Muslim man.�

Mr. Dadayan was handed over to the Armenian government, tried and sentenced to two and a half years in prison. Mr. Sadik, Georgian authorities say, is now in custody of the Turkish secret services.

Since that episode, the United States has spent millions of dollars to help the Georgians strengthen nuclear security, especially along the borders.

Two years later, Georgian authorities learned that highly enriched uranium was again being offered for sale, this time in South Ossetia, a rugged and beautiful land no bigger than Long Island, with few border controls on either the Russian or Georgian side. People and contraband move freely through its fields and along its mountain roads. The United States says it has discovered counterfeit $100 bills traceable to South Ossetia circulating in at least four American cities.

The man trying to sell the uranium, Georgian officials say, was Oleg Khinsagov, a shabbily dressed 50-year-old trader who specialized in fish and sausages.

Eventually he came into contact with four Georgians who were already under government surveillance. The four men went to North Ossetia, a neighboring region within Russia, and arranged to smuggle the uranium into Georgia. It was at that point that the Georgian authorities set their trap.

They arranged for a Georgian operative who speaks fluent Turkish to meet with the middlemen and tell them he represented a Muslim man from �a serious organization.�
Mr. Khinsagov and several of his cohort entered Georgia in late January 2006, and on Feb. 1 they were arrested in a two-room apartment on the eighth floor of a crumbling Soviet-style building in a lower-class district of Tbilisi.

�We got that 100 grams and put it into a box and were very afraid,� said Mr. Merabishvili, the interior minister. Where the smuggler got the uranium and whether he actually had more remains unclear.

The Georgians called for help from American diplomats, who sent in experts from the Federal Bureau of Investigation and the Department of Energy, American officials say. Mr. Merabishvili said the Americans shocked them by taking the uranium and simply putting it �in their pocket.� Uranium in that form emits little radiation and presents little or no danger to its handlers.

When it was analyzed at the Energy Department�s laboratory in the Pacific Northwest, it was found to have a U-235 purity of 89.451 percent, �suitable for certain types of research reactors, as a source material for medical isotope production, and for military purposes including nuclear weapons.�

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B.  Iran

U.S. Urges Europe to Follow Sanctions on Iran Bank
Mark John
(for personal use only)

The United States urged the European Union this week to join it in banning business with Iran's Bank Sepah, which it accuses of funding efforts to secure the atom bomb, a U.S. official said on Thursday.

U.S. Deputy Treasury Secretary Robert Kimmitt argued such a move was required by a U.N. resolution on December 23 threatening Iran with sanctions if it did not halt activities that the West suspects are aimed at acquiring a nuclear bomb.

Iran says its nuclear program is peaceful.

"He said they should take that action because of the U.N. Security Council resolution which they signed on to," the U.S. official said of Kimmitt's meetings with EU foreign policy chief Javier Solana and others during a trip to Brussels on Monday.

Kimmitt also voiced optimism that President Mahmoud Ahmadinejad was becoming isolated.

"There is a growing cleavage between the president and the body of the Iranian population and business community who are not involved in illicit activity," the U.S. official quoted Kimmitt as saying.

Kimmitt told Reuters at the Davos World Economic Forum on Thursday he was encouraged by EU assurances that the bloc would fully implement the U.N. resolution, but did not refer specifically to Bank Sepah.

"We both want to abide by the rules ... The most important thing is to lay the political foundations, and I was pleased with my meetings with the EU in that respect," he said.


State-owned Bank Sepah denies U.S. charges it was helping Iran acquire nuclear weapons and condemned the ban on U.S. companies or citizens doing business with it.

EU foreign ministers vowed on Monday to implement "in full and without delay" the sanctions banning transfers of sensitive nuclear material to Iran and freeze assets of those associated with the nuclear program.

An EU official said discussions in the 27-member bloc continued on how it would apply the measures if Iran had not halted uranium enrichment by the end of a 60-day deadline.

The official said the talks did not mean a member state could not apply sanctions on its own.

Ahmadinejad has called the U.N. resolution a "piece of torn paper" and vowed to press ahead with the nuclear program.

Bankers say U.N. sanctions themselves may only directly target the country's nuclear program but they are having a wider impact on confidence, making investors and international financial institutions more cautious for fear of an escalation.

Unilateral U.S. sanctions on two big Iranian state banks including Bank Sepah are impeding business, they say.

"They (Americans) are systematically trying to destroy the Iranian reputation. It is a kind of economic war," said one international banker in Tehran, who asked not to be identified.

Since last year, bankers say most international banks have stopped dollar transactions with Iran because of U.S. pressure.

(Additional reporting by Edmund Blair in Tehran and Stella Dawson in Davos)

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C.  Russia - India

Russia, India Cement Nuclear Ties
Nirmala George
Associated Press
(for personal use only)

Russian President Vladimir Putin offered on Thursday to build four new nuclear reactors for energy starved India, cementing his country's traditional role as India's main nuclear benefactor.

A memorandum of understanding on the plants was signed by the heads of the Russian and Indian nuclear agencies after a meeting between Putin and Indian Prime Minister Manmohan Singh.

Putin arrived in India on Thursday, hoping to use the two nations' decades-long friendship to push for deals in civilian nuclear cooperation, military hardware and trade expansion.

Russia has been eager to reassert its traditional role as the chief supplier of nuclear technology and know-how to India in the wake of a landmark civilian nuclear cooperation deal between New Delhi and Washington last year that appeared to give U.S. companies a strong position in India's nuclear market.

Russia is now helping India build two 1,000-megawatt nuclear reactors in the southern town of Kudankulam.

The document said that the four new reactors would be built at Kudankulam and at other sites, but did not give a timetable or other specifics.

Russia in the past has supplied India with reactors and fuel, even as it was denied Western technology for its refusal to sign the Nuclear Nonproliferation Treaty.

Speaking after their meeting, Singh said nuclear energy was emerging as the most important aspect of India and Russia's ``strategic partnership.'' He also thanked Russia for its support ``in lifting international restrictions on nuclear cooperation and assisting India in the expansion of our nuclear energy program.''

Energy cooperation is vital for India, which has struggled to supply adequate power to its burgeoning economy that has been growing annually at more than 8 percent in recent years. Despite India's rapid recent development, power cuts remain frequent across the country.

Putin, who will be the guest of honor at India's Republic Day celebrations on Friday, came to India looking to cash in on Cold War ties that bound the two countries for years - but then slackened as India's burgeoning market attracted other players.

India and Russia also signed a series of agreements on scientific, space, aviation and economic cooperation, including giving India access to Russia's satellite navigation system, GLONASS.

India and Russia also signaled their intent to forge ahead with military ties with two new arms deals. One agreement will allow the licensed production of Russian aircraft engines in India, and another is for the joint development of a military transport plane.

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D.  Missile Defense

Russia Criticizes U.S Missile Defense Plan
Vladimir Isachenkov
Associated Press
(for personal use only)

Russia's defense minister on Wednesday harshly criticized U.S. plans to deploy missile defense sites in central Europe, saying that Moscow doesn't trust American claims that they are intended to counter missile threats posed by Iran and North Korea.

Sergei Ivanov, speaking during a trip to India where he co-chaired a bilateral commission on military ties, said that neither Iran nor North Korea has or will have a capability to build missiles that can reach Europe.

``They don't and won't have intercontinental ballistic missiles,'' Ivanov said at a news conference. ``And a question comes: whom it's directed against?''

U.S. authorities said Monday they had told Polish leaders that the United States wants to open formal negotiations on the possibility of locating ground-based interceptor missiles in their nation.

Prime Minister Mirek Topolanek of the Czech Republic - like Poland, a former Soviet satellite that is now a NATO member - said that Washington had asked to base a radar station in the country that would serve as another part of the system.

Ivanov said Wednesday that the deployment of U.S. missile defense facilities in Poland and the Czech Republic was a decided issue despite official claims that talks were still ahead.
``It's done mostly to assuage domestic public opinion,'' Ivanov said. ``The decision already has been made and the talks serve simply as a cover. Like other new NATO members, the Czech Republic and Poland want to show their loyalty.''

Russian military officials have said they see the U.S. system as a threat that would upset the security balance and have warned of unspecified measures in response.

Asked about how Russia could respond to the U.S. move, Ivanov said Wednesday that there was no need for any quick retaliation. ``Our strategic nuclear forces ensure national security under any scenario,'' he said.

Russia's criticism of the U.S. move comes just days after the United States and other allies raised concerns over the rising militarization of space after a successful test by China of an anti-satellite weapon.

China confirmed the test on Tuesday, but didn't provide details. Aviation Week, which first reported the test, said the satellite was hit by a kinetic kill vehicle launched from a ballistic missile.

Analysts said the test represented an indirect threat to U.S. defense systems by raising the possibility that its spy satellites could be shot down. The threat wouldn't affect the anti-missile system, which relies only on ground-based radar.

The U.S. military has had the capability to shoot down satellites since the 1980s. In October, President Bush signed an order asserting the United States' right to deny adversaries access to space for hostile purposes.

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E.  Nuclear Energy

Blix: At Least 10 Years before Egypt and Jordan Can Launch Nuclear Programs
Associated Press
(for personal use only)

Former U.N. chief weapons inspector Hans Blix on Thursday said it would be at least a decade before Egypt and Jordan could launch a nuclear program and urged Egypt to sign additional protocols allowing for greater inspection oversight.

Blix also said it was not illegal for Iran to enrich uranium but stressed that having the capacity to produce nuclear fuel creates tension in the Middle East.

Iran's controversial nuclear program, which it says is for peaceful purposes but the U.S. accuses it of secretly developing atomic weapons, has prompted Egypt, Jordan and the Gulf Arab states to express interest in creating their own peaceful programs.

Some warn that the flurry of nuclear program ambitions could lead to a dangerous proliferation of nuclear technology � or even weapons � in the volatile region.
But Blix said he supported Jordan and Egypt's aims.

"I am positive to Jordan and am also positive to Egypt for nuclear power. It takes a little while to do this, at least 10 years," Blix told reporters in the Egyptian capital.

He named three areas of concern that must be addressed before Arab countries would be ready to launch their programs: operational safety, waste disposal safety and nonproliferation.

"We will need then to have a system ... of commitments on nonproliferation and a system of inspection in place to give the confidence," he said.

Blix urged Egypt to sign on to more stringent protocols giving the International Atomic Energy Association, the U.N. watchdog, greater access to information and inspections. Jordan has agreed to the additional measures, according to the IAEA.

"I think it is desirable for world confidence that nuclear power is being used for peaceful purposes. A good and effective inspection system is needed. I hope Egypt joins as soon as possible," he said.

After two decades of freezing its nuclear program, Egyptian President Hosni Mubarak called for Egypt to revive plans for a nuclear program that were publicly shelved in the aftermath of the 1986 accident at the Soviet nuclear plant in Chernobyl.

Last month, the Supreme Council for Energy created a committee to explore the program's possibilities. It was the first time the council had convened in 18 years, according to the leading Al-Ahram pro-government newspaper.

Minister of Electricity and Energy Hassan Yunis said Egypt could have an operational nuclear power plant within 10 years. The plan is to build a 1,000 megawatt nuclear power plant at Al-Dabaa on the Mediterranean North coast, he said.

Yunis estimated that construction would cost US$1.5 billion (�1.16 billion), and the government would likely seek foreign investment to finance the project.

Egypt already produces some 84 billion kilowatt-hours of electricity annually, some of which is exported to neighboring countries. But Egypt's demand for electricity increases by an average of 6 to 7 percent each year.

In February 2005, the IAEA disclosed that it was investigating Egypt's nuclear activities. It concluded that Egypt had conducted atomic research for as long as four decades, but the research did not aim to develop nuclear weapons and did not include uranium enrichment.

Earlier this month, Jordan's King Abdullah II also said he wanted to develop nuclear capabilities, saying his kingdom wanted nuclear power "for peaceful purposes" and has been "discussing it with the West."

Egypt and Jordan have both signed the Nuclear Nonproliferation Treaty and have long called for a Middle East free of weapons of mass destruction.

When asked about Iran, Blix said that Tehran should be offered assurances that it will not face military actions and rewards for normalizing relations with the rest of the world.

The U.N. Security Council imposed limited sanctions on Iran last month over its defiance of international demands to halt uranium enrichment, a process that produces the material for nuclear reactors or bombs. Tehran says that as a signatory to the Nuclear Nonproliferation Treaty, it has the right to develop a peaceful uranium enrichment program to produce nuclear power.

"It's not illegal what they are doing unless you could prove that there is intention to go for weapons. But it's not illegal to plan to go for fuel," Blix said.

U.S. officials have long refused to rule out any options against Iran but said military action would be a last resort.

Blix also discounted the possibility of U.S. military action against Iran.

"I don't think that this is the direction they are moving on to now," he said. "The U.S. public opinion, and it means a lot, is essentially against military action."

Blix led the U.N. inspectors who searched for weapons of mass destruction in Iraq before the U.S.-led invasion in 2003. He now heads the Stockholm-based Weapons of Mass Destruction Commission, which is sponsored by the Swedish government.

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DISCLAIMER: Nuclear News is presented for informational purposes only. Readers are encouraged to visit the websites from which the source material originates. Views presented in any given article are those of the individual author or source and not of RANSAC. RANSAC takes no responsibility for the accuracy of information contained in any article presented in Nuclear News.

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