VZCZCXYZ0000
PP RUEHWEB

DE RUEHUNV #0583/01 3561317
ZNR UUUUU ZZH
P 221317Z DEC 09
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC PRIORITY 0465
INFO RUEHII/VIENNA IAEA POSTS COLLECTIVE PRIORITY
RUEHAD/AMEMBASSY ABU DHABI 0006
RUEHKU/AMEMBASSY KUWAIT 0060
RUEHNY/AMEMBASSY OSLO 0209
RUEHSM/AMEMBASSY STOCKHOLM 0381

UNCLAS UNVIE VIENNA 000583 
 
SENSITIVE 
SIPDIS 
 
FOR T TIMBIE/DESAULTES, ISN/NESS BURKART/CARNAHAN/HUMPHREY 
ALSO FOR S/SANAC, IO/GS 
DOE FOR NA-243 GOOREVICH/OEHLBERT 
NSC FOR SCHEINMAN/HOLGATE/CONNERY 
NRC FOR OIP DOANE/SCHWARTZMAN 
 
E.O. 12958: N/A 
TAGS: TRGY PREL ENRG KNNP AORC IAEA
SUBJECT: AMANO'S METHODICAL, "SOFT" WAY FORWARD ON FUEL BANK 
 
REFS: (A) UNVIE 535 
 (B) UNVIE 364 
    (C) SCHELAND-TIMBIE ETAL EMAIL 12/03/09 (NOTAL) 
 
¶1.  (SBU) Summary: DG Amano told EU Ambassadors the process for 
further considering an IAEA-administered international nuclear fuel 
bank (INFB) should be transparent; decisions on how to move forward 
rested with the Board Chair and Member States.  A Secretariat paper 
addressing implementation issues was under review in light of the 
adoption of the Russian LEU reserve.  Amano agreed with EU 
interlocutors that the approval of the Russian proposal was a first 
step in a larger process, but he found regrettable that the approval 
had not enjoyed consensus.  Secretariat staff sees an INFB as a more 
complex undertaking for the Agency than is the Russian reserve. 
Separately, the German Ambassador declined a request from the Board 
Chair to lead a working group (because, no doubt, he saw that a 
formal group would mean the death of the issue).  End Summary. 
 
¶2.  (SBU) Vienna's newly empanelled EU Troika, Ambassadors Lundborg 
(Sweden), Serra (Spain), and Lundin (Commission PermRep) and a 
Swedish Mission notetaker called on IAEA Director General (DG) Amano 
December 17 to advocate continued progress on multilateral nuclear 
arrangements (MNA), specifically on developing an international 
nuclear fuel bank (INFB) administered by the Agency.  The EU's 
principal message was that informal discussions should continue 
actively, with Secretariat help.  The EU Ambassadors posited that 
the Board of Governors' approval in November of the Russian LEU 
reserve (ref A) provided momentum toward further developments on 
MNA.  According to Swedish Counselor Stig Isaksson, Amano agreed the 
Russian reserve was a first step, but he found it regrettable that 
the Board had not approved the mechanism by consensus. 
 
¶3.  (SBU) Amano, according to Isaksson, said the process going 
forward should be transparent.  Asked by the EU about the 
Secretariat paper in development since shortly after the June Board 
meeting addressing technical issues raised at that time (ref B), 
Amano confirmed that the paper was largely complete prior to his 
assumption of office.  He said it was under review in light of the 
approval of the Russian reserve; he gave his EU interlocutors to 
understand he would release the paper when he was comfortable with 
it.  Overall, Isaksson characterized Amano as cautious on the way 
forward; indeed, Amano reportedly said the decision on how to move 
ahead resided with the Board Chair and Member States. 
 
¶4.  (SBU) Wrapping up his account of the EU meeting with Amano, 
Isaksson said EXPO Head Vilmos Cserveny had noted the greater 
complexity for the Secretariat of designing and administering an 
INFB in comparison with the Agency's role vis-a-vis the Russian LEU 
reserve.  IAEA division head for fuel cycle issues Hans Forsstroem 
shared with Isaksson subsequently that, following the departure of 
the EU Ambassadors, Amano and the Secretariat staff present 
(Cserveny, Forsstroem, Legal Adviser Johan Rautenbach, EXPO's Tariq 
Rauf, and Special Assistant for Management Suzuki) had engaged in a 
good further discussion of the issue. 
 
¶5.  (SBU) Parallel to the EU encounter, also on December 17 DepCouns 
heard from the DG's Special Assistant for Science and Technology, 
Graham Andrew, that Amano favored "soft consultation" to move the 
fuel bank forward.  Amano did not want the Secretariat to hurry the 
issue or Member States to bring it before the Board again before the 
issue was ripe.  Tasked by Amano to draft a strategy for moving 
ahead, Andrew told us he thought one-on-one contacts in which the 
Secretariat hears out concerned Member States were necessary. 
Having Turkey, for example, say that it had never really been 
consulted on the fuel bank gave the DG pause, Andrew explained. 
 
¶6.  (SBU) Finally from Isaksson, Mission learned that EXPO's Rauf 
reported Board Chairman Ambassador Arshad (Malaysia) had surprised 
one of the two Vice Chairmen, German Ambassador Luedeking, with the 
request to lead a formal working group of interested Member States 
on the issue of assurance of nuclear fuel supply.  German Counselor 
Trautwein confirmed this to us, along with the fact that his 
Ambassador had declined Arshad's request the same day.  Trautwein 
shared that Luedeking recognized the convening of a working group in 
this case as a sure recipe for paralysis. 
 
¶7.  (SBU) In addition to wordsmithing its long-withheld paper on 
implementation issues, EXPO intends to intensify outreach to expert 
consultants in nuclear fuel services ranging from transport to 
pricing, as it elaborates its fuel bank proposal.  Tariq Rauf 
informed IAEACouns and STATE/ISN visitors earlier in December that 
he aimed to have the proposal ready for approval at the June or, at 
the latest, September 2010 Board meeting.  Rauf acknowledged the 
prospect that pledged funds could be withdrawn in the absence of a 
successful outcome in 2010 was a factor in setting this target.  The 
Secretariat also apparently awaits information from the Government 
of Kazakhstan as a potential host for fuel storage and management. 
Counselor Sergey Savelyev told us his government had received a set 
of technical questions from the Secretariat in summer 2009; his 
mission was still awaiting responses from capital, but Savelyev was 
confident Kazakhstan would provide the Secretariat documentation of 
all relevant Kazakh law treating nuclear export control and 
regulation of nuclear operations. 
 
¶8.  (SBU) Comment: Our tactics for advancing the INFB should be 
informed by Amano's own agenda for rebuilding a climate of greater 
consensus in the Board, and the related imperative to ensure that 
U.S. initiatives do not get crosswise with the new DG's developing 
thinking.  DG Amano likely aims to use the process on the IAEA fuel 
bank also for healing the rifts he saw deepened by the 
confrontational outcome on the Russian reserve.  We will encourage 
Secretariat outreach on the model suggested by Graham Andrew, as the 
team from EXPO, Nuclear Energy and Legal who have worked the issue 
internally have not done enough locally with Member States (and were 
prohibited from doing so by the previous DG).  Anticipating release 
of the Secretariat paper in January, Mission will re-engage with EU 
and other INFB donors (Norway, Kuwait, UAE) after the end-of-year 
holidays to re-convene an informal "friends" group, including 
Kazakhstan and selected other G-77/NAM members, to take the 
discussion forward. 
 
DAVIES