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#16 - JRL 7217
June 9, 2003
By Sergei Blagov
Editors Note: Sergei Blagov is a Moscow-based specialist in CIS political affairs.

The International Atomic Energy Agency is expected to consider possible action on Irans nuclear program at a board of governors meeting scheduled for June 16. Already, the IAEA has issued a restricted-access report that reportedly raises questions about Irans ability to produce nuclear arms. For Russia, which appears eager to preserve a lucrative arrangement to help develop Irans nuclear capacity, the IAEA report creates a diplomatic dilemma.

Russias eight-year-old contract to supply materials for the Bushehr nuclear plant on Irans Persian Gulf coast appears implicitly up for debate at the upcoming IAEA meeting. Alexander Rumyantsev, Russias Minister of Atomic Energy, has sought to downplay any controversy, telling the Itar-Tass news agency on June 9 that he expected "hardly anything new" to come from the IAEA report.

The report, according to the New York Times, is critical of Iran for carrying out undisclosed research that could bolster possible efforts to develop nuclear weapons. It also notes that Iranian authorities have seemed more cooperative about sharing details on this research in recent months. Inspectors from the IAEA arrived in Tehran on June 7 for an inspection that Iranian officials claim will vindicate its nuclear program. Depending on the outcome of that inspection, Russia could face questions about whether its business interests in Iran are blinding the Kremlin to the danger of nuclear weapons proliferation in the Middle East.

Russias commitment to the $800-million Bushehr project, which entails 10 years of uranium sales starting in 2005, exerts strong influence over Moscows diplomacy. [For background, see the Eurasia Insight archives]. Russia has serviced the Bushehr project under IAEA oversight and has maintained that Iran has complied with the United Nations Nonproliferation Treaty. The NPT pact obliges Iran to open its nuclear facilities for inspection, but restricts inspectors to sites that Iran has declared.

Iran says it is honoring the treaty, and insists that it is developing a nuclear capacity to meet the energy needs of its growing population. The United States has argued that Iran intends to violate the treaty via work at secret sites, and that Russias technology could support the development of nuclear weapons.

In recent weeks, Russian leaders have sent mixed signals on the Iran nuclear question, creating some diplomatic embarrassments. President Vladimir Putin claimed in St. Petersburg on June 1, with US President George W. Bush by his side, that "the positions of Russia and the United States on [nonproliferation issues] are much closer than they seem."

But days later, Russia seemed to renege on a pledge it reportedly made at a meeting of G8 industrialized nations in France. After that meeting, British Prime Minister Tony Blair told reporters that Putin had promised to halt "all nuclear exports" until Iran agreed to a more stringent inspection regime. The next day, a Russian Foreign Ministry spokesman revealed that shipments to Bushehr would continue. Irans news agency reported on June 7 that this had always been Russias position, and that Blair had fallen victim to a "mistranslation" of Putins words.

Russian authorities have repeatedly stated their intention to continue "peaceful nuclear cooperation" with Iran, and Putin reportedly said during the recent G8 summit that he would not tolerate nonproliferation steps that put Russia at a competitive disadvantage. [For background, see the Eurasia Insight archives].

The IAEA meeting may consider whether Iran can submit to broader inspections without signing the United States preferred set of rules, called an Additional Protocol. Tehran has rejected this protocol, and many observers believe that Iranian leaders may try to link their acceptance to the lifting of US economic sanctions. [For additional information see the Eurasia Insight archive].

On June 1, Russian Foreign Minister Igor Ivanov urged Tehran to open the door to tougher inspections. But Russia has not altered its basic position, that Iran is not pursuing nuclear weapons, despite the IAEAs evident concern.

Russias potential payoff from Iranian nuclear cooperation is far more than the Bushehr uranium contract. Some 100 Iranians are reportedly being trained in Russia to operate the Bushehr plant. Over 700 Iranians are due for such training before the plants opening, now expected in 2005. According to IRNA, the Russian Atomic Energy Ministry reiterated its readiness to cooperate with Iran on building five more nuclear power plants, an offer made initially in 2002 when the Russian government released its plans for future economic relations with Iran. These plans involve arms sales, one of Russias most lucrative export spheres. In October 2001, Moscow and Tehran signed framework agreements for further supplies of Russian military equipment to Iran reportedly worth some $300 million each year.

Russia has tried to allay Western concerns since Bush met with Putin. Rumyantsev, the atomic energy minister, said on June 2 that Iran had agreed in principle to send all spent nuclear fuel from Bushehr back to Russia. Rumyantsev also told the Interfax news agency that Iran had accepted tougher inspections "in principle." The Russian nuclear official added that Tehran would not sign a protocol that mandates broader inspections unless Iran received guarantees of "assistance in obtaining nuclear technology for civilian nuclear programs."

On June 4, Rumyantsev confirmed that deliveries of uranium to Bushehr could begin by 2004, following a formalization of Irans promise to return all spent nuclear fuel to Russia for reprocessing and storage. A document covering that agreement could be signed as soon as August. Such a document could prompt sharper disagreement between Moscow and Washington. Recent Russian government statements arguably represent verbal concessions to American pressure. They also indicate that, in Moscows view, the promise of revenue from nuclear cooperation may outweigh concern about the emergence of a new nuclear power.

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