Research Story of the Week

Russian Nuclear Exports to Iran: U.S. Policy Change Needed

Photo [Source: Associated Press/Vahid Salemi]
Russia's Atomic Energy Minister Alexander Rumyantsev with Iran's parliament speaker Mehdi Karrubi during an official meeting in Tehran, Dec. 23, 2002. [Source: Associated Press/Vahid Salemi]
 

U.S. Policy and Russia's SNF Import Plans

Allowing Russia to import spent nuclear fuel (SNF) is a big decision with large ramifications, and should not be completely subsumed by the Iranian question. Recent U.S. offers appear to drop all other demands regarding the SNF import project. Other concerns should be clarified promptly to make certain that Minatom takes these demands into account during project development. There are no records of U.S. demands regarding public participation in the SNF project, while transparency and accounting requirements should be strengthened as well. Although negotiations certainly will not be over until the United States has approved the imports and signed a Section 123 agreement for nuclear cooperation with Russia, the fact that Department of Energy (DOE) personnel have been assisting the project (helping locate a geologic repository for the long-term storage of spent nuclear fuel, for instance), and that those personnel all appear to support the SNF import project, surely lead Minatom to believe that the United States has no major problems with how they intend to run the project. However, it is not clear that the DOE has in fact made an in-depth study of the political and nuclear implications of this project. DOE personnel should be asking many questions of their Russian counterparts.

Minatom's future plans call for SNF reprocessing, which will create more weapons-usable nuclear materials, and is already creating an incentive to develop technologies to utilize these materials. These developments further promote the creation of additional nuclear materials and thus additional proliferation risks. Russia already has huge quantities of its own SNF and radioactive waste, and has difficulty handling this material. Minatom argues that SNF imports are needed to fund safer storage for these Russian materials. While one would hope Russia could find a funding source that did not involve adding more hazardous materials to the mountain already in the country, the project could indeed help solve this problem -- if the money is sufficient, is not wasted, older materials can be moved, and there are no transport accidents. Ensuring that the program does not result in increased global plutonium stocks and that moneys are spent wisely should be primary U.S. concerns.

In "Securing Nuclear Weapons and Materials: Seven Steps for Immediate Action," Matthew Bunn, John Holdren, and Anthony Wier argue that the United States should not use all of its considerable leverage over the Russian SNF import project on the Iran issue. They suggest insisting that a portion of the revenues be spent on securing and destroying WMD stockpiles, and that effective arrangements (including independent regulation) of the entire operation, the elimination of excess plutonium stockpiles, and a democratic process whereby those most affected by the project might have their concerns effectively addressed, should also be criteria for determining if the project contributes to international security and deserves support.[13] While the United States seems to be unable to alter Minatom's desire for future reprocessing, it should certainly have sufficient leverage to influence the SNF import arrangements themselves, should it make the issue a priority. However, this will require a great deal of attention to detail.

One way to monitor the project is to insist that an outside organization with strong nonproliferation and environmental bona fides arrange the deals, handle the finances, and generally oversee the entire Russian SNF import project. The Nonproliferation Trust (NPT) Inc., brainchild of Tom Cochran, a physicist at the Natural Resources Defense Council in Washington, D.C., was created with just this idea in mind. [For more information on NPT, see the Spent Fuel Imports Overview in the NIS Nuclear Profiles Database.] However, even Russian environmentalists are wary of this idea, since so much would depend on a foreign organization. Another way to oversee the SNF project would be through Russia's presidential commission for monitoring SNF imports. The commission was created by President Putin after he signed legislation legalizing the import of SNF, in July 2001. Zhores Alferov, a vice president of the Russian Academy of Sciences and SNF import supporter, was appointed head of the commission.[14] The other 19 commission members are supposed to include five deputies from each chamber of parliament, five from the government, and four independent nuclear physicists and environmentalists. However, eight months have passed and there are no reports that these other members have been appointed. This gives the United States the opportunity to promote the appointment of representatives from major Russian environmental groups (not environmental groups set up at the behest of Minatom), the participation of the Russian Inspectorate for Nuclear and Radiation Safety (Gosatomnadzor), and the openness that was part of the commission's mandate. The oversight of SNF profits, which are supposed to be spent on environmental and social programs (75%) and remitted to regions affected by SNF imports (25%), is not enough.[15] Indeed, it is far from clear that there will actually be any outright profits from the deal. A preliminary study by a Stanford economist has suggested that the SNF import project can earn enough to fund safe storage of the imported materials and existing Russian materials, but little more. If so, there will be pressure on Minatom to cut corners, in order to provide the pay-offs promised regional politicians in exchange for political support of the plan.

It is in the interest of the United States to make certain the program is safe. The United States should be concerned about terrorist and proliferation dangers, as well as possible harm to the Russian environment. Any accidents would not only affect Russia, but could well affect U.S.-Russian nuclear cooperation beyond the SNF project, from power production to cooperative threat reduction. Russian citizens already worry that weapons dismantlement may negatively impact on the local environment. They also fear that the West is trying to use Russia as a radioactive waste dump, and that that will be the outcome of the SNF import project (that SNF will neither be reprocessed nor returned to other countries). Any accident involving nuclear materials, particularly materials that can in some way be linked to the United States, could have far-reaching ramifications. Before Washington approves the export of any such materials to Russia, a full study of the economics, politics, and security and environmental aspects of the project should be undertaken. Only then might it make sense to use this project as leverage over Russian actions in Iran.

By Cristina Chuen

On March 29, the State Department is scheduled to report to Congress on nuclear proliferation prevention in Iran.[1] Part of the report is likely to focus on Russia's role in Iran's nuclear development. Preventing Iran from obtaining nuclear weapons has been a key U.S. concern since the overthrow of the Shah, while stopping the spread of nuclear knowledge and materials from Russia has been a top priority since the fall of the Soviet Union. Even as U.S. policies have met with some success in both areas, there continue to be primary problem areas. U.S. pressure on third countries to halt all nuclear cooperation with Iran surely slowed its nuclear programs; however, Iran now appears to have the ability to create the nuclear materials it needs to build a bomb. If the United States is to be successful in preventing Iran from actually building nuclear weapons, it must both focus its aims more narrowly, and expand its tools for influencing that nation. Russia's role remains crucial in this regard, but the U.S. approach to Russia may need to change, from threatening to cut off nonproliferation assistance to Russia and blocking Russia's commercial nuclear projects (like Russian imports of Western spent nuclear fuel) to cooperating with Russia and encouraging it to engage Iran. Otherwise, the nuclear situation in both Iran and Russia may deteriorate.

The Situation in Iran

The United States was successful in persuading Germany, and later China, to halt nuclear cooperation with Iran, but has failed to stop the Russian project to complete a light-water reactor at Bushehr.[2] [For details on the reactor project, see the Bushehr section of the Global Security Website, at http://www.globalsecurity.org/wmd/world/iran/bushehr.htm.] The United States has tried a variety of carrots and sticks to persuade Russia to cancel the Bushehr project, most notably linking cancellation to the provision of nonproliferation assistance and, in 2002, to permission to import U.S.-origin spent nuclear fuel (SNF) to Russia for potentially lucrative storage contracts with foreign governments. However, the Bushehr reactor is now reported to be about 70% complete, and the first shipment of Russian nuclear fuel to Iran may be sent in a matter of months.

While the light-water reactor technology itself is not of great proliferation concern, there is concern that Iran might obtain weapons-grade material by reprocessing the spent nuclear fuel used in the power plant's reactors. Of even greater concern is the possibility that Iran has and will continue to use the Bushehr project as a cover for obtaining weapons technologies. Indeed, in a secret protocol to the January 1995 Russian-Iranian Bushehr nuclear power plant (NPP) contract, the Russian Ministry of Atomic Energy (Minatom) promised to supply Iran with key fuel-cycle facilities, including light-water research reactors, fuel fabrication facilities, and an uranium enrichment centrifuge plant.[3] U.S. protests resulted in a Russian promise to limit Russian cooperation to Bushehr Unit 1, the supply of nuclear fuel, and training. However, the United States continued to worry that sensitive technologies would be transferred from Russia to Iran, with the tacit approval of Minatom, and pushed Russia to obtain an Iranian agreement on the return of all spent nuclear fuel from Bushehr.

The existence of a uranium enrichment plant at Natanz, Iran, was first publicly revealed in August 2002 by an Iranian opposition group. On December 13, 2002, IAEA Director General Mohamed ElBaradei said that reports on Iran's nuclear activities had not surprised the Agency, citing Agency discussions with Iranian authorities over the past six months. In February 2003, ElBaradei visited the site, where uranium hexafluoride will be centrifuged to separate uranium-235. The technology can be used to enrich uranium beyond the needs of power reactors, for use in weapons. [For more information on the Natanz facility, see David Albright and Corey Hinderstein, "The Iranian Gas Centrifuge Uranium Enrichment Plant at Natanz" at http://www.isis-online.org/publications/iran/natanz03_02.html.] The hexafluoride will come from a plant at Esfahan. According to Gholamreza Aghazadeh, head of the Atomic Energy Organization of Iran, the latter plant will be used to convert uranium ore mined in Iran's Yazd region into three forms: metal, oxide, and hexafluoride. The metal form can be used in nuclear weapons as a tamper -- a layer of material wrapped around the core of a nuclear bomb to increase its yield by holding in the explosion long enough for the chain reaction to be completed. Uranium oxide can be used to fuel reactors, but not the Bushehr NPP, which will use low-enriched uranium. Instead, the oxide may be intended for use in a heavy-water reactor, which could be used to make plutonium. Although there are no reports that Iran is building a heavy-water reactor, it is constructing a heavy-water plant at Arak.[4] This means Iran may soon be able to create two types of weapons-grade material: highly enriched uranium and plutonium. It has also been working on delivery systems and associated technologies.

Russia's Role in Iran's Nuclear Programs to Date

Although Russia has no wish to create a nuclear Iran, it has only recently begun to display concern over the Iranian program. Russian Minister of Atomic Energy Aleksandr Rumyantsev, like his predecessor Yevgeniy Adamov, has belittled Iran's technological capabilities, arguing that Iran is far from building nuclear weapons.[5] Although Minatom denies transferring any sensitive technology, the Russian definition of sensitive may be more narrowly confined than that of the U.S. Department of Energy. In addition, there is the problem of brain drain. While difficult to interdict, the Russian government has not appeared to put a great deal of effort into discovering or prosecuting Russian firms found cooperating with Iran in the nuclear (or missile) sphere, or hampered the actions of Iranian procurement agents in Russia. In addition to arguing that Iran will not be able to build the bomb anyway, Russians also make the more fatalistic argument that Iran will develop nuclear weapons anyway.[6] Duma Deputy Andrey Kokoshin, who is also director of the Russian Academy of Sciences' International Security Institute, has argued that the current war in Iraq will push Iran to develop nuclear weapons even faster.[7] However, after a visit to Moscow in late February, U.S. officials said they believed that heightened Russian concern over Iranian developments might lead to greater cooperation on Iran. One official noted that Russia may not have the assured market for nuclear fuel it thought it had in Bushehr.[8] This statement, however, appears to be a misreading of statements made by Iranian President Mohammad Khatami earlier in February, where he indicated Iran was going to undertake uranium processing. (The statement was widely misreported in the Western press as meaning Iran intended to reprocess Russian fuel; in fact, Iran continues to assure Russians it intends to purchase fuel for Bushehr from Russia and return the spent fuel to that country, although a final agreement on this issue has yet to be signed).

Russia's course of action will be influenced both by cost and by what Russia might reasonably expect to gain. Halting the Bushehr project is economically extremely costly. Russia would likely lose all payments for the current contract (which is funded via generous Russian loans), as well as future reactor contracts (Iran has suggested Russia might build several more reactors at Bushehr), in addition to contracts in other industries, including conventional military sales. In contrast, the United States has so far offered economic carrots, in particular the spent fuel imports deal, which offer few short-term payoffs and uncertain long-term ones. Russia also has the example of Ukraine, which cancelled a contract to supply Iran with turbines for Bushehr at U.S. urging, and now complains that the so-called "Kharkiv Initiative," designed to compensate for Ukraine's losses, failed to attract investment, economic projects, or jobs to the Kharkiv region.[9] Strategic concerns also lead Russia to be cautious, given Iran's importance in the Gulf region and its apparently moderating role in Chechnya. Russia is therefore more likely to support a policy of engaging Iran and providing incentives than to cut off all assistance.

Russia's Possible Future Role in Iran

While the United States does not have enough leverage to persuade Russia to drop the NPP project, a combination of economic incentives, Russia's own strategic interests, and Moscow's desire to continue playing an important global role may induce the Kremlin to use its leverage over Iran to slow or halt its weapons program. It is likely that Russia would be amenable to insisting that Iran sign the IAEA Additional Protocol that would make spot inspections by the IAEA possible. This is more important than any additional know-how Iran might gain in the final NPP construction. Russia could continue construction, but refuse to ship nuclear fuel until the Protocol is signed. Iran will likely delay signing, particularly if it has in fact tested centrifuges in violation of existing safeguards agreements with the IAEA. The global community may not want to push on this issue, but allow the delay, waiting to inspect the centrifuges until after they have been used. It is not in anyone's interest to push Iran out of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT).

The Additional Protocol is only a start. If Iran begins to stockpile nuclear materials, their use in an Iranian weapons program is not the only risk. The materials could also be stolen, or diverted and/or sold to third countries or terrorists. Therefore, Iran may need MPC&A assistance. While the IAEA might naturally lead such an effort, Russia has a great deal of experience in protecting such sites, and could also use its leverage to push for cooperation in this realm. Openness to the IAEA and the world also reduces the possibility that Iran might sell or divert these materials to third parties.

While the options for pressuring Iran are few, and success uncertain, military options (which Russia would surely reject) are similarly flawed. A "surgical strike" might set Iran's weapons program back, but Iran's rapid progress in fuel cycle activities suggests that it would be able to resuscitate its programs underground. This sort of limited military solution would increase the incentive to obtain nuclear weapons, and would therefore be self-defeating in the long run. Given the slow regime change already underway in Tehran, the end-game to a military action like the current war in Iraq would be even more difficult to undertake in Iran.

Another option is that Russia join an IAEA or U.N. Security Council demand that Iran destroy its uranium enrichment and plutonium programs. Russia's nuclear cooperation with Iran gives it leverage, and thus there is a special role for it to play in any such global solution, which might focus on new ways to meet Iran's security needs. While Iran argues that its aims are purely for nuclear power engineering, not weapons production, this cannot really explain some of its fuel cycle efforts. Nevertheless, Tehran does not want its nuclear program to be held hostage to foreign-origin nuclear fuel, so the threat of abandoning Bushehr may not be enough to cause it to abandon nuclear fuel cycle projects that are already well on the way.

The final option is engagement. Despite increasing indirect contacts with Tehran in the past month as Washington prepared for war in Iraq, the United States is in a very poor position to engage Iran.[10] Instead, Washington can offer Moscow a payoff of prestige in exchange for Russian influence over Iran. Iran could build up enough uranium and/or plutonium for several bombs without violating the NPT, and withdraw at the last minute, when it can quickly complete its weapons. It has studied North Korea, and behaved quite carefully so that it is not caught breaking IAEA rules. Iran's dangerous WMD-armed neighbors, the failure of the international community to condemn Iraq's use of chemical weapons against it in the Iran-Iraq War, and the continued global clout of holding nuclear weapons make it difficult to dissuade Iran from believing in the usefulness of a nuclear program. Nevertheless, engagement and calming Iranian fears is now the last hope of halting or postponing Iran's break-out. Moscow would likely be keen to play such an important international role.

U.S. Russian Policy

The United States has tried to link limits on Russia's Iranian programs to nonproliferation assistance in the past, but has only been partially successful. The revelation of Iran's Natanz and Esfahan facilities has reportedly heightened Russian concerns over Iran's nuclear ambitions, but Russians have yet to suggest this might lead to a cancellation of the Bushehr project. U.S. policy, however, appears to emphasize the use of economic incentives, and these have been much less successful. Congress has linked the possibility of a debt-for-nonproliferation program (something Russia is not clearly convinced it wants anyway) to the Iranian issue, while State Department and Department of Energy personnel have suggested links between nonproliferation assistance and the Iranian issue. Yet, Russia knows it is in the U.S. interest to continue nonproliferation assistance, and the United States cares more about some of these programs than Russia does. In addition, the U.S. defense industry has lobbied against sanctions in the past, fearing their impact on joint ventures in Russia. During the past decade, threats to decrease nonproliferation assistance programs have in fact been followed by funding increases, making the threat even less credible today. Besides, a decrease in nonproliferation assistance, which would leave nuclear materials vulnerable, does not make sense: it would merely increase the incentive for Minatom to seek more secure funding sources, such as foreign reactor contracts.

Seeking to increase its economic leverage, U.S. government officials have told their Russian counterparts on numerous occasions in the last six months that they would be likely to permit Russia to import U.S.-origin SNF if the Bushehr NPP project is halted. [For an overview of Russia's SNF imports project, see the Russian Spent Nuclear Fuel Issue Brief on the NTI Website, at http://www.nti.org/analysis/articles/russian-spent-nuclear-fuel/.] This offer, too, is not likely to entice Minatom to end the Bushehr project, and is a dangerous promise because it does not pay due consideration to other concerns raised by Russia's spent fuel import plans. The Bushehr project will not be eliminated because the suggested pay-off is too small and uncertain. While Minatom has argued SNF imports would net $21 billion, the ministry knows the real number is likely to be far smaller, and is very uncertain. The world price for handling SNF is not as high as Minatom argued in the Russian State Duma, while costs were estimated before the September 11, 2001 terrorist attacks in the United States increased security demands. Environmentalists will continue to fight against the project, raising costs, while Russian laws may again change, and the United States may make additional demands. Although Russia has not gotten paid by Iran yet, Minatom and project contractors (such as Russian oligarch Kakha Bendukidze's United Machine-Building Plants (OMZ), which are building the reactor turbines) have. The Russian government has given Iran a very generous loan to pay for the NPP, however, and it may lose this money if it fails to complete production, while Minatom could lose influence for the boondoggle. Also, Minatom sees future Iran projects, worth many more billions. The value of spent fuel import contracts alone have been estimated at over $10 billion, as compared to $800 million for the Bushehr NPP contract.[11]

It will be very difficult, if not impossible, to persuade Russia to cancel the Bushehr contract using economic inducements. In addition, the focus on Bushehr does not promote U.S.-Russian cooperation in those areas where their interests vis-à-vis Iran coincide. According to recent Israeli intelligence, leaks of nuclear technology from Russia to Iran have slowed.[12] It is in Russia's own strategic interest to prevent Iran from actually building nuclear weapons or breaking out of the NPT. If this is also the primary aim of the United States, then the tools used to influence Iran's actions might be more clearly focused on this objective. This would imply a shift in the U.S. approach to Russia, from economic threats to seeking ways to help Russia (and through Russia the IAEA) further engage Iran.


[1] In accordance with Public Law 107-228, Sec. 1344. This law requires the president to certify that Russia is making "material progress" toward stemming the flow of sensitive goods, technologies, material, and know-how related to the research, design, development, and production of weapons of mass destruction and the means to deliver them to countries that have been determined by the Secretary of State to have repeatedly provided support for acts of international terrorism, before any reduction of Russian debt, as part of a debt-for-nonproliferation program, could be provided. See the Foreign Relations Authorization Act, THOMAS: Legislative Information on the Internet Website, ftp://ftp.loc.gov/pub/thomas/cp107/hr671.txt.
[2] In the early 1980s, the Reagan administration established what amounted to a nuclear embargo on Iran, and persuaded Germany not to renew work on Bushehr, under construction before the Iranian revolution. Iran turned to China, which promised to supply two reactors in 1992. China abandoned the project in 1997, as part of its 1997 nuclear cooperation agreement with the United States.
[3] For more details on the history of US-Russian-Iranian nuclear interactions, see Robert Einhorn and Gary Samore, "Ending Russian Assistance to Iran's Nuclear Bomb," Survival, Vol. 44 (Summer 2002), pp. 51-70.
[4] Rob Edwards, "A struggle for nuclear power; Iran and North Korea have fledgling nuclear programmes that could be harnessed to build a bomb. If they persist, it could spell the end for nuclear arms control," New Scientist, March 22, 2003, p. 8, Lexis-Nexis Academic Universe, http://web.lexis-nexis.com.
[5] Rumyantsev has made similar statements regarding North Korea.
[6] See Einhorn and Samore, and Stephen Sestanovich, "At Odds with Iran and Iraq: Can the United States and Russia Resolve Their Differences?" A Century Foundation and Stanley Foundation paper, February 2003.
[7] Andrey Kokoshin, "V yadernom koltse," Argumenty i fakty, 12 March 2003, in Integrum Techo, http://www.integrum.ru.
[8] Mark Hibbs, "Russia Tells U.S. It Now Shares Concerns About Iran's Program," NuclearFuel, 3 March 2003, p. 12.
[9] "Ukraine poplatilas svoimi natsionalnymi interesami iz-za otkaza ot 'Busherskogo kontrakta' - premer," Interfax, March 29, 2002.
[10] This engagement was chiefly aimed at ensuring Iran remain neutral in the current war. To date Iran has been hit by two stray missiles, one apparently American, the other Iraqi, and has indicated it will not protest so long as holy sites are not struck and planes to not violate its airspace. The United States, however, has continued to take a confrontational stance vis-a-vis Iran's nuclear program. On March 17 the Tehran Times recommended that Iran prevent any new inspections of the country's nuclear plants unless U.S. sanctions efforts, including recently renewed sanctions on oil trade with Iran, were abandoned. Mojdeh Sionit, "Iran Media Watch: Quarantining the war," United Press International, March 24, 2003, in Lexis-Nexis Academic Universe, http://web.lexis-nexis.com.
[11] Ann MacLachlan, "Bushehr spent fuel accord said to be advancing as U.S. seeks Russian exit," NuclearFuel, Vol. 27, No. 22, October 28, 2002.
[12] Aluf Benn, "Nuclear Tech Leaks To Iran Are Slowing Down, PM Reports," Ha'aretz, December 6, 2002.
[13] Matthew Bunn, John P. Holdren, and Anthony Weir, "Securing Nuclear Weapons and Materials: Seven Steps for Immediate Action," Harvard University, May 2002, http://bcsia.ksg.harvard.edu/BCSIA_content/documents/SevenSteps.pdf, pp. 77-78.
[14] Kommersant, July 12, 2001, p. 3.
[15] This division is required by Russian legislation. Nezavisimaya gazeta, 19 April 2000.


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Author(s): Cristina Chuen
Related Resources: Middle East, NIS, Nuclear, Weekly Story
Date Created: March 27, 2003
Date Updated: -NA-
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