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### Viewing cable 09KYIV1942, U.S.-UKRAINE NONPROLIFERATION MEETINGS SEPTEMBER

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
09KYIV1942 | 2009-11-09 12:12 | 2010-12-09 21:09 | SECRET | Embassy Kyiv

`

    VZCZCXYZ0001
    PP RUEHWEB

    DE RUEHKV #1942/01 3131205
    ZNY SSSSS ZZH
    P 091205Z NOV 09
    FM AMEMBASSY KYIV
    TO RUEHC/SECSTATE WASHDC PRIORITY 8754
    INFO RHMFISS/DEPT OF ENERGY WASHINGTON DC
    RHEHAAA/NSC WASHDC
    RUEKJCS/OSD WASHINGTON DC

` `

    S E C R E T KYIV 001942

    SIPDIS

    NSC FOR JOYCE CONNERY
     DOE FOR ANDREW BIENIAWSKI

    EO 12958 DECL: 11/05/2019
    TAGS PARM, PREL, KNUC, UP
    SUBJECT: U.S.-UKRAINE NONPROLIFERATION MEETINGS SEPTEMBER
    23-24, 2009

    Classified By: Political Counselor Colin Cleary, Reason 1.4 (b, d)

    ¶1. (S) Summary: Highlights of this semi-annual U.S.-Ukraine nonproliferation dialogue include:
    --Ukraine gave an inconsistent answer on the question of transferring HEU spent fuel to Russia. --Ukraine asked for additional security assurances beyond those provided in Budapest in 1994, and was interested in continued missile defense cooperation with the U.S. -- Ukraine noted that the SCUD missile elimination Memorandum of Understanding had been approved by all the Ministries, was submitted to the Cabinet of Ministers for final approval, and will soon be ready. -- Ukraine requested U.S. support for additional elimination of melange liquid rocket propellant, but the U.S. said it would concentrate first on eliminating the SCUDs and associated melange before discussing any further elimination of melange. -- Ukraine requested additional U.S. funding for SS-24 elimination, which the U.S. undertook to consider and respond to. -- The U.S. made a formal request for more information on Ukraine’s planned transfer of MTCR Category I items to Saudi Arabia to allow for robust bilateral consultations on the margins of the MTCR Rio de Janeiro Plenary in November on the Saudi issue as well as the broader issue of Category I transfers. -- Ukraine said it is no longer exporting weapons to Burma, and claimed not to have exported T-72 tanks to South Sudan despite U.S. satellite photos to the contrary. The U.S. noted it would have to consider whether to impose sanctions for the tank transfer, and that a factor in U.S. deliberations would be whether the GOU was being truthful. -- Ukraine again undertook to look into specialty steel exports to Iran’s missile program, while the U.S. warned that if Ukraine could not solve this problem on its own, the U.S. may take action of its own against the entities involved. -- After two years of negotiations, the U.S. and Ukraine signed a contract September 24 on the removal and storage of radioactive sources. -- The U.S. also pressed Ukraine to agree to destroy more small arms under the NATO Partnership for Peace Small Arms/Light Weapons destruction project. End Summary

    ¶2. (S) In a one-on-one meeting prior to the formal meeting, Nykonenko welcomed Van Diepen to Kyiv. Nykonenko said that Ukraine was very familiar with Van Diepen’s strong nonproliferation bona fides and took this as more proof that the United States had confidence Ukraine could be a strong nonproliferation partner. The sides previewed the agenda and discussed security assurances, HEU spent fuel repatriation and downblending, NATO Partnership for Peace issues related to small arms and light weapons elimination, SCUD missile elimination, missile defense, Ukrainian specialty steel exports to Iran, and Ukrainian T-72 tank exports to South Sudan. Relevant portions of the one-on-one discussion are included in the following readout of the regular meeting agenda.

    HEU
    ---
    ¶3. (C) During the one-on-one meeting, Van Diepen said that it was particularly urgent for Ukraine to approve the shipment of the HEU spent fuel from the Kyiv Institute to Russia by the end of September. He explained that if the shipment is not approved by then, it could not take place until 2011 at the earliest, and Ukraine would continue to bear the costs and security risks of storing the material until then; that the spent fuel had no commercial value, but would be valuable to terrorists; and that, since Ukraine had been invited to the Nuclear Security Summit next year, it would be important for Ukraine to report progress in securing its nuclear materials. Nykonenko replied that Ukraine’s position of February 2008 had not changed, and thus we had to wait for the Ukrainian National Academy of Sciences report in early 2010.

    ¶4. (C) In meetings the next day, Vladimir Ryabtsev from Ukraine’s National Security and Defense Council (NSDC) explained that all of the technical issues had been resolved, and Ukraine had made the decision to ship the spent fuel. They had not shipped it because it had not been worked out who would pay Russia $800,000 for addressing the waste associated with reprocessing the spent fuel. There was not enough money in Ukraine’s budget to pay this expense. Wayne Leach, the DOE officer assigned to Embassy Kyiv, said that
    the U.S. would send this new information back to Washington and provide an answer to Ukraine soon. (Comment: Other sources have indicated to DOE separately that the decision to repatriate this spent fuel still rests with the President and the NSDC and is still being addressed as a package along with the other Russian-origin HEU in Ukraine; in effect, that Ryabtsev may have been characterizing the debate somewhat inaccurately. The GOU has long been aware that DOE’s Global Threat Reduction Initiative program does not have authority to pay for waste issues associated with such repatriation.)

    Missile Defense
    ---------------
    ¶5. (U) In the one-on-one meeting before the plenary, Nykonenko told Van Diepen that Ukraine had read with interest the new U.S. plan for missile defense in Europe. Nykonenko pointed out that Ukraine had missile defense expertise and was interested in continued missile defense cooperation, which could help reconfirm Ukraine’s role in the new European security architecture. It was ‘very important’ for Ukraine to receive positive signals from the U.S., he said. Van Diepen replied that the U.S. would be looking forward to discussing missile defense with Ukraine the following week during the meetings in Kyiv led by Assistant Secretary of Defense for International Security Affairs Vershbow.

    Security Assurances
    -------------------
    ¶6. (S) The first item Nykonenko raised during the one-on-meeting was an appeal for additional security assurances for Ukraine, beyond those the U.S. had provided in the 1994 Budapest Declaration. He explained that Ukraine felt threatened, particularly after the Russian invasion of Georgia. Ukraine needed a security anchor to fill the vacuum until it could join NATO. Ukraine had received the August 2009 note from the U.S. reaffirming Budapest, but it wanted to discuss the issue in more detail. Ukraine was hoping that, with U.S. leadership, a new multilateral security assurance could be worked out. The GOU would be grateful to begin expert-level talks on this; the fact of such talks would send a good signal to Ukraine’s public*and neighbors. He passed a non-paper that proposed a new security assurance.  Legally binding assurances were best, he concluded, but he said he understood this was very difficult.

    ¶7. (U) Van Diepen explained that the United States’ Budapest commitment endured and was not tied to the expiration of the START Treaty in December. See paragraphs 53-54 below for additional discussions on this topic and issues related to the START Follow-on Treaty.

    SCUD Missile Elimination
    ------------------------
    ¶8. (S) Nykonenko introduced the SCUD agenda item by noting that this project is a priority for Ukraine. Ukraine’s Ministry of Defense Economic Department Deputy Director Sergiy Novosyolov reiterated that point and stated that we successfully completed the first stage -- the U.S. team inventory of the SCUDs and associated equipment in June-July 2009, the various documents and annexes from each of the sites, and U.S. agreement to eliminate a portion of the melange (liquid propellant for SCUD and other missiles). Novosyolov further explained that the SCUD Memorandum of Understanding (MOU) had been approved by all the Ministries and was submitted to the Cabinet of Ministers for final approval and will soon be ready. He also noted that a list of possible Ukrainian contractors had been sent to the U.S. Embassy and stated GOU readiness to discuss costs, timetables, volume of work, transporting the missiles to elimination sites, and other technical and logistical factors associated with implementation of the project.

    ¶9. (S) Alexander Dotsenko, from the National Security and Defense Council, added that there are several legal issues for the Cabinet of Ministers to consider before authorizing the MOD to sign the MOU. He stated that we should schedule an experts meeting to discuss the details of the elimination work, including the specific process for selecting the contractor, tax exemption issues, and a system to monitor the work of the contractor to ensure that all of the work is completed on time and in accordance with the other terms of the contract.

    ¶10. (S) Van Diepen expressed appreciation for the excellent cooperation received from the Ukraine Ministry of Defense in the conduct of the June-July 2009 site inventories. He noted U.S. interest in moving forward to the elimination phase of the project and hoped that the MOU would be approved soon. Paul Van-Son, from ISN’s Nonproliferation and Disarmament Fund (NDF) office, expressed agreement in principle to the Ukraine-proposed technical discussions, but emphasized that the MOU must be signed first. He also explained that the U.S. understood the importance of additional melange elimination to Ukraine, but noted that we would concentrate first on eliminating the SCUDs and associated equipment and melange in accordance with the MOU before discussing any further U.S. role in the elimination of additional stocks of melange.

    Melange Elimination
    -------------------
    ¶11. (S) Nykonenko noted that Ukraine had a dramatic melange problem, with over 16,000 tons of the rocket fuel and the steady deterioration of the storage containers. While the U.S. had committed to eliminating 1440 tons as part of the SCUD elimination project and the OSCE agreed on September 16 to eliminate 3000 tons, Ukraine was interested in additional bilateral U.S. assistance to dispose of the remaining fuel. Alexander Nilov, a rocket fuel expert from the MOD, explained that the 3000 tons would be transported by rail to Russia, where a Russian contractor hired by the OSCE would eliminate the fuel. The first shipment of melange would leave Ukraine on November 1, and the work would be completed in a year. This export of a military product to Russia was in compliance with Ukraine’s export control laws, he added.

    ¶12. (S) Van-Son explained that NDF contractors are evaluating the technical capability/costs of using the Polish mobile plant that is on site at Radekhiv to eliminate the 1440 tons of SCUD oxidizer. He again emphasized that the MOU on SCUD elimination must be concluded before further discussions can take place on elimination of SCUD-associated melange. He concluded that the U.S. would like to evaluate the progress on the OSCE melange elimination project once it commences, as well as progress on the NDF SCUD project, before considering any further funding for any separate melange project in Ukraine.

    ¶13. (S) Dotsenko reminded the U.S. of his request to consider eliminating additional melange as part of the SCUD project and stated that Ukraine had met its obligation to eliminate half of its missiles and associated equipment by 2005 as it agreed to do in 1998. (NOTE: While Ukraine currently has 54 SCUD TELs, Dotsenko maintains that Ukraine possessed 117 SCUD TELs when the 1998 U.S.-Ukraine Memorandum of Understanding was signed. According to Dotsenko, Ukraine eliminated half of its SCUD force prior to 2005 using its own funds, and the U.S. should therefore consider eliminating more melange based on the 1998 numbers.) Dotsenko asked the U.S. to consider additional melange elimination projects, pointing out that Ukraine would have 13,000 tons remaining even after the OSCE project is completed. He also requested that melange elimination be included on the agenda for the next meeting.

    Removal of SS-24 Solid Rocket Fuel and Elimination of Motor Cases
    --------------------------------------------- ---
    ¶14. (S) Nykonenko explained that, because of Ukraine’s budget crisis, the water wash-out removal of SS-24 rocket fuel from the motor cases had been significantly delayed. Ukraine was continuing to adhere to the “black box” elimination method, under which the USG paid Ukraine a given amount of money for each eliminated motor case, regardless of how Ukraine removed the propellant. As in previous meetings, Ukraine requested additional U.S. funding for SS-24 elimination ($250,000 per rocket motor to remove the fuel in an environmentally safe manner and an additional $15,000 per empty rocket case). Nykonenko highlighted a letter sent to the U.S. Congress from the Ukrainian Rada requesting additional U.S. assistance under the Cooperative Threat Reduction program to perform this work.

    ¶15. (S) Neil Couch, from the VCI Bureau’s START Treaty office, said that the U.S. remains committed to economically feasible, technologically sound propellant removal and motor case elimination as part of the Nunn-Lugar Cooperative Threat Reduction program. He continued that the Department of Defense is committed to the SS-24 elimination program regardless of the end of START in December 2009, but will not pay Ukraine more than it pays Russia for the elimination of the exact same missile system.

    ¶16. (S) Sergei Birin, from the National Space Agency of Ukraine, explained that Ukraine had begun this work with 10
    rocket motors. It needed $250,000 to remove the fuel from each case plus an additional $15,000 per empty rocket case for expenses related to the operation of the facility where the motors were located. Birin said that Ukraine needed an additional $6 million to complete this work, and Ukraine was waiting for the U.S. answer to its request. Ukraine had allocated $50 million to speed up the implementation of rocket fuel wash-out, but this sum was not sufficient to continue the work*operations at the Pavlohrad missile facility had been suspended. Nykonenko noted that Russia’s costs were lower because it used a method that Ukraine did not regard as environmentally safe*burning the fuel out of the motors. Ukraine cannot use this method because it is located in the center of Europe and the rocket facilities where this work is done are near large population centers. He added the U.S.-Ukraine 1993 CTR Agreement stated that elimination would be completed in an environmentally safe manner.

    ¶17. (S) Couch recalled that Ukraine had agreed after four years of intensive negotiations in the START Treaty Joint Compliance and Inspection Commission (JCIC) to cut four 80-millimeter holes in the motor cases so they could not be used again as rockets, but could be used for other commercial purposes after the fuel was eliminated. Ukraine also could have crushed the motor cases or cut them in two. Birin said that Ukraine had already eliminated the fuel from four of the ten rocket motor cases in the test batch it was using to refine its wash-out technique. In the first motor case there was some residual fuel remaining that Ukraine burned out. This burn-out left big holes in the motor case such that there was no need to cut the smaller holes as agreed in the JCIC. With each successive wash-out, the amount of residual fuel remaining had been less, so Ukraine was confident it would come up with an effective technique to wash out the fuel.

    ¶18. (S) Van Diepen noted that Ukraine was having detailed technical discussions on these SS-24 elimination issues with DTRA this week. He said he would get a detailed debriefing from DTRA and forward Ukraine’s remarks to the political level, which would consider Ukraine’s new requests for assistance. He promised to provide Ukraine a response.

    Nuclear Risk Reduction Center (NRRC)
    ------------------------------------
    ¶19. (C) Couch said that for several weeks the NRRC link between the U.S. and Ukraine had been out of service. The U.S. had determined that the link between Washington and Kyiv was ok, and that the problem was between the MOD and the Ukraine ground station. Nykonenko replied that Ukraine appreciated U.S. assistance to upgrade the link, and that Ukraine had completed this work. He said that Ukrainian engineers were working on the current problem and hoped to have the link back in service soon.

    Wassenaar Arrangement
    ---------------------
    ¶20. (C) Nykonenko said that Ukraine had amended its list of military items subject to export control restrictions. In addition, it had revised the list of dual use items; that list is awaiting interagency approval. Finally, Ukraine is working to enhance the control of lathes and other items, including training, that are not on the Wassenaar or MTCR lists, but are on the EU list. Ukraine is using best practices guides for approval of exports. Van Diepen emphasized it is very important to pass national legislation to implement the export control regimes effectively.

    Missile Technology Control Regime (MTCR)
    ----------------------------------------
    ¶21. (S) Tetyana Vidzigovska, State Service of Export Control of Ukraine, stated that Ukraine had implemented the changes to the MTCR Annex agreed to at the 2008 Canberra Plenary, noting that the GOU approved these changes on September 19, 2009. She also explained that the GOU is paying close attention to items not controlled by the MTCR and is considering enhancing controls over training and intangible technologies, and adopting additional controls on items going to Iran in accordance with the European Union list. Van Diepen thanked Ukraine for the update and noted that the U.S. undergoes a similar interagency process in implementing changes to the MTCR Annex.

    ¶22. (S) Boris Atamanenko, National Space Agency of Ukraine, stated that Ukraine had transferred MTCR Category I items to the U.S., Russia, Germany, and Saudi Arabia, and Category II
    items to the U.S., Russia, Saudi Arabia, the Republic of Korea, China, and India during the past year. In accordance with its MTCR commitments, he noted that Ukraine had informed MTCR Partners in April 2009 (POC Document 86) of the intended Category I transfer to Saudi Arabia, and none of the Partners had objected or made an official request for further information. Van Diepen attempted to confirm that Ukraine had actually transferred Category I items to Saudi Arabia., not just notified its intention to transfer, but Atamanenko’s response created confusion on this point.

    ¶23. (S) Van Diepen then said that the United States was extremely disappointed by this unwelcome news of an MTCR Category I transfer to Saudi Arabia. By definition, MTCR Category I systems are inherently capable of delivering weapons of mass destruction, and the MTCR Guidelines clearly state that such transfers should only be made on rare occasions. A principal purpose of the MTCR is to prevent the transfer of MTCR Category I items to non-MTCR countries. Van Diepen further noted that he understood that Ukraine had previously notified MTCR Partners of an MTCR Category I transfer to India, to which the U.S. objected but Ukraine transferred the items anyway. He stated that the India case was the first time that an MTCR Partner had gone ahead with a transfer when objections were made by another Partner. If Ukraine were to transfer Category I items to Saudi Arabia, that would be yet another unfortunate precedent. Van Diepen added that the U.S. would object to such a transfer, as it is our right to do as an MTCR Partner, but he said he would reserve further commentary until we get more information on what is actually being contemplated for transfer or has been transferred to Saudi Arabia.

    ¶24. (S) Van Diepen said that Ukraine should consider this discussion a formal request for more information on the Category I transfer to Saudi Arabia. He also asked that this information be provided to the U.S. well in advance of the MTCR Rio de Janeiro Plenary in November. This would allow for bilateral consultations on the margins of the MTCR Plenary on the Saudi issue as well as the broader philosophy on MTCR Category I transfers. Given the confusion over whether or not a transfer had already taken place, Van Diepen requested further clarification from Ukraine on Day 2 of the talks.

    ¶25. (C) On Day 2, Atamanenko clarified that no MTCR Category I items had yet been transferred to Saudi Arabia, but a project had been started that will result in a Category I transfer. Ukraine will not transfer any technology that would create any missile systems. Atamanenko also noted that the U.S. (ISN Director Durham) and UK had approached the GOU at the MTCR RPOC meeting in Paris in April, that they had requested further information about the sale, and had not raised concerns about the potential transfer. However, Ukraine had not received a formal written request from the U.S. or the UK for this information. Van Diepen then reiterated his ‘formal’ request for further information on the equipment/technology to be transferred in preparation for a robust discussion of this issue on the margins of the upcoming MTCR Plenary. (Embassy Kyiv subsequently followed up with a written request and raised the request in further meetings with MFA.)

    Arms Trade Treaty (ATT)
    -----------------------
    ¶26. (S) Nykonenko said that Ukraine had participated in the ATT’s Open-Ended Working Group meetings in 2009 and was looking forward to the February 2010 meetings. Ukraine supported the development of the ATT as long as it did not restrict self-defense and the legitimate production of military items. Ukraine was optimistic that an ATT could capture countries outside of the export control regimes. He said that Russia did not agree with Ukraine’s position, so we needed a common strategy to deal with Russia. Nykonenko added that any Treaty negotiated without the participation of the U.S., Russia, and China would be of limited utility.

    ¶27. (S) Van Diepen said that the United States supports greater responsibility in arms transfers, reducing the destabilizing trade in illicit arms, and ensuring that all states have national systems and internal controls that meet the highest standards. In working towards these goals, we will continue to oppose lowering of international standards on the transfer of conventional arms and ensure that there is no infringement on domestic ownership of firearms. He continued that work on the ATT must be done on a consensus basis in order to ensure these objectives are met. The UK needs to get back tQconsensus decision-making; the UK planned to introduce a resolution during the UN First Committee*the U.S. needed Ukraine’s help to ensure that consensus decision-making is part of any resolution passed. Nykonenko supported the U.S. position on the feasibility of an ATT and that the two countries (along with Russia and China) needed to develop a common strategy.

    Transfer Cases
    --------------
    ¶28. (S) Van Diepen said that there are two types of cases the U.S. wanted to discuss on the second day of the consultations: 1) transfers to Burma and South Sudan in which there were deliberate Ukrainian government actions that are contrary to U.S. philosophy on exports; and 2) other transfers by Ukrainian entities, presumably not authorized by the Ukrainian government. The U.S. wants to work cooperatively with Ukraine to stop this second category of illicit transfers.

    Burma
    -----
    ¶29. (S) Nykonenko said that Ukraine had received the U.S. demarche and was no longer exporting weapons to Burma. Ukraine was just wrapping up existing contracts, and had been reducing its exports to Burma since 2005. In 2008 Ukrainian exports to Burma were ‘as good as zero’ in part due to previous U.S. warnings, and Ukraine had not signed any new contracts with Burma in the last two and one half years. Current exports were just spare parts. The remaining business was so small that the company involved had recalled all of its workers from Burma.

    ¶30. (S) ISN/CATR Deputy Director Brian Bachman thanked Nykonenko for the information. He said that the U.S. was still concerned about the exports to Burma, but was pleased to hear that Ukraine was now only exporting a small number of spare parts and was no longer exported completed weapons, as reports had indicated.

    South Sudan
    -----------
    ¶31. (S) Van Diepen recalled that when the U.S. had raised with Ukraine in July 2008 that an additional shipment of T-72 tanks, BM-1 GRAD armored vehicles, small arms, and other military equipment planned for a late June or early July shipment to Kenya was being purchased by the Kenyan Ministry of State Defense for South Sudan, Ukraine had assured us the arms were for the Government of Kenya. Ukraine had informed the U.S. that it had received an end-user certificate from the Kenyan government and receipts acknowledging the arrival of the earlier tank shipment in Kenya. Subsequent to our discussions, the M/V Faina, which was carrying another weapons shipment from Ukraine, was hijacked, and it became clear that cargo was also intended for South Sudan. Van Diepen asked if the GOU had investigated.

    ¶32. (S) Valeriy Lysenko, from Ukraine’s Export Control Service, said that the T-72 tank shipment was intended for Kenya. He said Ukraine had not transferred any military equipment to South Sudan. All of Ukraine’s contracts were checked.

    ¶33. (S) Van Diepen gave the Ukrainian side a copy of the contract that clearly lists the GOSS, and asked if the GOU side maintained that the export was for Kenya. Lysenko held to this line, questioned the authenticity of the contract, and asked if the U.S. had any better evidence. Van Diepen, regretting that the GOU had forced him to do so, showed the Ukrainians cleared satellite imagery of T-72 tanks unloaded in Kenya, transferred to railyards for onward shipment, and finally in South Sudan. This led to a commotion on the Ukrainian side.

    ¶34. (S) Van Diepen continued that he appreciated the sides could have different export control policies, as was their sovereign right. But not being told the truth was something the United States did not expect from a strategic partner. There was nothing for Ukraine to gain from lying and a lot to lose, he cautioned. Since South Sudan is on the U.S. terrorism list, the U.S. would have to consider whether to impose sanctions over the transfer; a factor in U.S. deliberations would be whether the GOU the truth.

    ¶35. (S) Lysenko said that Ukraine would study the U.S. information and he asserted that Ukraine only had a relationship with Kenya, and did not have a relationship with South Sudan. Ukraine could not be held responsible for the actions of a third country. This matter was a common problem for the U.S. and Ukraine to resolve. He said Ukraine’s special agencies might need to get involved to find out what had happened. Nykonenko said that Ukraine would study this situation in the light of a partner relationship so hat the U.S. would know that Ukraine is a reliable partner.

    Ukraine’s Exports of Specialty Metals for Iran’s Ballistic Missiles
    ---------------------------------------
    ¶36. (S) Van Diepen said that, contrary to Ukraine’s export control policy, Ukrainian entities, including XXXXXXXXXXXX, were engaged in providing the Iranian ballistic missile program with specialty metals and other sensitive items such as ball bearings used in liquid propellant missile systems. It is possible that these activities were taking place without the knowledge of the Ukrainian government. The U.S. remains deeply concerned that, given the high quality of steel that can be purchased from Ukrainian manufacturers, Iran’s ballistic missile program continues to seek items from Ukrainian entities, including XXXXXXXXXXXX. Van Diepen continued that such steels have long been difficult for Iran to produce indigenously. Van Diepen provided the following points/non-paper:
    -- The United States and Ukraine have discussed in the past the supply by Ukrainian firms of sensitive materials to Iran’s ballistic missile program.
    -- Specifically, between 2002 and 2007, we repeatedly raised concerns that Ukraine’s XXXXXXXXXXXX was engaged in providing the Iranian ballistic missile program with specialty metals and other sensitive items such as ball bearings used in liquid propellant missile systems.
    -- In September 2004, the United States imposed sanctions against XXXXXXXXXXXX for transferring items controlled under the Missile Technology Control Regime (MTCR) to Iran.
    -- Subsequently, in May 2006, we advised you of XXXXXXXXXXXX’s continued efforts to supply Iran’s ballistic missile program with additional materials, including MTCR-controlled 08X22HGT titanium stabilized duplex stainless steel, which is used in the production of Scud and NoDong propellant tanks, as well as CR18NI10TI, a type of stainless steel that is not MTCR-controlled, but is used in the production of a variety of Scud engine parts.
    -- We remain deeply concerned that, given the high-quality of steel that can be purchased from Ukrainian manufacturers, Iran’s ballistic missile program continues to seek items from Ukrainian entities, including XXXXXXXXXXXX.
    -- Such steels have long been difficult for Iran to produce indigenously. As you will recall, in late 2006 we shared with all MTCR Partners information indicating that a key choke point for Iran’s missile programs is the ability to acquire advanced materials such as AISI 4340 and AISI 4130 steels.
    -- Both of these steels are used by Iran’s solid-fueled ballistic missile program in the production of motor cases.
    -- We therefore urge you to exercise vigilance in your export control processes, and to take all appropriate measures to ensure that Ukrainian firms are not acting as sources of specialty metals to Iranian ballistic missile entities.

    ¶37. (S) Nykonenko said that Ukraine would look into the matter and provide detailed information to the U.S. Van Diepen said that if Ukraine could not solve this problem on its own, the U.S. would consider taking action by sanctioning the entities involved, including the steel companies, and by taking other measures. Iran’s missiles threatened U.S. and allied troops stationed in the Middle East, so for self-defense reasons, the U.S. had to act to stop these exports. Ukraine’s steel companies have benefited from trade with the West, but they could not have it both ways-- it was not in their interest to risk large profits from the West for small illicit profits from rogue states like Iran.

    Ukrainian Training to Iran’s Malek-Ashtar University of Technology
    --------------------------------
    ¶38. (S) Van Diepen said that we recently shared with the GOU information indicating that as of early 2009, Iran’s Malek-Ashtar University of Technology (MUT), as in years past, was continuing to sponsor international scientists, including from Ukraine, to provide training in Iran. Malek-Ashtar University of Technology is subordinate to Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), and provides instruction to representatives of Iran’s Defense Industries Organization (DIO) as well as the Aerospace Industries Organization (AIO). The U.S. urged Ukraine to ensure that Ukrainian individuals and institutions are not providing sensitive technology, training, and/or other support to Malek-Ashtar University of Technology or other Iranian entities affiliated with Iran’s missile program, and asked for the status of Ukraine’s actions. Nykonenko said that Ukraine had recently received the U.S. information and was reviewing it.

    Prohres-Pakistan
    ----------------
    ¶39. (S) Van Diepen noted that we recently provided information to Ukraine noting the interest in Pakistan’s National Engineering and Scientific Commission (NESCOM) in procuring gyrotheodolites from Ukraine’s Prohres. He urged Ukraine to investigate this activity and take actions to prevent any transfer of this missile-related equipment. Nykonenko said that Ukraine had recently received the U.S. information and was reviewing it.
    XXXXXXXXXXXX

    -------------
    ¶40. (S) Van Diepen said that there is a long history to this case and requested an update from Ukraine. He also provided additional information on this case:
    -- We now have new information indicating that in August 2009, XXXXXXXXXXXX was working with representatives of China’s Changda Corporation to establish a partnership related to the production of gyrotheodolites with China’s Shaanxi Cangsong Machinery Plant.
    -- The Shannxi Cangsong Machinery Plant is subordinate to the China Aerospace Science and Technology Corporation Tenth Academy and manufactures inertial guidance systems for Chinese ballistic missiles.
    -- Given the possible missile-related end-use of these items, as well as the identity of XXXXXXXXXXXX’s potential Chinese partner, we are concerned that this cooperation could be used to support China’s MTCR Category I missile programs.
    -- We therefore strongly urge you to conduct further inquiries into XXXXXXXXXXXX’s dealings with Chinese missile-related entities, and take all appropriate measures to ensure that  XXXXXXXXXXXX is not serving as a source of goods or technologies for China’s MTCR Category I programs.

    ¶41. Nykonenko said that Ukraine is still reviewing the U.S. information on these matters. (NOTE: Ukraine provide a written update on this case at the end of the talks: “XXXXXXXXXXXX did negotiate with China Great Wall and received licensing approval to repair a previously provided UGT-S gyrotheodolite. However, XXXXXXXXXXXX did not negotiate with the China Academy of Launch Vehicle Technology to transfer MTCR-controlled DOZ stellar sensors.” END NOTE.)

    G8 Global Partnership/Combating Nuclear Smuggling
    --------------------------------------------- ----
    ¶42. (U) Viktor Ryazantsev of the State Committee for Nuclear Regulation, Mykola Proskura of the Ministry for Emergency Situations, and Oleksandr Panchenko of the State Border Guard Service provided detailed reports on the progress made on the range of anti-nuclear smuggling assistance projects developed with the GOU by the U.S. Nuclear Smuggling Outreach Initiative (NSOI) in January 2006. Each reported extensive progress on these projects and expressed deep appreciation for U.S. assistance in facilitating both project implementation and participation by other donors.

    ¶43. (U) NSOI Coordinator Mike Stafford agreed with them that the two sides had made remarkable progress on these projects and added that their degree of cooperation provided a model for NSOI’s engagement with other governments. Stafford also noted that, in addition to progress on the assistance projects, it was important to monitor progress in implementing the agreed steps in the joint action plan that the sides had also agreed upon in January 2006 and whose
    implementation the assistance projects were designed to facilitate. Stafford noted that the USG had just received from the Ukrainian Embassy earlier in the week an updated matrix indicating that 27 of the 30 steps in the joint action plan were either complete or in progress. He congratulated the GOU on this progress and secured Nykonenko’s agreement to keep the U.S. side updated as implementation proceeds. Stafford also announced that NSOI had allocated $935,000 from its FY09 budget to assist monitoring on Ukraine’s green border with Russia, proposed on behalf of the Preventing Nuclear Smuggling Program a workshop to strengthen Ukraine’s ability to respond to nuclear smuggling incidents, and agreed to a Ukrainian request to query the Government of Finland on when a proposed mobile radiation monitoring van might be provided. (The Finnish regulatory authority subsequently reported that they hoped to provide it in December.)
    ¶44. (U) On behalf of ISN/CTR, Stafford expressed U.S. appreciation for the provision of a temporary location for the Science and Technology Center Ukraine (STCU) and requested periodic updates on construction of the permanent headquarters. Nykonenko emphasized three additional assistance projects that had been suggested by Ukraine at the most recent Global Partnership (GP) Working Group meeting, and reiterated a request that contributions by GP members to the Chernobyl Shelter Fund not be credited against their commitments to the GP. Stafford said he had investigated the latter matter after the original Ukrainian request and had learned the USG and several other GP members were counting these contributions within their GP commitments. The USG was not inclined to change this practice and thus would not ask others to change, either, especially since how to account for assistance was a sovereign decision.

    Electron
    --------
    ¶45. (U) Proskura said that, after two years of negotiations, the U.S. and Ukraine had signed a contract September 24 on the removal and storage of radioactive sources from the Electron Gaz Plant.and the Kavetskiy Institute. Ukraine had selected the contractor, and he saw no reason why Ukraine’s nuclear regulatory body would intervene to stop the work.

    ¶46. (C) Leach said that this contract demonstrated Ukraine’s strong commitment to nonproliferation. The sides would begin be securing the sources at the two facilities and then would work on removing the material beginning with one-of-a-kind sources at the Institute of Physics in Kyiv. The sides would work out a way to deal with the different sources and more difficult conditions at Electron Gaz. The sides would need to work closely and cooperatively to resolve all of the problems as the project moved forward, he concluded.

    NATO Partnership for Peace Destruction Project
    --------------------------------------------- -
    ¶47. (U) PM/WRA Deputy Director Steven Costner noted that the sides would have detailed technical discussions the next day on this topic, but he wanted to summarize the state of play in front of the larger group. While the original Phase I of the project planned for the destruction of 15,000 tons of munitions and 400,000 small arms/light weapons (SA/LW), revised plans by NATO and the USG (as Lead Nation) was for the project to terminate when current funding ran out (around the end of March 2010), due to the GOU deciding not to destroy all of the SA/LW. This revised plan would cover 6000 tons of munitions. The good news was that munitions destruction finally had commenced, with approximately 600 tons destroyed to date, and that the NATO Maintenance and Supply Agency had determined that an extra 2000 tons of munitions could be destroyed (i.e., 8000 tons total) due to interest accrued in the account. The other donors would need to approve the use of the interest for this purpose, but that was expected to be a formality. Additionally, construction on the explosive waste incinerator would begin in October. As for SA/LW destruction, over 134,000 had been destroyed to date, with the GOU recently committing to destroy another 54,000 after over a year and a half suspension of such destruction. This would bring the total destroyed to approximately 190,000 SA/LW, but would leave the project approximately 210,000 weapons short of the original goal.

    ¶48. (U) Costner emphasized that the USG had committed to engage the GOU on its proposal to convert the balance of the SA/LW into replicas for sale to see if this could be done in a way that would satisfy USG requirements that the weapons no longer function as such. If agreement was reached, the USG and NATO would commit to continuing the destruction project and destroying the balance of the 15,000 tons of munitions as originally envisioned. However, he emphasized that U.S. laws were stringent in this regard and that experts may not reach agreement the next day. In this case, the sides would be faced with two options: 1) Ukraine would need to destroy the weapons as originally agreed; or 2) the project would be shut down, as noted above.

    ¶49. (U) Nykonenko expressed appreciation for the good news that the munitions total would be increased to 8000 tons, and expressed confidence that the experts would find a solution the following day that would allow destruction assistance to continue. (Note: The following day Ukrainian experts stated that they have recommended to the Cabinet of Ministers that the GOU agree to destroy the balance of weapons consistent with their original commitment, instead of converting them to replicas. If Cabinet of Ministers approval is attained, this will allow the project to continue. See septel for details. End Note.)

    Biological Threat Reduction Initiative
    --------------------------------------
    ¶50. (U) Ludmilla Muherska from the Ministry of Health gave a detailed presentation on Ukraine’s efforts to upgrade 18 regional medical laboratories. The Ministry of Health is also working with the MOD and the other security services to upgrade security at the laboratories. Ukraine would require additional assistance to reduce the biological threat and to complete all of this work

    ¶51. (U) Van Diepen urged Ukraine to identify expeditiously a new location for a Central Reference Laboratory (CRL) that meets DoD/CTR’s conditions and he emphasized that Ukraine needs to consolidate all especially dangerous pathogens in the CRL, once completed.

    ¶52. (U) Muherska said that Ukraine is working on this complex issue and was considering several sites for the CRL. Some of the sites were located on MOD-owned property, so if selected, the site would need to be transferred to the Ministry of Health. Ukraine is hoping that it would be able to select a site soon.

    Side Conversation -- Security Assurances and START Follow-On
    --------------------------------------------- ---------------
    ¶53. (S) On the margins of the Nonproliferation talks, Nykonenko had three conversations with VCI/SI Deputy Director Neil Couch to clarify Ukraine’s desire to participate in the START Follow-on Treaty and Kiev’s security concerns. Nykonenko stated that he has been appointed as the Ukrainian Representative to the START Follow-on negotiations and, in that capacity, he wants to consult with the U.S. negotiator. He added that, despite a rocky relationship with Russia, he has met with Ambassador Antonov on four occasions and he doesn’t understand why the United States has not offered similar consultations. He is willing to meet with A/S Gottemoeller at any time or place. Nykonenko reiterated his offer for Ukraine to play a mediating role between the United States and Russia in START Follow-on, citing past examples in which Ukraine had played such a role in START. Finally, Nykonenko asked that the START Follow-on Treaty contain a preambular statement that singled-out Ukraine’s contribution to START implementation specifically and to nuclear non-proliferation in general. He added that it was unfair to include Ukraine in the same category as Belarus and Kazakhstan since they are members of the CIS and only do what Russia tells them to do.

    ¶54. (S) Couch asked Nykonenko to explain why Ukraine needed additional, legally binding security assurances, recalling that the 1994 Budapest security assurances provided by the United States, the United Kingdom, and the Russian Federation did not expire with the START Treaty in December of 2009; that the 2008 United States-Ukraine Charter on Strategic Partnership was still in force; and that Vice President Biden’’s recent speech in Kyiv had confirmed the United States’ commitment to Ukrainian security. With all of these assurances, what else did Ukraine need? Nykonenko responded that Ukraine had no doubts about the commitment of the United States; however, Ukraine had serious concerns about Russia’s commitment. Citing the Russian-Georgian conflict and the large ethnic Russian population in Ukraine, Nykonenko explained that if the United States would agree to new security assurances with Ukraine, then Russia would likely agree to join in the document. That is Ukraine’s real desire; it views an agreement with the United States as a vehicle to bring Russia along. Nykonenko added that such an agreement would also satisfy the two halves of Ukraine society, the westward-leaning half and the Russian-leaning half, and help quell internal tension. He also raised the issue of the Russian Black Sea Navy Base at Sevastopol, stating that Ukraine has no way of knowing how many soldiers Russia had on the base and that he believed Russia has exceeded its number of personnel allowed under the Navy Base lease. This was especially urgent for Ukraine given Russia’s suspension of its CFE commitments. Nykonenko was clearly concerned that the Russians could use the Black Sea Base as jumping-off point for military action in Ukraine. (Note: A subsequent initial check with analysts at the Defense Intelligence Agency indicates no visible build-up of Russian forces at the Black Sea Navy Base. DIA is currently conducting a more thorough review of available information. End note.)

    ¶55. (U) Participants:
    United States:
    ISN Acting Assistant Secretary Vann Van Diepen XXXXXXXXXXXX
    ¶56. ISN Acting Assistant Secretary Van Diepen cleared this cable. PETTIT

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