IAEA/EGYPT: SAFEGUARDS IMPLEMENTATION REPORT CITES INVESTIGATION OF LEU/HEU PARTICLES FOUND AT INSHAS NUCLEAR CENTER

Reference ID 09UNVIEVIENNA220
Created 2009-05-11 14:02
Released 2011-01-28
Classification SECRET
Origin UNVIE


VZCZCXYZ0000
OO RUEHWEB

DE RUEHUNV #0220/01 1311416
ZNY SSSSS ZZH
O 111416Z MAY 09
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9444
INFO RUEHEG/AMEMBASSY CAIRO IMMEDIATE 0227
RUCNDT/USMISSION USUN NEW YORK IMMEDIATE 1646
RHEBAAA/DOE WASHDC IMMEDIATE

S E C R E T UNVIE VIENNA 000220

SIPDIS

DEPT FOR ISN/RA AND IO/T

E.O. 12958: DECL: 05/08/2034
TAG PARM, PREL, KNNP, IAEA, MNUC, EG
SUBJECT: IAEA/EGYPT: SAFEGUARDS IMPLEMENTATION REPORT CITES
INVESTIGATION OF LEU/HEU PARTICLES FOUND AT INSHAS NUCLEAR
CENTER

REF: 05 UNVIE 00136

Classified By: CHARGE D'AFFAIRE GEOFFREY PYATT FOR REASONS 1.4 (B) AN
D (D)

-----------------------------------
Summary, Comment and Recommendation
-----------------------------------

¶1. (SBU) The IAEA's Safeguards Implementation Report (SIR)
for 2008, an annual report on safeguards worldwide, includes
a country-specific section on Egypt citing for the first time
an ongoing investigation of findings in 2007 and 2008 of HEU
and LEU particles at the Inshas research center. The key
sentence reports that although the Agency "has no indication
contrary to Egypt's explanations" for the presence of the
enriched uranium (i.e., the uranium particles came from
contamination on imported radioisotope containers), the
Agency "has not yet identified the source of the particles"
and will continue to investigate according to its "procedures
and practices." The Report specifies that additional
environmental samples will be required. The SIR section on
Egypt also concludes that earlier issues of undeclared
nuclear activities and material reported to the Board in
February 2005 (GOV/2005/9) are no longer outstanding,
effectively de-linking the current issue of contamination
from the past safeguards problems.

¶2. (S) The SIR report refrains from characterizing safeguards
implementation in Egypt as "routine." Rather, for purposes
of presentation in the SIR, Egypt is placed on similar
footing with Iran, Syria and DPRK with a country-specific
section in the table of contents. Including Egypt in the SIR
report in this manner is a step short of making Egypt the
subject of a country-specific safeguards report as in 2005,
and as has been the case for Iran, Syria and DPRK.
Nevertheless, the optics of being classed in the same
category as the others in the SIR report are not good for
Egypt. Egypt has already begun playing down the report as
"old news" by conflating the new HEU/LEU finding with the
2005 issues. We fully expect Egypt to take this tack in the
June Board meeting which will consider the SIR report along
with country-specific reports on Iran and Syria. Prompted by
the Syrian case, the June Board will also discuss the issue
of "de-restricting" Board documents, such as the DG's reports
on safeguards investigations. The immediate leak of the
restricted draft SIR will likely be cited by Egypt as it
argues against release of the DG's reports, a likelihood
foreshadowed by statements already appearing in press from
the Egyptian MFA spokesman. As an IAEA Board member and
representative of the NAM troika, Egypt is one of the more
unhelpful delegations (next to Cuba) on the Board,
particularly on Iran and Syria issues, and in the IAEA
General Conference (GC) on Middle East safeguards.

¶3. (S) Recommendation and Guidance Request: Mission requests
any guidance for responding to the SIR. We recommend that
our statement to the June Board supports the strengthened
safeguards approach in Egypt and clearly welcomes and
appreciates Egypt's full cooperation with those efforts. We
believe such a U.S. posture would be the best means for using
the SIR report as a source of leverage against Egypt to
persuade Cairo to be more cooperative in the Board and GC.
For example, expressing concern about the HEU finding in
Egypt, or threatening to do so (as Israeli Ambassador
Michaeli suggested to us), in national statements on the SIR
(which would be reflected in the Board Chair's Summary) could

be a point of leverage. However, overplaying our hand in
this regard could also provoke a defensive reaction from
Cairo, making Egypt even less cooperative at the IAEA. We
recommend a measured, positive approach calibrated to the
knowledge (as the Secretariat has told us in confidence) that
there is likely a benign explanation for the presence of the
uranium contamination, not the tip of a nuclear weapons
program iceberg. A positive approach, both in Vienna and
Cairo, taking account of other equities we may have with
Egypt, could be used to build some currency toward a renewed
sense of common purpose with Egypt at the IAEA.
End Summary, Comment, and Recommendation.

-------------------------------------
Safeguards Implementation Report 2008
-------------------------------------

¶4. (SBU) The annual Safeguards Implementation Report (SIR)
for 2008 was issued on May 5 as GOV/2009/24. The SIR
provides a description and analysis of the Agency's


safeguards operations worldwide in 2008 and summarizes the
problems encountered. Egypt received its own section in the
report (see para 13 below for full text), along with Iran and
Syria. The SIR addresses two distinct issues on Egypt: 1)
for the first time informing the Board of HEU and LEU
particles found in environmental samples taken at Inshas
Nuclear Center in 2007-2008; and 2) closing out other
outstanding issues related to Egypt's past undeclared nuclear
activities and materials (reported to the Board in February
2005 in GOV/2005/9). There is no change to the Agency's
conclusion that all declared nuclear material in Egypt
remained in peaceful activities for 2008. As Egypt does not
have an Additional Protocol, there is no conclusion on
undeclared nuclear material or activities.

¶5. (S) Although this new finding of HEU and LEU contamination
at Inshas is established as a distinct issue from the past
safeguards problems reported to the Board in February 2005,
the Secretariat/Director General reports both issues in
tandem in the context of the SIR document. (Comment:
Although we suspect access/procedures related to the previous
investigation may have contributed to the finding of uranium
contamination, Mission believes the IAEA reported it as "new"
to illustrate Egyptian cooperation on the earlier issues,
therefore making the reporting of the new issue more
palatable to Egypt. The optics of the alternative, issuing a
special report on Egypt as is the case with Iran, Syria and
DPRK would have been far more damaging. End comment.)

----------------------------------
Reaction to the IAEA's HEU Finding
----------------------------------

¶6. (S) According to the SIR, Egypt has stated to the IAEA
that it "believed the particles could have been brought into
the country through contaminated radioisotope transport
containers." The Agency notes that it will continue its
investigation - including taking additional environmental
samples - to determine the source of the uranium particles
but "has no indications contrary to Egypt's explanation."
The Secretariat notably does not characterize this
investigation as a "routine," but instead says it will be
investigated in accordance with the Agency's "procedures and
practices." The Secretariat's investigation will be geared
toward confirming the origins of the HEU and LEU and how they
may have ended up in Egypt. Secretariat contacts have told
us (strictly protect) they do not so far see any indication
that this finding could be the tip of a covert nuclear
military or weapons program. They see as much more likely
possible benign explanations, such as the contamination
originating from an old uranium standard or some other very
small quantity of uranium that was enriched elsewhere.

¶7. (S) The SIR section on Egypt has already generated
negative press for Egypt, including the fact that the HEU may
have been near weapons-grade. Thus far the Egyptian reaction
in Vienna has been "no comment" (both the Ambassador and DCM
were absent when it came out) and Cairo seems inclined to
downplay the issue (incorrectly) as "old news" by conflating
the issue with the 2005 report. One press report even
speculated that it could have been prompted by Bechtel losing
a contract bid to build a reactor in Egypt. Another press
report foreshadowed Egypt citing the immediate leakage of the
"Board restricted" SIR draft during the upcoming June Board
discussion of deristriction of Board documents. Egypt helped
prompt the coming June Board discussion by joining others in
resisting release of DG ElBaradei's reports on Syria. The
reaction among other delegations in Vienna has also been
relatively muted. The Australian Mission assessed that the
SIR did not give rise to proliferation concerns at this stage
but that the issue remains open until the Agency is able to
determine the source of the HEU particles. The Canadian
Mission was still assessing the implications and importance
of the report. France also awaits guidance from Paris.

--------------------------------------
Background of Past Egypt Noncompliance
--------------------------------------

¶8. (SBU) Egypt was cited in the 2004 SIR report after
findings of undeclared material and activities. The Director
General issued a report to the Board on February 14, 2005
with details of the problems that the Agency had uncovered in
Egypt. (Comment: Discovery of the undeclared activity was
particularly noteworthy for the fact that the IAEA launched
the investigation on its own after reviewing open source
documents that suggested activities not yet declared to the


Agency, i.e., there was no tip-off from member state
intelligence. End comment.) The undeclared activity related
to uranium extraction and conversion, irradiation of uranium
targets and reprocessing that had not been reported to the
Agency.

¶9. (SBU) The 2005 DG report noted Egypt's active
participation in addressing the Agency's outstanding
questions, and the Chairman's conclusion from the March 2005
Board of Governors meeting supported the Agency's
investigation and welcomed Egypt's cooperation. No
resolution was passed at the March 2005 Board on Egypt's
failure to report nuclear materials and activities; thus, the
Board made no formal finding of noncompliance and made no
report to the UN Security Council. The U.S. statement at the
March 2005 Board welcomed Egypt's cooperation with the
Agency, while also noting the safeguards failures were a
matter of concern. As noted, the newly released 2008 SIR
closes out these past issues.


¶10. (SBU) The DG concluded in his February 2005 (GOV/2005/9)
report that the Agency identified a number of failures by
Egypt to act in accordance with its obligations under its
Safeguards Agreement and that these failures were a matter of
concern:

-- Failure to report on its initial inventory of imported
UF4, imported and domestically produced uranium metal,
imported thorium compounds, small quantities of domestically
produced UO2, UO3, and UF4, and a number of unirradiated low
enriched and natural uranium fuel rods;

-- Failure to report the uranyl nitrate and scrap UO2
pellets, and their use for acceptance testing of the
Hydrometallurgy Pilot Plant;

-- Failure to report the irradiation of small amounts of
natural uranium and thorium and their subsequent dissolution
in the Nuclear Chemistry Building laboratories, including the
production and transfer of waste;

-- Failure to provide initial design information for the
Hydrometallurgy Pilot Plant and the Radioisotope Production
Facility, and modified design information for the two
reactors.

¶11. (SBU) During the March 2005 Board (see reftel), Members
uniformly expressed their satisfaction with Egypt's
cooperation with the IAEA and concluded that Egypt's failures
to declare nuclear material, activities, and facilities in a
timely fashion were not a matter of proliferation concern.
Members justified this conclusion by arguing that some
activities were published in open sources and were,
therefore, not clandestine; that some of them occurred 15-40
years ago, even before Egypt signed the NPT and concluded a
Safeguards agreement; and that only small amounts of nuclear
material were involved. Egypt, at the time, added that any
failure to report arose from different interpretations of
Egypt's Safeguards Agreement.

¶12. (SBU) The 2008 SIR indicates that between 2004 and 2006,
Egypt made available to the Agency nuclear material,
submitted design information for three additional facilities,
and gave the Agency access to information, such as logbooks
and operating records. Egypt also strengthened the authority
of its Atomic Energy Authority to exercise effective control
of all nuclear material and activities in the State. As a
result of Egypt's actions, the Agency concludes in the 2008
SIR that it has been able to verify all declared nuclear
material in Egypt and that Egypt's statements are consistent
with the Agency's findings. (See para 13 for full text.)

-----------------
SIR Text on Egypt
-----------------

¶13. (SBU) Begin text of SIR (GOV/2009/24) paragraphs 42-47
dealing with Egypt:

B.1.7. Arab Republic of Egypt

¶42. Following Agency enquiries, Egypt, between 2004 and
2005, disclosed past undeclared nuclear activities and
material to the Agency, as reported to the Board in February
2005 (GOV/2005/9) and in the Safeguards Implementation Report
for 2005 (GOV/2006/31, paragraph 124). The results of the


Agency's investigation since the issuance of these reports,
and the Agency's current assessment thereof, are described
below.

¶43. Between 2004 and 2006, Egypt made available to the
Agency nuclear material that it had failed to report. Egypt
characterized and provided information about the material and
submitted design information for three additional facilities
located at the Nuclear Research Centre of Inshas (the Nuclear
Chemistry Building, the Hydrometallurgy Pilot Plant, and the
Radioisotope Production Facility). Egypt also gave the
Agency access to information, such as logbooks and operating
records, and access to personnel and locations related to its
conversion and irradiation experiments and its preparatory
activities related to reprocessing.

¶44. The Agency was informed in 2004 by Egypt's SSAC, the
Atomic Energy Authority (AEA), that it did not have the
authority necessary for it to exercise effective control of
all nuclear material and activities in the State. A
Presidential Decree was issued in May 2006 to redefine the
AEA's authority. Ministerial Decrees were issued in October
2006 for the practical implementation of the Presidential
Decree. The AEA then undertook a State-wide investigation of
its nuclear material holdings, during which additional,
previously unreported, nuclear material was identified,
including several depleted uranium items for which Egypt
subsequently provided accounting reports.

¶45. The Agency has received relevant nuclear material
accounting reports, and has been able to verify all declared
nuclear material in Egypt. Egypt has also clarified issues
relating to its past undeclared activities carried out at the
laboratories of the AEA at Inshas and at the laboratories of
the Nuclear Material Authority at El Qattamiyah. The Agency
has concluded that Egypt's statements are consistent with the
Agency's findings, and that the issues raised in the report
to the Board are no longer outstanding.

¶46. In 2007 and 2008, some high enriched uranium (HEU) and
low enriched uranium (LEU) particles were found in
environmental samples taken at Inshas. Egypt stated that, as
a result of an investigation carried out to identify the
source of the particles, it believed the particles could have
been brought into the country through contaminated
radioisotope transport containers. Although the Agency has
no indications contrary to Egypt's explanations, it has not
yet identified the source of the uranium particles. It will
continue, in accordance with its procedures and practices, to
seek to clarify this issue as part of its ongoing
verification activities; this will include taking additional
environmental samples.

¶47. For 2008, the Agency found no indication of the
diversion of declared nuclear material in Egypt. Therefore,
the Agency was able to conclude for Egypt that all declared
nuclear material remained in peaceful activities.



PYATT







Source: Wikileaks