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"I actually have a pretty good collection of Arms Control Today, which I have read throughout my career. It's one of the few really serious publications on arms control issues."
– Gary Samore
Former White House Coordinator for Arms Control and WMD Terrorism
Nuclear Suppliers Group

India, U.S. Agree on Defense Trade Monitoring

Jeff Abramson and Daniel Horner

India and the United States have agreed on an end-use monitoring arrangement that will make it easier for India to acquire advanced U.S. defense equipment, External Affairs Minister S.M. Krishna announced at a joint press appearance with Secretary of State Hillary Rodham Clinton in New Delhi July 20.

The pact “will boost India’s ability to defend itself through the acquisition of U.S. defense equipment while promoting American high tech exports,” according to a Department of State summary of the trip. Few details about the deal were released. A State Department official said in an Aug. 28 e-mail that the end-use monitoring text has been finalized, but is not publicly available.

The agreement is significant in part because India currently is seeking 126 fighter jets to update its air force, a contract that could be worth more than $10 billion. Major U.S. defense contractors Boeing and Lockheed Martin are part of an international competition for the contract.

The possibility of broad U.S. access to sensitive Indian defense sites was controversial in India. Typical U.S. end-use monitoring agreements place a number of limitations on recipients of U.S. defense articles, including provisions for on-site inspection by U.S. officials and prohibitions on the retransfer of the equipment.

Shortly after the July 20 announcement, Indian Prime Minister Manmohan Singh defended the agreement, telling Parliament that Indian sovereignty was not compromised and that the agreement did not allow “unilateral” U.S. inspections. According to Indian press reports citing unnamed government officials, the two countries reworked the on-site inspection system. Although U.S. inspectors will be allowed to inspect equipment purchased or transferred from the United States, the inspections will be prescheduled and occur at locations of India’s choice, the reports said. If the equipment is being used, there are provisions for rescheduling the inspection, according to the reports. The State Department official did not confirm this information but instead indicated that some of the details are still being determined.

Monitoring Nuclear Exports

Export monitoring also has been an issue in proposed nuclear cooperation between the United States and India. Last year, the United States and the Nuclear Suppliers Group (NSG), which includes the United States, lifted long-standing restrictions on nuclear exports to India. (See ACT, October 2008.) In return, India agreed to take certain steps with regard to its nuclear program, including opening some of its currently unsafeguarded nuclear reactors to inspections by the International Atomic Energy Agency.

Under U.S. law and NSG guidelines, countries generally are not eligible to receive major nuclear exports if they are not parties to the nuclear Nonproliferation Treaty.

Congress in 2006 passed legislation opening the door to renewed nuclear trade with India. The legislation, known as the Hyde Act, also contained several nonproliferation provisions, including one creating a “nuclear export accountability program.” In the congressional debate over the Hyde Act, a key concern was to ensure that U.S. nuclear exports would not boost India’s weapons program.

The export accountability provision requires detailed reporting on the use of U.S. nuclear technology exports to India. An official from the U.S. Department of Energy’s National Nuclear Security Administration (NNSA), which oversees such exports, said earlier this year that the Hyde Act establishes a process that goes beyond the tracking requirements for similar U.S. exports to other countries.

A January trip report by a nuclear industry delegation that had traveled to India cited the monitoring requirement as one of several obstacles to U.S. nuclear trade. An NNSA spokesperson said in Aug. 24 e-mail that she had “no updates” on efforts to resolve the issue.

India and the United States have agreed on an end-use monitoring arrangement that will make it easier for India to acquire advanced U.S. defense equipment, External Affairs Minister S.M. Krishna announced at a joint press appearance with Secretary of State Hillary Rodham Clinton in New Delhi July 20. (Continue)

G-8 Tightens Nuclear Export Rules

Daniel Horner

The members of the Group of Eight (G-8) industrialized countries agreed to adopt new rules for sensitive nuclear exports, according to a statement released during the group’s July 8-10 summit in L’Aquila, Italy. Subsequent remarks by officials from some of the G-8 countries regarding trade with India, however, seem to be at odds with the G-8 statement.

The new G-8 policy is laid out in a November 2008 document that was originally drafted in the Nuclear Suppliers Group (NSG) late last year. The NSG, which now has 46 members, has not been able to reach consensus on that text or any alternative. (See ACT, July/August 2009.)

The G-8 countries—Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States—said they “agree to implement this text on a national basis in the next year,” while the full NSG continues to try to reach consensus.

“We urge the NSG to accelerate its work and swiftly reach consensus this year to allow for global implementation of a strengthened mechanism on transfers of enrichment and reprocessing facilities, equipment, and technology,” the G-8 statement said. All the members of the G-8 are also members of the NSG.

The new rules would spell out specific criteria that non-nuclear-weapon states would have to meet to be eligible for exports related to uranium enrichment and spent fuel reprocessing. According to the text, one of the criteria is that a recipient of such exports must be a party to the nuclear Nonproliferation Treaty (NPT). Current NSG guidelines say suppliers should exercise “restraint” in considering requests for such exports.

The G-8 action has caused a stir in India, which is not party to the NPT. Prime Minister Manmohan Singh and members of his government said the decision does not undercut the waiver that India received from the NSG a year ago. (See ACT, October 2008.) The waiver allows NSG members to resume major nuclear trade with India, lifting a ban that lasted more than three decades. NSG guidelines prohibit members from sending nuclear fuel, reactors, and other nuclear goods to countries that are not NPT parties. However, in response to an initiative led by the United States, the NSG waived that rule for India in return for a series of nonproliferation commitments from New Delhi.

Indians sometimes refer to the NSG action as a “clean” waiver because it did not specifically exclude any categories of nuclear exports, including those related to enrichment and reprocessing.

Comments by U.S. Secretary of State Hillary Rodham Clinton at a July 20 press event in New Delhi seemed to give support to the Indian government’s position. When a reporter asked whether it was the Obama administration’s policy to prevent enrichment- and reprocessing-related transfers by NSG members, she replied, “Well, clearly, we don’t” oppose such transfers, according to a Department of State transcript.

The United States has long opposed such transfers to any state, including India. President George W. Bush’s 2008 transmittal letter to Congress for the U.S.-Indian nuclear cooperation agreement noted that “[s]ensitive nuclear technology, heavy water production technology and production facilities, sensitive nuclear facilities, and major critical components of such facilities may not be transmitted under the Agreement unless the Agreement is amended.” In responses provided to the Senate Foreign Relations Committee in November 2005, Undersecretary of State for Arms Control and International Security Robert Joseph said, “We do not intend to provide enrichment and reprocessing technology to India. We do not currently provide enrichment and reprocessing equipment to any country.”

Asked about the seeming inconsistency with the G-8 statement and long-standing U.S. policy, a State Department spokesperson said in an Aug. 7 e-mail that “U.S. policy has not changed” and is a matter “of public record,” apparently referring to statements such as the ones from Bush and Joseph. The department did not respond to requests to state the current policy or cite a specific previous public statement of it.

Russia also seemed to have varying responses to the question of whether the G-8 action applies to India. In an interview published July 31 in India’s Business Standard, Vyacheslav Trubnikov, Russia’s outgoing ambassador to India, said India was “excluded” from the G-8 action and that Russia’s agreement with India “[d]efinitely” contemplates enrichment and reprocessing technology.

Another Russian source said he thought there was a “misunderstanding.” In an Aug. 4 e-mail, he said, “Russia’s official policy is not to export [enrichment and reprocessing] technologies to anybody because of proliferation concerns.” The only exception, he said, is China, which is one of the five countries that the NPT recognizes as a nuclear-weapon state.

Singh was quoted in the Indian press as saying that French President Nicolas Sarkozy had assured him that France was interested in “full” nuclear cooperation with India, including enrichment and reprocessing.

Asked about the Singh statement, a French source said in a July 28 e-mail that “France will respect its international commitments” but did not provide additional detail.

France, Russia, and the United States are the main countries whose companies are vying for nuclear business with India.

The members of the Group of Eight (G-8) industrialized countries agreed to adopt new rules for sensitive nuclear exports, according to a statement released during the group’s July 8-10 summit in L’Aquila, Italy. Subsequent remarks by officials from some of the G-8 countries regarding trade with India, however, seem to be at odds with the G-8 statement. (Continue)

Accord on New Rules Eludes Nuclear Suppliers

Daniel Horner

Nuclear supplier countries last month ended their annual plenary meeting without agreeing on new rules for exports related to uranium enrichment and spent fuel reprocessing.

In a June 12 statement issued at the close of a meeting in Budapest, the 46-nation Nuclear Suppliers Group (NSG) said its members had "agreed to continue to work to strengthen" the group's guidelines in that area. Equipment and technology related to enrichment and reprocessing are considered to be particularly sensitive types of nuclear exports because those processes can produce material that is usable in a nuclear weapon.

The current NSG guidelines contain only a general instruction to exercise "restraint" in sensitive exports. The suppliers have been working for years to adopt a more rigorous standard. They have agreed to use a so-called criteria-based approach, under which recipients of sensitive exports would have to meet a list of preset requirements. However, the NSG members have not been able to agree on the specific list of criteria.

At the end of last year, the suppliers appeared to be closing in on an agreement, in large part because the United States and Canada had reached a compromise on rules for enrichment-related exports. (See ACT, December 2008.) Canada's objections to more stringent rules had been one of the main obstacles to an accord.

But since then, current and former diplomats said, other countries have raised objections to various parts of the proposal. Two sources mentioned Turkey as a country voicing objections. Other countries previously mentioned as having concerns include Brazil, South Africa, and South Korea.

According to sources familiar with the proposal, the criteria fall into two groups, "objective" and "subjective." The objective criteria would cover issues such as whether the country is a party to the nuclear Nonproliferation Treaty (NPT) and has agreed to an additional protocol to its International Atomic Energy Agency safeguards agreement. Such protocols give the agency inspectors more latitude than they have under standard safeguards agreements.

Subjective criteria would require potential exporters to consider issues such as whether the export would undermine regional stability and if the recipient country was in a volatile region. Turkey is concerned that its access to sensitive exports could be restricted if it were considered part of the Middle East, the diplomatic sources said.

According to a former U.S. diplomat, some European countries expressed concern that the arrangement would impose additional restrictions on their access to enrichment technology if they one day joined Urenco, the British-Dutch-German enrichment consortium.

U.S. Sees Progress

The NSG "made progress" in Budapest toward reaching agreement on new rules for enrichment and reprocessing exports, an official from the U.S. Department of State said in a June 25 e-mail. The NSG "agreed that efforts to reach consensus should continue over the summer and prior to the next regular meeting of the NSG Consultative Group this fall," the official said. According to the NSG's Web site, the consultative group is the NSG's "standing intersessional working body." The consultative group typically meets several times a year and, like the NSG as a whole, makes decisions by consensus.

As it generally does, the consultative group met during the days just before the plenary in Budapest. There was no consensus on the export criteria, a diplomat from a key NSG country said. Sometimes, if there is only one country standing in the way of consensus, an issue will be forwarded to the plenary, where higher-level officials might be able to break the deadlock, he said. But pushing an issue to the plenary when there is broader disagreement could "ruin it," he said.

He said some of his fellow diplomats believed the June meeting was "a decisive moment" and that the failure to reach an agreement there could be a "bad indicator."

According to the former U.S. diplomat, many NSG countries want to resolve the issue and put it behind them. But when asked if he thought they were near agreement, he replied, "I wouldn't say that."

Last September, during final negotiations between the U.S. Congress and the Bush administration over the U.S.-Indian civilian nuclear cooperation agreement, Secretary of State Condoleezza Rice promised Rep. Howard Berman (D-Calif.) that the United States would press for an agreement on new NSG guidelines for enrichment and reprocessing. (See ACT, October 2008.)

In a Sept. 26 statement, Berman, chairman of the House Foreign Affairs Committee, said Rice had pledged that the "highest priority" of the United States at a November 2008 NSG meeting would be to reach an agreement to ban enrichment and reprocessing exports to countries that are not parties to the NPT. India is not an NPT party.

In the June 25 e-mail, the State Department official said, "The United States continues to believe that strengthening the NSG Guidelines as they apply to transfers of sensitive enrichment and reprocessing equipment and technologies is a major priority."

 

Russia, India Ink Nuke Cooperation Deal

Peter Crail

During a Dec. 5 visit by Russian President Dmitry Medvedev to New Delhi, Russia agreed to provide India with four new nuclear power plants as part of a nuclear cooperation agreement between the two countries. The agreement marks the third such accord India has signed with nuclear suppliers since a Sept. 6 decision by the 45-member Nuclear Suppliers Group (NSG) to lift a long-standing prohibition against providing nuclear technology to India. (See ACT, October 2008.) India signed similar agreements with France and the United States in September and October, respectively.

Russia and India also concluded several additional agreements on a range of issues, including defense and space cooperation.

The nuclear cooperation agreement cements a memorandum of understanding agreed in January 2007 regarding Russia's provision of four additional power reactors to be constructed at Kundankulam, in India's southern state of Tamil Nadu. (See ACT, March 2007.) The four reactors would join two reactors Russia is constructing at that site that are near completion.

Russia and India agreed on the construction of the first two reactors in 2001 over U.S. objections that such cooperation violated Russia's commitment to NSG rules. (See ACT, December 2001.) This time, however, Moscow waited until after the NSG decision to formalize the reactor construction deal. That decision exempted India from the group's 1992 rule not to provide nuclear technology to states that do not have full-scope International Atomic Energy Agency (IAEA) safeguards.

Full-scope safeguards require all nuclear activities in a state to be subject to monitoring and inspections by the agency to ensure that they are not diverted for weapons purposes. India, which has not joined the nuclear Nonproliferation Treaty (NPT) but tested nuclear devices in 1974 and 1998, has an active nuclear weapons program that is off-limits to such inspections.

As part of India's nuclear cooperation agreement with the United States, New Delhi has agreed to formulate a plan to ensure that its military facilities and civilian facilities will operate autonomous of each other. It has pledged then to place all of its civilian nuclear facilities under IAEA safeguards by 2014. India currently has a total of 17 operating nuclear power reactors and has plans to construct an additional 25-30 by 2030 to help meet expected energy shortages.

In addition to the construction of the four new plants at Kundankulam stipulated under the Russian-Indian nuclear cooperation accord, a joint declaration signed by Medvedev and Indian Prime Minister Manmohan Singh indicated an intention to construct nuclear power reactors in other sites in India and "to expand and pursue further areas for bilateral cooperation in the field of the peaceful uses of nuclear energy."

The Indo-Asian News Service quoted Russian ambassador to New Delhi Vyacheslav Trubnikov Dec. 7 stating that Russia is "ready to build 10 more nuclear plants" should the Indian government decide to do so.

Russia's nuclear cooperation with India also involves supplying nuclear fuel for Indian reactors. Moscow agreed to provide New Delhi with a lifetime supply of fuel for the reactors that it is constructing, as well as to a five-year renewable contract to supply fuel for India's U.S.-origin nuclear reactors at Tarapur. Russia has intermittently provided fuel for the Tarapur reactors contrary to NSG rules and U.S. objections. (See ACT, March 2001.) Washington cut off U.S. fuel supplies for the reactors following India's 1974 nuclear test.

The United States reversed its objection to fueling the Tarapur reactors in a 2005 joint statement between Singh and President George W. Bush on nuclear cooperation between the two countries, which eventually led to the NSG exemption this year.

Russia's nuclear cooperation agreements do not include stipulations regarding conditions under which this fuel supply would be suspended, such as an Indian nuclear weapons test. A Russian diplomat told Arms Control Today Jan 14 that Moscow "would deal with nuclear cooperation with India in accordance with the NSG rules."

During the negotiations regarding the NSG waiver for India, several members argued that the group should stipulate that trade would be terminated in the event of an Indian test. (See ACT, October 2008.) At the U.S. insistence, however, this stipulation was not included in the text of the waiver. In a response to congressional questions regarding the U.S. nuclear cooperation agreement with India, the Department of State indicated in February, however, that "should India detonate a nuclear explosive device, the United States has the right to cease all nuclear cooperation with India immediately."

In addition to the Russian deal, the French nuclear conglomerate Areva concluded an agreement Dec. 18 to provide India with 300 tons of uranium for reactor fuel.

Neither the Russian nor the French fuel supply arrangements include provisions for the return of spent fuel to the country of origin. The lack of such a provision allows India to recover plutonium from the spent fuel by reprocessing it. Similarly, the U.S.-Indian nuclear cooperation agreement provides India with advance consent to reprocess U.S.-origin spent fuel, an exception that has only been granted to Japan and the European Atomic Energy Community.

Generally, plutonium recovered from reprocessing may be used as part of the explosive core of nuclear weapons or as a component in the nuclear fuel for nuclear reactors such as "breeder reactors," which produce more plutonium than they consume. All foreign-origin fuel, including spent fuel reprocessed for plutonium, is subject to IAEA safeguards, thereby prohibiting it from being used for weapons.

New Delhi maintains three breeder reactors and has declared that it intends to develop a "three-stage fuel cycle" that will incorporate the use of such plants, thereby producing large amounts of plutonium. Although India has pledged to place its future civilian breeder reactors under IAEA safeguards, two such reactors are not included on its list of civilian nuclear facilities, and New Delhi has left open the possibility that additional breeder reactors may not be classified as civilian. (See ACT, April 2006.)

 

 

 

 

During a Dec. 5 visit by Russian President Dmitry Medvedev to New Delhi, Russia agreed to provide India with four new nuclear power plants as part of a nuclear cooperation agreement between the two countries. The agreement marks the third such accord India has signed with nuclear suppliers since a Sept. 6 decision by the 45-member Nuclear Suppliers Group (NSG) to lift a long-standing prohibition against providing nuclear technology to India. (See ACT, October 2008.) India signed similar agreements with France and the United States in September and October, respectively (Continue)

Nuclear Suppliers Make Progress on New Rules

Miles A. Pomper

Efforts by nuclear suppliers to develop tougher rules restricting transfers of sensitive nuclear technologies appear to have made progress during Nov. 19-20 meetings in Vienna, according to diplomats involved in the process, with the possibility that the Nuclear Suppliers Group (NSG) could adopt new rules this month. Meanwhile, the Department of State has told Congress that it does not believe that NSG rules permit Pakistan to receive additional reactors from China as Islamabad has claimed they do.

For several years, the 45 members of the NSG have been discussing the possibility of developing rules that would bar transfer of uranium-enrichment and spent fuel reprocessing technologies to countries that did not hew to a tight set of conditions. These technologies can provide either fuel for nuclear reactors or fissile material for nuclear weapons.

Existing NSG policy calls on participating governments to exercise "restraint." NSG members have voluntarily agreed to coordinate their export controls governing transfers of civilian nuclear material and nuclear-related equipment and technology to non-nuclear-weapon states.

The Bush administration had previously opposed the idea of imposing criteria-based rules on transfers of sensitive fuel-cycle technologies. Instead, it had backed a blanket ban on these transfers to countries that did not already operate such facilities. The U.S. proposal garnered little support in the NSG, and Washington abandoned it and backed a revised version of the criteria-based approach earlier this year. (See ACT, May 2008.)

The administration stepped up its efforts in the wake of its campaign to win congressional support for a controversial nuclear cooperation agreement with India. As part of her lobbying effort, Secretary of State Condoleezza Rice promised Rep. Howard Berman (D-Calif.), chair of the House Foreign Affairs Committee, that the United States would make its "highest priority" achieving a decision at the next NSG plenary meeting prohibiting the export of enrichment and reprocessing equipment and technology to states such as India that are not members of the nuclear Nonproliferation Treaty (NPT). (See ACT, October 2008.)

In addition to that restriction, an earlier draft NSG proposal would have added criteria that would bar sales of enrichment and reprocessing technologies to states that have not agreed to an additional protocol to their International Atomic Energy Agency (IAEA) safeguards agreement and are not in compliance with their NPT or safeguards obligations. It would also have discouraged states from exporting sensitive nuclear technologies to regions in which such transfers might promote proliferation or undermine security. Under mandatory safeguards agreements, IAEA inspectors can verify that peaceful nuclear material and technologies are not being diverted to military uses; an additional protocol, based on the voluntary 1997 Model Additional Protocol, provides inspectors' greater authority and access to make such determinations.

Until now, achieving the required consensus in the NSG has been held up by two disputes over aspects of the provisions.

First, the United States has demanded that if enrichment or reprocessing transfers do occur, they should be executed only via "black box" technologies, wherein only the supplier can access and own the technology. Canada, which is the world's largest uranium miner but has no enrichment facilities, opposed this provision, thereby blocking consensus on the package. Second, Brazil, which has rejected signing an additional protocol, has opposed making the protocol a condition for such transfers. (See ACT, June 2008.)

Diplomats said that enough progress had been made in overcoming disputes during the November consultative meetings in Vienna that they believe new rules may well be endorsed at a future NSG plenary meeting, perhaps as early as December. The draft text, however, must first be approved by NSG member governments.

Diplomats said the rules would require the use of "black box" techniques for transfers of current enrichment technologies by current technology holders. They said that, under the proposed new rules, the NSG would consider proposals from other members, such as Canada, to export any enrichment technologies they developed on their own if they adhered to at least "black box" techniques for transfers of that technology.

In a concession to Brazil, the rules would also allow the additional protocol standard to be waived if regional arrangements could offer similar levels of nonproliferation confidence.

Diplomats said that the compromise also would make comprehensive, or full-scope, IAEA safeguards a condition of supply to non-nuclear-weapon states in addition to NPT adherence. This would rule out transfers to those NPT members that have only small quantities protocols (SQPs) with the IAEA.

Saudi Arabia, for example, has an SQP in force but has not signed a comprehensive safeguards agreement. SQP protocols allow a state to forgo certain inspection and reporting requirements due to the absence of nuclear activities under a certain low threshold. Such a protocol must be rescinded once a country obtains a sufficient amount of nuclear material, as defined in its safeguards agreement, or once it introduces nuclear material into a nuclear facility. The IAEA has been pushing to strengthen these protocols, adopting an amended model small quantities protocol several years ago. (See ACT, November 2005.)

Diplomats said the only potential opposition to the new rules appeared to come from South Africa, which has been a strident critic of any further restrictions on nuclear trade to non-nuclear-weapon states. South Africa's representative Ambassador Abdul Minty did not attend the November session. Minty is a leading candidate to serve as the next IAEA director-general. (See ACT, October 2008.)

They also said that the November meeting did not discuss Pakistani claims of an agreement with China for Beijing to supply it with two additional reactors at its site at Chasma beyond one that has already been constructed and one that is being built. (See ACT, November 2008.) The NSG prohibits such trade with Pakistan, but China had already agreed to construct the first two reactors before it was invited to join the organization in 2004.

Amid U.S. opposition, Pakistan has sought and failed to win an exemption from NSG rules similar to the one recently granted to India.

Responding to concerns expressed by Rep. Edward Markey (D-Mass), Matthew Reynolds, assistant secretary of state for legislative affairs, wrote Markey on Nov. 18 that the United States believed China's potential construction of two new reactors, Chasma III and Chasma IV, would be "inconsistent with the commitments China made at the time of its adherence to [NSG] guidelines in 2004."

Reynolds said that China's representatives at that time detailed what "ongoing nuclear cooperation with Pakistan would be 'grandfathered' upon China's adherence; nothing in that statement permitted construction of reactors beyond" the existing Chasma I and Chasma II reactors. Other countries have expressed similar views.

Reynolds said any new cooperation would therefore require consensus approval by the NSG and that "Pakistan's proliferation record would make NSG consensus difficult were China to request an exemption." Pakistani scientist Abdul Qadeer Khan provided uranium-enrichment technology to Iran, Libya, and allegedly North Korea, which could have aided nuclear weapons programs.

Nonetheless, Pakistan has claimed that it is moving forward with a deal with China, saying that the additional reactors should also be considered as having been agreed on prior to China joining the NSG. Chinese officials have only offered vague statements on the reported deal. (See ACT, November 2008.)

 

Nuclear Deals Adding Up for South Asia

Wade Boese

Key nuclear suppliers wasted little time in offering their goods to India after a September waiver of international nuclear trade restrictions against that country. France and the United States swiftly signed bilateral nuclear cooperation agreements with India, while Russia is on the verge of finalizing a similar pact. Pakistan, India’s rival, also did not stay idle, claiming a new deal for two Chinese reactors despite a multilateral rule proscribing such a transaction.

On Sept. 30, France concluded the first nuclear cooperation agreement with India following the Sept. 6 Nuclear Suppliers Group (NSG) decision to exempt India from a 1992 rule restricting nuclear exports to countries, like India and Pakistan, that refuse to grant international access to their entire nuclear complexes. (See ACT, October 2008.) The terms of the French-Indian accord, negotiated earlier this year, remain confidential. On the day of the signing, Indian Prime Minister Manmohan Singh thanked the French government for its “consistent support” of the three-year Bush administration campaign to void the NSG rule on India’s behalf.

Pranab Mukherjee, India’s external affairs minister, similarly praised Bush administration officials Oct. 10 when he joined Secretary of State Condoleezza Rice to sign the U.S.-Indian cooperation pact. The two sides completed negotiations in July 2007 on the so-called 123 agreement (see ACT, September 2007), but were prohibited from finalizing it until a series of actions took place, including the NSG waiver.

In an Oct. 20 address to India’s parliament, Mukherjee said the government also hoped to conclude a nuclear cooperation agreement with Russia when President Dmitry Medvedev visits India in December. A draft agreement reportedly includes a Russian commitment to supply India with at least four new reactors.

Foreign firms cannot commence nuclear trade, including nuclear reactor fuel exports, with India until it brings into force its new safeguards arrangement with the International Atomic Energy Agency (IAEA). To accomplish that, India must notify the agency that it is ready to bring the safeguards into force and specify where they are to be applied. Safeguards are measures, such as inspections, intended to deter or detect the diversion of nuclear materials or technologies from permissible peaceful purposes to nuclear arms.

India, however, intends to continue operation of a nuclear weapons sector, so the new safeguards arrangement will apply exclusively to facilities that India voluntarily declares to the agency in accordance with a March 2006 plan. (See ACT, April 2006.) New Delhi, which already has safeguards arrangements for six reactors, pledged by 2014 to incrementally submit eight additional power reactors (some currently operating and some under construction) to safeguards. Moreover, India will have to put the four possible reactors from Russia under safeguards. Eight other current Indian reactors would be out of bounds to the IAEA.

On Oct. 20, President George W. Bush fulfilled a legislative requirement to certify that U.S. nuclear transfers to India would be “consistent with the obligation of the United States under the [nuclear Nonproliferation Treaty (NPT)] not in any way to assist, encourage, or induce India to manufacture or otherwise acquire nuclear weapons or other explosive devices.” That certification enables U.S. companies to apply for nuclear export licenses to India.

Critics of the U.S.-Indian agreement have said it will aid India’s bomb efforts by enabling India to dedicate more of its scarce uranium resources to producing fuel for weapons rather than power reactors. Opponents further contended that as India steps up its nuclear activities, Pakistan will seek to do the same.

Rep. Edward Markey (D-Mass.), who was among the minority of lawmakers voting against approval of the U.S.-Indian 123 agreement, seized on Pakistan’s announced deal for two new Chinese reactors as confirming the critics’ concerns. In an Oct. 18 press statement, Markey asserted that, “by destroying the nuclear rules for India, President Bush has weakened the rules for everyone else.” He added, “Pakistan and China will be the first, but almost certainly not the last, to take advantage of this perilously weakened system.”

Makhdoom Shah Mahmood Qureshi, Pakistan’s foreign minister, apparently disclosed the deal to the media as part of a recent package of agreements concluded between the Chinese and Pakistani governments. News reports stated the deal would entail the supply of two additional reactors to Pakistan’s Chashma nuclear complex, where China has previously built one reactor and is installing another. The contracts for the first two reactors were concluded before NSG members in May 2004 invited China to join the group, so China could legally fulfill the contracts. The NSG rule recently waived for India still restricts trade with Pakistan, so China appears to be acting against its group commitments.

Qin Gang, a spokesperson for China’s Foreign Ministry, offered journalists Oct. 21 only vague statements on the reported deal. Without specifically confirming the transfer of two additional reactors, Qin said China would continue its civilian nuclear “cooperation” with Pakistan and contended that such cooperation “fully complies with the two countries’ respective international obligations.”

The U.S. government has not commented on the purported deal and declined to answer questions posed Oct. 20 by Arms Control Today. Bush administration officials over the past few years have maintained Pakistan should not be given the same nuclear trade privileges as India. Prior to the NSG’s offer of membership to China and two weeks after China had concluded the contract for the second reactor at Chashma, John Wolf, assistant secretary of state for nonproliferation, told a May 18, 2004, House International Relations Committee hearing that “the United States would prefer that no country provide Pakistan the benefits of peaceful nuclear cooperation.” (See ACT, June 2004.)

Whether some governments will press China on its nuclear ties to Pakistan at an upcoming November NSG meeting is unclear. One item supposedly on the agenda is discussion of criteria to limit uranium-enrichment and spent fuel reprocessing technologies, which can be used to produce nuclear fuel for reactors and the key ingredients for nuclear arms. (See ACT, June 2008.) To help pave the way for congressional approval of the U.S.-Indian nuclear cooperation agreement, Rice promised to make the pursuit of such criteria, including a draft requirement that recipients be NPT states-parties, the “highest priority” of the United States.

If adopted, that criteria would block enrichment and reprocessing exports to New Delhi. India appears to be maneuvering to prevent such a possibility. At a recent trilateral summit, India joined two NSG members, Brazil and South Africa, in issuing an Oct. 15 declaration that included a provision underscoring “the importance of ensuring that any multilateral decisions related to the nuclear fuel cycle do not undermine the inalienable right of [s]tates to pursue nuclear energy for peaceful purposes.” The NSG operates by consensus, so the adoption of any criteria pertaining to exports of nuclear fuel cycle technologies, including enrichment and reprocessing transfers, could be blocked by a single state.


Key nuclear suppliers wasted little time in offering their goods to India after a September waiver of international nuclear trade restrictions against that country. France and the United States swiftly signed bilateral nuclear cooperation agreements with India, while Russia is on the verge of finalizing a similar pact. Pakistan, India’s rival, also did not stay idle, claiming a new deal for two Chinese reactors despite a multilateral rule proscribing such a transaction. (Continue)

Unfinished Business for the NSG

Daryl G. Kimball

In an unprecedented move that will undermine the value of the Nuclear Suppliers Group (NSG) and the already beleaguered nuclear Nonproliferation Treaty (NPT), the NSG reluctantly agreed Sept. 6 to exempt NPT holdout India from its guidelines that require comprehensive international safeguards as a condition of nuclear trade.

The decision is a nonproliferation disaster of historic proportions that will produce harm for decades to come. It severely erodes the credibility of global efforts to ensure that access to nuclear trade and technology is available only to those states that meet global nuclear nonproliferation and disarmament standards. India does not.

Furthermore, foreign supplies of nuclear fuel to India's civil nuclear sector will reduce or eliminate India's need to sacrifice electricity production to produce weapons-grade plutonium. This would enable India to increase the rate of fissile material production for bombs and worsen nuclear arms competition in Asia.

Compounding the error, the Bush administration rebuffed efforts by a group of responsible NSG states to incorporate into their decision provisions in U.S. law that severely restrict transfers of sensitive nuclear fuel-cycle technologies to India and mandate a cutoff of nuclear trade if India resumes nuclear testing.

When the NSG meets again in November, the United States and other participating governments will have an opportunity to close one of the loopholes of their India-specific exemption: barring the transfer of uranium-enrichment and spent fuel reprocessing technologies to states that have not joined the NPT or agreed to an additional protocol to their safeguards agreement, which gives international inspectors broader authority.

Tougher NSG standards on sensitive fuel cycle technologies are long overdue. In India's case, enrichment and reprocessing cooperation could actually help its nuclear bomb production program because international safeguards cannot prevent the replication or use of such technologies for weapons purposes.

In practice, it is unlikely that suppliers will transfer enrichment or reprocessing technology to India anytime soon. The NSG waiver for India maintains that NSG states must continue to "exercise restraint" with respect to transfers of sensitive dual-use technologies and enrichment and reprocessing technologies to India or any other state. And, according to the Bush administration, no NSG participating government intends to transfer enrichment or reprocessing technology to India. Yet, India continues to demand "full" access to the nuclear fuel and technology market, and supplier states intentions could change, especially if they smell a profit.

Before agreeing to consider the U.S.-Indian nuclear cooperation agreement last month, the House and Senate should have demanded that the United States win support for tougher NSG guidelines on enrichment and reprocessing transfers. Under heavy political pressure to rush the flawed deal through, they failed to do so.

In exchange for quick House approval of the India agreement, however, Secretary of
State Condoleezza Rice acknowledged the NSG loophole in a personal commitment to Howard Berman (D-Calif.), chair of the House Committee on Foreign Affairs. Rice promised that the United States will make its "highest priority" to achieve a decision at the next NSG meeting to prohibit the export of enrichment and reprocessing equipment and technology to states that are not party to the NPT.

NSG discussions on the matter predate the proposal for opening nuclear trade with India and are ripe for a decision. In 2004 the United States proposed a complete ban on sensitive fuel-cycle technology transfers to states without such capabilities. Many NSG states objected and suggested a criteria-based approach, but the United States said no.

Just ahead of the May 2008 NSG meeting, the United States adjusted its position and threw its support behind a proposal that would bar enrichment and reprocessing technologies to states that:

  • have not signed the NPT;
  • have not agreed to an additional protocol to their International Atomic Energy Agency safeguards agreement;
  • are not in compliance with their NPT or safeguards obligations; or
  • are located in regions in which such transfers might promote proliferation or undermine security.

However, Washington also demanded that if enrichment or reprocessing transfers do occur, they should be executed only via "black box" technologies, wherein only the supplier can access and own the technology. Canada opposed this provision, thereby blocking consensus on the package.

If Washington and Ottawa can resolve their differences and if Brazil can be prevailed on to drop its misguided opposition to the additional protocol criterion, the NSG can adapt tougher enrichment and reprocessing transfer guidelines. This would plug one of the gaping holes in the September NSG waiver for India and ensure that other suppliers are more in line with U.S. policy.

The Bush administration must now follow through and rally NSG support for tougher NSG guidelines that would help mitigate some of the damage caused by the waiver for India.

In an unprecedented move that will undermine the value of the Nuclear Suppliers Group (NSG) and the already beleaguered nuclear Nonproliferation Treaty (NPT), the NSG reluctantly agreed Sept. 6 to exempt NPT holdout India from its guidelines that require comprehensive international safeguards as a condition of nuclear trade.

The decision is a nonproliferation disaster of historic proportions that will produce harm for decades to come. It severely erodes the credibility of global efforts to ensure that access to nuclear trade and technology is available only to those states that meet global nuclear nonproliferation and disarmament standards. India does not. (Continue)

NSG, Congress Approve Nuclear Trade with India

Wade Boese

The Bush administration succeeded Sept. 6 in its three-year campaign to secure a waiver for India from long-standing international nuclear trade restrictions. Three days of U.S. prodding and an Indian reiteration of its current nuclear testing moratorium pledge helped the United States overcome the last resistance of some nuclear suppliers to the sweeping policy reversal. With international trade restrictions on India removed, the U.S. Congress heeded Bush administration exhortations to bypass existing U.S. law to approve a bilateral U.S.-Indian nuclear cooperation agreement on an expedited basis.

Indian Prime Minister Manmohan Singh, who agreed in July 2005 to the joint venture with the United States and risked his coalition government’s survival on the deal, hailed the decision by the 45-member Nuclear Suppliers Group (NSG). In a Sept. 6 statement, Singh said the move “marks the end of India’s decades-long isolation from the nuclear mainstream and of the technology denial regime.”

The United States and some other countries curtailed nuclear exports to India after it conducted a 1974 nuclear explosion that broke Indian commitments to Canada and the United States to use their trade for peaceful purposes only. India’s isolation grew when the NSG, founded in response to the Indian test, adopted a 1992 rule that required non-nuclear-weapon states as defined by the 1968 nuclear Nonproliferation Treaty (NPT) to permit international oversight of their full nuclear complex to be eligible for most nuclear trade. Although nuclear armed and not a signatory to the treaty, India is classified by the accord as a non-nuclear-weapon state because it did not explode a nuclear device before Jan. 1, 1967. India has not opened up its entire nuclear enterprise to outside inspection, so the 1992 rule effectively has barred India from global nuclear commerce. It was that rule that the NSG members recently agreed in Vienna to waive for India.

Secretary of State Condoleezza Rice, who feverishly lobbied foreign officials by phone during the NSG deliberations, told reporters Sept. 6 that the waiver was a “very big step forward for the nonproliferation framework.”

But some representatives of other NSG members did not share Rice’s enthusiasm. After the NSG conclave, according to a Sept. 6 Reuter’s report, one diplomat remarked, “NPT RIP?” Another diplomat told the same reporter that the final decision met with “complete silence…no clapping, nothing.” The diplomat said the quiet reception reflected that “a lot of us felt pressured to some extent into a decision by the Americans, and few [NSG members] were totally satisfied.”

Heading into the meeting, originally scheduled for two days but extended to a third, many states objected to the initial U.S.-proposed waiver. Austria, Ireland, the Netherlands, New Zealand, Norway, and Switzerland led calls for augmenting the draft to terminate nuclear trade if India conducts new nuclear tests as well as to prohibit certain transfers, such as uranium-enrichment and spent fuel reprocessing technologies that can be used to produce material for nuclear bombs in addition to fuel for nuclear reactors. India strenuously opposed such measures and demanded a “clean” exemption.

Austria, Ireland, and New Zealand apparently resisted U.S. pressure the longest but eventually acquiesced to adopting the waiver after some slight modifications and a Sept. 5 statement by Pranab Mukherjee, India’s external affairs minister. Mukherjee reiterated previous Indian positions to adhere to a unilateral nuclear testing moratorium and negotiate an additional protocol with the International Atomic Energy Agency (IAEA). Such measures grant the IAEA greater authority to investigate a country’s nuclear activities to ensure that materials and facilities for peaceful purposes are not used surreptitiously to make nuclear arms. In India’s case, such an instrument would be largely symbolic because India will continue to operate a nuclear weapons production sector outside of IAEA safeguards.

The text of the approved waiver states that it is “based on the commitments and actions” described by Mukherjee. Several states assert this reference indicates that the group will end nuclear trade with India if it does not honor the Mukherjee statement, particularly if it conducts a nuclear test. In a Sept. 6 statement, New Zealand declared, “It is our expectation that in the event of a nuclear test by India, this exemption will become null and void.” Other states, including Japan and Ireland, offered similar statements.

Still, the waiver does not contain any explicit provisions that trade will be terminated automatically. It mandates that the group will meet if a member considers that “circumstances have arisen which require consultations.” Because the NSG operates by consensus, a single state could block the group from cutting off trade with India for any alleged transgression.

Unless the president intervenes, U.S. law mandates that U.S. trade with India cease in the event of a nuclear test. The Bush administration also told lawmakers that pledged U.S. nuclear fuel supply assurances to India “are not, however, meant to insulate India against the consequences of a nuclear explosive test or a violation of nonproliferation commitments.”

The Bush administration delivered that statement in January to the House Committee on Foreign Affairs as part of a series of responses to October 2007 questions posed by the panel. The administration asked the committee to closely hold the answers, but the panel’s chairman, Rep. Howard Berman (D-Calif.), ordered their release Sept. 2. Publication of the answers touched off a fresh round of incriminations by Singh’s domestic opponents, who charged his government had falsely conveyed that the fuel assurances would help India maintain foreign nuclear supplies even if it tested again.

Although President George W. Bush and Singh committed to pursuing “full civil nuclear energy cooperation,” the NSG waiver cites existing group guidelines that members “should exercise restraint” in enrichment and reprocessing exports. Moreover, NSG members are negotiating criteria to limit all future enrichment and reprocessing transfers; and one of the draft criteria requires recipients to be NPT states-parties, which would disqualify India. (See ACT, June 2008.) Expectations that such a criterion eventually will be adopted helped the United States dissuade other countries from insisting that a specific enrichment and reprocessing transfer ban be included as part of the India waiver. In its Sept. 6 statement, Ireland asserted its understanding, based on consultations with other governments, that “no [participating NSG member] currently intends to transfer to India any facilities, equipment, materials or technology related to the enrichment of uranium, or the reprocessing of spent fuel.”

The waiver commits each NSG member to regularly inform the group of certain “approved transfers” to India and invites each country to share information on their bilateral nuclear cooperation agreements with India. France and Russia have negotiated preliminary agreements with India and are expected to formally sign them within weeks. Singh said in a Sept. 22 statement that he was “confident” that a trip to France before the end of the month would lead to “further consolidation” of Indian-French civil nuclear cooperation.

Transfers of nuclear materials or technologies to India by France, Russia, or others, however, cannot legally occur until India brings into force its IAEA safeguards agreement that was approved Aug. 1 by that agency’s 35-member Board of Governors. (See ACT, September 2008.) India has informally stated which facilities it intends to put under safeguards but is not obligated to follow that plan.

In the wake of the NSG move, the Bush administration urged Congress to rapidly approve a July 2007 U.S.-Indian nuclear cooperation agreement (see ACT, September 2007) so U.S. companies can take advantage of the rule change and compete for future nuclear deals with India. Bush submitted the bilateral agreement Sept. 10 to lawmakers and certified that India had filed a safeguards declaration with the IAEA. But Melissa Fleming, an agency spokesperson, e-mailed Arms Control Today Sept. 18 that India had “not yet” done so. The congressional resolution of approval sidestepped the issue by requiring that the list of facilities placed under safeguards not be “materially inconsistent” with the list of facilities described in a plan presented by the Indian government to its parliament in May 2006.

Passed by legislators and signed into law in December 2006, the Henry J. Hyde Act requires that Congress wait 30 continuous days before voting on the U.S.-Indian cooperation agreement. Yet, key lawmakers agreed to expedite the process. The Senate Foreign Relations Committee held one hearing on Sept. 18 and on Sept. 23 passed 19-2 a resolution of approval. The committee rejected by a margin of 15-4 a proposed amendment from Sen. Russell Feingold (D-Wis.) that would have made the agreement’s implementation contingent on the NSG amending its guidelines to ban enrichment and reprocessing exports to states outside the NPT.

Shortly thereafter, House Committee on Foreign Affairs Committee Chairman Howard Berman (D-Calif.) agreed to introduce a resolution identical to the Senate version and allow quick House approval of the India agreement, in exchange for a commitment from Secretary of State Condoleezza Rice that the United States will make its “highest priority” winning an NSG commitment at a November meeting to prohibit the export of enrichment and reprocessing equipment and technology to states that are not party to the NPT.

After nearly an hour of debate, on Sept. 27 the House approved the agreement 298-117. For a few days, some senators blocked similar action in the Senate , but finally relented after Democratic Leader Harry Reid (Nev.) threatened to reconvene the Senate for a vote on the matter later in the month. On Oct. 1 the Senate approved the agreement 86-13 after voting down by voice vote a proposed amendment by Sens. Byron Dorgan (D-N.D.) and Jeff Bingaman (D-N.M.) that sought to clarify that it is the policy of the United States to terminate nuclear trade with India if it resumes testing. Citing various Bush administration statements and the Hyde Act, the bill managers argued the amendment was unnecessary. As Sen. Richard Lugar (R-Ind.) put it: “if India resumes testing, the 123 agreement is over.” The vote opens the way for Bush to sign the bill and for the United States and India to finalize the nuclear cooperation agreement.

The Bush administration succeeded Sept. 6 in its three-year campaign to secure a waiver for India from long-standing international nuclear trade restrictions. Three days of U.S. prodding and an Indian reiteration of its current nuclear testing moratorium pledge helped the United States overcome the last resistance of some nuclear suppliers to the sweeping policy reversal. With international trade restrictions on India removed, the U.S. Congress heeded Bush administration exhortations to bypass existing U.S. law to approve a bilateral U.S.-Indian nuclear cooperation agreement on an expedited basis. (Continue)

Text, Analysis, and Response to NSG "Statement on Civil Nuclear Cooperation with India"

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Note for Reporters by Daryl G. Kimball (202-463-8270 x107)

September 6, 2008

In an unprecedented move that will undermine the value of the Nuclear Suppliers Group (NSG) and the already beleaguered nuclear Nonproliferation Treaty (NPT), the NSG reluctantly agreed today in Vienna to exempt NPT hold-out India from its guidelines that require comprehensive international safeguards as a condition of nuclear trade.

Click here for a PDF file of the NSG statement on India.

The decision is a nonproliferation disaster of historic proportions that will produce harm for decades to come. Contrary to the Orwellian claims of the George W. Bush administration, the India-specific exemption from NSG rules and safeguards standards does not "bring India into the nuclear nonproliferation mainstream."

Unlike 179 other countries, India has not signed the Comprehensive Test Ban Treaty. It continues to produce fissile material and expand its nuclear arsenal. As one of only three states never to have signed the NPT, India has not made a legally binding commitment to pursue nuclear disarmament.

India's political promises on nonproliferation and a voluntary test moratorium are not in any way equivalent to the legal obligations and commitments made by the member states of the NPT. Given India's history of violating its peaceful nuclear use agreements to build nuclear weapons, India's promises provide little confidence, especially if the consequences of noncompliance are not made clear by India's future potential nuclear supplier states.

As a result, the India-specific exemption from NSG guidelines severely erodes the credibility of global efforts to ensure that access to peaceful nuclear trade and technology is available only to those states that meet global nuclear nonproliferation and disarmament standards.

Also, nuclear fuel sales to India for Indian power reactors may marginally help increase India's energy output, but at the same time it will free up India's limited domestic uranium supplies to be used exclusively for bomb-making. This will lead Pakistan to follow suit and help fuel the South Asian arms race.

Making matters worse, the Bush administration resisted efforts by a group of responsible NSG states to incorporate in the NSG waiver language that would unambiguously establish the same restrictions and conditions on nuclear trade that are mandated through U.S. law (the 2006 Henry Hyde Act) and U.S. national policy.

The Arms Control Association and our allies and supporters will work to ensure that the current Congressional requirements and expectations regarding U.S. nuclear trade are fully addressed and that additional measures are taken to ensure that other nuclear suppliers do not undercut the minimal but vital restrictions, requirements, and conditions on nuclear trade mandated by Congress.

The NSG Waiver

The NSG statement on India does not meet ACA's standards or that of a large number of NSG states, nor should it satisfy key U.S. congressional leaders, but it is not the "clean" and "unconditional" waiver India was demanding either.

There were language changes made to the revised U.S. NSG proposal during the Sept. 4-6 discussions.

Because of the negotiations were tough and the real differences not fully resolved, there will likely be serious differences between India and most of the NSG about the interpretation of what the guidelines allow and don't allow and what the consequences of any violation of India's nonproliferation and disarmament commitments would be. This outcome is a failure of the NSG as a whole, the U.S. delegation, and the NSG chair Germany.

The text of the NSG's Sept. 6 statement on India -- along with the national statements issued today by Austria, China, Germany, Ireland, Japan, the Netherlands, New Zealand, Norway, Switzerland, and others -- indicates that even if the NSG guidelines are not as clear as they should be or fail to include key provisions to reduce the adverse nonproliferation consequences, for all practical purposes:

- NSG states should not and will not likely engage in "full" nuclear trade with India;

- NSG states should and very likely would terminate nuclear trade with India if it resumes testing; and

- India's compliance with it pre-2005 nonproliferation commitments and the implementation of bilateral trade with India will be reviewed on a regular (probably annual) basis by the NSG.

Why? Most states will try to remain consistent with U.S. law, policy, and the U.S. interpretations of its bilateral trade agreement with India. Collectively, these bar the transfer of enrichment, reprocessing, and heavy water technology to Indian national facilities, the Hyde Act also mandates a cutoff of U.S. trade if India resumes testing, and according the State Dept's January 16 responses to the House Committee on Foreign Affairs, U.S. fuel supply assurances will be invalid if India tests for any reason. See <http://www.armscontrol.org/node/3338>.

Linkage Between India's Commitments and the Waiver

The connection between India's nonproliferation statements and the NSG decision to allow nuclear trade and its possible termination of nuclear trade should have been clear and unambiguous. Yet, Paragraph 3 of the NSG statement undeniably says the "basis" of the India specific waiver includes its July 2005 pledges and the Sept. 5 statement by India's External Affairs Minister Pranab Mukherjee, which include a pledge to maintain India's nuclear test moratorium.

Following the NSG's reluctant approval of the statement on India, several states delivered national statements that clarify their views on how the NSG's policy on India shall be implemented. Among the states that delivered statements were: Austria, China, Germany, Ireland, Japan, the Netherlands, New Zealand, Norway and Switzerland.

Japan noted that the exemption for India was decided on the condition that India continues to observe its commitments, especially its nuclear test moratorium pledge. Japan noted that if India resumed testing, "the logical consequence is to terminate trade." Most of the other statements also made this point.

Germany, and perhaps others, added that it expects India to take further nonproliferation and disarmament measures, including "entry into force of the CTBT and a termination of fissile material production for weapons."

Therefore, if India tests, the NSG would immediately meet in an emergency session (as already allowed for in the NSG guidelines) and the widespread expectation would be for all NSG states to terminate nuclear trade immediately. And despite the Indian government's false representations to its public and parliament, neither the United States nor other responsible nuclear suppliers are going to feel obliged to respect earlier fuel supply guarantees or help find some other country to supply India with nuclear fuel if India tests for any reason or violates its safeguards commitments.

Permanent Safeguards: Paragraph 2.a refers to India's March 2006 "separation plan" which says India will put at least 8 additional nuclear power reactors under safeguards by 2014. The inclusion of this language was resisted by Inda, which has still not formally filed the list of facilities its will actually put under safeguards with the IAEA.

Paragraph 2.b of the NSG statement on India also refers to the maintenance of facility-specific safeguards in accordance with IAEA standards and practices including Gov. 1621, which means that the safeguards agreement puts India's materials and facilities under indefinite safeguards that Indian cannot legally terminate unilaterally. The Government of India has suggested to its parliament that this is not the case.

Enrichment and Reprocessing Transfers: International safeguards cannot prevent the replication or possible use of sensitive fuel cycle technologies transferred to India for "civilian" purposes for use in its military sector. The NSG should have explicitly banned such technology transfers. India Paragraph 3.a in the NSG statement on India maintains that Paragraphs 6 & 7 of the current NSG guidelines will continue to apply. This means that NSG states must continue to "exercise restraint" with respect to transfers of sensitive dual use technologies and enrichment and reprocessing technologies to India or any other state.

In addition, in the course of the NSG meeting, the United States confirmed that participating NSG governments expressed assurances that they did not intend to transfer enrichment or reprocessing technology to India.

Review of the Implementation of the Statement: Paragraph 3.c and 3.e require NSG suppliers to report on their nuclear transfers to India and consult regularly on India's implementation and compliance with India's its nonproliferation commitments and bilateral nuclear cooperation with India.

India and the NSG: In Paragraph 2.f, the NSG statement notes that India has pledged to harmonize its export policies with that of the NSG and that India commits to adhere to all NSG guidelines. But contrary to India's demands, India may not "participate" in future NSG decisions or the development of future guidelines. Instead, India may be consulted by the NSG chair regarding future policies. One of those policy discussions will soon be aimed at establishing clearer limitations on the transfer of enrichment and reprocessing technology, including a ban on any transfers to non-members of the NPT.

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In an unprecedented move that will undermine the value of the Nuclear Suppliers Group (NSG) and the already beleaguered nuclear Nonproliferation Treaty (NPT), the NSG reluctantly agreed today in Vienna to exempt NPT hold-out India from its guidelines that require comprehensive international safeguards as a condition of nuclear trade. (Continue)

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Nonproliferation Experts Analyze State Department Responses to Congressional Questions Concerning U.S.-Indian Nuclear Deal

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Note for Reporters by Sharon Squassoni (202-939-2297), Fred McGoldrick (617-298-2024), and Daryl G. Kimball (202-463-8270 x107)*
September 4, 2008

(Washington, D.C.) As U.S. and Indian officials race against the clock to win domestic and international approval for a controversial proposal to relax rules governing nuclear trade with India, the House Committee on Foreign Affairs (HCFA) has made public the Department of State’s January 2008 responses to more than 40 questions sent by the committee in October 2007 that were aimed at sorting out ambiguous and contradictory statements about the August 2007 U.S.-Indian nuclear cooperation agreement.

Background

Under a 2006 law known as the Hyde Act, Congress granted the U.S. president limited and conditional authority to waive the longstanding U.S. legal restrictions on nuclear trade with countries, such as India, that have tested nuclear weapons, have not joined the nuclear Nonproliferation Treaty (NPT), and do not allow comprehensive international nuclear safeguards.

In 2007, Washington and New Delhi negotiated a bilateral nuclear trade agreement, known as a 123 agreement, which President George W. Bush may only submit to Congress for its possible approval if the 45-member Nuclear Suppliers Group (NSG) agrees by consensus to an India-specific exemption from group guidelines, which currently restrict nuclear trade with India. The NSG is meeting Sept. 4 and 5 in Vienna to consider a revised U.S. proposal to exempt India.

Given India’s demands for a “clean” and “unconditional” exemption and proposed amendments from approximately 15 NSG countries for conditions and restriction on trade with India (barring enrichment or reprocessing technology transfers and terminating trade if India resumes nuclear testing), it is highly unlikely the NSG will reach a decision anytime soon.

Congressional Questions and the State Department’s Responses

The HCFA in October 2007 submitted 45 questions to the State Department and its responses were delivered in February 2008. But they were put under a virtual “gag order” by the Bush administration until now.

The good news is that the Bush administration interpretation of the U.S.-Indian 123 agreement reflects the right of the United States and requirement (per Sections 123 a (4) and 129 of Atomic Energy Act) to cut off nuclear trade if India tests. However, it is doubtful that the Indian government agrees.

Consequently it is essential that the NSG write this “post-condition” into any decision it might make to grant an exemption for India if the United States expects other nations to follow suit.

The following is a preliminary analysis of the responses to questions on several key issues:

“Full” nuclear cooperation: Indian officials insist this means enrichment and reprocessing cooperation. In response to the HCFA questions, the State Department wrote:

1. “As a matter of policy, the United States does not transfer dual-use items for use in sensitive nuclear facilities.” (Q. 4)

2. “Consistent with standing U.S. policy, the USG will not assist India in the design, construction, or operation of SNT [sensitive nuclear technologies] through the transfer of dual-use items.” (Q. 5)

3. “The Administration does not plan to negotiate an amendment to the proposed U.S.-Indian Agreement to transfer to India sensitive nuclear facilities or critical components of such facilities.” (Q. 6)

Bottom line: The United States does not plan to transfer enrichment and reprocessing technology, which could be used to assist India's weapons program. If the NSG decides to grant India an exemption from its guidelines, it should establish an unambiguous policy barring the transfer of enrichment, reprocessing, or heavy water production technology to India.

Termination for nuclear testing: Indian officials have stressed that the 123 agreement does not constrain India’s ability to test a nuclear device. However, the State Department told the HCFA:

1. “Article 14 of the…agreement…provides for a clear right for the United States to terminate nuclear cooperation and a right to require the return of equipment and materials subject to the agreement in all of the circumstances required under the AEA, including if India detonated a nuclear explosive device.” (Q. 35)

2. “…both of the actions that must be taken to exercise the right of return [giving written notice of termination and ceasing cooperation] would be within the discretion of the USG, and both actions could be taken at once.” (Q. 36)

3. “…Should India detonate a nuclear explosive device, the United States has the right to cease all nuclear cooperation with India immediately, including the supply of fuel, as well as to request the return of any items transferred from the United States, including fresh fuel.” (Q. 16)

Bottom line: These answers tie an Indian nuclear test definitively to termination of nuclear cooperation—something that Indian officials have suggested is not the case. The U.S.-Indian draft cooperation agreement doesn’t mention testing at all as a reason for termination and tries to soften the impact of a potential nuclear test on the agreement by referring to whether a trigger for termination resulted from a changed security environment or the actions of another state (for example, Pakistan). Indian officials also have interpreted the agreement as having a “cooling off” period of a year before termination would actually happen. The State Department answers suggest that action after a nuclear test would be swift, unambiguous, and unilateral. So too should the actions of other NSG members. If the NSG grants India an exemption, it should specify that NSG nuclear trade shall be terminated and unused fuel supplies returned if India conducts another nuclear test explosion for any reason.

Fuel supply assurances: Article 5 of the 123 agreement, as well as the Indian-specific safeguards agreement approved Aug. 1, refer to a range of fuel supply assurances. Indian officials have insisted on their ability to take corrective measures in the event that fuel supplies are disrupted. This implies that their legal obligation to keep indigenous reactors is tied to assured supply. Yet U.S. responses indicate that the fuel assurances are not legally binding and they are not meant to insulate India against the consequences of a nuclear test:

1. “The fuel supply assurances…from the March 2006 separation plan…are important Presidential commitments that the United States intends to uphold, consistent with U.S. law.” (Q. 14)

2. “Like all other U.S. agreements for nuclear cooperation, the proposed U.S.-Indian agreement is a framework agreement and does not compel any specific cooperation.” (Q. 37)

3. “The use of the phrase ‘disruption of fuel supplies’…is meant to refer to disruptions in supply to India that may result through no fault of its own.” Examples include a trade war resulting in the cutoff of supply, market disruptions in the global supply of fuel, and the potential failure of an American company to fulfill fuel supply contracts. We believe the Indian government shares our understanding of this provision. (Q. 15)

4. “The fuel supply assurances are not, however, meant to insulate India against the consequences of a nuclear explosive test.” (Q. 18)

Bottom line: Even though the Indian government has argued that it has negotiated long-term fuel supply assurances in its bilateral nuclear cooperation agreement, it is clear that U.S. commitments in this regard are political and not legally-binding in nature and would not apply if India resumed nuclear testing. NSG states should not undermine this policy by allowing India to accumulate strategic or lifetime reserves of fuel that would enable India to overcome a supply cutoff in the event it resumes testing.

Strategic reserve: India has insisted on a lifetime reserve of fuel for its reactors. However, the State Department’s responses to the HCFA paint a different picture:

1. “The parameters of the proposed ‘strategic reserve’ and India’s capacity to acquire nuclear fuel for its reactors will be developed over time.” (Q. 19)

2. “The U.S.-Indian Agreement does not define ‘reasonable operating requirements’ and the two governments have not discussed a definition….We would expect that the actual amount of fuel put in the reserve would depend…on such factors as the availability of fuel in the market, price, Indian storage capacity, costs of storage, and similar practical considerations.” (Q. 20)

Bottom line: The United States has not made a specific commitment to help India amass a strategic fuel reserve. Nevertheless, it is important that the NSG clarifies that such a reserve shall not be created, individually or collectively, and that any fuel supplies provided are “commensurate with reasonable reactor operating requirements,” as specified in the Hyde Act.

Corrective measures: This has never been defined by either side or the International Atomic Energy Agency (IAEA). In response to the HCFA questions, the State Department wrote:

“Until a safeguards agreement is completed between India and the IAEA and the issue of ‘corrective measures’ is clarified, we cannot comment on the appropriateness of the agreement.” (Q. 25)

Bottom line: This response, along with the Indian government’s failure to acknowledge that it may not unilaterally withdraw facilities or material from safeguards, would suggest the Bush administration is still not in a position to determine whether the IAEA-Indian safeguards agreement is consistent with the Hyde Act requirement that the safeguards are permanent and consistent with IAEA standards and practices.

Consent to reprocessing: In its October 2007 questions, the HCFA asked whether safeguards on a reprocessing plant would differ for a non-NPT state. The State Department told the HCFA that:

“…there would be little, if any, difference in the technical challenge of applying safeguards to such a facility [a new reprocessing plant in India] as opposed to a comparable facility in a state with a comprehensive safeguards agreement….In the case of India, the Agency’s safeguards conclusions would have to be limited to the civil facilities and materials under safeguards, and could not be extrapolated to apply to the nuclear program as a whole” (Q. 27)

Yet, U.S. officials commented to earlier congressional questions contained in S. Report 109-288 on the problem of personnel rotations between safeguarded and unsafeguarded Indian nuclear facilities. See below and page 160 of Senate Report 109-288, dated July 2006.

Question (2). The Separation Plan tabled by the Indian Government with its Parliament states nothing about the future bureaucratic structure of its Department of Atomic Energy (DAE) in respect of removing from that organization any personnel involved in any military activities. To what extent will DAE personnel working at any declared sites, facilities and locations continue to have access to military programs in India?

The State Department responded: “In the July 18, 2005 Joint Statement and under India’s March 2, 2006 separation plan, the Government of India committed to separate its civil and military facilities and programs. While the specific issue of DAE personnel has not yet been discussed in detail, we would consider routine, frequent rotation of personnel between civil and military programs as being inconsistent with Indian commitments on separation. In our view, such a rotation would be inconsistent with India’s commitment to identify and separate its civil and military nuclear facilities and programs. We have made this position clear to the Indian government.”

Bottom line: NSG participant countries should agree not to grant India consent to reprocess nuclear fuel supplied by an NSG member in a facility that is not under permanent and unconditional IAEA safeguards.

Furthermore, it is important for NSG states to obtain further details regarding India’s proposed “separation plan” and to understand how the still-to-be-negotiated Additional Protocol between India and the IAEA regarding safeguards can improve confidence that civilian technology transfers do not leak into India’s military nuclear sector.

Click here for the full set of questions and responses.

* Daryl G. Kimball is the Executive Director of the Arms Control Association, Sharon Squassoni is a Senior Associate of the Nonproliferation Program at the Carnegie Endowment for International Peace, and Fred McGoldrick is an independent consultant who previously served as a former Director of Nonproliferation and Export Policy at the Department of State.

Description: 

As U.S. and Indian officials race against the clock to win domestic and international approval for a controversial proposal to relax rules governing nuclear trade with India, the House Committee on Foreign Affairs (HCFA) has made public the Department of State’s January 2008 responses to more than 40 questions sent by the committee in October 2007 that were aimed at sorting out ambiguous and contradictory statements about the August 2007 U.S.-Indian nuclear cooperation agreement. (Continue)

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