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Copyright © 1995, by the Middle East Data Project, Inc. All rights reserved.

Issue No. 8, June 1, 1995
Russian nuclear deals are on (Serial 0817)

It is true that the contract does contain components of civilian and military nuclear energy. [...] Now we have agreed to separate those two."

- President Boris Yeltsin

Russian Minister of Atomic Energy Viktor Mikhailov announced last week that Russia intended to build a 40 MW research reactor in Iran, despite pressure from the United States to limit Russia's nuclear cooperation with Iran. He told the Interfax agency on May 22 that a contract for the research reactor should be signed "later this year." He also accused the West of inconsistency in acting to block the training in Russia of Iranian nuclear experts. "While the Russian Nuclear Energy Ministry is criticized today for wanting to invite 20 to 40 experts from Iran for training in the sphere of nuclear energy, thousands of Iranians are now studying the field in the USA and Western Europe."

To muddy the waters even further, Mikhailov contradicted earlier statements from the Russian Foreign Minister, saying that no decision had been made to cancel the contract to build a gas centrifuge enrichment plant in Iran. He argued that such a plant was unrelated to nuclear weapons, and noted that Germany and Japan had similar plants.

Military technology: Following the summit in Moscow with President Clinton on May 10, a statement by President Yeltsin appears to acknowledge that the original Jan. 8 agreement with Iran contained nuclear military technology and material. "The contract was concluded legitimately and in accordance with international law and no international treaties were violated in the process," Yeltsin said. "But it is true that the contract does contain components of civilian and military nuclear energy. [...] Now we have agreed to separate those two. In as much as they relate to the military component and the potential for creating weapons grade fuel and other matters - the centrifuge, the construction of shafts - we have decided to exclude those aspects from the contract. So the military component falls away and what remains is just a civilian nuclear power station with light water reactors, which are designed to provide heat and power."

Yeltsin's statement is a remarkable admission that the Jan. 8 protocol was not as innocent as both the Russians and the Iranians have tried to make out. A copy of the protocol, obtained by the Natural Resource Defense Council (see below) confirms Yeltsin's statements. The mysterious "uranium shaft," translated variously as "mineshaft" or "vault," could be a reference to a nuclear weapons test shaft, which must be dug several hundred meters below the earth and equipped with a variety of electronic sensors. Or it could be a uranium mine, although this would not explain why Yeltsin called it a "military component" of the sale.

Speaking to ITAR-TASS one day after the summit, Viktor Mikhailov reiterated that Russia would not rule out building a centrifuge plant in Iran at some future date, and rejected the idea that the Gore-Chernomyrdin commission would be discussing anything but "technical details" involving the disposition of spent fuel from the reactors, and the issue of conventional arms sales. The reactor sale itself, he said, was not on the table.

Kickbacks? One reason the Russians have not backed down on the power plant deal is obviously financial. But behind the clearly lucrative agreement to complete the Busheir power plant could be hidden a murkier financial arrangement with various individuals in the Russian hierarchy.

Published accounts of the amount of the sale have varied significantly. Mikhailov told Interfax that the Iranian parliament had earmarked $700 million for the construction of the first power unit in Busheir. But Iranian accounts of the agreement have consistently used the figure of $800 million, $20 million of which will go for an initial examination of existing work at the site, and $780 million for equipment and final construction.

Iranian government sources, contacted by The Iran Brief from Paris, hinted that the cause for the discrepancy involved a substantial kickback - as much as $100 million - which would be spread among several Russian government officials. According to the sources, Vice Premier Chernomyrdin was promised a substantial cut, to support his new Center-Right coalition party, "Our House is Russia." Coincidentally, perhaps, Chernomyrdin established "Our House is Russia" just one month ago, and is already planning to field candidate in the parliamentary elections later this year. At virtually the same time, he was named by President Yeltsin as the Russian co-chairman of the joint commission with the U.S. that will examine Russia's nuclear and arms sales agreements with Iran.


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