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DE RUEHUNV #0220/01 1311416
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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