07MOSCOW2187, RUSSIA: PUTIN SIGNS NUCLEAR SECTOR DECREE

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Reference ID Created Released Classification Origin
07MOSCOW2187 2007-05-11 12:28 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO2412
OO RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD
DE RUEHMO #2187/01 1311228
ZNR UUUUU ZZH
O 111228Z MAY 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0138
INFO RUEHUNV/USMISSION UNVIE VIENNA PRIORITY 0482
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUEHZN/EST COLLECTIVE

UNCLAS SECTION 01 OF 02 MOSCOW 002187 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT ALSO FOR EUR/RUS AND ISN 
 
E.O. 12958: N/A 
TAGS: ENRG KNNP TRGY RS
SUBJECT: RUSSIA: PUTIN SIGNS NUCLEAR SECTOR DECREE 
 
REF: A) MOSCOW 301 
     B) 2006 MOSCOW 12948 
 
SENSITIVE BUT UNCLASSIFIED.  PLEASE PROTECT ACCORDINGLY.  NOT FOR 
INTERNET DISTRIBUTION. 
 
1. (SBU) SUMMARY.  On April 27 President Putin signed a decree that 
splits the Russian nuclear industry into three parts:  a) civilian, 
for-profit; b) military; and c) waste management.  The decree is the 
first practical step in effecting massive changes in the structure, 
management, and forms of ownership of practically all nuclear 
industry enterprises in Russia.  It lays the groundwork for creation 
of the Atomenergoprom civilian nuclear monopoly and, more 
importantly, identifies those entities that will be included in 
Atomenergoprom and those that will not.  END SUMMARY 
 
--------------------------------------------- --- 
AEK (aka ATOMENERGOPROM) -- CIVILIAN, FOR PROFIT 
--------------------------------------------- --- 
 
2. (SBU) On April 27 President Putin signed a decree "On 
Restructuring the Nuclear and Energy Industry Complex of the Russian 
Federation."  This decree splits the Russian nuclear industry into 
three parts:  civilian, for-profit; military; and waste management. 
The decree follows from nuclear sector legislation enacted by the 
Duma earlier this year (refs A and B) and is the first practical 
step in effecting massive changes throughout Russia's nuclear 
industry. 
 
3. (SBU) In accordance with the decree, the Open Joint Stock Company 
Atomniy Energopromishlennii Kompleks (AEK) will be created with 
headquarters in Moscow.  AEK, popularly known as Atomenergoprom, 
will bring together the following enterprises: 
 
-- All enterprises involved in the fuel cycle from uranium ore 
exploration up through fuel assembly production (i.e., those 
enterprises that previously reported to TVEL); 
 
-- All uranium enrichment facilities; 
 
-- All nuclear power plants; 
 
-- Some machine building factories; and 
 
-- Design, scientific, and infrastructural institutes and firms 
(including TENEX) working on peaceful uses on nuclear energy 
 
In all AEK will consist of 86 sub-entities that make up the civilian 
sector of Russia's reorganized nuclear industry.  Although some of 
these entities are involved in R&D, the primary focus is on profit. 
 
4. (SBU) One hundred percent of AEK shares will belong to the State. 
 Those AEK sub-entities that formerly were federal unitary 
enterprises are converted into joint stock companies.  The Russian 
Government will convert all property (including nuclear materials) 
belonging to these sub-enterprises into ??? charter capital. 
 
5. (SBU) The decree specifies that AEK's priorities are: 
 
-- The design, construction, operation, and decommissioning of 
nuclear installations and nuclear power plants; 
 
-- R&D on peaceful uses of nuclear energy; 
 
-- Prospecting for and extraction of uranium ore and ore containing 
nuclear materials; 
 
-- Uranium enrichment; 
 
-- Fuel assembly production and export; 
 
-- Uranium import and export, enrichment services, and other 
products and services connected with the use of nuclear energy. 
 
-------- 
MILITARY 
-------- 
 
6. (SBU) In addition to creating AEK, the decree identifies those 
enterprises that will NOT be included in AEK.  First among these are 
15 enterprises serving the needs of Russia's military nuclear 
complex.  This list includes all warhead production facilities, 
Mayak, the All-Russian Scientific Research Institute for 
Experimental Physics (VNIIEF) in Sarov, the All-Russian Scientific 
Research Institute for Technical Physics (VNIITF) in Snezhinsk, the 
test site at Novaya Zemlya, and other R&D institutes. 
 
7. (SBU) The military nuclear facilities will remain state owned and 
 
MOSCOW 00002187  002 OF 002 
 
 
will continue to report directly to Rosatom as in the past. 
 
-------------------------------- 
SNF STORAGE AND WASTE MANAGEMENT 
-------------------------------- 
 
8. (SBU) Those facilities concerned with the storage of spent 
nuclear fuel (e.g. the Mining Chemical Combine in Zheleznogorsk) and 
radioactive waste management (e.g., Dal RAO in Murmansk oblast' and 
Sev Rao in the Far East) also will not be included in AEK. 
Moreover, they were not covered by the presidential decree. 
 
9. (SBU) Sergey Mostinskiy, adviser to Deputy Rosatom Head Andrey 
Malyshev, explained to us that these enterprises will be included in 
the soon to be established Federal Center for Nuclear and Radiation 
Safety, which will be created by internal Rosatom executive order. 
This Center will receive its funding directly from the state 
budget. 
 
--------- 
OWNERSHIP 
--------- 
 
10. (SBU) Significantly, the presidential decree also establishes 
for the
 first time that legal entities have the right to own nuclear 
materials (with the exception of weapons grade materials and 
actinides).  The decree provides a list of the entities that will 
have this right, from which we see that they are in fact those same 
entities that possess nuclear materials today. 
 
------- 
COMMENT 
------- 
 
11. (SBU) The presidential decree was announced one day after 
President Putin made his annual address to the Federal Assembly in 
which he said, "I propose setting up a corporation to integrate 
nuclear power enterprises operating on domestic and foreign 
markets."  The decree sets in motion the reorganization expected 
since the Duma passed nuclear sector legislation earlier this year. 
We are already hearing hints of dramatic personnel shifts at Rosatom 
and elsewhere. 
 
BURNS

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