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Reference ID Created Released Classification Origin
07MOSCOW2970 2007-06-19 14:42 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

DE RUEHMO #2970/01 1701442
O 191442Z JUN 07

E.O. 12958: N/A 
1.  (SBU)  Summary:  In May 27-28 sessions in Moscow of the 
U.S.-Russian Senate-Federation Council Interparliamentary 
Working Group, co-chairs Senators Ben Nelson and Trent Lott 
and Russian Federation Council Foreign Affairs Committee 
Chair Mikhail Margelov underlined the importance of 
encouraging legislative branch cooperation between the U.S. 
and Russia while not shying away from engagement on 
differences.  In several spirited sessions, legislators 
discussed the threat posed to U.S. and Russian interests by 
Iran, debated the necessity for U.S. missile defense sites in 
Europe, and talked about U.S. policies in Iraq.  In 
discussions on economic ties, legislators focused on 
investment opportunities for U.S. firms in Russia, repeal of 
Jackson-Vanik, progress on IPR protection and the need to 
boost energy ties.  Both sides urged greater counterterrorism 
cooperation.  End Summary. 
2.  (SBU)  In addition to Interparliamentary Working Group 
co-chairs Senators Nelson (D-NE) and Lott (R-MS), additional 
U.S. participants included Senators Evan Bayh (D-IN), Judd 
Gregg (R-NH), and Richard Burr (R-NC), and Ambassador Burns. 
Additional participants on the Russia side included:  First 
Deputy Foreign Affairs Committee Chairs Umar Dzhabarilov and 
Ilyas Umakhanov, Deputy Foreign Affairs Committee Chair 
Vasiliy Likhachev, Financial Markets Committee Chair Sergey 
Vasiliyev, Industrial Policy Committee Chair Valentin 
Zavadnikov, First Deputy Chair of the Natural Monopolies 
Committee Valentin Mezhevich, Foreign Affairs Committee 
member Igor Rogachev, Judicial and Legal Affairs Committee 
member Farhad Akhmedov, Budgetary Committee member Konstantin 
Tsitsin, Ministry of Defense Director for International 
Military Cooperation General Buzhinskiy, and MFA officials. 
U.S.-Russian Interparliamentary Cooperation 
3.  (SBU) Chairman Margelov stressed the value of open, 
direct discussions between Federation Council Members and 
Senators, particularly when there were problems in bilateral 
relations.  Senator Nelson acknowledged the value of 
parliamentary exchanges and noted the timeliness of the 
talks, given the tensions surrounding missile defense and 
Kosovo.  He emphasized the importance of finding common 
ground, as did Senator Lott, who also highlighted areas of 
cooperation on counterterrorism, nonproliferation, energy and 
trade.  Lott noted that the full potential of the bilateral 
relationship was not yet being realized. 
4.  (SBU)  Federation Council member Akhmedov acknowledged 
that a nuclear Iran would pose a threat to both Russian and 
U.S. interests.  Senator Bayh said that failures of 
intelligence in Iraq meant that intelligence about Iran 
required greater scrutiny, but it seemed clear that Tehran 
was intent on developing a nuclear weapons capacity and the 
means to deliver such weapons and was actively supporting 
terrorist groups.  He welcomed Russian efforts to slow 
Bushehr from coming on line.  Bayh stressed that the U.S. was 
now committed to a multilateral approach on Iran, but 
expressed skepticism about its efficacy.  Senator Gregg 
argued that the U.S. and Russia were in a unique position to 
deter Iran from developing weapons.  Senator Lott stressed 
that international dependence on Iranian oil would not 
prevent the U.S. from taking whatever steps were necessary to 
address Iranian challenges.  He argued that Iran's nuclear 
program was not just a U.S. problem, it was a common problem 
for the rest of the world.  Senator Nelson said Iran was now 
seeking hegemony in the Middle East. 
5.  (SBU)  Chairman Margelov said that his February visit to 
Tehran reminded him of the USSR in 1982 -- there was a strong 
state, but the political class was quite cynical.  Iran was 
very active internationally and was using its oil money, 
promises of nuclear cooperation, and a radicalized Shiism to 
stir up trouble.  Akhmedov argued that the only way to hurt 
Iran was an oil embargo, while Deputy Chair Dzhabarilov was 
skeptical about the effects of sanctions.  Senator Bayh asked 
whether Russia would help stabilize world oil prices in the 
event of an embargo.  Margelov said that the markets would 
adjust rapidly, while Akhmedov said that the U.S. and others 
would have to choose between their pocketbooks and security 
concerns.  Akhmedov warned that Iran would seek to cause 
trouble among Russia's 20 million Muslims. 
Missile Defense 
6.  (SBU)  General Buzhinskiy, MOD Director for International 
Military Cooperation, gave a presentation on Russian concerns 
MOSCOW 00002970  002 OF 003 
about U.S. MD plans.  Buzhinskiy
 thought it would be at least 
30 years before Iran would have the technological capacity to 
strike the U.S. with nuclear-tipped ICBMS.  To do so, Iran 
would need to build a new industrial base and develop a means 
of testing rockets.  He expressed concerns that the U.S. 
could develop breakout missile technology which would make 
interceptors in Poland a threat to Russian strategic assets. 
Noting that these were his personal views, Buzhinskiy 
suggested that the U.S. provide assurances that its MD system 
was not aimed at Russia, would not be expanded, that any 
radar would be fixed and would face south, and that site 
visits would be possible.  He said that Russia was willing to 
discuss technical cooperation on MD, but argued that Russia 
was not interested in developing a new global MD system and 
was concerned about technology transfers.  He noted that 
China was also concerned about U.S. MD plans, given the small 
size of its strategic forces, and argued that Beijing's 
anti-satellite tests demonstrated China's resolve. 
7.  (SBU)  Deputy Chair Likachev stressed Russian and 
European opposition to U.S. MD plans and wondered why the 
U.S. was not placing MD facilities closer to Iran.  Chairman 
Margelov noted the Cold War legacy made Russia suspect U.S. 
plans.  Senator Bayh acknowledged that U.S. plans created 
concerns in Russia, but said the U.S. proposal was not 
directed against Moscow.  Senators Nelson and Bayh urged that 
U.S. and Russian experts cooperate on MD.  Senator Lott 
acknowledged that Iran had limited indigenous technical 
capabilities, but was concerned that Iran would buy 
technology from others.  General Buzhinkskiy dismissed 
concerns that Tehran could purchase workable ICBMS and said 
that Iran was many years away from developing a nuclear 
warhead that could be mounted on a long range missile. 
Senator Burr cautioned that the pace of technological change 
was accelerating and that Iran's wealth allowed it to seek 
access to sophisticated weapons technology.  He hoped that 
Russia would grow more comfortable with U.S. MD plans so that 
together they could address a common threat. 
8.  (SBU)  Federation Council Member Akhmedov argued that the 
U.S. and Russia were competing in Central Asia over energy 
supplies when there should be greater cooperation.  He 
challenged U.S. involvement and motives in Iraq and 
questioned what U.S. interests were in Iran, suggesting that 
the desire to control energy resources drove U.S. policies. 
Deputy Chair Likhachev criticized attempts to "impose" 
democracy in the Middle East, arguing that the Iraq 
experience alienated others from pursuing a democratic course 
because democratization was associated with chaos.  At the 
same time, the U.S. needed to be effective and consistent in 
9.  (SBU)  Senator Bayh noted that U.S. involvement in Iraq 
had stirred divisions in the U.S.  The U.S. should support 
elements in a society that were authentic and supported 
democracy; there needed to be some choice besides 
authoritarian, corrupt governments and radical Islamists. 
Senator Burr said that Iraq lacked the strong leadership 
necessary to encourage democratization and underlined the 
dangers of continued instability in the Middle East.  Burr 
said the globalized economy meant that instability in one 
area could have ripple effects around the world. 
Economic and Energy Cooperation 
10.  (SBU)  Committee Chair Zavadnikov reviewed Russian 
economic reforms efforts in manufacturing and energy 
production and stressed the growing importance of the 
services sector in the Russian economy.  Russia was focused 
on diversifying its economy and was seeking to develop high 
technology and value-added industries.  Senator Gregg noted 
the role of Gazprom in the Russian and global economy.  He 
underlined the importance of IPR protection.  Zavadnikov said 
that Russia had made major strides in IPR legislation, but 
now had to focus on implementation.  Deputy Chair Umakhanov 
noted that Russia's pursuit of high tech development was 
creating a strong lobby for IPR protection. 
11.  (SBU)  Senator Lott encouraged greater energy 
cooperation, noting Russian expertise in oil and gas 
development.  Council Member Akhmedov noted that oil revenues 
were a double-edged sword for Russia, because they postponed 
the need for reforms and warped the Russian economy. 
Chairman Margelov defended Russia's market-based energy 
relationships with the former Soviet republics, arguing there 
was no reason any longer for Moscow to subsidize them.  He 
also pointed to difficulties between Germany and Poland over 
MOSCOW 00002970  003 OF 003 
the Russian North Sea pipeline.  Senator Burr heralded 
Russian purchases of Boeing aircraft and noted International 
Paper's interest in acquisitions in Russia.  U.S. firms would 
be even more interested if Russia established a fair and 
transparent legal system.  Zavadnikov and Akhmedov both noted 
that the long Soviet experience had retarded the development 
of legal institutions and created economic distortions that 
were slowly being addressed; corruption was a major cause of 
12.  (SBU)  Akhmedov called for the repeal of Jackson-Vanik, 
arguing that it was a bilateral irritant that had long 
outlived its usefulness.  Senator Gregg acknowledged that 
there was a consensus that it should be removed.  Senator 
Burr said the U.S. looked forward to Russia's full 
participation in the WTO.  Senator Lott noted the interest of 
U.S. firms in doing business in Russia as well as Russian 
firms that had now entered the U.S. market.  He stressed the 
importance of the rule of law and effective corporate 
governance to ensure the security of U.S. investments and 
warned that U.S. firms were concerned about GOR's 
unpredictability and actions taken to change the rules of the 
13. (SBU)  Chairman Margelov reviewed progress to date in the 
global war on terrorism, noting that the U.S., Russia, and 
Europe were constrained in fighting terrorism by the need to 
balance terrorist threats with respect for human rights.  He 
argued that Europe in particular emphasized the need to 
respect this balance.  Senator Burr observed that the 
counterterrorist fight brought together the U.S., Russia and 
Europe.  He outlined the need to take a long view of the 
struggle against terrorism, agreeing there was a need to 
strike a balance between human rights and the obligation to 
protect citizens from attack.  Demographic changes would 
complicate the task of fighting terrorism.  Burr encouraged 
greater cooperation between the U.S. and Russia in sharing 
intelligence and stressed that a successful fight against 
terrorism required leadership from many countries, while 
noting that the U.S. and Russia had the clearest view of the 
threat posed by radical Islamis
ts.  Both countries also had a 
special responsibility and capacity to combat nuclear 
terrorism.  Burr also noted links between drug traffickers 
and terrorists. 
14.  (SBU)  Deputy Chair Likhachev argued that the 
international community should rely more on international 
organizations, such as the UN Security Council, in addressing 
counterterrorism.  The counterterrorism committees in the UN 
Security Council should be consolidated to improve 
efficiency.  The U.S. and Russia should be leaders on this 
issue internationally, Likhachev said, and should also 
support interparliamentary and intercivilizational dialogue 
to understand better differences between religions and 
cultures.  Fighting terrorism required close attention to the 
specific circumstances in a region; in Chechnya, Russia had 
successfully isolated the terrorists from the Islamic 
institutions in society.  Senator Lott reviewed the difficult 
task of balancing protection of citizen's rights with the 
need to confront terrorist threats, flagging issues such as 
profiling, interrogation techniques, detentions and 
electronic eavesdropping.  Lott endorsed the need for 
international cooperation in the fight against terrorists, 
pointing out that the threat was not limited to the Middle 
15.  (U)  This message has been cleared by CODEL Nelson-Lott. 


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