US embassy cable - 05PARIS1086

UNCLAS SECTION 01 OF 03 PARIS 001086 
 
SIPDIS 
 
FROM USOECD PARIS 
 
STATE FOR EUR/ERA 
STATE FOR NP/SC 
STATE FOR L/NP 
 
E.O. 12958: NA 
TAGS: ENRG, OTRA, TRGY, FR, TECH, RU 
SUBJECT:  OECD/NEA MULTILATERAL NUCLEAR ENVIRONMENT 
PROGRAM IN RUSSIA (MNEPR) COMMITTEE MEETING 
 
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Summary 
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The OECD Nuclear Energy Agency (NEA) Multilateral 
Nuclear Environment Program in Russia (MNEPR) Committee 
Meeting was held 19-20 January at the NEA Headquarters 
in Issy-Les-Molineaux, France.  The Netherlands 
reported its recent submission of its ratification 
document to the Depositories.  The Committee reached 
consensus on proffering an invitation to Nordic 
Environmental Finance Corporation (NEFCO) to become a 
Party.  The Russian diplomatic note on taxation was 
accepted with the Swedish co-chairperson noting that it 
did not change the rights and obligations of the 
Parties.  The Joint Interpretation of the MNEPR 
Framework Agreement was accepted by the Committee, with 
the subsequent steps being for the co-chair to provide 
it to one of the Depositories, and for the Depository 
to then promulgate it to the Parties.  The Russian co- 
chairperson clarified the position of the Russian 
Federal Atomic Energy Agency (ROSATOM). A Legal Task 
Force was reconstituted to examine procedural issues. 
End Summary. 
 
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Contributing Parties Pre-Meeting 
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1. A meeting of the Contributing Parties was held at 
OECD Headquarters prior to the full Committee meeting 
chaired by Patrick Reyners, Head of Legal Affairs, NEA. 
Swedish Committee representative Nystrom, was re- 
elected as the Committee co-chairperson representing 
the donor Parties. All Parties agreed to accept the 
Joint Interpretation of the MNEPR Framework Agreement. 
German Committee representative Ranau, and legal 
counsel Pelzer, emphasized the need for the co- 
chairpersons to provide the Joint Interpretation to one 
of the two Depositories (the Minister of Foreign 
Affairs of the Russian Federation and the Secretary 
General of the OECD).  The Joint Interpretation would 
then be promulgated by the Depositories to the Parties, 
who would in turn convey their confirmation of the 
document.  While it was understood that the Russian 
Federation might have to go through a ratification 
procedure, the Germans offered that they would likely 
provide their confirmation via a `note verbale' or 
diplomatic note.   Reyners offered that the 
confirmation did not have to be very formal and could 
even be in the form of an email message. 
 
2. The donor Committee members reviewed the Russian 
diplomatic note on taxation and agreed to accept the 
latest version.  The U.S. Committee member stated that 
the USG was willing to accept it on the belief that it 
would not be possible to obtain any further 
improvements to the text and understanding the 
importance to other Parties to resolve the matter.  He 
noted that the Russian text version of the diplomatic 
note is the controlling text, rather than the English 
version, notwithstanding MNEPR provisions that English 
text prevails.  Secondly, it was suggested that the co- 
chair reiterate to the Russian delegation that the 
diplomatic note was merely a description of procedures 
the Russians have put in place and do not limit or 
modify Parties rights to such exemptions, which are 
established in the Agreement.  The co-chair and other 
Committee members concurred. The donor Committee 
members reviewed the Joint Interpretation of the MNEPR 
Agreement and reached consensus on its acceptance. 
 
3. Reyners noted that the NEA MNEPR administrative 
costs had been supported during the past year through a 
generous contribution from Norway.  He suggested that 
if each Contributing Party could provide an equally 
apportioned amount, calendar year 2005 could be 
covered.  He offered that donations in the amount of 
3,000-5,000 Euros should cover the 2005 expenses. 
Finnish Committee representative Kaupila, countered 
that since these appeared to be annual expenses of the 
NEA, the costs should be covered within the annual 
OECD/NEA budget.  After further discussion, this issue 
was deferred without any determination. 
 
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2005 MNEPR Committee Meeting 
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4. The initial item of the Committee meeting was the 
election of the co-chairs.  Nystrom had been selected 
as co-chair for the Contributing Parties and Russian 
Committee member Antipov (Vice Chief, ROSATOM), was 
elected as co-chair for the Russian Party.  After 
general administrative issues were concluded, the 
discussion moved to the issue of inclusion of the 
Contact Experts Group (CEG).  Under the Framework 
Agreement, the Committee may decide to admit as 
Observers, an interested state, inter-governmental 
organization or regional economic integration 
organization being subject to public international law 
not party to the Agreement (Article 4, para 5).  Of 
specific concern was the inability to invite the CEG as 
an Observer, since it did not meet these requirements. 
After discussion, the issue was placed under the 
examination of a newly reconstituted Legal Task Force. 
 
5. The Netherlands Committee member stated that his 
country had deposited its instrument of ratification on 
13 January 2005. The UK, the European Community, the 
European Atomic Energy Community, Germany, Belgium and 
the U.S. have yet to deposit their instruments of 
ratification, acceptance or approval. 
 
6. The intention of NEFCO to accede to the Framework 
Agreement was then discussed.  The Committee reached 
consensus on the accession of NEFCO and an invitation 
was duly proffered. 
 
7. The committee accepted the Russian Diplomatic Note 
on Tax Exemption (No.5558/dvbr).  This note dealt with 
the exemption from value added tax and other taxes on 
equipment and goods purchased within the territory of 
the Russian Federation for implementation of projects 
within the framework of the Agreement.  It also applied 
to services rendered within the territory of the 
Russian Federation for the same.  The exemption shall 
be provided by the Russian Party at the time of the 
transaction (i.e., at the source).  Co-chair Nystrom 
noted that this diplomatic note did not modify any 
rights or obligations under the MNEPR Agreement. 
 
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Joint Interpretation of the MNEPR Framework Agreement 
--------------------------------------------- -------- 
 
8. The Committee concurred on the Joint Interpretation 
of the MNEPR Framework Agreement.  It was also 
understood that only representatives of the Parties 
could be elected chairpersons, as noted in Article 4, 
paragraph 4.  Co-chair Nystrom stated that the Joint 
Interpretation would be considered to be constructively 
delivered to the Depositories and constructively 
provided by the Depositories to the Parties.  After the 
meeting, Nystrom clarified his comments to the U.S. and 
German Committee members by agreeing that the Joint 
Interpretation would actually be provided to at least 
one of the Depositories and then be sent by one of 
Depositories to the Parties.  He concurred that the 
Depositories would have to provide the Joint 
Interpretation to the Parties in order for the Parties 
to officially respond with their respective 
concurrences. 
 
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Clarification of ROSATOM's Status 
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9. Russian Co-Chair Antipov clarified that ROSATOM was 
the legal successor to MINATOM (the Ministry of Atomic 
Energy).  He had been requested to clarify ROSATOM's 
relation in relation to the Annex to the Protocol on 
Claims, Legal Proceedings, and Indemnification since 
MINATOM is cited therein as being the provider for the 
indemnity confirmation letter to be provided to 
Parties.  Different understandings had been developed 
among Parties regarding ROSATOM's status.  Antipov 
further noted that ROSATOM has the characteristics of a 
ministry but also has the status of an agency.  It had 
been moved out of the Ministry of Energy and now was 
under the direct responsibility of the Prime Minister. 
He noted that a diplomatic note should have been 
delivered to the Parties providing official designation 
of ROSATOM's status. 
 
10. Antipov then went on to the question concerning the 
qualifications of Committee members.  He initially 
wanted to know whether the Committee members present 
had been properly selected/appointed by their 
respective governments.  NEA Legal Director and 
Secretariat member Reyners responded that all Committee 
 
SIPDIS 
members had been properly accredited and seated. 
Antipov then suggested that there be a more formalized 
process, such as written letters from respective 
Ministries of Foreign Affairs so denoting the Committee 
members.  He went on to try to have the MNEPR Committee 
determine which national ministry would handle matters 
of spent nuclear fuel and radioactive waste within the 
Parties.  This maneuver was rebuffed, and Reyners moved 
that the question of accreditation of Committee members 
be reviewed by the Legal Task Force. 
 
11. Antipov then questioned the paper on identification 
of "good practices" in implementing agreements or 
contracts.  He took umbrage that the Russian Federation 
had not been consulted and wanted to be included in any 
such review.  The NEA Secretariat and the Swedish Co- 
Chair stated that the work would continue further with 
inclusion of Russian input. 
 
12. No decision was taken on the venue and time for the 
next MNEPR Committee meeting.  It was generally agreed 
that unless a Party called for a meeting sooner, that 
the next Committee meeting would be held in early 2006. 
The Finnish Committee member had tentatively offered 
Helsinki as a venue.  The Netherlands and Belgium 
offered that the March/April time period would be best, 
due to competing requirements for Committee members. 
 
SMOLIK