Foreign Relations of the United States, 1969–1976, Volume E–14, Part 2, Documents on Arms Control and Nonproliferation, 1973–1976

160. Memorandum From David Elliott and Jan Lodal of the National Security Council Staff to Secretary of State Kissinger¹

Washington, September 6, 1975.

SUBJECT

• Instructions to the U.S. Delegations to the Nuclear Suppliers’ Conference and to the U.S./French Nuclear Talks

Instructions are required for the subject meetings. The Verification Panel Working Group has prepared a study and options paper for each of the two meetings, and agency recommendations have been obtained.

Nuclear Suppliers’ Conference

We are scheduled to have the third multilateral meeting of the seven key nuclear suppliers in London on September 16–17. The purpose of this meeting is to agree on the basic principles for safeguards and controls associated with nuclear exports, commission a working group to work out the details of the understandings, and consider ways to expand the group to include other potential future suppliers.

The analysis of the options for our position at the Suppliers’ Conference is at Tab C, and our positions and fallbacks—as recommended by all agencies—are embodied in the delegation instructions at Tab A.

The agreement we foresee as now achievable is less than we would desire in terms of exhaustive measures to inhibit proliferation, particularly in the area of promoting restraint in transfer of reprocessing and enrichment technology to third countries and making such transfers contingent on multilateral ownership and operation. It will include the following key elements:

—Prohibitions in PNE development;

—IAEA safeguards on supplied nuclear facilities and matériel (but not on all facilities in-country);

—Safeguards on replicated enrichment, reprocessing and heavy water production facilities;

—Encouragement of multinational regional reprocessing and enrichment; and

—Bilateral consultation provisions on specific export cases to areas where there is risk of instability.

In view of the comprehensiveness of the above provisions and their general support by all participants, and comparing our current expectations with the state of play last fall where we had no knowledge of French attitudes toward nonproliferation or even their willingness to apply any kind of safeguards, we view even this agreement as a significant accomplishment. However, there will probably be considerable criticism that there are no mandatory controls which would bar export of reprocessing and enrichment technology to sensitive areas or at least require continuing supplier involvement in the operation of such plants. In particular, the FRG-Brazil deal would be permitted under this agreement and bilateral supply of reprocessing technology such as the French arrangements with South Korea and Pakistan could go forward. This is a serious problem since public awareness of the Supplier discussions has generated expectations that the Suppliers will agree to measures which would prohibit or severely constrain such exports.

The only alternative to this type of agreement would be to back off from our compromises in the first two meetings and insist on much stronger controls such as IAEA safeguards on all nuclear facilities in recipient countries; mandatory supplier involvement with multinational participation in reprocessing or enrichment plants and prohibitions on supply of such technology to sensitive areas. There would be support from most of the other Suppliers for some or all of these measures and we could probably isolate the French and Germans on these issues. However, we do not have much leverage with either country on the basis of our peaceful nuclear exports and it is unlikely that we could accomplish such a fundamental change in their positions.

We do have some leverage with the French in that they have asked us for some relief on three bilateral issues: liberalization of U.S. COCOM policy on nuclear reactor exports; relaxation of U.S. licensing requirements on French licenses of U.S. firms; and relaxation of our policy of requiring the return of uranium tails when the Soviets provide toll enrichment services. However, we promised to be sympathetic to these requests in securing French agreement to participate in the Suppliers talks and to some extent they will consider U.S. movement in these issues as a quid pro quo for their attendance.

A possible additional source of leverage—which you might be able to use in your channel—is our special nuclear assistance relationship with the French. The President has committed himself to Giscard on much of this assistance, however, and any attempt to use it as leverage would constitute a major reversal of this policy. Another problem with a tough approach is that we assured the French at the outset of the Suppliers talks that we were sympathetic with their concerns and would not isolate them in these proceedings. Thus, an attempt to take a “high road” at this time would suffer from a lack of leverage, would be inconsistent with previous assurances, and could result in a collapse of the Suppliers’ talks. Therefore, we strongly recommend that you authorize us to continue with our present approach and make the few additional compromises that may be required to reach an agreement.

French Bilaterals

We will meet with the French in Paris on September 10 to discuss the bilateral concerns as a prelude to the September 16–17 Nuclear Suppliers Conference. We are still hopeful that we may get some French movement on two outstanding issues: mandatory participation of the Supplier in management of any exported enrichment and reprocessing facilities, and standard provisions requiring Supplier consent for reprocessing, storage or alteration of weapons usable material (plutonium and highly enriched uranium) derived from supplied materials or facilities. It must be pointed out, however, that we do not know whether, or to what extent, a favorable U.S. response on these three bilateral issues would actually cause France to modify her stance in the Suppliers negotiations. Further, a favorable U.S. response on the bilateral issues could create difficulties for the Administration with respect to Congressional reactions, particularly when the extent of the proposed French sale to the Soviets becomes known to the Congress (6 to 12 power reactors).

An interagency study of these bilateral issues and of U.S. options is at Tab D, with agency views at Tab E. The issues are discussed below.

Liberalization of U.S. policy within COCOM in approving exceptions for the sale of nuclear reactors to Bloc countries

In the NSDM 298 decision on the FRG reactor sale to the Soviet Union, we modified our policy of requiring IAEA safeguards on such sales so that we now require them only where there is a substantial risk of diversion of fissionable materials—a criteria which effectively excludes the USSR from a safeguards requirement. (In the FRG case, we did however require that the FRG obtain a peaceful uses assurance on the transfer and that the Soviets should supply the uranium ore to be used for fuel.) Since the safeguards requirement was a major stumbling block for COCOM approval of reactor sales to the USSR in the past, the change would probably be accepted by France as substantially meeting their first request. However, waiving this requirement does not represent blanket approval for future export requests. These requests must still be reviewed in COCOM in order to assure that other strategic interests (such as sensitive technology and information) are protected.

There is interagency disagreement on our response to the French on this issue. State and ACDA would be prepared to discuss our position on the FRG reactor sale along with specific French proposals for such sales; DOD and ERDA would avoid such discussions for fear of misleading the French into assuming a favorable U.S. attitude toward these sales.

We recommend that the French be told, as we already have conveyed to the FRG, that the U.S. will not require as a condition of our COCOM approval that IAEA safeguards be imposed on reactors sold to the USSR, as long as the USSR gives a peaceful use guarantee and supplies its own nuclear fuel. We would explain that we cannot give advance assurances of our COCOM position vis-à-vis French reactor sales to the USSR because our study of the strategic implications of the transfer of this level of technology has not been carried out (and won’t really be started until the French supply us with the data and information regarding the proposed export).

A change in the U.S. position within COCOM requiring the return of uranium “tails” (the residue left over when uranium is enriched) when the Soviet Union provides toll enrichment services for COCOM countries

Our position on this issue was stated in NSDM 275:

(1) The U.S. should seek to maintain its position requiring the return of the tails.

(2) However, the President authorized a compromise, for use if significant opposition developed in COCOM, which would require the return only of tails above 0.2 percent uranium 235 content.

(3) If a compromise could not be achieved on this basis, options for a revised position should be submitted for Presidential decision.

In the third round of discussions in COCOM, the U.S. maintained its current position on return of the tails in the face of wide-spread opposition. Canada was the only country to support the U.S. view, and even Canada was willing to exempt the USSR from the requirement. The FRG proposed what is essentially the NSDM 275 compromise but our Delegation did not support it. State and ACDA feel that enough opposition has been shown to justify tabling our compromise position. ERDA and DOD feel we should await further pressure on the issue, particularly from the French. We feel the time is right to implement the compromise authorized in the NSDM.

Modification of present industry-to-industry licensing arrangements

While the French are ready to consider regulation of exports to the USSR through inter-governmental channels (including COCOM), they object, in principle, to such clauses in contracts between U.S. and French companies which in effect, in their view, subject French exports to U.S. regulatory policy. During our most recent consultations with the French, we sought to allay their anxieties by indicating that we would not approve an export in COCOM and then refuse a specific authorization for the same transaction. However, the French Delegation did not find our reassurances sufficient and presumably the French desire a more extensive and formal accommodation.

This is a more contentious issue within the bureaucracy. State recommends that should the French insist on dropping the clause in industry-to-industry agreements, our Delegation should be authorized to indicate that we will make our best efforts to devise a means to eliminate the clause or at least to modify it to meet the French objection, if it is possible to do so within existing U.S. legislation. ERDA recommends that we make no commitments in this area, but if the French are forthcoming at the Suppliers’ Conference, then we could indicate a willingness that the U.S. would not block an export that it had approved in COCOM. DOD recommends that we take no steps at this time pending completion of the study authorized in NSDM 298 on the implications of transfer of U.S. reactor technology to the Soviet Union.

We recommend that we offer to give the French formal assurance that we would not block a French reactor sale to the USSR through our unilateral control if we approved the sale in COCOM. If the French insist that they cannot tolerate any U.S. export control exercised through the licensee-licensor commercial arrangement, our recommendation would be to indicate willingness to try to work out a U.S.-France agreement that would shift the control to the government-to-government level, and indicate the legal difficulty for us in attempting to go further.

At Tab B are draft instructions to the U.S. Delegation on the three bilateral issues with the French, incorporating our recommendations to:

—Indicate to the French the policy shift represented by the U.S. decision on the FRG reactor sale but emphasize that the strategic implication of future sales must still be reviewed on a case-by-case basis.

—Present the compromise on the tails issue already authorized by NSDM 275.

—Assure the French that we will not use licensing arrangements to block reactor sales we have already authorized in COCOM and offer to explore whether there is a way to eliminate the licensing provision and replace it with a government-to-government agreement.

Under this approach we will be able to show substantial accommodation of the French on the first two issues. Our recommendations on these two issues are somewhat more forthcoming than the official positions of DOD and ERDA. However, their major concern is with the licensing issue, and on this point, the draft instruction would only authorize an expression of willingness to consider compromise arrangements and not commit us to specific changes in licensing requirements.

Recommendations

That you authorize us to continue our present approach in the Suppliers’ Conference by approving the instructions to the U.S. Delegation at Tab A.

That you approve the instructions for the U.S.-French talks on bilateral nuclear issues at Tab B.

1. Summary: Elliott and Lodal provided Kissinger with recommendations concerning the instructions to the U.S. delegations to the Nuclear Suppliers’ Conference in London and to the U.S.-French nuclear talks in Paris. They recommended that Kissinger approve the attached instructions to the two delegations.

   Source: Ford Library, National Security Adviser, NSC Program Analysis Staff Files, Convenience Files, Box 32. Secret. Sent for action. Marcum initialed for both Elliott and Lodal. Kissinger initialed his approval of both recommendations. Tab A, the draft instructions to the U.S. delegation to the conference in London, is attached but not published. Tabs B–E are not attached. NSDM 298 is Document 152. NSDM 275 is Document 92.