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November 26, 2008

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Reference ID Created Released Classification Origin
08KYIV2339 2008-11-26 16:31 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv


DE RUEHKV #2339/01 3311631
P 261631Z NOV 08

C O N F I D E N T I A L KYIV 002339 
E.O. 12958: DECL: 11/25/2018 
REF: STATE 111716 
Classified By: Political Counselor Colin Cleary; reasons 1.4 (b/d). 
 1.  (C) Following up on proposals made by the U.S. 
delegation at the July 30-August 1 U.S.-Ukraine 
Non-Proliferation Working Group discussions (reftel), a State 
Department delegation met with Ukrainian Ministry of Defense 
and National Security and Defense Council officials in Kyiv 
on November 18.  The purpose was to further discuss the 
elimination of Ukraine's SCUD missiles pursuant to the 1998 
confidential bilateral Memorandum of Understanding (MOU) on 
issues related to Ukraine's membership in the Missile 
Technology Control Regime.  The two sides agreed to move 
forward on next steps in advance of the next U.S.-Ukraine 
Bilateral Non-Proliferation discussions, which could be held 
in Washington as early as February.  End Summary. 
2. (SBU)  On November 18, a State delegation including 
ISN/NDF Senior Negotiator Paul B. van Son, ISN/MTR Deputy 
Director Ralph Palmiero, ISN/MTR Greg Richard, and EUR/PRA 
Matt Hardiman participated in discussions on eliminating 
Ukraine's SCUD missiles with Ukrainian Ministry of Defense 
and National Security and Defense Council  officials.  The 
Ukrainian side included MOD Acting Chief of the Department of 
Economy Sergiy Novosiolov, MOD Chief of the Department of 
Ammunition and Missile Disposal Anotoliy Sosnovskiy, and 
other MOD officials, and Aleksandr Dotsenko of the National 
Security and Defense Council of Ukraine  (NSDC). 
How to get the ball rolling 
3. (C)  After introductions and agreement on the agenda, 
Palmiero provided a brief overview of the 1998 MOU and a 
summary of previous discussions/actions related to the SCUD 
elimination project.  Van Son then provided an overview of 
the Nonproliferation and Disarmament Fund and provided a 
detailed briefing on how to move forward based on proposals 
made by the U.S. during July 30,  2008 non-proliferation 
working group meetings in Kyiv.  The U.S. proposal is to use 
the Agreement Between the United States and Ukraine 
Concerning Assistance to Ukraine In the Elimination of 
Strategic Nuclear Arms, and the Prevention of Proliferation 
of Weapons of Mass Destruction, dated 25 October 1993, as 
Amended and Extended (the 1993 CTR Umbrella Agreement) as the 
basis for eliminating Ukraine's SCUD missiles and associated 
4. (C) As part of this approach, the U.S. proposed an 
exchange of diplomatic notes to add the Department of State 
as an executive agent to the CTR Umbrella Agreement, in much 
the same way as the Department of Energy was also added as an 
executive agent to that agreement.  Following that exchange 
of notes, an agreement/MoU between the U.S. Department of 
State and the Ministry of  Defense of Ukraine would be 
concluded to detail logistical  and administrative SCUD 
elimination procedures, and a contract would be concluded 
between the service provider (NDF contractor) and the MoD for 
labor and support services.  There will be a separate 
contract between the NDF and the service provider for the 
overall cost to the NDF for the work. 
5. (C)  Ukrainian reaction to this proposal was mixed but 
positive; both Dotsenko and Novosiolov flagged procedural 
issues of concern.  Dotsenko urged that the project be 
carried out by one of the four licensed U.S. companies 
currently working on DTRA projects in Ukraine, as this would 
cut down on the administrative processing time required to 
register and license a new U.S. company; furthermore, Ukraine 
would want to ensure the process would allow local companies 
to bid on the project as well.  He also warned that any new 
bilateral agreements would need Rada ratification. 
6. (C)  Van Son clarified that there is precedent for the 
addition of an Executive Agent to the Umbrella Agreement via 
exchange of diplomatic notes, as was done for the Department 
of Energy in 2004; the Agreement itself was  amended in 2003 
to allow other executive agents.  The agreement/MoU between 
State and MoD would therefore be only an implementing 
agreement, and would not require Rada ratification.  Van Son 
also explained that in the U.S. view, this would be a small 
project; the amount of equipment brought in would be small 
(thus VAT exemption issues minimized), and as was the case in 
our SCUD elimination projects in Bulgaria and elsewhere in 
the region.  All or nearly all contracted labor would be from 
the Ministry of Defense, with little or no need to hire local 
companies or bring in any non-Ukrainian subcontractors.  This 
would keep costs and overhead low as well, making most 
efficient use of funds available.  The first step would be to 
bring in the NDF contractor and conduct the site visits and 
inventory the SC 
UD missiles and associated equipment. 
7. (C)  Novsiolov noted that there have been procedural 
problems with other arms destruction projects recently, most 
notably the destru
ction of small and light weapons under the 
NATO Partnership for Peace (PfP) Trust Fund.  This project 
has been stopped for over a year by the Ministry of Economy 
and the Ministry of Finance, which maintain that some items 
may still be salable or have novelty value.  Palmiero noted 
that the annexes to the agreement/MoU clearly categorize the 
SCUD system components into items requiring elimination, 
demilitarization, or those not requiring demilitarization. 
The categorization provides a clear picture of the items that 
would be retained by the Government of Ukraine at the end of 
the project.  Furthermore, he noted, few countries maintain 
SCUD missile programs, and hopefully these are not countries 
to which Ukraine would consider selling SCUD-related missile 
items (e.g., Syria, Iran, and North Korea.)  Hardiman also 
sought to clarify whether the MoD concerns about potential 
problems with the Finance and Economy ministries as in the 
case of the PfP Trust Fund project.  In response, the MoD 
indicated they would have to demonstrate the SCUD-related 
items to be destroyed have no value, but thought the Annexes 
would help mitigate any problems.  Novosiolov indicated this 
aspect could require additional time to work out, and 
promised to have details available before the next bilateral 
Non-Proliferation meetings. 
8. (C)  Sosnovskiy raised the question of melange (starter 
fuel) destruction, seconded by Dotsenko. Palmiero clarified 
that we are willing to discuss destruction of fuel related to 
SCUDs, but discussion of any potential U.S. assistance would 
be limited to an amount commensurate with the number of SCUDs 
to be destroyed.  He noted that the Ukrainian estimate of 
sixteen thousand metric tons of melange certainly includes 
more than just SCUD missile fuel.  Sosnovskiy admitted 
Palmiero was correct that the sixteen thousand tons of 
melange was not all SCUD fuel, and took note of the U.S. 
position.  He also clarified that any discussion of melange 
destruction associated with this project would be specific to 
nitric acid-based fuel. 
9. (C)  Sosnovskiy informed the group that the OSCE will be 
assisting with destruction of 3,000 metric tons of melange 
starting in 2009, and that an earlier partnership with Poland 
had been completed with the destruction of 215 metric tons of 
melange.  He explained that Ukraine has developed a 
processing center in Western Ukraine, near the Polish border, 
and that initial processing takes place in Ukraine and final 
processing in Poland.  Dotsenko said the Polish government 
has guaranteed to take more Ukrainian melange for final 
processing. Van Son noted that processing and disposing of 
melange is very expensive, and that location, condition, and 
volume would impact the project budget.  Thus it is even more 
important to get an on site inventory of the scope of this 
project as soon as possible. 
10. (C)  Van Son and Palmiero both asked on two separate 
occasions whether Ukraine had any high explosive SCUD 
warheads.  Van Son pointed out that destruction of these 
raises the cost of the project considerably.  Smiling, 
Dotsenko repeated that there were no high explosive warheads 
in the Ukraine SCUD inventory. 
Next Steps 
11. (C)  U.S. and Ukrainian officials agreed that a 
discussion on the margins of the next regularly scheduled 
U.S.-Ukraine nonproliferation discussions (normally held 
twice a year in February and July), would offer a convenient 
opportunity to meet again and for Ukraine to respond with any 
detailed comments to the draft U.S. agreement and diplomatic 
note and to discuss a possible date in the Spring for an 
on-site inventory.  They agreed to proceed with the exchange 
of diplomatic notes between the State Department and Ukraine 
Ministry of Foreign Affairs to add the State Department as an 
Executive Agent to the CTR Umbrella Agreement.  Van Son 
stated that NDF may send the NDF's contractor (Controlled 
Demolition, Inc.) on a familiarization mission to Ukraine to 
consult with MOD and DTRO on the process of proper 
registration and, hopefully, begin that process.  Nosiolov 
promised to obtain approval from MOD leadership on the MOU, 
and to try to facilitate the on-site inventory so that it 
could take place as soon as possible.  Van Son stated that 
the delegation would meet with the Ukrainian Embassy upon 
their return to Washington and give them a debrief on this 
meeting.  (Note:  This meeting took place in EUR/PRA on 
12. (C)  The November 18 meeting was a step in the right 
direction, and valuable particularly for the opportunity it 
afforded MoD to understand how State and the NDF would move 
forward on SCUD destruction.  Challenges lie ahead in getting 
the inventory performed in a reasonable time frame and with 
the participation of the NDF contractor that will perform the 
work; in getting registration accomplished; and in 
particular, in dealing with the Ministry of Economy on 
registration and destruction issues.  The Ministry of Economy 
has proven problematic recently on both of these issues.  It 
has repeatedly refused to recognize the proper registration 
of a DTRO-contracted company operating legally in Ukraine. 
It has also held up the implementation of the NATO PfP Trust 
Fund Small and Light Weapons destruction commitments approved 
by Ukraine's Cabinet of Ministers in 2005, although it may 
soon (following repeated US demarches) lift that hold. 
13. (U)  The U.S. delegation cleared this cable. 




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