The Iranian Government is about to refuse the proposal to ship 75% of its stock of low-enriched uranium to Russia before the end of the year. Instead, it will offer shipment in small batches. This is unacceptable. The Geneva and Vienna talks focused on the expectation that most of the uranium would be shipped beyond Iranian borders soon. Indeed, the West needs a solid confidence-building gesture from Iran to reduce the risk of a breakout scenario (the domestic re-enrichment of the accumulated stock to weapon levels) and also a genuine token of seriousness for the forthcoming negotiations.
The Iranian counterproposal is clearly not acceptable. Yet, before closing the door again, before re-launching stronger and more efficient sanctions, the IAEA should ask Iran to opt for a similar confidence-building option, namely the storage of the evolving stock of Iranian low-enriched uranium in a small European country -- with occasional, partial shipments to fuel manufacturing plants in Russia and France to feed the Tehran research reactor and the Busher power plant. Let's see why and how it could work.
One needs to understand the Iranian reluctance to hand over to Russia and France the bulk of its low-enriched uranium. Over the years, the Russians have generously provided Iran with a protective political umbrella in the Security Council while leading the Iranians by the nose -- commercially speaking -- in connection with the Busher nuclear power plant. During the last decade, the Russians have been industrially unable to complete Busher within any schedule, or else they were clearly unwilling to do so (a Russian official told me once that Busher will be completed "when the Kremlin so decides"). Or both.
At the same time, they try to extract horrendous prices for the future take-back of Busher's spent fuel. As to France, in the seventies, Iran loaned some 1.2 billion dollars to the French enrichment project Eurodif (together with France, Belgium, Italy and Spain). Following the Iranian Revolution and a wave of Iran-inspired political assassinations in France, the Eurodif deal with Iran fell apart. After lengthy negotiations, Iran got some 1.6 billion dollars back in the early nineties. All in all, France treated Iran very reasonably. Were it not -- in the present case of fuel element manufacturing for the Tehran Research Reactor -- for the recent dim-witted public declaration of a French official saying that France would not deliver the Tehran reactor fuel if not satisfied with Iranian behavior. With such a loaded historical background, many Iranians hesitate to entrust Russia and France with their nuclear crown jewels.
If not Russia, who could be acceptable partners of Iran for safe-keeping its stocks of enriched uranium? I see two possibilities, the US or a small European country (such as Sweden or Switzerland, two countries with a solid nuclear experience and infrastructure).
Of course, the US solution is a very long shot. Still, there are signals that some Iranians would prefer to get higher enriched uranium from the US to feed the American-made Tehran reactor, while others would like to purchase from the US modern electronic control equipment for the same reactor. Indeed, a US focal point exists. The original reactor supplier (General Atomics of San Diego) is still associated with the French company CERCA that manufactures fuel elements for such reactors, and is also a primary supplier of electronic control equipment for nuclear reactors in general.
Thus, under a US arrangement, the US would play the role of prime contractor by 1) securing the storage somewhere outside Iran of most of the low-enriched Iranian uranium, 2) having batches of this uranium enriched in Russia, 4) letting this uranium be manufactured into fuel elements at CERCA in France and 5) taking formal delivery of the finished fuel elements. Subsequently, towards the end of 2010, the US would deliver fuel and electronic equipment for the third operating phase of the Tehran Research Reactor. Incidentally, remember that such activities do not fall under UNSC sanctions, since the reactor serves medical purposes.
If Iran and/or the US should not yet be ready to deal so directly with each other (quite likely), the parties could turn to a European arrangement, namely the storage of Iranian uranium in a small European country, a country deemed trustworthy by both Iran and the international community, a trade partner of Iran with a high degree of political independence. This country should be outside the Middle-East region and be at a short distance from Iran.
Within the European Union, countries like Sweden, Finland, and Austria (with its IAEA headquarters and technical facility) would qualify, as well as Switzerland outside the Union. On a regular basis (e.g. monthly to quarterly), uranium dioxide would be shipped to the partner country. Low-enriched uranium oxide is hardly radioactive, therefore easy to transport and to store. There are containers approved for air transport. The frequency of air shipments would be dictated by the objective of not keeping more than some 300 kilograms of low-enriched uranium in Iran from the production cascades at Natanz and Fordo. At all times, the material would remain the property of Iran. The stored uranium could be freely transferred by Iran to a fuel manufacturer of its choice, but not repatriated.
The bottom line? The Obama Administration made an enlightened move by opening negotiations with Iran without preconditions. The "Geneva Talks II" should stand, in particular on the issue of shipment of most uranium stock outside Iran. The IAEA played a remarkable role in bringing about a first agreement. Storing this uranium -- not in Russia as foreseen by the talks in Geneva and Vienna -- but in Europe, would still be in line with the objective of the Geneva Talks. This would be no additional concession to Iran. Before slamming the door, these two alternative arrangements deserve consideration. "Failure is not an option", as pointedly stated by the Director General of the IAEA, Mohamed ElBaradei.