U.S. already got NSG inspection rule tightened for India

The United States got the 45-member Nuclear Suppliers Group to amend its export Guidelines to mandate third country fall-back safeguards verification inspections of the kind India says it cannot accept. The purpose of the NSG rule is to make sure India can't buy nuclear equipment from Russian or French firms under conditions that are less restrictive than what will apply to U.S. equipment.

12 December 2006
The Hindu

U.S. got NSG inspection rule tightened for India

Siddharth Varadarajan

New Delhi: Prime Minister Manmohan Singh may have assured Parliament last August that "there is no question of allowing American inspectors to roam around our nuclear facilities." But under new U.S.-drafted rules adopted by the Nuclear Suppliers Group on the eve of last July's landmark deal, India will have to accept potentially intrusive inspections from any country it buys nuclear equipment from.

At its Oslo plenary last June, the NSG amended its crucial guideline governing the conditions under which the cartel's 45 members may sell equipment notified in their "trigger list" covering nuclear equipment and material. The new guidelines were only notified to the International Atomic Energy Agency in December 2005 and published on March 20 as INFCIRC/254/Rev.8/Part 1.

The new guideline states: "Suppliers should authorise [nuclear] transfers only upon formal government assurances from the recipient that... if the IAEA decides that the application of IAEA safeguards is no longer possible, the supplier and recipient should elaborate appropriate verification measures."

The guideline adds that if the recipient does not accept these measures, "it should allow at the request of the supplier the restitution of transferred and derived trigger list items".

Unlike the requirement for full-scope safeguards — which the U.S. is asking NSG countries to waive in the case of India — this new rule is not going to be changed. A precondition for imports, therefore, will be the acceptance of a parallel bilateral inspection regime. And a subsequent refusal by India to allow intrusive visits by inspectors from a supplier country could lead to that country demanding the return of nuclear facilities, materials and their derivatives.

India's objection

In his statement to the Rajya Sabha on August 17, Dr. Singh had objected to a clause in the Senate version of the U.S.-India nuclear cooperation Bill explicitly spelling out the fall-back safeguards Washington wanted India to agree to before it lifted nuclear sanctions on Delhi. This clause was reworded in the final Act but its intent was left untouched. Though supporters of the Act have said the clause would not be binding on the Bush administration or India, the fact that fall-back safeguards have been made part of the NSG guidelines suggests the Indian negotiators will have to wage a tough battle to keep intrusive third-party inspections off the agenda.

End-use verification

Until now, India has maintained that it will not allow the U.S. access beyond what is envisaged by the bilateral "End-Use Verification Agreement" signed as part of the Next Steps in Strategic Partnership in 2004. Though the EUVA is a secret document, officials say it provides for U.S. inspectors to visit the "balance of plant" (i.e. non-reactor) portion of an Indian nuclear facility where any American dual-use item might be used.

Whatever the U.S.-India nuclear Act may finally contain, the U.S. administration has so far been insisting on writing into its bilateral nuclear cooperation agreement with India (the `123 Agreement') a provision for "special verification visits" in the event that the IAEA is unable to implement its safeguards agreement with India.

In her testimony to Congress on April 5, 2006, Secretary of State Condoleezza Rice described the "fall-back" safeguards the U.S. is seeking as "direct verification by the United States of material, equipment and components subject to the agreement." "In general", she said, the U.S. relies upon IAEA inspections and monitoring. "However, the United States would in fact be able to conduct "special verification visits" in the form of fall-back safeguards as required by the U.S.-India agreement for peaceful nuclear cooperation in the event that IAEA safeguards were not being applied."

By amending the NSG rule, Washington has ensured a level playing field for its own nuclear contractors once the Indian nuclear industry is opened up for business. Section 123(a)(1) of the U.S. Atomic Energy Act (AEA) stipulates the provision of fall-back safeguards that a potential customer like India may find intrusive. By universalising this requirement and forcing India to sign a similar bilateral agreement with other potential suppliers like Russia or France, U.S. firms will no longer be unduly disadvantaged. In other words, buying Russian or French equipment as a means of avoiding U.S. conditionalities may no longer be an option since the NSG guideline mandating fall-back safeguards is not going to be waived.

What worries Indian officials is the different interpretation of the circumstances under which fall-back safeguards might kick in. "When we first began negotiating, the U.S. side said fall-back safeguards would only be applied if the IAEA breaks up of if there is some major calamity or act of God," an official noted. "But now we see in the Congress conference report the argument that fall-back safeguards are needed in case budget or personnel strains at the IAEA render it unable to fulfil a safeguards mandate."

In his August 17 statement, the Prime Minister chose his words carefully, almost as if to keep open the door to U.S. inspectors. "[T]here is no question of accepting other verification measures or third country inspectors to visit our nuclear facilities, outside the framework of the India specific safeguards agreement [with the IAEA]," he said. One proposal that has been made is for India to specify a limited role for U.S. inspectors "within the framework of the India specific safeguards agreement."

[In the printed edition, this story was split into two parts. The original link for the second part is here.]