(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000100230001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: January 12, 2017
• Document Release Date: June 14, 2011
• Sequence Number: 1
• Publication Date: February 1, 1980
• Content Type: MEMO

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NATIONAL FOREIGN ASSESSMENT CENTER
1 February 1980
MEMORANDUM FOR: Harold Bengelsdorf, Director
Office of Nuclear Affairs
Department of Energy
SUBJECT Intelligence Assessment of Argentine-
US Nuclear Relations
We have attached a copy of our intelligence assess-
ment of Argentine-US Nuclear Relations in response to
indications from Edward Milenky that you might find
it useful in preparing for the briefing session with
Deputy Secretary Sawhill tomorrow.
Chief ,
International Issues Division
Office of Political Analysis
25X1
25X1
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D/NFAC
NFAC Registry
Secretary of Production Board
NFAC Senior Review Panel
NFAC Coordination Staff
Presidential Briefing Coord.
D/OPA
OPA Production Staff
P&PG
CD/II
PM files
NED/OSI, 2 PM/II analysts)
NFAC/OPA/II/PM~ (1 Feb 80)
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CENTRAL INTELLIGENCE AGENCY
NATIONAL FOREIGN ASSESSMENT CENTER
31 January 1980
MEMORANDUM
COOPERATION TERMINATE?
Relations on nuclear matters between the United States
and Argentina may be at a breaking point as a result of
Buenos Aires' resistance to US efforts to implement a more
restrictive export policy with regard to nuclear fuel and
technology. Argentine officials are specifically opposed to
US requests that they adopt full-scope safeguards. For the
past several months, Argentine and US nuclear policymakers
have been attempting to negotiate a nuclear safeguards
arrangement that would provide for continued shipments of
US-enriched nuclear fuel to Argentina on the basis of
diplomatic assurances and inspection requirements that
satisfy US nuclear nonproliferation objectives and laws. At
issue is the Argentine contention that it already fully
complies with the terms of the US Nuclear Non-Proliferation
Act of 1978 (NPA) and that current US demands for fuZZ-scope
safeguards are unwarranted.*
* The concept of fuZZ-scope safeguards generally involves at a minimum,
the application of Article III of the Non-Proliferation Treaty (NPT), which
requires signatories to accept IAEA safeguards on all existing nuclear
material and facilities within their territory. The United States, however,
also insists on a commitment to safeguard all future nuclear facilities.
Argentina, which has not signed the NPT, is legally obligated, as an
IAEA member, to accept only a version of the IAEA safeguards; these
safeguards are less rigorous than those stipulated in Article III of 25X1
This paper was prepared by Inter-
national Issues Division, Office of ical Analysis, an
Nuclear Energy Division, Office of Scientific Intelligence. It was 25X1
requested by Harold Bengelsdorf, Director, Office-of Nuclear Affairs,
Department of Energy. 25X1
This paper was coordinated within the Office of Political Analysis,
and with the Office of Scientific Intelligence and the Office of Econom~c
Research. Research for this paper was completed 30 January 1980.E
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Argentina's leaders recognize that failure to resolve
this dispute prior to the 10 March 1980 deadline established
by the NPA could result in termination of US nuclear exports
and assistance to their country. Against a background of a
general cooling in US-Argentine relations, they have
been preparing for this contingency with plans to shut down
one research reactor currently dependent on US-enriched
fuel, and to recover enriched uranium from partially spent
US-supplied fuel. They have strong reasons, including
domestic political concerns for maintaining their current
position, and so far have shown no sign of backing down
Evolution of the Conflict in Policy Aims
For more than 20 years, Argentina has made nuclear
development a top policy priority, with nuclear fuel cycle
self-sufficiency a key derivative objective. The decision
of Argentine leaders in 1957 to stop depending on foreign
suppliers for research reactors may be seen as an important
first step toward that goal. Since then, the Argentine
National Atomic Energy Commission (CNEA) has had primary
responsibility for coordinating the design, engineering, and
construction of most of Argentina's operational reactors,
and its officials are currently directing the planning and
construction of the next generation of Argentine reactors.
The delegation of such authority by the Argentine Government
to the CNEA initially served to insulate Argentina's nuclear
program from endemic political and economic turbulence.
CNEA officials, however, have become more vulnerable to
political pressures during the past decade, as evidenced
in the personnel shifts that have accompanied changes in the
government. During this same period, senior CNEA officials
have been elevated to important policy positions within the
Argentine Government. This politicization of the CNEA under-
scores the growing importance of the nuclear program to
Argentina's national leaders. 25X1
Since 1957, Argentina has made significant strides
towards acquiring a complete nuclear fuel cycle. It has an
advanced nuclear research program, a technologically sophisticated
industrial base with operational nuclear power reactors and
some nuclear fuel cycle facilities, and ample uranium reserves.*
Moreover, it has demonstrated an export capability in nuclear
technology by beginning construction of a nuclear research
center in Lima, Peru. Argentina has also signed agreements
with five other Latin American countries to provide nuclear
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assistance, including equipment, technology and training.
Argentina's proven ability to construct indigenous
nuclear facilities and to export nuclear technology, combined
with the availability of domestic natural uranium for fuel,
has allowed Buenos Aires to limit its dependence on foreign
assistance and to resist pressures for stricter international
control over its program. Despite repeated assurances by
Argentine leaders that they support international and US
nonproliferation objectives, their refusal to sign the Non-
Proliferation Treaty, failure to ratify the regional non-
proliferation Treaty of Tlatelolco, and opposition to US
insistence on full-scope safeguards indicate their deter-
mination to maintain maximum freedom of maneuver in the
nuclear field.
Significance of West German-Swiss Deal
Argentina's longstanding desire to acquire a complete
nuclear fuel cycle as soon as possible has encouraged its
nuclear policymakers to seek out those suppliers who would
be the most flexible on the question of safeguards. Buenos
Aires' decisions on 1 October 1979 to turn to the West
Germans for the purchase of a nuclear power reactor and to
the Swiss for the purchase of a heavy water production plant
were clearly motivated by the fact that both nations were
more willing than their strongest competitor, Canada, to
provide these facilities under conditions of less than full-
scope safeguards.*
The importance that Argentina attaches to the safeguards
issue is underscored by its agreement to pay $500 million
more to the West Germans for a heavy water reactor system
which is less proven than that offered by the Canadians.
it was advantageous for Argentina to split
the commercial deal between the West Germans and the Swiss.
The Swiss were awarded the contract for the heavy water
production plant largely because they had indicated that
they would require only IAEA safeguards for Swiss-supplied
At the time, Argentina publicly emphasized that a leading factor in
its decision was dissatisfaction with Canadian handling of the heavy watfr
power reactor under construction at EmbaZse. Despite serious problems
of work stoppages and cost overruns at the Embalse project, however,
we believe that the safeguards issue was the most important consideration
for Buenos Aires.
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facilities and technology and other "derived facilities."*
Argentina's decision to expand relations with West
European nuclear suppliers is consistent with other recent
foreign policy moves by Buenos Aires designed to bolster
Argentine confidence and prestige and to expand the horizon
of its diplomatic options. Such actions included establishiilhg
closer economic ties with West Germany, assuming a more
active stand on issues of particular interest to the Third
World, and placing increasing emphasis on relations with
China and the Soviet Union. Since many of the agreements
that Argentine leaders are now signing with these partners
are long-range ones, they will almost certainly lead to
other forms of cooperation. 25X1
Neither West Germany nor Switzerland is legally obligated to insist
on full-scope safeguards by its participation in the NPT Exporters
Committee or the London Suppliers Group.
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25X1
Global Implications
Should the current impasse result in termination of US
nuclear assistance to Argentina, the longer term inter-
national implications of the US move will depend in part on
whether or not it is generally perceived as consistent with
US policy toward other countries that prove unwilling to ,
accept more rigorous nonproliferation obligations. Brazil,
India, South Africa, Pakistan, and Spain, for example, have
all indicated varying degrees of reluctance to accept full-
scope safeguards, and of these only Brazil currently comes
close to satisfying US requirements because all of its
significant nuclear facilities are being acquired from
West Germany under strict safeguards. 25X1
A firm and uniform US safeguards policy toward all
these nations would have the virtue of consistency, but
it could have undesired effects." For one thing, the opposi-
tion of Argentina and the other affected countries with
ambitious nuclear programs would probably be mutually
reinforcing. Buenos Aires would be able to draw encouragerhent
from the moral support of other developing nations (LDCs)
that believe the United States is no longer a reliable
supplier of nuclear fuel and technology. Should Argentina
in turn join other important LDCs in collective denunciation
of a cut-off in US nuclear assistance after 10 March, future
efforts to reach a consensus within the IAEA on additional
measures to control the spread of sensitive nuclear tech-
nology would be certain to encounter severe difficulties.
25X1
The international regime to regulate nuclear commerce
would probably suffer even greater erosion if a selective
US-nonproliferation policy removed pressure on some signa-
tories to the NPT such as India and Pakistan to accept full
scope safeguards. Not only would Argentina feel that it had
been unfairly singled out for punitive action, but such a
development would deeply disturb those LDCs which have
already accepted full scope safeguards as NPT signatories
and reinforce their feeling that the treaty is not only
discriminatory but also ineffective. Whether or not some of
these nations individually sympathize with the efforts of
non-signatories to preserve their nuclear autonomy, avoidance
or defiance of the increasingly rigorous international
ground rules for recipients of nuclear assistance would be
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widely regarded as evidence of a fundamental inequity in
the global nonproliferation system, that is, the system's
potential for favoring those LDCs that have secured a
substantial degree of independence from the restrictive
export policies of supplier states over those that have not.
25X1
Whatever specific course of action the United States
decides to take with regard to Argentina, the latter's
relative invulnerability to supplier pressure tactics will
not be lost on other developing nations that wish to acquire
advanced nuclear technology. Although for many years few
developing nations will actually be in a position to bargain
as hard with nuclear supplier states as Argentina has done,
the Videla government's skill in playing suppliers against
one another on the safeguards issue will almost certainly
become a model for others to emulate. For their part,
supplier states that are skeptical about the effectiveness
of nonproliferation policies may use the Argentine case in a
self-serving fashion. They are likely to cite Argentine
resistance to US demands in support of their argument that
insistence on rigorous international controls is counter-
productive in the long run. 25X1
Conclusions
For a variety of reasons, Argentine leaders are unliRely
to adopt full-scope safeguards, regardless of US efforts to
persuade them to do so. First, the Argentine Government
is limited in its ability to respond favorably to US policy
initiatives.* President Videla has indicated repeatedly
that he would like relations with Washington to improve, taut
US efforts to force major modifications in Argentine human
rights and nuclear development policies have provoked
widespread and deep resentment among virtually all members
of the military government. They see US policy on these
issues as discriminatory and publicly condemn such actions
as overt interference in Argentine internal-affairs. It
follows that this resolve to stand firm on the request that
Washington honor its fuel supply contracts will probably
only grow stronger if, for whatever reason, the United
States shows leniency toward other LDCs that face the
10 March deadline. 25X1
Argentina's outspoken opposition to the United States on the safoguardc
issue tends to limit its diplomatic flexilibity with respect to other!
nonproliferation issues. For example, a senior Argentine nuclear polfcy-
maker recently told US Embassy officials that Argentina must have firOt
commitments from major nuclear suppliers for all of its planned nucle4cr
fuel cycle facilities before it will consider the ratification of the;Treatz
of Tlatelolco. Moreover, should Buenos Aires eventually decide to ratify
that treaty, it will almost certainly follow Brasilia's example and s ipula
that the treaty will have no binding effect on Argentina until all other
Latin American nations adhere to it. 25X1
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Argentina's reluctance to accept full-scope safeguards is
also attributable, in part, to more concrete considerations.
For example, the absence of such comprehensive controls
will give it the freedom to export those nuclear technologies
it has developed without foreign assistance. This freedom
would pertain to the export of various technologies in re-
processing and heavy water production which Argentine
scientists have perfected or which are within their capability.
Even though Buenos Aires has never publicly addressed the
question of the future export of sensitive nuclear tech-
nologies by Argentine firms, this issue is likely to grow
in importance in the coming decade, as the nation tries to
carve out a role as a nuclear supplier state, particularly
to other developing countries. 25X1
Finally, Argentina's longer term security concerns
unquestionably play an important role in the dispute with
the United States. Despite recent assurances from Argentine
officials that they are willing to place existing facilities
under safeguards, their steadfast insistence that they
are not obligated to make commitments regarding future
nuclear installations,must be carefully noted. While
some officials in the Videla government claim that Buenos
Aires will not allow safeguards restrictions to become an
obstacle if a nuclear weapons program is required for
security purposes, it is clear that Argentina strongly
prefers to keep certain important indigenous nuclear
facilities completely free of international control. Foremost
among these facilities are the pilot-reprocessing facility
under construction at Ezieza and the natural uranium heavy
water-moderated research reactor, construction of which will
probably start sometime in the early 1980s. There can be no
doubt that the completion of the pilot reprocessing plant
and the heavy water research reactor will enable Buenos
Aires to produce enough weapons-grade lutonium for a
nuclear weapon as early as 1983.* 25X1
The tangible benefits of having an unsafeguarded
pilot-scale nuclear fuel cycle, however, can be exaggerated.
The absence of full scope safeguards would not spare the
Argentine Government from international criticism because
its activities in the nuclear area will, in all probability,
be under constant scrutiny. Nore would safeguards on these
pilot-scale facilities be a guarantee against the diversion
of nuclear material for a weapons program, because, in a
We believe that the acquisition of sufficient amounts of heavy
water for a research reactor will not pose a problem for Argentina.
The requirement of 15-20 metric tons should be easy to fulfill by draping
on the unsafeguarded heavy water currently stockpiled or through
purchases o heavy water from suppliers that are lax about safeguards,
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crisis situation, Argentina could and probably would
violate existing safeguards by reprocessing spent fuel from
the Atucha I power reactor. 25X1
Nevertheless, indigenous nuclear facilities solely
under national control would have the advantage of
permitting Argentina to proceed with a weapons program
without having to tamper with those commercial-scale
facilities purchased from foreign suppliers under inter-
national controls. In this sense, the absence of full scope
safeguards will not only give Buenos Aires more freedom-wjth
regard to any future nuclear weapons-related activities, but
also provide some assurance to those Argentine officials *ho
do not want to have to contend with possible accusations
that they have violated international treaties or agree-
ments. 25X1
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THE ARGENTINE NUCLEAR PROGRAM
POWER REACTORS
Facility
Completion Date
Tie
Po
wer (Mwe)
Status
Atucha I
1974
PHWR*
370
:.Operational
Embalse
1982/1983
CANDU
630
Under construction
Atucha II
1987
Contracted
Power Reactor
1991
Authorized
Power Reactor
1994/1995
Authorized
Power Reactor
1997
Authorized
* AZZ currently planned power reactors are of the natural uranium, heavy water
moderated type:
PHWR denotes the West German pressurized (vessel) heavy water reactor
CANDU denotes CA!adian Deuterium .Lranium. reactor, a pressure-tube heavy water reactor
HWR denotes heavy water reactor; neither version has of yet been selected
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