Declassn ed Released US Department of State E0 Systematic Review 30 JUN 2005 Message Text SECRET PAGE OI SEOUL 07328 0422482 l5 ACTION SS-ZS INFO OCT -01 ISO-00 026 109222 04 0002 NOV 14 FM AMEMBASSY SEOUL TO SECSTATE WASHDC 6168 INFO AMEMBASSY EXDIS E0 652 TAGS EMES PARM MNUC CA KS SUBJECT CANADIAN NUCLEAR REACTOR PROGRAM IN KOREA SUMMARY- DURING CALL NOVEMBER 4 AMBASSADOR REVIEWED WITH CANADIAN AMBASSADOR STILES CURRENT STATUS OF CANADIAN NUCLEAR REACTOR SALE TO KOREA CANDU 3 AND 4 ANDU 3 AGREEMENT READY FOR SIGNING AND FINANCING ALL ARRANGED CANADIAN CABINET WILL MEET SOON TO REVIEW SALE ON POLITICAL LEVEL ROK FONMIN PLANNING VISIT OTTAWA NOVEMBER 15 TO PRESS FOR COMPLETION SALES AGREEMENT CANADIANS LEERY OF SELLING RESEARCH REACTOR TO KOREANS HOWEVER AND THEY HAVE ESTABLISHED ELABORATE SAFEGUARD PROVISIONS IN AGREEMENT IN LIGHT INDIAN EXPERIENCE END SUMMARY 1 AMBASSADOR STILES SAID THAT SALE OF CANDU 3 IS NOW FULLY WORKED OUT EXCEPT FOR FINAL CABINET APPROVAL AGREEMENT IS READY FOR SIGNING AND CONTAINS ELABORATE SAFEGUARD PROVISIONS INSISTED UPON BY CANADIANS AND ACCORDING TO STILES READILY ACCEPTED BY KOREANS STILES INDICATED HOWEVER SOME CONCERN ABOUT ENFORCEMENT THESE ARRANGEMENTS 2 IN ADDITION FINANCING FOR CANDU 3 SALE ARRANGED CANADIAN GOVT WILL PROVIDE THREE HUNDRED MILLION DOLLARS WITH ADDITIONAL FINANCING PROVIDED BY BRITISH TO COVER PARTS SUPPLIED FROM UK SECRET SECRET PAGE 02 SEOUL 07328 0422482 3 ONLY STEP LEFT IS FINAL CABINET APPROVAL AFTER POLITICAL Declassi ed Released US Department of State E0 Systematic Review 30 JUN 2005 Declassi eleeleased US Department of State E0 Systematic Review 30 JUN 2005 CONSIDERATION OF PROJECT BEYOND PROBLEM OF FUNDAMENTAL CANADIAN POLICY ON SALES OF REACT ORS THERE ADDITIONAL PROBLEM FROM CHURCH AND OTHER GROUPS OPPOSED TO REACTOR SALES TO KOREA DUE TO INTERNAL REPRESSION HERE STILES NEVERTHELESS ANTICIPATES FULL CABINET APPROVAL KOREANS ARE PRESS ING FOR EARLY AGREEMENT AND SENDING FONIN KONG JO TO OTTAWA NOVEMBER 15 WITH APPROVAL PRESIDENT PARK STILES COMMENTED THAT HIGH LEVEL ROKG INTEREST IN PROJECT IS CLEARLY EVIDENT 4 STILES SAID KOREANS ARE EQUALLY ANXIOUS TO GET RESEARCH REACTOR WHICH WOULD PROVIDE TRAINING FOR OPERATION CANDU 3 CANADIANS HOWEVER ARE RELUCT ANT PROVIDE THIS REACTOR GIVEN GREATER RISK OF PLUTONIUM DIVERSION FOR POSSIBLE WEAPONS PROGRAM IN GENERAL STILES STRESSED THAT CANADIANS WELL AWARE OF POTENTIAL DIVERSION PROBLEM AND SEEKING TO BUILD INTO AGREEMENT AS EFFECTIVE AS POSSIBLE SAFEGUARD ARRANGEMENTS KEY FACTOR WOULD BE KOREAN PURCHASE OF FUEL REPROCESSING PLANT AMBASSAODR SHARED WITH STILES VERY GENERAL TERMS U S CONCERNS ABOUT POTENTIAL DIVERSION 5 COMMENT EMBASSY NOW IN PROCESS OF DRAWING TOGETHER ASSESSMENT ROK NUCLEAR PROGRAM AND SEPTEL SHOULD FOLLOW SHORTLY GIVEN RECENT CONTRACT WITH WESTINGHOUSE FOR SECOND POWER GENERATION PLANT AND ADVANCED STAGE OF CANADIAN NEGOTIATIONS IT UNLIKELY WE CAN BLOCK THE SALE OF CANDU 3 HOWEVER CANADIANS MAY WELL BE SUSCEPTIBLE TO REFUSING SALE OF RESEARCH REACTOR IF JUDGMENT REACHED THAT THIS WOULD ENTAIL UNDUE RISKS SNEIDER SECRET HNN Declassi ed Reteased US Department of State EO Systematic Review 30 JUN 2005 This document is from the holdings of The National Security Archive Suite 701 Gelman Library The George Washington University 2130 H Street NW Washington D C 20037 Phone 202 994-7000 Fax 202 994-7005 nsarchiv@gwu edu