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US Department of Energy Statement on Nuclear Cities Initiative (NCI), July 22

'Secretary Abraham Proposes Continuing Defense Conversion Projects In Russian Closed Cities', US Department of Energy (DOE) Press Release R-03-164, July 22; DOE website, http://www.energy.gov.

US Secretary of Energy Spencer Abraham has acted to ensure that US nonproliferation projects in Russia continue uninterrupted if the 1998 Nuclear Cities Initiative (NCI) agreement is not renewed before it expires in September.

Secretary Abraham informed Russian Atomic Energy Minister Alexandr Rumyantsev that the United States will not be able to renew the NCI agreement until the Russian government approves legal provisions intended to protect American workers and companies working on projects in Russia.

Secretary Abraham said, "We are eager to continue our cooperation in this area." He noted that projects underway can be completed even if the current agreement expires.

At issue is a 2002 commitment from Russian President Putin to take necessary steps to ensure adequate liability protection for foreign projects carried out in Russia. When the G-8 countries accepted a United States proposal to form a Global Partnership, they agreed to negotiate such liability protections. Because of their importance, the United States is not prepared to extend agreements such as that covering the Nuclear Cities Initiative unless the agreements include liability provisions meeting US standards.

Secretary Abraham proposed that should it not be possible to renew the NCI agreement by September, the two countries exercise a provision in the existing NCI agreement that allows all ongoing projects continue if the agreement terminates.

"We hope that the Russian Federation will accept our broad proposal on liability in time to allow for the extension of the Nuclear Cities Initiative Agreement," said Abraham in announcing his proposal. "Still, it is prudent for us to act now to continue our ongoing projects. We look forward to reinstating the NCI agreement once broader issues of liability protection have been settled."

The Nuclear Cities Initiative is a component of the Department of Energy's Russian Transition Initiative. NCI works in partnership with American industry to transform the infrastructure in the closed cities of the Russian nuclear weapons complex to permanent non-defense uses. The program serves an important non-proliferation goal by re-directing Russian nuclear weapons scientists to non-nuclear efforts.

The United States funds similar projects in Russia under the Initiatives for Proliferation Protection (IPP) and through the International Science and Technology Centers. Those projects are administered under separate agreements and will not be affected if the Nuclear Cities Initiative Agreement lapses.

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