VZCZCXRO5471
PP RUEHBC RUEHDBU RUEHDE RUEHDIR RUEHKUK RUEHTRO
DE RUEHMO #3010/01 3481520
ZNY CCCCC ZZH
P 141520Z DEC 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 5655
INFO RUCNCIS/CIS COLLECTIVE
RUCNIRA/IRAN COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCNDT/USMISSION USUN NEW YORK 0540

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 003010 
 
SIPDIS 
 
E.O. 12958: DECL: 12/14/2019 
TAGS: PGOV PREL KNNP IAEA RS IR
SUBJECT: MOSCOW'S INCREASING FRUSTRATION WITH TEHRAN 
 
Classified By: Acting Political M/C David Kostelancik for reasons 1.4 ( 
b) and (d). 
 
¶1.  (C)  Summary:  Official GOR reports and media have 
pronounced the Russian-Iranian relationship healthy and 
Minister of Energy's Shmatko's recent visit to Tehran as a 
success.  Privately, GOR officials and Russian analysts agree 
that there are serious tensions in the bilateral relationship 
such as the S-300s issue, the Bushehr project and the 
possibility of Russia's support of sanctions.  They downplay 
Moscow's ability to influence Iran, noting competing 
interests within Russia that complicate Russian policy 
decisions.  Iran policy remains a sensitive domestic 
question.  End Summary 
 
--------------------------- 
Signaling Iran on Sanctions 
--------------------------- 
 
¶2.  (C) Italian Embassy interlocutors in Moscow reported 
that, during his recent visit to Rome, President Medvedev 
confided to PM Berlusconi that dealing with Iran lately had 
been "frustrating."  Medvedev said he was bothered by Iran's 
refusal to accept the Tehran Research Reactor (TRR) proposal 
and that Iran's reaction showed a lack of trust for Russia. 
While Russia did not necessarily agree that sanctions would 
be effective, he said, the threat of sanctions could signal 
Iran that it was time to change course.  Medvedev admitted 
that he did not know who was making decisions in Tehran now, 
but he was nevertheless optimistic that there was still some 
room for negotiation on the TRR proposal. 
 
¶3.  (C) Ali Mustafabeily, Deputy for Iran and Afghanistan in 
the MFA's Second Asia Department who accompanied Shmatko to 
Iran, told us that it was time to pressure Iran.  The TRR 
proposal was a fair offer, but there was also a deadline that 
Iran had missed.  Commenting that the Iranians were "sly" and 
knew how to negotiate, he said that just last week Saeed 
Jalili, Secretary of the Islamic Republic of Iran's Supreme 
National Security Council, had informed the Russian 
Ambassador in Tehran of Iran's new thinking on the TRR 
proposal.  If the West, including Russia, did not agree to a 
plan in which the IAEA would take "possession" of the low 
enriched uranium (LEU) while it remained on Iranian soil, it 
meant the West did not trust the IAEA.  Mustafabeily seemed 
exasperated by this thinking.  He also reported that Iran had 
conferred with (unnamed) other countries and determined that 
the enrichment proposed in the TRR proposal could be 
completed in five months rather than one year.  Mustafabeily 
said that Russia could not accomplish this process in five 
months, but said it was possible that others could. 
 
¶4.  (C) Mustafabeily also remarked that he had met many 
members of the Iranian diaspora living in France.  Most were 
involved in business and kept one foot in France and the 
other in Iran.  While uniformly critical of the current 
Iranian regime, they also unanimously opposed sanctions as a 
way to influence Iran.  They believed sanctions would only 
harm average Iranians, not the elites.  Mustafabeily reported 
his own private conversations with businessmen in Tehran that 
confirmed this opinion. 
 
--------------------------------------- 
S-300s:  Still Yellow Light on Transfer 
--------------------------------------- 
 
¶5.  (C) On the issue of the S-300s, Mustafabeily reported 
that the Iranians had strongly criticized delays in the sale. 
 Specifically, the Iranian Ministers of Trade and Economic 
Development summoned Shmatko to discuss the S-300s and 
threatened legal action against the GOR to resolve the issue. 
 According to Mustafabeily, the Iranians reminded Shmatko 
that they had already paid a considerable amount towards 
delivery of the system and they expected fulfillment of the 
contract.  While Moscow was not considering a refund, GOR 
officials recognized the gravity of the issue and that Tehran 
was likely waiting for Russia's decision on sanctions before 
carrying out its threat of legal action.  Baranov said the 
decision on the Russian side would be made at the 
Presidential level, implying that the MFA was not involved in 
the discussions.  He did note that some in the GOR believed 
transferring the S-300s to Iran would increase stability in 
the region because Iran would feel more secure without 
developing nuclear weapons. 
 
----------------------- 
Anti-Russian Mood Grows 
----------------------- 
 
 
MOSCOW 00003010  002 OF 003 
 
 
¶6.  (C) Interestingly, Mustafabeily noticed an anti-Russian 
feeling in Iran, even to include unorchestrated 
demonstrations in front of their embassy in Tehran.  He 
commented that Russia was being criticized by the government 
and the elites for being too close to the West and for voting 
with Western countries in the IAEA.  Simultaneously, the 
Iranian opposition was also condemning Russia for working 
with the Iranian government.  Mustafabeily complained that 
the propaganda machine was working at full-speed in Iran. 
 
¶7.  (C) Maxim Baranov, Director of the MFA's Iran Desk, said 
that Minister of Energy Shmatko's visit to Tehran was a 
chance to calm Iran's concerns about delays at the Bushehr 
facility and reduce rising tensions in the relationship.  He 
said that Russia planned to open the Bushehr reactor as soon 
as technical tests were completed and that confusion over 
dates had led to misstatements in the press.  Baranov claimed 
that Russia was continuing with technical testing and did not 
truly have an expected opening date.  Baranov acknowledged 
that Shmatko's visit came at a difficult time in the 
bilateral relationship, given Russia's recent vote at the 
IAEA.  He noted that, although Iran was upset about Russia's 
decision, Iranians would not directly "criticize a guest in 
their home."  As could be expected, Iranian officials instead 
expressed their disappointment through the media.  Baranov 
explained Russia's IAEA vote as an effort to signal Iran that 
Russia would no longer remain its unconditional supporter. 
He indicated that Moscow felt deceived by the Qom site. 
Baranov also took the opportunity to call for the U.S. to 
consult more closely with Russia on Iran and not limit 
discussions to like-minded countries. 
 
¶8.  (C) Baranov claimed there was no clear signal coming from 
Tehran about if or when Iran would negotiate and who was in 
charge.  According to Baranov, Russia wanted Iran to 
understand that, while IAEA Director El Baradei had always 
tried to remain objective, there was no guarantee that the 
incoming director would follow this path.  El Baradei's 
proposal was a favorable deal that might not be available 
after he leaves his position.  Therefore, Russia was urging 
Iran to begin cooperation with the IAEA now on the TRR 
proposal.  When asked about Prime Minister Putin's recent 
statement that Russia had no information about a military 
dimension to Iran's nuclear program, Baranov seemed caught 
off guard.  He confided that backing up such a comment would 
be "complicated work." 
 
-------------------------------------- 
Iran's Goal--Capability or Production? 
-------------------------------------- 
 
¶9.  (C) Russian Academy of Sciences Vladimir Yevseyev claimed 
that Russia's red line with Iran would be if/when Iran 
withdrew from the IAEA because this would demonstrate that 
Iran's intention was to build a nuclear weapon.  He believed 
that, because Iran was hoping to keep the LEU on its 
territory and needed an excuse to back away from the IAEA, 
its reaction to the vote was calculated and exaggerated. 
Nina Mamedova of the Oriental Studies Institute and Zhigun 
Yefim of the Middle East Institute agreed that Iran's 
reaction was overly emotional.  Mamedova claimed that Iran's 
reaction and subsequent announcement of plans to build 10 
enrichment sites was meant to leave room for bargaining in 
the world community.  Iran was well known, according to 
Mamedova, for adopting harsh positions so there would be room 
for retreat.  She recalled that six years ago Iran reacted in 
the same way to an unfavorable IAEA resolution and threatened 
to build 20 nuclear power plants.  Then, when Iran realized 
that the isolation this decision produced was not helpful, it 
renewed cooperation.  She predicted that Iran would likely 
return to negotiations by early next year but did not know 
when exactly. 
 
¶10.  (C) Vladimir Sazhin of the Oriental Studies Institute 
and commentator for the Voice of Russia claimed that Tehran's 
overall goal was completion of the fuel cycle and 
infrastructure to produce a nuclear weapon when they needed 
it.  He did not believe Tehran intended to assemble a weapon. 
 Merely having the capacity would be enough to satisfy its 
need for security and self-aggrandizement.  Conversely, both 
Mamedova and Yefim believed Iran's goal was to build a 
nuclear weapon rather than just develop the capability.  They 
believed Iran would not feel secure until it had a small 
number of nuclear weapons to defend itself against the 
"threat" from Israel. 
 
----------------- 
Influencing Iran 
----------------- 
 
MOSCOW 00003010  003 OF 003 
 
 
 
¶11.  (C) Although Russia had long considered Iran as a key 
element of regional stability, most Russian officials and 
analysts agreed that its ability to influence Iran was 
minimal and quickly decreasing.  Yevseyev pointed out that 
Italy and Germany had far greater trade turnover with Iran 
than Russia did.  Similarly, Mamedova lamented that the 
bilateral economic relationship was small, even speculating 
that rumors circulating about Iran's readiness to start joint 
new exploration efforts with Gazprom of possible gas fields 
were more likely empty promises meant to convince Russia to 
defend Iran's position in the international community. 
 
¶12. (C) A carrot/stick approach was recommended by some 
observers.  Vladimir Sazhin said that any use of military 
force against Iran would cause catastrophe in the region or 
even globally.  He advocated balanced measures which included 
financial support to the oil and gas sector, a treaty between 
the P5 1 and Iran on security guarantees, and recognition of 
Iran's prominent role in the region.  If these failed to 
produce positive results, he believed sanctions against the 
banking and oil and gas sectors might be effective.  Yevseyev 
said the international community should remain flexible and 
strive for Iran's integration in to the global economic and 
political system when Iran demonstrates behaviors that are 
more positive.  Mamedova said it was critical that sanctions 
avoid inflicting suffering on average Iranians because this 
would only increase support for Iran's current behavior. 
 
¶13. (C) Comment:  The varying perspectives within the Russian 
foreign policy establishment reflect competing interests. 
From a purely mercantilist standpoint, sanctions against 
Iran, particularly its energy sector, would likely translate 
into a bump in world oil prices, which would boost annual 
revenues for Russia's state-connected energy companies and 
the state budget by billions of dollars annually.  If 
sanctions harm Iran's burgeoning economic relationship with 
China, some in Russia might also regard that as a plus.  On 
the other hand, sanctions could damage Russia's own trade 
with Iran, which is modest (Russia currently has a bilateral 
trade surplus of about USD 3 billion) but concentrated in the 
politically-influential defense and atomic-energy sectors. 
Since many high-ranking officials in these agencies also 
favor a more adversarial policy towards the West, an 
anti-sanctions posture serves them both economically and 
ideologically.  The status quo is preferable for Russia and 
as the decision point approaches Moscow will probably search 
for an outcome that changes as little as possible.  Given the 
stakes for Russia's economy and its relations with the U.S., 
Israel and the EU, this decision will be made by both 
Medvedev and Putin, with implications for the domestic and 
foreign influence each exerts.  End Comment. 
 
Beyrle