Nuclear Nonproliferation:

Uncertainties With Implementing IAEA's Strengthened Safeguards System

NSIAD/RCED-98-184: Published: Jul 9, 1998. Publicly Released: Jul 9, 1998.

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Pursuant to a congressional request, GAO reviewed: (1) changes the International Atomic Energy Agency (IAEA) is undertaking to strengthen its safeguards program; (2) the reasonableness of IAEA's assumptions regarding the impact of these changes on program costs and efficiency; and (3) comments on the extent of IAEA's reliance on the United States to finance the Agency's safeguards activities.

GAO noted that: (1) in response to Iraq's secret nuclear weapons program, the international community, led by the United States, launched an intensive effort to create a new capability within the IAEA's safeguards system to detect secret or undeclared activities; (2) IAEA is beginning to implement a strengthened safeguards system by introducing advanced safeguards techniques under its existing safeguards agreements; (3) it is also seeking additional rights to conduct more intrusive inspections and collect information on nuclear activities through an Additional Protocol that supplements the existing safeguards agreements; (4) IAEA's changes to its safeguards systems are intended to give its inspectors greater ability to detect clandestine nuclear activities in non-nuclear weapons states that are signatories to the Non-Proliferation of Nuclear Weapons or other regional nonproliferation treaties; (5) under existing safeguards agreements with states and regional organizations, IAEA has increased its access to information on all nuclear activities at declared facilities in non-nuclear weapons states; (6) IAEA's member states expect that the Agency will implement the strengthened safeguards system through cost neutrality, that is, through savings from expected future efficiency gains and cutbacks on certain types of inspections that on an annual basis offset the cost increases resulting from implementation; (7) while IAEA has performed some preliminary planning, it does not have a long-term implementation plan that: (a) identifies the total resource requirements for implementing the new measures; (b) provides an implementation schedule with milestones for equipment and estimated projections of adoption of the Additional Protocol; and (c) provides criteria for assessing the effectiveness of the new measures and their usefulness for reducing inspection efforts; (8) IAEA has limited options for funding the new Strengthened Safeguard System because of the practice, imposed by its major contributors, that limits the Agency's regular budget to zero-real growth, and by the Agency's practice, insisted on by IAEA's less developed member states, of maintaining a balance between IAEA's technical cooperation and its safeguards programs; and (9) as a result, if these constraints continue and IAEA's assumptions about cost neutrality for the new program are not borne out by experience, IAEA will likely turn to the United States for substantial voluntary extrabudgetary contributions to implement the Strengthened Safeguards System.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: International Atomic Energy Agency (IAEA) Member States are implementing Part I of the Strengthened Safeguards System on a routine basis, including enhanced access to safeguarded facilities, regular use of environmental sampling at enrichment plants and large hot cells, and evaluation of open-source information. Part 2 is being implemented as Member States bring their Additional Protocols into Force, and as of August 2001, 21 states had done so. The IAEA has made progress in developing "Integrated Safeguards", the combination of traditional safeguards measures and the Additional Protocol measures, including replacement of, or reductions in traditional measures. The Agency is developing Integrated Safeguards approaches for each facility type, starting with the most common type--light water reactors, and it has developed a schedule and milestones for the near-term phases of this work. While these approaches are intended to reduce costs while preserving effectiveness, IAEA Member States continue to allow for no real growth in the Agency's budget. As such, the total funds available for safeguards program implementation remain fixed. IAEA estimates that a regular budget increase of $28 million would be needed to fully implement its safeguards responsibilities. The United States, however, continues to support crucial unfunded safeguards expenses, especially procurement of equipment, through extrabudgetary contributions. While the IAEA is implementing Parts I and 2 of the Strengthened Safeguards System, the Agency's member states continue to allow no real growth in the IAEA budget. Full implementation hinges upon an increased IAEA budget and the results of safeguards underway. At this time it is difficult to assess when IAEA safeguards funding levels will increase and how successful the Integrated Safeguards approaches will be.

    Recommendation: The Secretary of State, working with other IAEA member states, should request the Director General to develop and circulate a plan for implementing parts 1 and 2 of the Strengthened Safeguards System. Such a plan should include: (1) an estimate of the total cost of program implementation; (2) a schedule, with milestones, for implementing the strengthened safeguards measures; and (3) criteria for assessing the effectiveness of the new measures. This plan should be used by IAEA and its member states to determine when the new measures can replace existing safeguards measures. Furthermore, IAEA should periodically revise and update the plan as it implements the strengthened safeguards measures and use the plan to develop its budgetary requirements for the program.

    Agency Affected: Department of State

  2. Status: Closed - Implemented

    Comments: State concurred with this recommendation and the Secretary of State completed the evaluation called for in GAO's report. The Executive branch has decided not to exempt IAEA from the current budget practice of zero nominal growth because of the impact such a change would have on overall funding issues for international organizations.

    Recommendation: To reduce reliance on U.S. extrabudgetary contributions, the Secretary of State should reevaluate the United States' policy of supporting zero real growth for IAEA's regular budget and the need to maintain a one-for-one funding balance between the safeguards and technical cooperation programs.

    Agency Affected: Department of State


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