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### Viewing cable 09MOSCOW3010, MOSCOW'S INCREASING FRUSTRATION WITH TEHRAN

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Reference ID | Date | Classification | Origin
--- | --- | --- | ---
09MOSCOW3010 | 2009-12-14 15:03 | CONFIDENTIAL | Embassy Moscow

`

    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

`