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CONFIDENTIAL CONFIDENTIAL//NOFORN SECRET SECRET//NOFORN UNCLASSIFIED UNCLASSIFIED//FOR OFFICIAL USE ONLY

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### Viewing cable 09MOSCOW2531, MEDVEDEV, PUTIN, AND RUSSIA'S IRAN POLICY

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Reference ID | Date | Classification | Origin
--- | --- | --- | ---
09MOSCOW2531 | 2009-10-06 15:03 | CONFIDENTIAL | Embassy Moscow

`

    VZCZCXYZ2640
    OO RUEHWEB

    DE RUEHMO #2531/01 2791535
    ZNY CCCCC ZZH
    O 061535Z OCT 09
    FM AMEMBASSY MOSCOW
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 5004
    INFO RUCNCIS/CIS COLLECTIVE IMMEDIATE
    RUEHXD/MOSCOW POLITICAL COLLECTIVE IMMEDIATE
    RUEAIIA/CIA WASHDC IMMEDIATE
    RUEKJCS/JOINT STAFF WASHDC IMMEDIATE
    RHEHNSC/NSC WASHDC IMMEDIATE
    RUEKJCS/SECDEF WASHDC IMMEDIATE
    RUEHGV/USMISSION GENEVA IMMEDIATE 5383

` `

    C O N F I D E N T I A L MOSCOW 002531

    SIPDIS

    E.O. 12958: DECL: 10/06/2019
    TAGS: PGOV PREL RS IR
    SUBJECT: MEDVEDEV, PUTIN, AND RUSSIA'S IRAN POLICY

    Classified By: Ambassador John Beyrle for reasons 1.4 (b)
    and (d).

    ¶1. (C) SUMMARY:  Despite Russian President Medvedev's
    September 24 remarks that sanctions against Iran might be
    necessary, other government officials and experts here
    caution that Russia will remain, for the time being,
    reluctant to pursue a tougher line against Tehran.  The
    consensus among the Russian political elite is that
    maintaining a dialogue with the Iranians and exhausting
    diplomatic avenues is preferable to imposing sanctions in the
    near term.  While Medvedev as president is responsible for
    controlling arms and nuclear technology transfers, Prime
    Minister Putin remains closely identified with decisions on
    Iran policy, including the sale of civilian nuclear
    technology and weapons, which provides a boost to powerful
    state enterprises.  According to Deputy FM Ryabkov, Putin's
    relative silence on Iran since Medvedev's statements does not
    signal any difference between them on sanctions.  End
    Summary.

    Medvedev on Sanctions: Few Official Echoes
    ------------------------------------------

    ¶2. (C) Russian Government officials, including Prime Minister
    Putin, have not yet echoed President Medvedev's public
    statement that Russia would consider the imposition of
    sanctions on Iran if the world community ran out of other
    options.  Asked about Russian views on the Qom revelation in
    New York September 25, FM Lavrov adopted a strikingly softer
    tone than in the just released Kremlin statement.  He noted
    that Iran had acted positively by notifying the IAEA about
    its plans to construct a new nuclear facility, and complained
    that some of Russia's "partner countries" in the P5-plus-1
    had not shared information about the Qom facility earlier.
    Lavrov stressed that Iran's cooperation with the world
    community as a member of the NPT with non-nuclear status
    could prove the peaceful nature of its nuclear program.

    ¶3. (C) Before the most recent P5-plus-1 meeting in Geneva, PM
     Putin said that Russia would not support "significant"
    changes to its approach on Iran.  Ariel Cohen, a senior
    fellow at the Heritage Foundation, said Putin and Lavrov told
    him in early September that they are opposed to tougher
    sanctions and the use of force against Iran.  Russian Deputy
    Foreign Minster Sergei Ryabkov said September 29 that Iran's
    recent proposals presented a "broad field for dialogue."
    Ryabkov added that whether sanctions against Iran might
    become inevitable was a "completely separate issue, one that
    we are not yet ready to address."  He stressed Russia's
    position was to do everything possible to find a "diplomatic,
    political solution to the Iranian nuclear problem."

    ¶4. (SBU) While expressing concern over Iran's missile
    program, Russian Ambassador to NATO Dmitriy Rogozin stressed
    September 29 that Russia preferred political dialogue over
    tough measures that could trigger an "arms race in the
    region."  Russian Ambassador to the United States Sergey
    Kislyak said September 24 that sanctions were not the way to
    resolve the problem; rather, the point was how to find a
    "political solution that would eliminate this problem."  The
    priority was to "start a serious dialogue with our Iranian
    partners in seeking a way out of the situation."

    ¶5. (C) Russia's message to domestic audiences also remains
    unchanged.  Despite Medvedev's carefully worded comments on
    sanctions in New York (called by one analyst here "a jewel of
    diplomatic casuistry"), even prominent Russians with ties to
    the Kremlin's domestic propaganda machine believe Russian
    support for Western sanctions is highly unlikely.  Medvedev
    advisor Gleb Pavlovskiy, President of the Effective Policy
    Foundation, and Maksim Shevchenko, President of the Russian
    World Foundation, even spoke in favor of completing Russia's
    frozen S-300 surface-to-air missile deal with Iran.

    Interpreting Putin's Silence
    ----------------------------

    ¶6. (C) PM Putin's lack of public comment on the possibility
    of Iran sanctions after President Medvedev's public statement
    does not indicate disagreement between them on Iran, DFM
    Ryabkov told Ambassador Beyrle October 3.  Ryabkov repeated
    his comments, made in Geneva during P5-plus-1 talks, that
    Russia had not ruled out the possibility of sanctions, but
    would begin to contemplate them only as an absolute last
    resort.

    ¶7. (C) Most political commentators and analysts here have
    been echoing the same statements.  Tatyana Stanovaya of the
    Center for Political Technologies thought that Medvedev's
    seemingly more positive statement indicates no real
    rapprochement with the U.S. on Iran.  Rather, she said, his
    words are carefully calibrated to indicate a welcoming of
    U.S. willingness to use the P5-plus-1 format and engage in
    actual discussions with Iranian officials.

    ¶8. (C) Nevertheless, Medvedev's New York comments and the
    September 25 Kremlin statement mark a definite toughening of
    Russian rhetoric on Iran.  Pravoe Delo co-Chairman Georgiy
    Bovt told us October 5 that Medvedev's use of the word
    "sanctions" represents a policy change.  Boyt cautioned that
    Medvedev's words would probably resonate with only a distinct
    minority of Russian society.  He believes it will be hard for
    Medvedev to sell Iran sanctions to the Russian bureaucracy
    without the full support of Putin.  At the Sochi Economic
    Forum, Putin blasted the U.S. for not allowing the export of
    certain high technology to Russia.  Boyt thinks Russia might
    ask for an easing of these restrictions in exchange for
    supporting sanctions.

    Sanctions: Economic Implications
    --------------------------------

    ¶9. (C) Despite Medvedev's presidential authority over arms
    transfers, Putin undoubtedly retains a critical, if not
    decisive role over an issue with such significant domestic
    economic implications as the transfer of nuclear technology
    and armaments to Iran.  Russia and Iran currently have
    limited military cooperation, so the effect of any lost
    revenue from arms sales to Iran would be small.  While the
    sale of S-300s to Iran, for example, would only net Russia
    from USD 750 million to USD one billion, future military
    sales could be considerably larger.

    ¶10. (C) Several years ago Iran was a stable source of hard
    currency and this cash flow helped Russia preserve its
    nuclear construction sector.  The importance of Russia's
    trade with Iran has decreased, but Russian exports to Iran
    last year still exceeded USD 3 billion.  In the currently
    depressed Russian economy, that is not an insignificant
    amount.  In addition, great potential for future economic
    gain to Russia exists via civilian nuclear technology sales
    and increased military cooperation.

    ¶11. (C) As the world's largest exporter of oil and gas,
    Russia also benefits significantly from the "instability
    premium" embedded in world oil prices due to tensions with
    Iran.  Even a USD 5 per barrel instability premium would net
    Russia almost USD 9 billion per year for oil and
    approximately USD 2-4 billion from its gas exports.  Finally,
    given Iran's position as the second largest owner of gas
    reserves, Russia's gas sector clearly benefits from the lack
    of international investment in the development of Iran's
    natural gas sector.

    Life without Iran
    -----------------

    ¶12. (C) Russia could profit from alternatives to its
    continued support for Iran.  For example, news reports
    indicate that Saudi Arabia has offered to purchase the
    Russian S-400 system for USD two billion in an effort to
    force Moscow to back out of the S-300 deal with Iran.
    Medvedev cited Arab League concerns about Russia's close
    relationship with Iran when he stated that Russia's stance on
    Iran might be changing.

    ¶13. (C) Israel also is clearly pushing Russia to take a
    firmer stance towards Tehran, in light of recent press
    reports that PM Netanyahu personally delivered a list of
    Russian scientists who contributed to Iran's nuclear program.
     Conversations with Israeli diplomats in Moscow indicate that
    Israel believes there may be even more to Iran's program than
    is now known to the GOR and Russian decision makers.  They
    hint that Israeli disclosures on Russian participation could
    force Moscow into taking a harder line.

    COMMENT
    -------

    ¶14. (C) Success in moving Russia to support tougher actions
    against Iran will require a coordinated strategy involving
    our friends and allies, including Israel and Saudi Arabia.
    The strategy may need to include the continuation of
    diplomatic efforts like the P5-plus-1 process and perhaps
    include new ways of engaging in dialogue with Iran.  A
    strategy created by a broad international consensus must
    offer Moscow a series of options that will challenge the
    stubborn mentality here that instinctively opposes common
    cause with the West on Iran.  Sanctions would have a major
    impact on the Russian economy, and especially to the domestic
    constituencies like RosOboronexport and RosAtom.  The fact
    that the economy and these key state-controlled enterprises
    are part of Putin's portfolio only reinforces the certainty
    that he will remain the key decision maker on any imposition
    of sanctions.  Key to the GOR's calculations would be any
    politically salable alternatives that benefit them both
    economically and politically.  End comment.
    Beyrle

`