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Conflict of Interest Shadows Germany in Upcoming Controversial India Nuclear Trade Decision, Report Shows
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For Immediate Release: August 20, 2008


Contacts: Daryl G. Kimball, Executive Director, 1-202-463-8270 x107 and Oliver Meier, International Representative (Berlin), +49 171 359 2410.

(Washington): A respected nuclear journal this week reported that Germany's position on a controversial proposal to lift global nuclear trade restrictions on India might have been influenced by a private German firm's joint venture with the French nuclear conglomerate Areva. France is supportive of a U.S. drive to exempt India from existing nuclear trade rules, while many other countries have expressed opposition or concerns.

Previously, Germany had been more critical of the proposal, but now, under pressure from the United States and France, Germany has agreed to support the exemption for India, according to an Aug. 19 report in Platts Nuclear News Flash. That report notes that during German government discussions on the proposal to exempt India from the NSG rule in 2007 and 2008, "participants had expressed concern that Germany's reluctance to support granting India the exemption might impact a pending decision by French President Nicolas Sarkozy whether to make changes in the ownership structure of Areva NP that would replace the German Siemens with a French firm. Siemens currently holds a one-third share in Areva NP."

Germany's position on the issue matters greatly because it is currently the chair of the 45-member Nuclear Suppliers Group (NSG). The voluntary group is scheduled to meet Aug. 21-22 to discuss the U.S. proposal to exempt India from an NSG trade rule that nuclear importers must have international safeguards on all of their nuclear facilities and materials, which India does not. In its role as the NSG chair, Germany has a vital role in arbitrating the discussion and helping the NSG reach a decision by consensus.

"The report is deeply troubling because it suggests that Germany's role as the chair of the NSG is compromised given that it clearly has a conflict of interest that has affected its nonproliferation policy at the NSG. It is also clear that France is in a position to exert undue political influence over Germany's behavior," said Daryl G. Kimball, the executive director of the Arms Control Association. "Germany has a special responsibility to consider and take into account the position of NSG states that do not support the proposed exemption for India and to incorporate their proposed restrictions and conditions on trade with India," Kimball suggested.

According to an Aug. 19 report by Platts Nuclear News Flash publication, during German interagency discussions on the proposal to exempt India from the NSG rule in 2007 and 2008, "participants had expressed concern that Germany's reluctance to support granting India the exemption might impact a pending decision by French President Nicolas Sarkozy whether to make changes in the ownership structure of Areva NP that would replace the German Siemens with a French firm. Siemens currently holds a one-third share in Areva NP."

Areva, along with other nuclear vendors in Russia, the United States, and Japan hope to sell nuclear power plants and technology to India if the restrictions on such trade with India are lifted. According to the report in the industry newsletter, "During 2008, German leaders have urged Sarkozy to retain Siemens in Areva NP, in the interest of assuring the German company's future as a global nuclear power vendor."

"It is highly ironic that the German government and its foreign minister, which support a policy to phase out the use of nuclear power in Germany, are now seeking to facilitate a change in NSG policies to help a German company profit from nuclear business in other countries," noted Kimball.

The proposed NSG rule exemption would allow India to acquire nuclear technology and material previously off limits to it because of India's misuse of past nuclear imports for peaceful purposes to conduct a nuclear explosion in 1974 and refusal to allow full-scope international safeguards.

Several NSG members have raised questions about rewarding India with greater opportunities to engage in international nuclear trade while India continues to refuse to constrain its nuclear weapons program.

ACA and a wide-range of other NGOs and experts have called the proposal a "nonproliferation disaster" in an Aug. 15 letter to Germany and other NSG participants. They are recommending that at a minimum, the NSG establish a policy banning the transfer of enrichment and reprocessing technology to India and an immediate suspension of all NSG trade if India resumes nuclear testing. (See http://www.armscontrol.org/node/3287)

A copy of the text of the U.S. proposal to exempt India from NSG rules and ACA's analysis is available online at http://www.armscontrol.org/node/3274

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The Arms Control Association is a private research and policy advocacy organization established in 1971 to promote effective arms control and nonproliferation solutions.

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