Nuclear Nonproliferation and Safety: Concerns With the International
Atomic Energy Agency's Technical Cooperation Program (Letter Report,
09/16/97, GAO/RCED-97-192).

Pursuant to a congressional request, GAO examined: (1) the purpose and
effectiveness of International Atomic Energy Agency's (IAEA) technical
cooperation program; (2) the cost of U.S. participation in IAEA's
technical cooperation program; and (3) whether the United States ensures
that the activities of IAEA's technical cooperation program do not
conflict with U.S. nuclear nonproliferation and safety goals.

GAO found that: (1) while the United States and other IAEA major donor
countries believe that applying safeguards is IAEA's most important
function, most developing countries believe that receiving technical
assistance through IAEA's technical cooperation program is just as
important; (2) the United States and other major donors principally
participate in the program to help ensure that the member states fully
support IAEA's safeguards and the 1970 Treaty on the Non-Proliferation
of Nuclear Weapons; (3) in the past, concerns were raised about the
effectiveness and efficiency of the technical cooperation program; (4)
most of IAEA's program evaluation reports, internal audits, and project
files that GAO reviewed did not assess the impact of the technical
cooperation program, and no performance criteria had been established to
help measure the success or failure of the program; (5) for the past 5
years, IAEA's Deputy Director General for Technical Cooperation has been
taking steps to improve the overall effectiveness and efficiency of the
program, but State Department officials are concerned about their
sustainability; (6) the United States, historically the largest
financial donor to the fund, provided a voluntary contribution of about
$16 million, or about 32 percent of the total $49 million paid by IAEA
member states for 1996; (7) for 1996, 72 of the 124 member states made
no payments at all to the technical cooperation fund yet most of these
states received technical assistance from IAEA; (8) officials from the
Department of State, the Arms Control and Disarmament Agency, and the
U.S. Mission to the United Nations System Organizations in Vienna,
Austria, told GAO that they do not systematically review or monitor all
of IAEA's technical assistance projects to ensure that they do not
conflict with U.S. nuclear nonproliferation or safety goals; (9)
however, GAO found that U.S. officials had sporadically reviewed
projects in countries of concern to the Unites States; (10) U.S.
officials also told GAO that the vast majority of IAEA's technical
assistance projects do not pose any concerns about nuclear proliferation
because the assistance is generally in areas that do not involve the
transfer of sensitive nuclear materials and technologies; (11) however,
GAO found that IAEA has provided nuclear technical assistance projects
for countries where the United States is concerned about nuclear
proliferation and threats to nuclear safety; and (12) moreover, a
portion of the funds for projects in countries of concern is coming from
U.S. voluntary contributions to IAEA.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-97-192
     TITLE:  Nuclear Nonproliferation and Safety: Concerns With the 
             International Atomic Energy Agency's Technical
             Cooperation Program
      DATE:  09/16/97
   SUBJECT:  Nuclear proliferation
             Energy research
             Nuclear facility safety
             International cooperation
             Foreign technical aid
             International organizations
             Technology transfer
             Nuclear energy
IDENTIFIER:  Iran
             Cuba
             Japan
             Bulgaria
             Egypt
             North Korea
             IAEA Nuclear Technical Cooperation Program
             
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Cover
================================================================ COVER


Report to Congressional Requesters

September 1997

NUCLEAR NONPROLIFERATION AND
SAFETY - CONCERNS WITH THE
INTERNATIONAL ATOMIC ENERGY
AGENCY'S TECHNICAL COOPERATION
PROGRAM

GAO/RCED-97-192

IAEA's Technical Cooperation Program

(170273)


Abbreviations
=============================================================== ABBREV

  ACDA - Arms Control and Disarmament Agency
  DOE - Department of Energy
  IAEA - International Atomic Energy Agency
  MINATOM - Ministry of the Russian Federation for Atomic Energy
  NPT - Treaty on the Non-Proliferation of Nuclear Weapons
  NRC - Nuclear Regulatory Commission
  UNDP - United Nations Development Program

Letter
=============================================================== LETTER


B-277303

September 16, 1997

The Honorable Jesse A.  Helms
Chairman, Committee on Foreign Relations
United States Senate

The Honorable Dan Burton
Chairman, Committee on Government Reform
 and Oversight
House of Representatives

The Honorable Bob Graham
United States Senate

The Honorable Peter Deutsch
The Honorable Robert Menendez
House of Representatives

The International Atomic Energy Agency (IAEA)\1 has the dual role of
promoting the peaceful uses of nuclear energy and verifying that
nuclear materials under its supervision are not diverted to military
purposes (safeguards).\2 Since 1958, in promoting the peaceful uses
of nuclear energy through its technical cooperation program, IAEA has
provided technical assistance to its member states by supplying
equipment, expert services, and training that support the upgrading
or establishment of nuclear techniques and facilities.  Although the
United States does not receive technical assistance, it has been the
leading financial donor to IAEA's technical cooperation program. 

In March 1997, we reported to you on IAEA's technical assistance for
Cuba, including assistance for the partially completed Cuban nuclear
power reactors whose construction is suspended.\3 As requested, this
report examines (1) the purpose and effectiveness of IAEA's technical
cooperation program, (2) the cost of U.S.  participation in IAEA's
technical cooperation program, and (3) whether the United States
ensures that the activities of IAEA's technical cooperation program
do not conflict with U.S.  nuclear nonproliferation and safety goals. 


--------------------
\1 IAEA, an autonomous international organization affiliated with the
United Nations, was established in Vienna, Austria, in 1957.  IAEA's
principal policy-making organizations are the General Conference,
composed of representatives of the 124 IAEA member states; its
decision-making body, the 35-member Board of Governors; and a
Secretariat headed by a Director General.  The United States is a
permanent member of IAEA's Board of Governors. 

\2 In the early 1960s, IAEA established an inspection program based
on a system of technical measures, referred to as safeguards,
designed to detect the diversion of significant quantities of nuclear
material.  The 1970 Treaty on the Non-Proliferation of Nuclear
Weapons expanded IAEA's safeguards responsibilities because it
required signatory non-nuclear-weapon states to agree not to acquire
nuclear weapons and to accept IAEA's safeguards for all nuclear
material used for peaceful nuclear activities.  Both the
nonproliferation treaty and the Treaty of Tlatelolco--which prohibits
nuclear weapons in signatory Latin American countries--bind
signatories to blanket nonproliferation agreements for their entire
nuclear program and require inspections of all nuclear facilities by
IAEA, known as "full-scope" safeguards. 

\3 See Nuclear Safety:  International Atomic Energy Agency's Nuclear
Technical Assistance for Cuba (GAO/RCED-97-72, Mar.  24, 1997). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

While the United States and other IAEA major donor countries believe
that applying safeguards is IAEA's most important function, most
developing countries believe that receiving technical assistance
through IAEA's technical cooperation program is just as important. 
The United States and other major donors principally participate in
the program to help ensure that the member states fully support
IAEA's safeguards and the 1970 Treaty on the Non-Proliferation of
Nuclear Weapons.  In the past, the United States and other major
donors raised concerns about the effectiveness and efficiency of the
technical cooperation program.\4 For example, the United States
expressed concern that some technical assistance projects were devoid
of significant technical, health, or socioeconomic benefit to the
recipient country.  Most of IAEA's program evaluation reports,
internal audits, and project files that we reviewed, covering the
period from 1985 through 1996, did not assess the impact of the
technical cooperation program, and no performance criteria had been
established to help measure the success or failure of the program. 
For the past 5 years, IAEA's Deputy Director General for Technical
Cooperation has been taking steps to improve the overall
effectiveness and efficiency of the program, including establishing a
system for measuring the performance of some of its projects.  The
United States and other major donors strongly support these
initiatives, but State Department officials are concerned about their
sustainability. 

The United States provided a voluntary contribution of about $16
million, or about 32 percent of the total $49 million paid by IAEA
member states to the technical cooperation fund for 1996.  The United
States has historically been the largest financial donor to the fund. 
Because many IAEA member states are not paying into the technical
cooperation fund, some member states, including the United States and
Japan, are carrying the program financially.  Specifically, for 1996,
72, or about 58 percent, of the 124 IAEA member states made no
payments at all to the technical cooperation fund, yet most of these
states received technical assistance from IAEA. 

Officials from the Department of State, the Arms Control and
Disarmament Agency, and the U.S.  Mission to the United Nations
System Organizations in Vienna, Austria, told us that they do not
systematically review or monitor all of IAEA's technical assistance
projects to ensure that they do not conflict with U.S.  nuclear
nonproliferation or safety goals.  However, we found that U.S. 
officials had sporadically reviewed projects in countries of concern
to the United States.  U.S.  officials also told us that the vast
majority of IAEA's technical assistance projects do not pose any
concerns about nuclear proliferation because the assistance is
generally in areas, such as medicine and agriculture, that do not
involve the transfer of sensitive nuclear materials and technologies. 
However, we found that IAEA has provided nuclear technical assistance
projects for Iran, North Korea, and Cuba--all countries where the
United States is concerned about nuclear proliferation and threats to
nuclear safety.  For example, although the United States strongly
opposes the completion of Iran's Bushehr nuclear power plant because
civilian nuclear technology and training could help advance Iran's
nuclear weapons program, IAEA has budgeted, for 1995 through 1999,
about $1.3 million in technical assistance related to Iran's efforts
to complete the plant.  Moreover, a portion of the funds for projects
in countries of concern to the United States is coming from U.S. 
voluntary contributions to IAEA. 


--------------------
\4 Fourteen member states--known as the Geneva Group--are major
donors to United Nations agencies, including IAEA.  These major
donors are Australia, Belgium, Canada, France, Germany, Italy, Japan,
the Netherlands, the Russian Federation, Spain, Sweden, Switzerland,
the United Kingdom, and the United States. 


   BACKGROUND
------------------------------------------------------------ Letter :2

Under its 1957 statute, IAEA is authorized, among other things, to
facilitate the peaceful uses of nuclear energy, including the
production of electric power, by supplying materials, services,
equipment and facilities to its member states, particularly
considering the needs of the developing countries.  About 90
countries receive technical assistance, mostly through over 1,000
projects in IAEA's technical cooperation program.  IAEA' s technical
cooperation program funds projects in 10 major program areas,
including agriculture, the development of member states' commercial
nuclear power programs, and nuclear safety.  The average cost of a
member state's technical assistance project is about $60,000. 

IAEA provided about $800 million in technical assistance to its
member states from 1958 through 1996, for equipment, expert services,
training, and subcontracts (agreements between IAEA and a third party
to provide services to IAEA member states).  IAEA's training
activities include fellowships, scientific visits, and training
courses.  Egypt was the largest recipient of IAEA's technical
assistance overall.  About 44 percent of the assistance was spent for
equipment, and--from 1980 through 1996--about half of the funds were
provided for assistance in three program areas--the application of
isotopes and radiation in agriculture, general atomic energy
development, and safety in nuclear energy.  For 1997 through 1998,
IAEA approved $154 million more in technical assistance for its
member states.\5

Technical assistance projects are approved by IAEA's Board of
Governors for a 2-year programming cycle, and member states are
required to submit written project proposals to IAEA 1 year before
the start of the programming cycle.  The proposals are appraised for
funding by IAEA staff and IAEA member states in terms of the
projects' technical and practical feasibility, national development
priorities, and the projects' long-term advantages to the recipient
countries.  Because IAEA's full-scope safeguards, as embodied in the
1970 Treaty on the Non-Proliferation of Nuclear Weapons (NPT),
emerged after IAEA was established, all IAEA member states in good
standing are eligible for the same privileges, including receiving
technical assistance.  IAEA does not bar technical assistance for
member states that do not have IAEA's full-scope safeguards or are
not parties to the NPT.  For example, Pakistan, Israel, and Cuba
receive IAEA's technical assistance but do not have full-scope
safeguards and are not parties to the NPT.\6

U.S.  participation in IAEA's technical cooperation program is
coordinated through an interagency group--the International Nuclear
Technology Liaison Office--which is chaired by the Department of
State and includes representatives from the Department of Energy
(DOE), the Arms Control and Disarmament Agency (ACDA), and the
Nuclear Regulatory Commission (NRC).  The United States also
maintains a presence at IAEA through the U.S.  Mission to the United
Nations System Organizations in Vienna, Austria.  U.S.  contractors
from Argonne National Laboratory and the National Academy of
Sciences/National Research Council support U.S.  training and
fellowship activities for the program.  In addition to developing and
coordinating U.S.  policy towards IAEA's technical cooperation
program, the interagency group (1) proposes and recommends U.S. 
support for specific projects--known as "footnote a" projects--only
in IAEA member states that are parties to the NPT or other nuclear
nonproliferation treaties;\7 (2) selects courses and participants for
U.S.-hosted IAEA training courses and places IAEA fellows at U.S. 
institutions, such as national laboratories and universities; (3)
facilitates purchases of U.S.  equipment on behalf of IAEA; (4)
recommends U.S.  experts and consultants to represent the United
States at IAEA meetings, conferences, and symposia; and (5) recruits
U.S.  nationals to provide expert advice to IAEA and to staff IAEA's
operations.  In addition, according to a U.S.  Mission official,
almost 200 U.S.  nationals are employed by IAEA. 


--------------------
\5 According to IAEA officials, about $45 million of this amount is
for projects that are currently unfunded. 

\6 India is also not a party to the NPT, but it has not requested
technical assistance from IAEA since 1979.  Cuba signed the Treaty of
Tlatelolco in March 1995 but has not ratified it.  According to State
Department officials, despite Cuba's failure to accept IAEA's
full-scope safeguards, all of Cuba's nuclear facilities are subject
to safeguards under separate, legally binding agreements between IAEA
and Cuba.  In addition, IAEA member states that receive technical
assistance must sign a revised supplementary agreement to ensure that
the technical assistance they receive will be used only for the
peaceful applications of atomic energy and that the technical
assistance projects in their country will be subject to IAEA's
safeguards. 

\7 "Footnote a" projects are funded through extrabudgetary cash
contributions by IAEA member states that are in addition to these
states' contributions to IAEA's technical cooperation fund.  IAEA
considers these projects to be technically sound, but recipient
states consider them to be a lower priority than the projects that
are funded through the technical cooperation fund. 


   PURPOSE AND EFFECTIVENESS OF
   IAEA'S TECHNICAL COOPERATION
   PROGRAM
------------------------------------------------------------ Letter :3

U.S.  officials and representatives of other IAEA major donor
countries told us that the principal purpose of IAEA's technical
cooperation program is to help ensure that IAEA member states, many
of whom are developing countries, support IAEA's safeguards and the
NPT.  Most of the member states participate in IAEA primarily for the
nuclear technical assistance it provides.  In the past, the United
States and other major donors raised concerns about the effectiveness
and efficiency of the technical cooperation program.  However, since
1992, IAEA has been implementing improvements to the program that the
United States and other IAEA member states strongly support. 


      IAEA'S TECHNICAL COOPERATION
      PROGRAM HELPS ENSURE SUPPORT
      FOR SAFEGUARDS AND THE NPT
---------------------------------------------------------- Letter :3.1

While the United States and other IAEA major donor countries believe
that applying safeguards is IAEA's most important function, most
developing countries believe that receiving technical assistance
through the technical cooperation program is just as important, and
they participate in IAEA primarily for the technical assistance it
provides.  State Department, ACDA, and NRC officials told us that the
principal purpose of U.S.  participation in IAEA's technical
cooperation program is to help ensure that IAEA member states, many
of whom are developing countries, support IAEA's nuclear safeguards
system and the NPT.  A State Department document noted that the
United States regarded support for the technical cooperation program
to developing countries as the "price tag" for safeguards.  At an
October 1996 meeting, IAEA's Director General told us that the
opportunity to receive technical assistance dissuades member states
from engaging in the proliferation of nuclear weapons. 

Representatives from four IAEA major donor countries--Australia,
Canada, Germany, and Japan--told us that they generally agree with
U.S.  views that technical assistance is necessary to ensure that
developing countries support safeguards and the NPT.  However,
representatives from six developing countries that have benefited
from IAEA's technical assistance--Argentina, Brazil, China, India,
Pakistan, and South Africa--told us that their countries participate
in IAEA primarily because their participation enables them to receive
technical assistance.\8 According to the representatives from India,
Pakistan, and South Africa, IAEA would simply become an international
"policing" organization for monitoring compliance with safeguards if
IAEA did not provide technical assistance.  A U.S.  Mission official
stated that several member states, including India and Pakistan,
would be likely to withdraw from IAEA if its technical assistance
were severely scaled back. 

According to IAEA officials, IAEA carries out its dual
responsibilities and manages the competing interests of its member
states by maintaining a balance in funding between providing
technical assistance and ensuring compliance with safeguards.  As
figure 1 shows, in 1996, IAEA spent about $97 million on safeguards
and about $89 million on technical assistance, accounting for
approximately 30 percent and 27 percent, respectively, of IAEA's
total expenditures of about $325 million.\9

   Figure 1:  IAEA's 1996
   Expenditures, by Major Activity

   (See figure in printed
   edition.)

Note:  Dollars in millions. 

Source:  IAEA. 


--------------------
\8 Of the about 90 member states that receive IAEA's technical
assistance, 74 do not have operating nuclear power plants.  About 20
of the member states are considered to be "least-developed"
countries. 

\9 Funding for safeguards comes from IAEA's regular budget and from
extrabudgetary contributions by member states.  Funding for technical
assistance comes from voluntary contributions to IAEA's technical
cooperation fund, extrabudgetary contributions from the United
Nations Development Program and from member states for "footnote a"
projects, and a portion of IAEA's regular budget for administration
and support. 


      CONCERNS ABOUT THE
      EFFECTIVENESS AND EFFICIENCY
      OF IAEA'S TECHNICAL
      COOPERATION PROGRAM LED TO
      IAEA INITIATIVES TO IMPROVE
      THE PROGRAM
---------------------------------------------------------- Letter :3.2

In the past, officials in the United States and other IAEA major
donor countries had concerns about the effectiveness and efficiency
of the technical cooperation program.  A 1993 State Department cable
stated that the United States had long been concerned that "footnote
a" projects were devoid of significant technical, health, or
socioeconomic benefit to the recipient country.  Some of the
evaluations that we reviewed indicated other deficiencies in the
technical cooperation program.  For example, an October 1993 special
evaluation review of lessons learned from completed evaluation
reviews noted that inadequate project plans and designs resulted in
implementation problems and delays in 30 percent of the technical
assistance projects reviewed from 1988 through 1993.  Some of the
negative effects IAEA cited that resulted from insufficient project
planning included (1) approving a 2-year project without obtaining
sufficient evidence about its feasibility; (2) planning research
reactor activities that did not yield significant results because
they were premature or ambitious in relation to local resources; and
(3) conducting nuclear physics projects in Africa that lacked clear
results and benefits to the recipient country. 

IAEA officials in the Department of Technical Cooperation told us
they have not prepared a comprehensive report on the accomplishments
of the program since its inception in 1958.  Although IAEA has
provided its member states with detailed descriptions of all of its
technical assistance projects, it did not assess the success or
failure of these projects in the past.  According to the head of
IAEA's Department of Technical Cooperation's Evaluation Section,
evaluations of projects' impact were not required because IAEA was
focusing on the efficiency of projects' implementation.  Moreover,
IAEA stated that in 1993, the technical cooperation program's
priorities shifted from implementing research and
infrastructure-building activities efficiently to designing projects
that have an impact on the end-user and provide nuclear science and
technology activities that contribute to national development.  IAEA
noted that it is unrealistic to expect impact analyses of projects
designed and implemented according to standards that did not embody
measures of impact at the time.  In the year 2000, IAEA plans to
review the program's performance against the criteria for success
contained in IAEA's strategy for technical cooperation. 

We reviewed 40 reports prepared by IAEA's Department of Technical
Cooperation's Evaluation Section and summaries of four audits of the
program prepared by IAEA's Office of Internal Audit and Evaluation
Support, which covered the period from 1985 through 1996, to
determine whether they contained assessments of the program's
effectiveness.\10 We found that most of the 40 reports and audit
summaries did not assess the impact of specific technical assistance
projects, and no performance criteria had been established to help
measure the success or failure of the projects.  The evaluations and
audits were also limited because insufficient travel funds generally
precluded visits by IAEA staff to the recipient nations.\11 We also
reviewed the project files for four selected technical assistance
projects in Iran, North Korea, Bulgaria, and Egypt that had been
completed or canceled by IAEA.  None of the project files we reviewed
contained information on the project's accomplishments.  Our review
of other project files was limited by IAEA's policy on
confidentiality, which regards information obtained by IAEA under a
technical cooperation project as belonging to the country receiving
the project.  Under this policy, IAEA cannot divulge information
about a project without the formal consent of the receiving country's
government. 

Since 1992, IAEA's Deputy Director General for Technical Cooperation
has taken steps to improve the effectiveness and efficiency of the
technical cooperation program.  For example, IAEA is establishing a
system for measuring the quality and performance of some of its
technical assistance projects.  However, in 1996, IAEA's Secretariat
reported to the Board of Governors that outcomes were still clearly
defined for only 25 percent of the 90 technical assistance projects
whose results they had monitored from January through October 1996. 
The Evaluation Section of IAEA's Department of Technical Cooperation
is also helping the department to establish criteria for measuring
the results of a project while planning it.  The United States and
other IAEA major donor countries strongly support IAEA's efforts to
improve the effectiveness and efficiency of the program, but U.S. 
officials are concerned that all of the improvements may not be fully
implemented and made permanent in the 2 years before the term of the
current Deputy Director General for Technical Cooperation ends. 
(App.  I discusses the status of IAEA's efforts to improve the
effectiveness and efficiency of the technical cooperation program and
the U.S.  position on these actions.) According to a State Department
cable describing the results of meetings held in September 1996, the
major donors in attendance were highly supportive of IAEA's
initiatives to improve the program.  The donors concluded that they
were

  -- under increasing pressure at home to demonstrate that their
     countries' contributions to IAEA were being well spent;

  -- supportive of the Deputy Director General for Technical
     Cooperation's efforts to make the entire technical cooperation
     program more efficient and effective;

  -- concerned because the technical cooperation program had not set
     priorities or established a schedule for accomplishing
     improvements to the program; and

  -- concerned that IAEA's Department of Technical Cooperation may
     not have the management skills required to accomplish these
     improvements. 

More recently, during the Board of Governors' June 1997 meeting, the
members highly praised IAEA's efforts in carrying out its initiatives
to improve the effectiveness and efficiency of the technical
cooperation program. 


--------------------
\10 Of the 40 IAEA reports that we reviewed, fewer than half were
project or program evaluation reports.  The remaining reports were
country program summaries that provided an inventory of selected
member states' projects by program area. 

\11 IAEA devotes 1 percent of its resources in the technical
cooperation program to program evaluation.  Several major donor
countries have expressed a desire to maintain this limit. 


   COST OF U.S.  PARTICIPATION IN
   IAEA'S TECHNICAL COOPERATION
   PROGRAM
------------------------------------------------------------ Letter :4

Most of the funding for IAEA's technical cooperation program--about
70 percent--comes from voluntary contributions made by member states
to IAEA's technical cooperation fund.  In 1996, the United States
provided a total of about $99 million to IAEA, which consisted of
about $63 million for IAEA's regular budget and an additional
voluntary contribution of $36 million.  About $16 million of the $36
million U.S.  voluntary contribution to IAEA went to the technical
cooperation fund; this contribution represented about 32 percent of
the fund, which totaled $49 million.  The remainder of the U.S. 
voluntary contribution to IAEA--about $20 million--was spent on other
forms of support for the technical cooperation program, including (1)
U.S.-hosted IAEA training courses, (2) "footnote a" projects, (3)
placements of IAEA fellows at U.S.  institutions, (4) the services of
U.S.  experts, and (5) support for other IAEA programs, including
safeguards.  In 1996, the United States was the largest single
supplier of equipment for the program.  (App.  II provides
information on the sources of funding for IAEA's technical assistance
program from 1958 through 1996.)

Because many IAEA member states are not paying into the technical
cooperation fund, the United States and some other major donors are
paying for a larger percentage of the fund than designated.  IAEA has
informally adopted a target funding level for member states'
contributions to the technical cooperation fund.  IAEA's data show
that, as of August 1997, 52 of 124 member states had paid into the
1996 technical cooperation fund.  The United States and Japan
contributed the most, accounting for over half of the total payments
to the fund.  Seventy-two--or 58 percent--of the member states made
no payments at all, yet 57 of these states received technical
assistance.  In a statement made to IAEA's Board of Governors in June
1996, the U.S.  Ambassador to the U.S.  Mission to the United Nations
System Organizations in Vienna, Austria, observed that the United
States strongly believed that IAEA's technical assistance should go
only to those member states that support technical assistance fully,
by paying their fair share.  The Ambassador further noted that,
because many IAEA member states are not paying their designated share
of the technical cooperation fund, some member states, including the
United States and Japan, are carrying the program financially, by
paying more than their share.  (App.  III lists the IAEA member
states and their shares of and payments to the 1996 technical
cooperation fund.)

The Ambassador of the Permanent Mission of the Republic of South
Africa in Vienna, Austria, who chairs IAEA's Informal Consultative
Working Group on the Financing of Technical Assistance, told us that
the group was designed to, among other things, encourage member
states to increase their payments to the fund and to review whether
member states that have not regularly paid into the fund should
receive the benefits of IAEA's technical assistance.  The Ambassador
from South Africa also told us that many of the developing countries
that are members of IAEA believe that funding for the technical
cooperation program should be predictable and assured and have
proposed that the program be funded through member states'
contributions to IAEA's regular budget.  The major donors do not
support this proposal because they believe that the program will be
adequately funded if all member states provide financial support for
the program.  Representatives of the major recipients of IAEA's
technical assistance, including Argentina, China, Pakistan, and South
Africa, told us that they are concerned that some major donors are
considering reducing their voluntary contributions to IAEA, which
fund the technical cooperation program.  Canadian and German
representatives told us that their countries may reduce their
voluntary contributions to IAEA because of budget constraints.  In a
statement before the June 1997 meeting of IAEA's Board of Governors,
the Ambassador from South Africa said that the members of the working
group were deeply divided on whether to put the technical cooperation
fund into IAEA's regular budget.  She believed, however, that IAEA
should take member states' records of payment to the technical
cooperation fund into account in deciding upon requests for technical
assistance.  IAEA officials stated that they took member states' past
payments to the fund into account when preparing for their 1997-98
program. 


   U.S.  OFFICIALS DO NOT
   SYSTEMATICALLY MONITOR PROJECTS
   FOR CONSISTENCY WITH U.S. 
   NUCLEAR NONPROLIFERATION AND
   SAFETY GOALS
------------------------------------------------------------ Letter :5

U.S.  officials do not systematically review or monitor all of IAEA's
technical assistance projects to ensure that IAEA's activities do not
conflict with U.S.  nuclear nonproliferation and safety goals.  We
found that U.S.  officials had sporadically reviewed projects in
countries of concern to the United States.  Several of IAEA's
technical assistance projects were related to a nuclear power plant
under construction in Iran, to uranium prospecting and exploration in
North Korea, and to a nuclear power plant whose construction has been
suspended in Cuba.  These are countries where the United States has
concerns about nuclear proliferation and threats to nuclear safety. 
Moreover, since 1996, a portion of the funds for projects in
countries of concern to the United States has come from U.S. 
voluntary contributions to IAEA. 


      U.S.  OFFICIALS' REVIEWS OF
      TECHNICAL ASSISTANCE
      PROJECTS ARE SPORADIC
---------------------------------------------------------- Letter :5.1

The Special Assistant to the U.S.  Representative to IAEA in the
State Department's Bureau of Political-Military Affairs told us that
the State Department, in conjunction with its contractor at the
Argonne National Laboratory, is chiefly responsible for reviewing
IAEA's technical assistance projects for consistency with U.S. 
nonproliferation and safety goals before the projects are approved by
IAEA's Board of Governors.  However, we found that although U.S. 
officials at the State Department and U.S.  Mission have reviewed
technical assistance projects in countries of concern to the United
States sporadically, they have not done so systematically.  Officials
in IAEA's Department of Technical Cooperation told us that they do
coordinate with IAEA's Department of Safeguards in reviewing projects
that may involve the transfer of nuclear materials or other items
with implications for proliferation.  We also spoke with officials in
IAEA's Department of Safeguards to determine whether they
systematically review all of IAEA's technical assistance projects for
consistency with nonproliferation goals.  These IAEA officials told
us that they do not. 

We found that the International Nuclear Technology Liaison
Office--the interagency group that coordinates U.S.  participation in
the technical cooperation program and includes representatives from
the State Department, DOE, ACDA, and NRC--and the U.S.  contractor at
Argonne National Laboratory focus their review on the "footnote a"
projects that the United States may want to support with U.S.  funds. 
The interagency group does not systematically review the majority of
the technical assistance projects that are proposed for funding
through IAEA's technical cooperation fund.  Neither does it regularly
monitor ongoing projects.  An Argonne official informed us that he
reviews the list of "footnote a" projects to determine whether they
have technical merit and should be funded by the United States;
however, he is not responsible for assessing whether these or other
projects funded through the technical cooperation fund are in keeping
with U.S.  nuclear nonproliferation and safety goals.  State
Department officials in the Bureau of International Organization
Affairs told us that the Department did not have the resources to
review all of the ongoing technical assistance projects and that U.S. 
oversight of these projects could be improved. 

ACDA, DOE, and U.S.  Mission officials told us that the vast majority
of IAEA's technical assistance projects do not pose any concerns
about nuclear proliferation because the assistance is provided in
benign areas, such as medicine and agriculture, that do not involve
transferring sensitive nuclear materials and technologies.\12 IAEA's
Director General also told us that IAEA will not provide technical
assistance in sensitive areas, such as the reprocessing and
enrichment of nuclear material.  State Department and U.S.  Mission
officials told us that if the United States does have concerns about
specific technical assistance projects, it can informally raise its
objections to IAEA's Secretariat.  However, U.S.  officials we spoke
with generally could not recall whether the United States had raised
objections or had attempted to cancel any projects in the past
several years.  These U.S.  officials also said that the United
States does not have absolute control over the approval of specific
technical assistance projects because decisions about approving and
funding the projects are made collectively every 2 years at the
December meeting of IAEA's Board of Governors. 

A former U.S.  Mission official told us that U.S.  Mission
representatives can meet informally with IAEA staff to discuss a
preliminary list of technical assistance projects months before the
Board of Governors' meeting.  The United States and other IAEA member
states also have an opportunity to formally review the proposed list
of technical assistance projects at IAEA's General Conference in
September and at the November meeting of the Technical Assistance and
Cooperation Committee, the final meeting where member states can
provide recommendations for the December Board of Governors' meeting. 
U.S.  officials told us that by the time the list of technical
assistance projects reaches the Board of Governors, IAEA member
states consider the projects to be approved.  The U.S.  officials
added that it would be rare for representatives from the United
States or any other member state to object formally to a specific
technical assistance project during a meeting of IAEA's Board of
Governors. 


--------------------
\12 Our analysis of the technical assistance that IAEA provided to
its member states by program area, from 1980 through 1996, shows that
most of IAEA's assistance was provided in three program areas--the
application of isotopes and radiation in agriculture, general atomic
energy development, and safety in nuclear energy--as discussed in
app.  IV. 


      IAEA PROVIDES TECHNICAL
      ASSISTANCE FOR SEVERAL
      PROJECTS IN COUNTRIES OF
      CONCERN
---------------------------------------------------------- Letter :5.2

Of the total amount in technical assistance (about $800 million) that
IAEA provided from 1958 through 1996 for its member states, about $52
million was spent on technical assistance for countries of concern to
the United States, as defined by section 307(a) of the Foreign
Assistance Act of 1961 and related appropriations provisions.  These
countries include Cuba, Libya, Iran, Myanmar (formerly Burma), Iraq,
North Korea, and Syria.\13 Iran and Cuba ranked 19th and 21st,
respectively, among the 120 nations that received assistance over
this period, receiving about 1.5 percent each of the total amount in
technical assistance that IAEA provided.  Projects IAEA provided for
these countries involved nuclear training and techniques in medicine
and agriculture, including establishing laboratory facilities for the
production of radiopharmaceuticals in Iran and using nuclear
techniques to improve the fertility of the soil in Iraq and the
productivity of the livestock in Libya.  (App.  IV provides
information on the dollar amounts and types of technical assistance
that IAEA provided for its members states, including the countries of
concern to the United States, from 1958 through 1996.)

Although IAEA provides most of its technical assistance in areas that
do not generally pose concerns about nuclear proliferation, our
review of projects in countries of concern to the United States
identified three cases in which IAEA provided technical assistance to
countries where the United States has concerns about nuclear
proliferation and threats to nuclear safety.  A discussion of these
three cases follows. 


--------------------
\13 The Palestine Liberation Organization is also covered under the
act but is considered to be a political entity and is thus not a
member of IAEA.  North Korea has not received technical assistance
since it withdrew from IAEA in June 1994. 


      BUSHEHR NUCLEAR POWER PLANT
      IN IRAN
---------------------------------------------------------- Letter :5.3

The United States strongly opposes the sale of any nuclear-related
technology to Iran, including the sale of Russian civilian reactor
technology, because the United States believes that any nuclear
technology and training could help Iran advance its nuclear weapons
program.  At an April 1997 hearing on concerns about proliferation
associated with Iran, held before the Committee on Foreign Relations,
Subcommittee on Near Eastern and South Asian Affairs, the former
director of the Central Intelligence Agency stated that through the
operation of the Bushehr reactor, the Iranians will develop
substantial expertise that will be relevant to the development of
nuclear weapons.\14 For 1995 through 1999, IAEA has budgeted about
$1.3 million for three ongoing technical assistance projects for the
Bushehr nuclear power plant under construction in Iran.  As of May
1997, about $250,000 of this amount had been spent for two of these
projects.  According to IAEA's project summaries for 1997 through
1998, the three projects are (1) developing a nuclear regulatory
infrastructure by training personnel in nuclear safety assessment;
(2) establishing an independent multipurpose center that will provide
emergency response services, train nuclear regulators, and conduct
accident analyses in preparation for licensing the plant; and (3)
building the capability of the nuclear technology center in Iran to
support the Bushehr plant.  (See app.  V for more details on the
assistance IAEA is providing to Iran for the Bushehr nuclear power
plant.)

IAEA also spent about $906,000 more for three recently completed
technical assistance projects for the Bushehr plant in Iran.\15
According to IAEA's status reports, the objectives of these projects
were (1) to increase the capacity of the Atomic Energy Organization
of Iran for evaluating nuclear power plant bids and to develop a
regulatory infrastructure and policy; (2) to assist in assessing the
status of the Bushehr plant before construction resumed, including
advising on nuclear safety criteria for licensing and assisting in
developing a national infrastructure for work on the plant's
construction; and (3) to assist in assembling and installing a
radioactive waste incinerator for the plant.  Under these projects,
IAEA has sent experts on numerous missions to conduct safety reviews
of the Bushehr plant and has provided equipment, such as computer
systems.  According to IAEA documents, IAEA believes that this
assistance made a valuable contribution to the establishment of an
infrastructure for Iran's nuclear power program.  In addition, IAEA
cited an on-site assessment of the reactor building and components by
Russian contractors as a critical element in the decision to complete
the plant. 

We asked the State Department's Deputy Assistant Secretary for
Nonproliferation for his views on the technical assistance that IAEA
has provided for Iran's Bushehr nuclear power plant.  According to
his representative in the Bureau of Political-Military Affairs, the
Special Assistant to the U.S.  Representative to IAEA, the United
States, as a general rule, opposes nuclear cooperation with Iran and
the State Department would rather not see IAEA provide technical
assistance for Iran's Bushehr nuclear power plant.  The State
Department official also told us that the United States had
informally raised concerns to IAEA about its provision of technical
assistance to the Bushehr nuclear power plant. 


--------------------
\14 In 1973, a German firm began to construct two reactors in Iran
near Bushehr, but the construction was halted during the Islamic
Revolution in 1979.  In 1995, Iran and Russia reached an $800 million
agreement for the Ministry of the Russian Federation for Atomic
Energy (MINATOM) to resume construction of Unit 1 of the Bushehr
nuclear power plant with a Russian VVER-1000 design nuclear power
reactor. 

\15 In addition to these recently completed projects, IAEA spent
about $107,000 for two other projects for the plant, completed in
1985.  The objectives of these projects were to (1) train a group of
Iranian engineers in quality assurance with a view to completing the
Bushehr nuclear power plant and (2) assist in assessing the safety of
the concrete structure of Unit 1 of the plant's reactor building. 
Furthermore, IAEA has funded projects for Iran in uranium prospecting
and exploration. 


      URANIUM PROSPECTING AND
      EXPLORATION IN NORTH KOREA
---------------------------------------------------------- Letter :5.4

In March 1994, Senator Jesse Helms sent a letter to the President
stating his concerns about IAEA's providing technical assistance for
uranium exploration in North Korea at a time when the country was
suspected of developing a nuclear weapons program.\16

According to an April 1994 letter to IAEA's Director General from the
U.S.  Ambassador to the U.S.  Mission, IAEA's Director General had
earlier assured U.S.  congressional representatives that IAEA had
suspended its technical assistance for North Korea because North
Korea was in violation of its obligations under the NPT for failing
to comply with IAEA's safeguards.  The U.S.  Ambassador to the U.S. 
Mission stated that he was unaware that several technical assistance
projects for North Korea were still ongoing or had recently begun. 
At the June 1994 meeting of the Board of Governors, the U.S. 
delegation strongly recommended that IAEA's Director General suspend
the provision of technical assistance to North Korea for all
activities related to nuclear material, fuel cycle, and nuclear
industrial applications until concerns about North Korea's compliance
with IAEA's safeguards had been resolved.  North Korea withdrew from
IAEA in June 1994, and its technical assistance projects were
canceled. 

From 1987 through 1994, IAEA spent about $396,000 in technical
assistance for two projects on uranium prospecting and exploration in
North Korea.  According to IAEA's April 1997 project status reports,
the objectives of these projects were (1) to enable North Korea to
better assess the potential of its nuclear raw materials in view of
its increasing commitment to nuclear power and (2) to provide support
for North Korea's uranium exploration program.  Under the uranium
prospecting project, which was completed in 1994, the status report
shows that IAEA contributed a considerable amount of uranium
exploration equipment to North Korea, as well as a microcomputer and
software for data processing.  IAEA spent more than one-third of the
$87,000 budgeted for the follow-on project on uranium exploration
before the project was canceled following North Korea's withdrawal
from IAEA. 


--------------------
\16 Highly enriched uranium can be used in the development of nuclear
weapons. 


      NUCLEAR POWER PLANT IN CUBA
---------------------------------------------------------- Letter :5.5

In March 1997, when we issued our report on IAEA's nuclear technical
assistance for Cuba, including IAEA's technical assistance to the
partially completed nuclear power plant, the State Department's
Deputy Assistant Secretary for Nonproliferation visited IAEA's Deputy
Director General for Technical Cooperation to raise concerns about
IAEA's technical assistance projects for the nuclear power plant. 
The Deputy Assistant Secretary noted that strong U.S.  support for
IAEA's technical cooperation program could be endangered by
perceptions that IAEA is supporting Cuban plans to build an unsafe
reactor.  He also told IAEA's Deputy Director General for Technical
Cooperation that the United States found it hard to justify IAEA's
provision of assistance to Cuba's nuclear power plant for quality
assurance and licensing when, because of financial constraints, it
was unlikely that the plant would be completed.  However, as of June
1997, IAEA was still conducting these two projects in licensing and
quality assurance for the Cuban plant. 


      UNITED STATES NO LONGER
      WITHHOLDS VOLUNTARY FUNDS TO
      IAEA FOR COUNTRIES OF
      CONCERN
---------------------------------------------------------- Letter :5.6

In our March 1997 report, we noted that, from 1981 through 1993, the
United States was required, under section 307(a) of the Foreign
Assistance Act of 1961 and related appropriations provisions, to
withhold a proportionate share of its voluntary contribution to the
technical cooperation fund for Cuba, Libya, and Iran, because the
fund provided assistance to these countries.  The United States
withheld about 25 percent of its voluntary contribution to the fund
for these countries.  From 1981 through 1995, the State Department
withheld a total of over $4 million.  State Department officials told
us they believe that the withholding was primarily a symbolic gesture
that had no practical impact on the total amount of technical
assistance that IAEA provided to these countries.  On April 30, 1994,
the Foreign Assistance Act was amended, and Myanmar (formerly Burma),
Iraq, North Korea, and Syria were added to the list of entities from
which U.S.  funds for certain programs sponsored by international
organizations were withheld.  At the same time, IAEA was exempted
from the withholding requirement.  Consequently, as of 1994, the
United States was no longer required to withhold a portion of its
voluntary contribution to IAEA's technical cooperation fund for any
of these entities.  However, State Department officials told us that
they misinterpreted the act and continued to withhold funds in 1994
and 1995.  Beginning in 1996, the State Department discontinued
withholding any of the U.S.  voluntary contribution to the fund.\17


--------------------
\17 On June 3, 1997, H.R.  1757, which authorizes appropriations for
the Department of State for fiscal years 1998 and 1999, was
introduced by the 105th Congress.  The bill proposes, among other
things, that the United States withhold a proportional share of its
funds for IAEA's programs or projects in Cuba. 


   CONCLUSIONS
------------------------------------------------------------ Letter :6

The United States and other IAEA major donor countries have had
concerns about the effectiveness and efficiency of the technical
cooperation program.  However, IAEA has taken steps to improve the
effectiveness and efficiency of the technical cooperation program and
the measurement of the program's performance.  The United States and
others strongly support these initiatives, but concerns remain about
the sustainability of these improvements. 

The United States is paying for more than its designated share of the
technical cooperation fund because many member states are not paying
into the fund.  Yet many of these states are receiving the benefits
of IAEA's technical assistance.  This is contrary to the State
Department's position that all IAEA member states, particularly those
that receive technical assistance, should provide financial support
for the program. 

Although U.S.  officials are sporadically reviewing technical
assistance projects in countries of concern to the United States,
they are neither systematically reviewing technical assistance
projects before their approval nor regularly monitoring ongoing
technical assistance projects.  Without a systematic review, U.S. 
officials may be unaware of specific instances in which IAEA's
assistance could raise concerns for the United States about nuclear
proliferation and threats to nuclear safety.  Most of the assistance
that IAEA provides is not considered to be sensitive.  However, in
several cases, the technical assistance that IAEA has provided is
contrary to U.S.  policy goals.  Moreover, since 1996, a portion of
the U.S.  funding has supported technical assistance projects that
will ultimately benefit nuclear programs, training, and techniques in
countries of concern to the United States, including Iran and Cuba. 


   MATTERS FOR CONGRESSIONAL
   CONSIDERATION
------------------------------------------------------------ Letter :7

To assist the Congress in making future decisions about the continued
U.S.  funding of IAEA's technical cooperation program, the Congress
may wish to require that the Secretary of State periodically report
to it on any inconsistency between IAEA's technical assistance
projects and U.S.  nuclear nonproliferation and safety goals. 

If the Congress wishes to make known that the United States does not
support IAEA's technical assistance projects in countries of concern,
as defined by section 307(a) of the Foreign Assistance Act of 1961
and related appropriations provisions, it could explicitly require
that the State Department withhold a proportional share of its
voluntary funds to IAEA that would otherwise go to these countries. 


   RECOMMENDATIONS TO THE
   SECRETARY OF STATE
------------------------------------------------------------ Letter :8

We recommend that the Secretary of State direct the U.S.  interagency
group on technical assistance, in consultation with the U.S. 
representative to IAEA, to systematically review all proposed
technical assistance projects in countries of concern, as covered by
section 307(a) of the Foreign Assistance Act of 1961 and related
appropriations provisions, before the projects are approved by IAEA's
Board of Governors, to determine whether the proposed projects are
consistent with U.S.  nuclear nonproliferation and safety goals.  If
U.S.  officials find that any projects are inconsistent with these
goals, we recommend that the U.S.  representative to IAEA make the
U.S.  objections known to IAEA and monitor the projects in these
countries. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :9

We provided copies of a draft of this report to the Department of
State for review and comment.  The Department obtained and
coordinated comments from Argonne National Laboratory; ACDA; DOE;
NRC; the U.S.  Mission to the United Nations System Organizations in
Vienna, Austria; and IAEA.  On August 1, 1997, we met with officials
from the Department of State--including the Deputy Director, Office
of Technical Specialized Agencies, Bureau of International
Organization Affairs--and from the Department of Energy-- including a
Foreign Affairs Specialist in the Office of Nonproliferation and
National Security.  The agencies provided clarifying information and
technical corrections, which we incorporated into the report. 

The agencies generally agreed with the facts as presented in the
report and made no comments on our recommendations.  They did,
however, express one concern about our matters for congressional
consideration.  Specifically, they suggested that withholding a part
of the U.S.  voluntary contribution to IAEA that is proportional to
all of the assistance that IAEA provides to Cuba, North Korea, and
other countries of concern would be seen as a politicization of the
technical assistance process that could undercut U.S. 
nonproliferation objectives.  The agencies added that they do not
object to IAEA's providing technical assistance to countries of
concern in the areas of nuclear safety, medicine and agriculture.  We
cannot speculate on how others might view such a withholding
requirement.  However, as discussed in the report, the United States
did, from 1981 through 1995, withhold a portion of its voluntary
contribution to IAEA, amounting to over $4 million, for technical
assistance for countries of concern to the United States.  IAEA was
exempted from the withholding requirement in 1994, although the State
Department continued to withhold funds in 1994 and 1995.  Our report
also notes the recent introduction into the Congress of a bill
proposing that the United States withhold a proportional share of its
funds for IAEA's programs or projects in Cuba. 

In addition, the agencies said that IAEA's technical cooperation
program, in general, has strongly supported U.S.  nuclear safety
policy objectives, most notably in Central and Eastern Europe and in
the Newly Independent States that operate unsafe Soviet-designed
reactors.  The agencies further observed that the United States
continues to support IAEA's nuclear safety efforts.  In appendix IV,
we acknowledge IAEA's contribution to nuclear safety, noting that
from 1958 through 1996, IAEA spent about 16 percent of its technical
assistance on safety in nuclear energy. 


   SCOPE AND METHODOLOGY
----------------------------------------------------------- Letter :10

We discussed U.S.  participation in IAEA's technical cooperation
program with officials of and gathered data from the Department of
State; DOE; ACDA; NRC; Argonne National Laboratory; and the National
Academy of Sciences/National Research Council in Washington, D.C., as
well as from the U.S.  Mission to the United Nations System
Organizations and IAEA in Vienna, Austria.  We met with IAEA's
Director General; Deputy Directors General for Administration,
Research and Isotopes, Nuclear Energy, Nuclear Safety, and Technical
Cooperation; the Principal Officer for the Deputy Director General
for Safeguards; a Senior Legal Officer in the Department of
Administration; and other staff. 

We reviewed program files at the Department of State and at the U.S. 
Mission to the United Nations System Organizations in Vienna,
Austria.  We gathered financial and programmatic data from IAEA on
its technical cooperation for the period from 1958, when the program
began, until 1996.  Programmatic data for the entire period were not
always available from IAEA.  We did not independently verify the
quality and accuracy of IAEA's data. 

We also met in Vienna, Austria, with representatives from four of the
member states that are major financial donors to the technical
cooperation program and six of the states that receive extensive
technical assistance or represent the views of the developing
countries.  The four major donors were Japan, Australia, Canada, and
Germany; the six major recipient and/or developing countries were
Argentina, Brazil, China, India, Pakistan, and South Africa. 

We also reviewed 40 reports on various aspects of the technical
cooperation program that were prepared by IAEA's Department of
Technical Cooperation's Evaluation Section; summaries of four audits
of the program prepared by IAEA's Office of Internal Audit and
Evaluation Support that covered the period from 1985 through 1996;
and four project files for selected technical assistance projects in
Iran, North Korea, Bulgaria, and Egypt that were completed or
canceled.  We reviewed IAEA's data on the technical assistance
projects provided for countries of concern to the United States to
determine whether IAEA's assistance conflicted with U.S.  nuclear
nonproliferation and safety goals.  We observed two meetings of the
International Nuclear Technology Liaison Office (the U.S. 
interagency group that coordinates U.S.  participation in IAEA's
technical cooperation program), the November 1996 meeting of the
Technical Assistance and Cooperation Committee, and the December 1996
meeting of IAEA's Board of Governors in Vienna, Austria. 

We performed our work from July 1996 through August 1997 in
accordance with generally accepted government auditing standards. 


--------------------------------------------------------- Letter :10.1

We are sending copies of this report to the Secretaries of State and
Energy, the Chairman of the Nuclear Regulatory Commission, the
Director of the Arms Control and Disarmament Agency, and other
interested parties.  We will also make copies available to others on
request.  Please call me at (202) 512-3841 if you or your staff have
any questions.  Major contributors to this report are listed in
appendix VI. 

Victor S.  Rezendes
Director, Energy, Resources,
 and Science Issues


IMPROVING THE EFFECTIVENESS AND
EFFICIENCY OF IAEA'S TECHNICAL
COOPERATION PROGRAM
=========================================================== Appendix I

In 1992, the International Atomic Energy Agency's (IAEA) Deputy
Director General for Technical Cooperation embarked on a series of
improvements so that the technical cooperation program would better
meet the needs of its recipients and its impact would be measurable. 
The United States and other IAEA member states strongly support the
Deputy Director General's efforts to improve the program. 


   IAEA HAS INITIATED EFFORTS TO
   IMPROVE THE PROGRAM
--------------------------------------------------------- Appendix I:1

When IAEA's current Deputy Director General for Technical Cooperation
began his term in 1992, he established a new strategy for improving
the effectiveness and efficiency of the program.  According to an
IAEA paper, the goal of the new strategy is to develop partnerships
between IAEA and its member states so that technical assistance
produces a "measurable socio-economic impact by directly contributing
in a cost-efficient manner to the achievement of the highest
development priority of the [recipient] country." Important
components of the strategy are "model" projects that are expected to

  -- respond to a real need of the recipient country,

  -- produce a significant economic or social impact by looking
     beyond the immediate recipient of assistance to the final end
     user,

  -- demonstrate sustainability after the project's completion
     through a strong government commitment,

  -- require detailed workplans and objective performance indicators,
     and

  -- demonstrate an indispensable role for nuclear technology with
     distinct advantages over other approaches. 

Since 1994, IAEA has initiated nearly 60 model projects, including
those under the 1997-98 technical cooperation program.  Few model
projects have been completed, so it is too early to assess their
impact.  Nevertheless, some of the model projects that IAEA expects
will have measurable results include

  -- using a radioimmunoassay to screen for thyroid deficiency in
     newborn children in Tunisia,

  -- providing nuclear methods to evaluate the effectiveness of a
     government food supplement intervention program to combat
     malnutrition in Peru,

  -- supporting a program for using nuclear techniques to improve
     local varieties of sorghum and rice in Mali, and

  -- eliminating the tsetse fly from the island of Zanzibar using
     radiation to sterilize male flies. 

IAEA is also working to design model projects within a "country
program framework." The goal of this framework is to achieve
agreement between IAEA and the recipient country on concentrating
technical cooperation on a few high-priority areas where projects
produce a significant national impact.  IAEA expects to have
concluded the frameworks with one-half of the recipients of technical
assistance by the year 2000. 


   UNITED STATES SUPPORTS IAEA'S
   EFFORTS TO IMPROVE THE PROGRAM
--------------------------------------------------------- Appendix I:2

Like most other IAEA member states, the United States supports the
efforts of IAEA's Deputy Director General for Technical Cooperation
to improve the effectiveness and efficiency of the technical
cooperation program.  U.S.  officials believe that the initiatives
and strategic goals of the Technical Cooperation Department and IAEA
are extremely significant, particularly now that donor countries'
resources may be declining and the effectiveness and efficiency of
all international organizations are being questioned.  Since these
reform efforts began, the United States has been a strong supporter
of the program, making experts available to IAEA, funding specific
model projects, and supporting the program in statements before
IAEA's Board of Governors. 

Although the United States, with other IAEA major donor countries,
supports efforts to improve the technical cooperation program, it
also shares some concerns with the other major donors about the
sustainability of these improvements.  State Department officials,
including U.S.  Mission officials, believe that IAEA must focus on
implementation if the efforts at improvement are to last beyond the
tenure of the current Deputy Director General, which ends in 1999. 
According to State Department officials, there is a difference
between initiating change and achieving permanent change.  These
officials have insisted that the Department of Technical Cooperation
provide IAEA's Board of Governors with a strategic plan that will
lead to permanent change. 


SOURCES OF FUNDING FOR IAEA'S
TECHNICAL COOPERATION PROGRAM FROM
1958 THROUGH 1996
========================================================== Appendix II

Within IAEA, the Department of Technical Cooperation and three other
technical departments--the departments of Research and Isotopes,
Nuclear Safety, and Nuclear Energy--are the main channels for
technology transfer activities within the technical cooperation
program.  IAEA receives funding for the costs of administration and
related support in the Department of Technical Cooperation and for
activities in the three technical departments through IAEA's regular
budget.  However, most of the funding for IAEA's technical
assistance--about 70 percent--comes from voluntary contributions made
by the member states to IAEA's technical cooperation fund, as figure
II.1 shows.  In addition to the technical cooperation fund, other
sources of voluntary financial support for the program include the
following: 

  -- Extrabudgetary cash contributions are made by member states for
     specific technical assistance projects--known as "footnote a"
     projects--and for training.  Although "footnote a" projects are
     considered to be technically sound by IAEA, they are of lower
     priority to recipient member states than the projects that are
     financed through the technical cooperation fund.  The United
     States endeavors to provide support for "footnote a" projects in
     countries that are parties to nuclear nonproliferation treaties. 

  -- Assistance in kind includes equipment donated by member states,
     expert services, or fellowships arranged on a cost-free basis. 

  -- The United Nations Development Program (UNDP) provide funds
     through IAEA for its development projects that IAEA implements
     in areas involving nuclear science and technology. 

   Figure II.1:  Primary Sources
   of Funding for IAEA's Technical
   Cooperation Program, 1958-96

   (See figure in printed
   edition.)

Notes:  Dollars in millions. 

Figures in parentheses have been rounded and do not include funds
from IAEA's regular budget that are used to provide administration
and support for technical assistance. 

Source:  IAEA. 


IAEA MEMBER STATES' CONTRIBUTIONS
TO THE 1996 TECHNICAL COOPERATION
FUND
========================================================= Appendix III

For calendar year 1996, fewer than half of the 124 IAEA member states
contributed to the technical cooperation fund.  As table III.1
indicates, 52 states contributed a total of about $48.6 million.  Of
these states, the United States and Japan contributed the most,
accounting for over half of the total payments to the fund. 
Twenty-four member states that contributed to the fund also received
about $22.5 million in technical assistance from IAEA. 



                              Table III.1
                
                 IAEA Member States That Contributed to
                  the 1996 Technical Cooperation Fund,
                     Ranked by the Amount Paid as a
                Percentage of Total Contributions, as of
                              August 1997

                            Designated
                         percentage of                          Actual
                         $64.5 million  Amount paid to   percentage of
Member state               fund target            fund  total payments
----------------------  --------------  --------------  --------------
United States                    25.00   $15,723,000\a            32.4
Japan                            13.97       9,010,650           18.60
Germany                           8.96       4,579,200            9.40
France                            6.33       4,082,850            8.40
United Kingdom                    5.28       3,405,600            7.00
Canada                            3.08       1,914,077            4.00
Netherlands                       1.58       1,019,100            2.10
Australia                         1.47         969,925            2.00
Sweden                            1.22         786,900            1.60
Switzerland                       1.21         780,450            1.60
Austria                           0.85         548,250            1.10
Mexico                            0.78         503,100            1.00
China                             0.72         464,400            1.00
Denmark                           0.70         451,500            0.90
Finland                           0.61         393,450            0.80
Spain                             2.25         355,155            0.70
Norway                            0.55         354,750            0.70
Korea, Republic of                0.80         350,000            0.70
Argentina                         0.48         310,000            0.60
Poland                            0.38         245,100            0.50
Turkey                            0.34         219,300            0.50
Czech Republic                    0.32         206,400            0.40
India                             0.31         199,950            0.40
Iran                              0.60         190,000            0.40
Brazil                            1.62         151,028            0.30
South Africa                      0.34         109,650            0.20
Israel                            0.26         100,000            0.20
Hungary                           0.15          96,750            0.20
Romania                           0.15          96,750            0.20
Malaysia                          0.14          90,300            0.20
Thailand                          0.13          83,850            0.20
Portugal                          0.20          69,900            0.10
Indonesia                         0.14          70,000            0.10
Slovakia                          0.10          64,500            0.10
Colombia                          0.11          60,000            0.10
Egypt                             0.07          50,445            0.10
Algeria                           0.16          50,000            0.10
Ireland                           0.20          50,000            0.10
Slovenia                          0.07          48,762            0.10
Cuba                              0.07          45,150            0.10
Pakistan                          0.06          38,700            0.10
Philippines                       0.06          38,700            0.10
Morocco                           0.03          20,000            0.04
Iceland                           0.03          19,350            0.04
Bulgaria                          0.10          10,000            0.02
Bangladesh                        0.01           6,450            0.01
Lebanon                           0.01           6,450            0.01
Liechtenstein                     0.01           6,450            0.01
Vietnam                           0.01           6,450            0.01
Sri Lanka                         0.01           5,000            0.01
Syria                             0.05           4,000            0.01
======================================================================
Total                                      $48,579,932
----------------------------------------------------------------------
\a In addition, the United States paid $402,000 in fiscal year 1995
that was credited to fiscal year 1996. 

Source:  IAEA. 

In 1996, 72, or about 58 percent, of the 124 IAEA member states did
not contribute to the technical cooperation fund.  Fifty-seven of
these states received a total of $26,039,722 in technical assistance
from IAEA, as table III.2 indicates. 



                              Table III.2
                
                    IAEA Member States That Did Not
                    Contribute to the 1996 Technical
                 Cooperation Fund, Ranked by the Amount
                 of Assistance Received in 1996, as of
                              August 1997

                                                   Amount of technical
Member state                               assistance received in 1996
----------------------------------------  ----------------------------
Tanzania                                                    $2,020,700
Ghana                                                        1,508,200
Nigeria                                                      1,342,100
Peru                                                         1,222,200
Mongolia                                                       962,400
Chile                                                          946,900
Sudan                                                          935,200
Myanmar (Burma)                                                922,700
Ukraine                                                        906,600
Bolivia                                                        771,300
Albania                                                        695,900
El Salvador                                                    683,000
Armenia                                                        667,000
Ethiopia                                                       635,000
Uruguay                                                        633,900
Uganda                                                         615,600
Costa Rica                                                     593,100
Venezuela                                                      578,300
Jordan                                                         573,000
Namibia                                                        570,300
Zambia                                                         492,600
Kenya                                                          466,700
Tunisia                                                        442,300
Guatemala                                                      437,000
Dominican Republic                                             433,100
Nicaragua                                                      398,500
Zimbabwe                                                       371,000
Kazakstan                                                      368,000
Sierra Leone                                                   366,100
Niger                                                          354,100
Belarus                                                        339,400
Mali                                                           326,300
Cameroon                                                       323,700
Iraq                                                           300,200
Madagascar                                                     288,600
Macedonia                                                      279,400
Mauritius                                                      235,700
Croatia                                                        234,400
Ecuador                                                        231,500
Cote d'Ivoire                                                  222,000
Panama                                                         214,100
Libya                                                          200,600
Uzbekistan                                                     158,600
Cyprus                                                         148,900
Paraguay                                                       129,900
Senegal                                                        126,800
Saudi Arabia                                                   117,400
Zaire                                                           97,400
United Arab Emirates                                            90,000
Bosnia and Herzegovina                                          88,500
Estonia                                                         77,800
Lithuania                                                       57,000
Jamaica                                                         31,900
Marshall Islands                                                 8,600
Haiti                                                            8,200
Liberia                                                          6,300
Kuwait                                                           5,500
Afghanistan                                                          0
Belgium                                                              0
Cambodia                                                             0
Gabon                                                                0
Georgia                                                              0
Holy See                                                             0
Italy                                                                0
Luxembourg                                                           0
Monaco                                                               0
New Zealand                                                          0
Qatar                                                                0
Russian Federation                                                   0
Singapore                                                            0
Yemen                                                                0
Yugoslavia                                                           0
======================================================================
Total                                                      $26,039,722
----------------------------------------------------------------------
Note:  Technical assistance includes funds from the technical
cooperation fund, extrabudgetary contributions from member states,
assistance in kind, and UNDP funds. 

Source:  IAEA. 


DOLLAR AMOUNT AND TYPE OF
TECHNICAL ASSISTANCE IAEA PROVIDED
FOR ITS MEMBER STATES, INCLUDING
COUNTRIES OF CONCERN, FROM 1958
THROUGH 1996
========================================================== Appendix IV

IAEA spent about $800 million on technical assistance for its member
states from 1958--when the technical cooperation program
began--through 1996, for equipment, expert services, training, and
subcontracts.  Figure IV.1 shows that about 44 percent of the funds
were spent for equipment, such as computer systems and
radiation-monitoring and laboratory equipment.  In 1996, the United
States was the largest single supplier of equipment for IAEA's
technical cooperation program. 

   Figure IV.1:  Dollar Amount and
   Type of Technical Assistance
   That IAEA Provided for Its
   Member States, 1958-96

   (See figure in printed
   edition.)

Notes:  Dollars in millions. 

Figures in parentheses have been rounded. 

Source:  IAEA. 


   MAJOR RECIPIENTS OF IAEA'S
   TECHNICAL ASSISTANCE
-------------------------------------------------------- Appendix IV:1

Of the more than 120 IAEA member states that received IAEA's
technical assistance from 1958 through 1996, 10 states received more
than 20 percent of the $800 million given, or about $175.7 million
collectively, as table IV.1 indicates.  Egypt, which started to
receive technical assistance from IAEA in 1970, has received the
largest total amount. 



                               Table IV.1
                
                  Major Recipients of IAEA's Technical
                          Assistance, 1958-96

                         (Dollars in millions)

                                                                 First
                                      Amount of  Percentage       year
                                      technical    of total  assistanc
                         Recipient   assistance  assistance      e was
Rank                     country       received    provided   received
-----------------------  ----------  ----------  ----------  ---------
1                        Egypt            $27.5         3.5       1970
2                        Brazil            21.3         2.7       1959
3                        Indonesia         18.6         2.3       1959
4                        Thailand          18.5         2.3       1959
5                        Peru              16.1         2.0       1960
6                        Pakistan          15.6         2.0       1959
7                        Philippine        15.0         1.9       1959
                          s
8                        China             14.7         1.9       1959
9                        Poland            14.4         1.8       1959
10                       Bangladesh        14.0         1.8       1972
======================================================================
                         Total           $175.7        22.1
----------------------------------------------------------------------
Source:  IAEA. 


   IAEA'S TECHNICAL ASSISTANCE, BY
   PROGRAM AREA
-------------------------------------------------------- Appendix IV:2

About half--or $334 million--of the $648 million that IAEA spent for
technical assistance from 1980 through 1996 was provided for three
program areas--the application of isotopes and radiation in
agriculture, general atomic energy development, and safety in nuclear
energy--as figure IV.2 shows.\18 Moreover, two other program
areas--nuclear engineering and technology, and the application of
isotopes and radiation in industry and hydrology--received about 26
percent of the funds, for a total of about $169 million.  IAEA
approved about $154 million more in technical assistance projects for
its member states for 1997 through 1998.  Over half of this
additional assistance will be provided for the application of
isotopes and radiation in medicine, agriculture, and safety in
nuclear energy. 

   Figure IV.2:  Technical
   Assistance Provided by IAEA for
   Its Member States, by Program
   Area, 1980-96

   (See figure in printed
   edition.)

Note:  Percentages do not total 100 because of rounding. 

Source:  IAEA. 


--------------------
\18 IAEA was not able to provide us with data for years prior to
1980. 


   DOLLAR AMOUNT AND TYPE OF
   IAEA'S TECHNICAL ASSISTANCE FOR
   COUNTRIES OF CONCERN
-------------------------------------------------------- Appendix IV:3

Of the about $800 million in technical assistance provided by IAEA to
all of its member states from 1958 through 1996, about $52 million
was spent on countries currently of concern to the United States.  As
table IV.2 indicates, most assistance given to these countries was in
the form of equipment. 



                                        Table IV.2
                         
                           Amount and Type of IAEA's Technical
                          Assistance for Countries Currently of
                          Concern to the United States, 1958-96

                                  (Dollars in thousands)

                                           Type of technical assistance
                                   --------------------------------------------
                 Rank       First
             in terms        year
                   of   technical
            technical                                    Fellowship
Country                assistance                             s and
of         assistance         was    Expert              scientific  Subcontrac
concern      received    received  services   Equipment      visits        ts\a     Total
---------  ----------  ----------  --------  ----------  ----------  ----------  --------
Iran               19        1959    $2,950      $6,006      $2,839        $212   $12,007
Cuba               21        1963     1,248       8,718       1,915         113    11,994
Syria              31        1968     1,385       5,078       1,556         256     8,275
North              36        1978       494       5,142       1,033           0     6,669
 Korea\b
Myanmar            43        1959     1,505       2,806       1,056           0     5,368
 (Burma)
Libya              51        1970     1,190       1,441       1,652           0     4,283
Iraq               55        1960       912       1,381       1,089          18     3,400
=========================================================================================
Total                                $9,684     $30,572     $11,141        $599   $51,996
-----------------------------------------------------------------------------------------
\a Agreements between IAEA and a third party to provide services to
member states. 

\b North Korea has not received technical assistance since it
withdrew from IAEA in June 1994. 

Source:  IAEA. 


IAEA'S ACTIVE TECHNICAL ASSISTANCE
PROJECTS FOR THE BUSHEHR NUCLEAR
POWER PLANT IN IRAN
=========================================================== Appendix V

In 1973, a German firm began the construction of two reactors in Iran
near Bushehr, but construction was halted during the Islamic
Revolution in 1979.  In 1995, Iran and Russia reached an $800 million
agreement for the Ministry of the Russian Federation for Atomic
Energy (MINATOM) to resume the construction of Unit 1 of the Bushehr
nuclear power plant and to switch from a German-designed to a
Russian-designed VVER-1000 model reactor.  According to IAEA's
project summaries for the proposed 1997-98 program, the decision to
resume the Bushehr project with a new design has placed heavy
responsibility on Iran's Nuclear Safety Department, the regulatory
body of the Atomic Energy Organization of Iran. 

For 1995 through 1999, IAEA budgeted about $1.3 million for three
ongoing technical assistance projects for the Bushehr nuclear power
plant under construction in Iran.  As of May 1997, about $250,000 of
this amount had been spent for two of these projects.  According to
IAEA's project summaries for 1997-98, the three projects are (1)
developing a nuclear regulatory infrastructure by training personnel
in nuclear safety assessment; (2) establishing an independent
multipurpose center that will provide emergency response services,
train nuclear regulators, and analyze accidents in preparation for
licensing the plant; and (3) building the capability of the Esfahan
Nuclear Technology Center in Iran to support the Bushehr plant. 


   INFRASTRUCTURE FOR
   IMPLEMENTATION OF BUSHEHR
   NUCLEAR POWER PLANT PROGRAM
   PROJECT
--------------------------------------------------------- Appendix V:1

This ongoing project was originally approved in 1995 and is partly a
continuation of another project--completed in 1995 for about
$77,000--to increase the capability of staff at the Atomic Energy
Organization of Iran to evaluate nuclear power plant bids and to
develop a regulatory infrastructure and policy.  The aim of the
ongoing project is to develop a nuclear regulatory infrastructure by
training personnel in nuclear safety assessment and in operator
responsibilities.  Under the project, IAEA has sent experts on
numerous missions to Iran to provide advice and training in quality
assurance, project management, and site and safety reviews; has
provided supplies such as books and journals; and has sponsored some
fellowships and scientific visits.  A workshop for the top management
of Iran's atomic energy authority was held on quality assurance in
1995.  Eight reports have been prepared under the project by experts
on topics such as quality assurance, a preliminary safety review of
the plant, and a review of seismic hazard studies at the plant site. 
As of May 1997, IAEA had spent about $241,000 for expert services,
equipment (supplies), and fellowships--or about half of the
approximately $494,000 that it plans to spend through 1998, as
indicated in table V.1. 



                               Table V.1
                
                  Expenditures for Infrastructure for
                Implementation of Bushehr Nuclear Power
                        Program Project, 1995-97

                            Expert              Fellowship
Year                      services   Equipment           s       Total
----------------------  ----------  ----------  ----------  ----------
1995                       $99,546      $1,126           0    $100,673
1996                        99,269         490      $5,225     104,985
1997                        34,108           0       2,015      36,123
======================================================================
Total                     $232,924      $1,617      $7,240    $241,781
----------------------------------------------------------------------
Note:  Expenditure data are as of May 1997. 

Source:  IAEA. 


   REGULATORY INFRASTRUCTURE FOR
   LICENSING OF BUSHEHR NUCLEAR
   POWER PLANT PROJECT
--------------------------------------------------------- Appendix V:2

This new model project, which was approved under IAEA's 1997-98
technical cooperation program, is intended to improve the overall
safety of the plant by establishing an independent multipurpose
center that will provide emergency response services, train
regulators, and analyze accidents.  IAEA will furnish experts to
advise, assist, and provide training in the following areas:  (1)
identify safety features and evaluate them in the context of the
VVER-1000 design for formulating the regulatory requirements; (2)
formulate a safety policy and associated licensing and supervisory
procedures for the completion of the plant; (3) train regulatory
staff; (4) evaluate submitted regulatory documents; and (5) establish
a national regulatory inspectorate to carry out inspections during
the design, construction, commissioning, and operation of the plant. 
IAEA has already sent a number of experts on missions to Iran as a
part of the project.  IAEA expects that the project will help the
national regulatory body to discharge its statutory responsibilities
for ensuring that the plant is constructed according to regulatory
standards conducive to safe operation.  As of May 1997, IAEA had
provided approximately $8,440 in expert services and was planning to
provide a total of approximately $403,000 for expert services and
fellowships though 1999. 


   STRENGTHENING REACTOR
   TECHNOLOGY FOR BUSHEHR NUCLEAR
   POWER PLANT PROJECT
--------------------------------------------------------- Appendix V:3

Another new project for the plant, which was approved under IAEA's
1997-98 technical cooperation program, will enhance the ability of
Iran's Esfahan Nuclear Technology Center to support the Bushehr
plant.  IAEA's project summary states that while Iran's nuclear
technology center has adequate technical and scientific expertise on
nuclear safety and quality assurance to support Iran's nuclear
regulatory body and the plant, the center has asked for IAEA's expert
advice and transfer of up-to-date knowledge.  IAEA will provide
expert services to help the center analyze the capabilities of the
power plant and will provide training in reactor safety analysis and
reactor technology.  According to the project summary, this project
will develop expertise at the center in safety analysis and other
technical expertise for the Bushehr plant.  IAEA plans to provide a
total of $400,800 for expert services and fellowships for the project
by 1999. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix VI

RESOURCES, COMMUNITY, AND ECONOMIC
DEVELOPMENT DIVISION, WASHINGTON,
D.C. 

Gene Aloise, Assistant Director
Sarah E.  Veale, Evaluator-in-Charge
Daniel Semick, Senior Evaluator
Duane G.  Fitzgerald, Ph.D., Nuclear Engineer

OFFICE OF GENERAL COUNSEL

Jackie A.  Goff, Senior Attorney



RELATED GAO PRODUCTS
============================================================ Chapter 0

Nuclear Nonproliferation:  Implementation of the U.S./North Korean
Agreed Framework on Nuclear Issues (GAO/RCED/NSIAD-97-165, June 2,
1997). 

International Organizations:  U.S.  Participation in the United
Nations Development Program (GAO/NSIAD-97-8, Apr.  17, 1997). 

Nuclear Safety:  International Atomic Energy Agency's Nuclear
Technical Assistance for Cuba (GAO/RCED-97-72, Mar.  24, 1997). 

Nuclear Safety:  Uncertainties About the Implementation and Costs of
the Nuclear Safety Convention (GAO/RCED-97-39, Jan.  2, 1997). 

Nuclear Safety:  Status of U.S.  Assistance to Improve the Safety of
Soviet-Designed Reactors (GAO/RCED-97-5, Oct.  29, 1996). 

Nuclear Nonproliferation:  Implications of the U.S./North Korean
Agreement on Nuclear Issues (GAO/RCED/NSIAD-97-8, Oct.  1, 1996). 

Nuclear Safety:  Concerns With the Nuclear Power Reactors in Cuba
(GAO/T-RCED-95-236, Aug.  1, 1995). 

Nuclear Safety:  U.S.  Assistance to Upgrade Soviet-Designed Nuclear
Reactors in the Czech Republic (GAO/RCED-95-157, June 28, 1995). 

Nuclear Safety:  International Assistance Efforts to Make
Soviet-Designed Reactors Safer (GAO/RCED-94-234, Sept.  29, 1994). 

Foreign Assistance:  U.S.  Participation in FAO's Technical
Cooperation Program (GAO/NSIAD-94-32, Jan.  11, 1994). 

Nuclear Nonproliferation and Safety:  Challenges Facing the
International Atomic Energy Agency (GAO/NSIAD/RCED-93-284, Sept.  22,
1993). 

Nuclear Safety:  Progress Toward International Agreement to Improve
Reactor Safety (GAO/RCED-93-153, May 14, 1993). 

Nuclear Safety:  Concerns About the Nuclear Power Reactors in Cuba
(GAO/RCED-92-262, Sept.  24, 1992). 


*** End of document. ***