Financing of TC projects is generally supported through the annual  voluntary contributions of member states to IAEA’s Technical  Cooperation Fund (TCF). In the United States, State and DOE are the two principal agencies  involved in TC issues. GAO’s 2009 Findings and Recommendations on Potential Proliferation and Management Concerns Surrounding the TC Program

In our 2009 report, we identified potential proliferation concerns with the  TC program, including concerns about certain countries receiving TC  assistance—such as those designated by the United States as state  sponsors of terrorism—and lack of sufficient and timely information from  IAEA on TC project proposals to allow the United States or other member  states to assess the proliferation risks of the proposed projects. We also  identified several limitations in how the TC program is managed, which  could undermine its long-term effectiveness, including the use of outdated  program metrics and financial resource constraints. GAO’s Findings on Potential Proliferation and Management Concerns in the TC Program

In our 2009 report, we found that neither State nor IAEA sought to  systematically limit or prevent TC assistance to countries that (1) have  been identified as sponsors of terrorism, (2) are not parties to the NPT,  and (3) have not completed comprehensive safeguards or additional  protocol agreements with IAEA. Specifically:    State officials told us that the United States did not systematically try to  limit TC projects in Cuba, Iran, Sudan, and Syria—which the department  designated as sponsors of terrorism. IAEA’s former Deputy Director  General for the TC program told us that requests for TC assistance are  evaluated strictly on technical merits and the contributions of the  proposed projects to a nation’s development priorities. GAO’s Recommendations to Address Potential Proliferation and Management Concerns in the TC Program

Based on our findings, we asked Congress to consider directing State to  withhold a proportionate share of future U.S. voluntary contributions to  the TC program that is equivalent to the amounts of TCF funding that  would otherwise be made available to U.S.-designated state sponsors of  terrorism and other countries of concern, as it currently does with Cuba  and has done in the past with Iran, Libya, and the Territories Under the  Jurisdiction of the Palestinian Authority. In addition, we recommended that the Secretary of State, working with  IAEA and member states through the Board of Governors, explore  undertaking the following eight actions to address the range of  proliferation and management concerns related to the TC program:    Establish a formal mechanism to facilitate greater and more timely  information sharing on TC project proposals between IAEA and the United  States and other countries—including detailed information on the TC  proposals themselves, as well as the results of IAEA’s internal  proliferation reviews of the proposals—so that proliferation and other  concerns can be identified and addressed early in the project development  cycle. State Continues to Oppose Withholding a Proportionate Share of U.S. Funding for the TC Program, but State and IAEA have Made Some Progress in Implementing Our Other Recommendations

State officials told us that they continue to strongly oppose our matter for  congressional consideration to require State to withhold a proportionate  share of the U.S. voluntary contribution to the TC program that is  equivalent to the amounts of TCF funding that would otherwise be made  available to U.S.-designated state sponsors of terrorism and other  countries of concern. We continue to believe that Congress should give serious consideration to  this matter, and that it is not unique or unprecedented. To avoid the appearance of an inconsistent  approach and to foster greater cohesion in U.S. policy toward such  nations, we believe that it is fair for Congress to consider requiring State to  withhold a share of the U.S. contribution to the TCF for program activities  in countries that the United States chooses not to engage directly in trade,  assistance, and other forms of cooperation. State has developed formal guidance  establishing criteria for accepting or denying applications from TC fellows  from foreign countries requesting opportunities to study nuclear issues at  institutions in the United States. We are making no new recommendations at this time. We also reviewed documentation  provided by State and IAEA concerning our recommendations and the  steps taken to implement them.
Why GAO Did This Study

A key mission of the International Atomic Energy Agency (IAEA) is promoting the peaceful uses of nuclear energy through its Technical Cooperation (TC) program, which provides equipment, training, fellowships, and other services to its member states. The United States provides approximately 25 percent of the TC program's annual budget. While the vast majority of TC projects have not involved the transfer of sensitive nuclear materials and technology, TC assistance has been provided to countries of proliferation concern. In March 2009, GAO reported on potential proliferation and management concerns related to the program (GAO-09-275). This testimony discusses (1) GAO's findings and recommendations to the Department of State and IAEA in that report and (2) agency progress made to implement those recommendations to address these concerns. This testimony is based on GAO's 2009 report and updated in March 2011 by (1) reviewing documentation on actions taken by State and IAEA in response to the report's recommendations and (2) interviewing State and Department of Energy (DOE) officials.

What GAO Found

As GAO reported in 2009, neither State nor IAEA seeks to systematically limit TC assistance to countries that (1) the United States has designated as state sponsors of terrorism--Cuba, Iran, Sudan, and Syria; (2) are not party to the Treaty on the Non-Proliferation of Nuclear Weapons--India, Israel, and Pakistan; and (3) have not completed comprehensive safeguards or additional protocol agreements with IAEA. The former head of the TC program told GAO that requests for TC assistance are evaluated strictly on technical merits. GAO found that the lack of sufficient and timely information provided by IAEA on project proposals limits the ability of DOE and the national laboratories to fully assess potential proliferation concerns associated with the program. In addition, GAO identified limitations in how the program is managed, including the failure of many member states to pay their full share of support to IAEA's Technical Cooperation Fund (TCF) and the use of outdated program metrics. GAO asked Congress to consider directing State to withhold a proportionate share of the U.S. voluntary contribution to the TC program that is equivalent to the amounts of TCF funding that would otherwise be made available to U.S.-designated state sponsors of terrorism, as the United States currently does with Cuba and has done in the past with other countries and territories. GAO recommended that State, working with IAEA, undertake eight actions to address proliferation and management concerns related to the program, such as establishing a mechanism to facilitate greater and more timely information sharing on proposals. GAO made two additional recommendations to State, including enhancing its record-keeping on project proposals identified as having potential proliferation concerns, and developing formal guidance to evaluate requests from TC fellows to study nuclear issues in the United States. State and IAEA have made some progress in implementing several of the recommendations in GAO's report. This progress includes, among other things, (1) IAEA providing proposal information to the United States and other member states earlier in the project approval process; (2) IAEA pursuing efforts to promote results-based management of TC projects; (3) State doing better tracking of TC proposals that may contain proliferation concerns; and (4) State developing new guidance and criteria for accepting or denying requests by foreign TC fellows to study in the United States. State, however, continues to strongly oppose GAO's suggestion that Congress consider requiring State to withhold a proportionate share of U.S. voluntary contributions to the fund for TC program assistance provided to U.S.-designated state sponsors of terrorism. GAO continues to believe that Congress should give serious consideration to this matter because there is a precedent for such a withholding and because such action would foster a more consistent and cohesive U.S. policy toward such nations that the United States chooses not to engage directly in trade, assistance, and other forms of cooperation.

What GAO Recommends

GAO is making no new recommendations at this time and continues to believe that implementation of the recommendations in its March 2009 report could substantially reduce potential proliferation and management concerns related to the TC program.