The United States and IAEA Do Not Systematically Limit or Prevent TC Assistance to Countries Posing Potential Terrorism and Proliferation Concerns

Neither the United States nor IAEA seeks to systematically limit or deny  TC assistance to countries designated as state sponsors of terrorism, even  though under U.S. law these countries are subject to sanctions. The United States has designated four countries—Cuba, Iran,  Sudan, and Syria—as state sponsors of terrorism, pursuant to several U.S.  laws. However, states that are not party to the  NPT—India, Israel, and Pakistan—received approximately $24.6 million in  TC assistance from 1997 through 2007. IAEA Does Not Condition TC Assistance on the Basis of the Recipient Country’s Safeguards Status

While U.S. and IAEA officials have stressed the need for all countries to  bring into force comprehensive safeguards agreements and additional  protocols with IAEA as soon as possible, neither the United States nor  IAEA has sought to limit TC funding to countries that have not  implemented such agreements. The United States Faces Difficulties in Identifying, Assessing, and Resolving TC Program Proliferation Concerns

The proliferation concerns associated with the TC program are difficult  for the United States to fully identify, assess, and resolve for several  reasons. First, while State has implemented an interagency process to  review proposed TC projects for proliferation risks, consistent with the  recommendation in our 1997 report, the effectiveness of these reviews is  limited because IAEA does not provide the United States with sufficient or  timely information on TC proposals. Specifically, we found that  national laboratory officials received only the title of proposed projects for  97 percent—or for 1,519 of 1,565—of proposed TC projects they reviewed  from 1998 through 2006. Specifically, IAEA has not been able to accurately portray the TC  program’s achievements in meeting the development and other needs of  member states in a meaningful way because it has not updated and revised  the metrics for assessing program results. In addition, the program’s  impact is limited by financial resource constraints, including the failure of  many member states to pay their full share of support to the TCF. Finally,  the TC program’s long-term effectiveness could be undermined by  shortcomings in IAEA efforts to monitor how TC projects have been  sustained and in recent efforts to sustain the TC program overall by  reaching out to new partners and donors. Specifically,  the TCF experienced a funding shortfall in 2007 of $3.5 million, or 4  percent, of the $80 million total target budget because 62 member states  did not pay their full contributions. Of these 62 countries, 47 states made  no payment at all. The United  States is the largest donor to the TC program, providing approximately 25  percent of the TCF annual budget, and is not a beneficiary of TC  assistance. Appendix I: Objectives, Scope, and Methodology

To review the International Atomic Energy Agency’s (IAEA) Technical  Cooperation (TC) program we assessed the (1) extent to which the United  States and IAEA have policies limiting member states’ participation in the  TC program on the basis of nuclear proliferation and related concerns; (2)  extent to which the United States and IAEA evaluate and monitor TC  projects for proliferation concerns; and (3) limitations and challenges in  IAEA’s management of the TC program. We interviewed key  officials and analyzed documentation, such as cables, presentations,  financial information, and reports and analyses of TC program issues from  the Departments of State (State) and Energy (DOE). IAEA  member  state?
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. This report addresses the (1) extent to which the United States and IAEA have policies limiting member states' participation in the TC program on the basis of nuclear proliferation and related concerns; (2) extent to which the United States and IAEA evaluate and monitor TC projects for proliferation concerns; and (3) any limitations and challenges in IAEA's management of the TC program. To address these issues, GAO interviewed relevant officials at the Departments of State (State) and Energy (DOE) and IAEA; analyzed IAEA, DOE, and national laboratory data; and assessed State and IAEA policies toward the TC program.

What GAO Found

Neither State nor IAEA seeks to systematically limit TC assistance to countries the United States has designated as state sponsors of terrorism--Cuba, Iran, Sudan, and Syria--even though under U.S. law these countries are subject to sanctions. Together, these four countries received more than $55 million in TC assistance from 1997 through 2007. In addition, TC funding has been provided to states that are not party to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT)--India, Israel, and Pakistan--and neither the United States nor IAEA has sought to exclude these countriesfrom participating in the TC program. Finally, IAEA member statesare not required to complete comprehensive safeguards or additional protocol agreements with IAEA--which allow IAEA to monitor declared nuclear activities and detect clandestine nuclear programs--to be eligible for TC assistance, even though U.S. and IAEA officials have stressed the need for all countries to bring such arrangements into force as soon as possible. The proliferation concerns associated with the TC program are difficult for the United States to fully identify, assess, and resolve for several reasons. While State has implemented an interagency process to review proposed TC projects for proliferation risks, the effectiveness of these reviews is limited because IAEA does not provide the United States with sufficient or timely information on TC proposals. Of the 1,565 TC proposals reviewed by DOE and the U.S. national laboratories for possible proliferation risks from 1998 through 2006, information for 1,519 proposals, or 97 percent, consisted of only project titles. IAEA faces several limitations and challenges in effectively managing the TC program. First, the TC program's impact in meeting development and other needs of member states is unclear because IAEA has not updated and revised the program's performance metrics since 2002. Second, the TC program is limited by financial constraints, including the failure of many member states to pay their full share of support to the program's Technical Cooperation Fund (TCF). In 2007, the TCF experienced a shortfall of $3.5 million, or 4 percent, of the $80 million total target budget, because 62 member states did not pay their full expected contributions, including 47 states that made no payment at all. Furthermore, IAEA has not developed a policy for determining when countries should be graduated from receiving TC assistance, including those defined by the UN as high-income countries. Finally, the TC program's long-term viability is uncertain because of limitations in IAEA efforts to track how project results are sustained and because of shortcomings in strategies to develop new TC program partners and donors.