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Viewing cable 06TOKYO596, ITER: MORE ON FINALIZATION

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Reference ID Created Released Classification Origin
06TOKYO596 2006-02-02 09:04 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Tokyo
VZCZCXYZ0011
PP RUEHWEB

DE RUEHKO #0596/01 0330904
ZNR UUUUU ZZH
P 020904Z FEB 06
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 8209
INFO RUCNITN/ITER COLLECTIVE
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
UNCLAS TOKYO 000596 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
OES/SAT FOR MAXSTADT 
EAP/J FOR WINSHIP 
STAS FOR REYNOLDS 
DOE FOR HARDING AND M.ROBERTS 
 
E.O. 12958: N/A 
TAGS: PREL ENRG ITER TRGY KSCA JA
SUBJECT: ITER: MORE ON FINALIZATION 
 
REF: A. STATE 16118 
 
     B. TOKYO 502 
     C. STATE 13967 
 
1. (U)  This is an action request.  Please see paragraph 
seven. 
 
2. (SBU) On February 2, EST M/C and ESToff met with the 
Ministry of Foreign Affairs (MOFA) International Science 
Cooperation Office Director Kozo Honsei and others and 
delivered reftel demarche.  Honsei thanked EST M/C for the 
clear USG commitment to use the IOIA for ITER as conveyed in 
the talking points which were left as a non-paper.  Honsei 
said that it might be helpful to use the Record of Discussion 
document in Barcelona (as mentioned previously), but that 
Tokyo would talk with the other partners to see if it is 
indeed necessary or not.  Honsei elaborated that some of the 
partners may have a preference to not produce a Record of 
Discussion from the Barcelona meeting.  He said that the 
partners could work out how they would like to do this -- 
whether in the form of a Record or press release or something 
else -- at that meeting.  In response to EST M/C's request 
for confirmation, Honsei agreed that the U.S. offer as 
described in reftel was sufficient to meet the GOJ's earlier 
request for a tangible confirmation. 
 
3. (SBU) Honsei also thanked Washington for the quick 
response to MOF's questions.  MOF has some additional 
questions that are listed in paragraph six.  Honsei asked for 
a response to the inquiry as soon as possible, but noted that 
the responses were not/not a precondition for the Barcelona 
meeting.  He said that the answers were necessary to "fix the 
P&I agreement" because MOF will have to think about 
reciprocity when U.S. researchers come to Japan.  He 
explained that all of the questions were due to the fact that 
this was the first time in Japan's experience that the IOIA 
agreement was being used in such a small organization.  EST 
M/C reassured Honsei that the U.S. has managed to have the 
mechanism successfully work in other small international 
organizations that Japan may not be a part of in the past. 
 
4. (SBU) Turning away from P&I, Honsei then offered some 
additional points for consideration.  He said that Tokyo 
faced another "headache" because of the Russian delegation's 
request for budget tables and definition of rules.  Regarding 
a timetable, MOFA will still need to ask the legal department 
in the Cabinet Office to process the entire ITER agreement 
including the questions posed by the Russians.  EST M/C 
underscored the importance of completing this process as soon 
as possible because of Congressional requirements and 
deadlines in the United States.  Honsei then asked if it 
would be possible to get an explanation of the 120-day 
timetable in the United States. 
 
5. (SBU) Finally, Honsei said that the USG timetable to 
initial the agreement sometime in April is too quick for the 
GOJ.  After the Barcelona meeting, MOFA will have to run the 
agreement through the interagency process in Tokyo especially 
in regards to the budget.  He explained that it will be 
important to get a clear commitment from MOF because of the 
35-year time frame and the large investment involved with the 
ITER project.  ESToff asked if Honsei could offer a date by 
which Tokyo could initial the agreement, but he responded 
that he would need to further discuss the timing with MOFA's 
treaty division.  Honsei assured EST M/C that the GOJ would 
do its best to find some way forward to finalize the text so 
that the U.S. timetable would not need to slip.  He said that 
Japan would talk to the U.S. and others about this in 
Barcelona. 
 
6. (SBU) Additional Questions from the Ministry of Finance 
 
-- Regarding USG response A: do their "legal residents" in 
this context mean US nationals and permanent residents of the 
United States? 
 
-- According to USG response C, "the purpose of the tax 
reimbursement agreement is to prevent double taxation."  If 
there is no "internal tax" system inside a certain IO whose 
staff enjoy exemption of income tax, only U.S. national staff 
will be levied a U.S. national income tax.  In that case, we 
understand that the USG will not reimburse the amount of 
their national income tax levied to U.S. national staff of 
the IO.  Is this understanding correct? 
 
-- If the response to the above question is yes, is another 
purpose of the tax reimbursement agreement equalization 
between U.S. staff and others inside the IO? 
 
-- According to USG response D, our understanding is that the 
U.S. has concluded a tax reimbursement agreement with the 
IAEA.  Is this correct? 
 
-- When the United States concludes the tax reimbursement 
agreement with an IO, does the U.S. government reimburse all 
amounts of their national tax levied to US national staff? 
 
7. (SBU) Action requested: Please provide responses to 
Japanese MOF questions as soon as possible. 
SCHIEFFER