ALL-RUSSIAN SCIENTIFIC RESEARCH INSTITUTE OF EXPERIMENTAL PHYSICS (VNIIEF): FEDERAL NUCLEAR CENTER

LOCATION: Sarov (formerly Arzamas-16, also known as Kremlev), Nizhniy Novgorod Oblast, about 60km southwest of Arzamas. HOMEPAGE: http://www.vniief.ru/ SUBORDINATION: Minatom, Directorate of Nuclear Warhead Design and Testing. [Russian Business Directory, (Moscow: IBR Corporation, 1995) p. 19.] ADMINISTRATION: Director: Radiy Ilkayev [Anna Bakina, ITAR-TASS, 6/24/97; in "Nuclear Incident at Arzamas-16 Successfully Resolved," FBIS-SOV-97-175, 6/24/97.]{Entered 7/11/97 LBN} Deputy Director: Sergey Zykov [Segodnya Newscast, NTV, 6/20/97; in "Scientists Use Special Robot To Deal With Arzamas-16 Leak," FBIS-TEN-97-174, 6/23/97.] Scientific Director: Viktor Mikhailov (Mikhaylov) [Andrey Vagonov, "Canceling the Result: Attempt to 'Improve' Ranks of Russian Academy of Sciences Will Be Made at Academy of Sciences Elections Coming Up at End of May," Nezavisimaya gazeta, 5/20/97, p. 6; in "Election of New RAS Members Described as Attempt to Improve Staff," FBIS-UST-97-018.] {Entered 7/11/97 LBN} {Cleared 7/13/97 JL} Deputy Director, Head of Center of International Relations: Vladimir Rogachev [Analytical Center for Non-proliferation, RFNC-VNIIEF Quarterly Information Bulletin, No. 1, 2000, pp. 7-8.] {Entered 5/4/00 SS} ACTIVITIES: VNIIEF was founded in 1946, under the leadership of Yuliy Khariton, as the Soviet Union's main research and development center for nuclear weapons. Originally called KB No. 11, it developed the first Soviet atomic bomb in 1949. VNIIEF was originally established to produce 20 RDS-1 atomic bombs yearly, but beginning in December 1949, VNIIEF's output grew sharply. VNIIEF was the first to produce the RDS-6S hydrogen bomb and the only Russian weapons facility to produce the RDS-1 and RDS-3 nuclear bombs, the 4R ICBM warhead, and the 100 megaton RDS-37. (Warhead production was carried out at the Avangard plant in Sarov.) In 1955 VNIIEF first began developing the 4R warhead and work expanded to include production of warheads for torpedoes and strategic cruise missiles.[11] In 1992, President Boris Yeltsin declared VNIIEF a Federal Nuclear Center.[1] In 1995, around 24,000 people were employed at VNIIEF.[2] As of April 1998 the Center employed approximately 18,500 individuals, including 160 new employees who joined VNIIEF in 1997.[10] VNIIEF is currently involved in nuclear weapons research, design, and development and advanced weapons research, including the Iskra-5 iodine laser.[3] VNIIEF also studies nuclear reactor physics, controlled fusion, and the impact of ionizing radiation on health.[4] VNIIEF falls under Minatom's Directorate of Nuclear Warhead Design and Testing.[5] Warheads are tested by the explosions department at a facility called Area 19.[6] Though the primary mission of Arzamas-16 has been to design nuclear warheads, weapons-related activity made up only 60 percent of total operations in 1992.[7] Production levels were to be decreased to 50 percent by 1995[7], but in 1996, weapons-related activity made up 57 percent of VNIIEF's activity.[8] The activities of VNIIEF are broken down as follows: R&D in the areas of nuclear warheads, weapons automation, and non-nuclear ammunition--57 percent; R&D in the areas of materials science, nuclear and laser physics and engineering, and supercomputers--34 percent; and high-tech projects in the fields of power engineering, mechanical engineering, instrumentation, the environment and medicine--9 percent.[8] In the late 1980s and early 1990s, VNIIEF began research and development of conventional weapons and their components, using gas dynamics research, missile theory, and computational modeling. VNIIEF's Gas Dynamics complex employs roughly 1,000 specialists and engineers, and includes a research institute that studies the behavior of substances under extreme pressures, a closed complex for the study of the properties of explosive materials, and a system of internal test sites.[12] By mid-1993, VNIIEF had signed memoranda or protocols with several foreign nuclear laboratories, including the US national weapon laboratories, China's Academy of Engineering and Physics, the Department of Military Application of France's Atomic Energy Commission, the EU's Central Bureau of Nuclear Measurements, and the Institute of Physics of the Czech Academy of Sciences.[9] For more information on recent developments at VNIIEF, please see the VNIIEF and Avangard Developments section, below. Sources: [1] Veronika Romanenkova, "Arzamas-16 khranit svoi sekrety," SEGODNYA, 4/20/95, p. 9. [2] Kimberly Marten Zisk, "Arzamas-16: Economics And Security In A Closed Nuclear City," POST-SOVIET AFFAIRS, Vol. 11, No. 1, 1995, pp. 57-79.

[3] "Kremlev," RUSSIAN DEFENSE BUSINESS DIRECTORY, US Department of Commerce--Bureau of Export Administration, 1995, p. 51-52. [4] RUSSIAN BUSINESS DIRECTORY, (Moscow: IBR Corporation, 1995), p. 45. [5] RUSSIAN BUSINESS DIRECTORY, (Moscow: IBR Corporation, 1995) p. 19. [6] Thomas Cochran, Robert S. Norris, Oleg Bukharin, MAKING THE BOMB: FROM STALIN TO YELTSIN (Boulder: Westview Press, 1995), pp. 40. [7] Thomas Cochran, Robert S. Norris, Oleg Bukharin, MAKING THE BOMB: FROM STALIN TO YELTSIN (Boulder: Westview Press, 1995), pp. 39-42; [8] Elena Dorofeyeva, Presentation on VNIIEF and Arzamas-16 given at CNS-MIIS, 3/20/96. [9] Kimberly Marten Zisk, "Arzamas-16: Economics And Security In A Closed Nuclear City," POST-SOVIET AFFAIRS, Vol. 11, No. 1, p. 67. [10] Olga Zaguskina, "A nam nuzhna odna pobeda my za tsenoy ne postoim?" Gorodskoy kurer online edition, http://www.sar.nnov.ru:80/~courier/ , 23 April 1998. {Added 11/5/98 CF} [11] Vladimir Dernovoy, "Boyegolovki ot 'Avangarda,'" Krasnaya zvezda, No. 264, 17 December 1999, p. 4.{Added 3/3/2000 SS} [12] Anatoliy Mikhaylov, "VNIIEF: Laboratornaya otrabotka neyadernykh boyevikh chastey," Voyennyy parad, No. 1, 24 November 1999, pp. 44-45. {Added 5/22/00 SS} MPC&A: VNIIEF was one of the first sites to participate in the US Department of Energy MPC&A program and initially demonstrated DOE's Lab-to-Lab program. Upgrades at VNIIEF began in 1994 with a pilot project and were limited to a few buildings within the VNIIEF complex. The pilot project was completed in 1995 and was used to demonstrate MPC&A methods and technologies that could be used at other facilities within the Minatom weapons complex. The initial upgrades focused on five areas: 1) computerized accounting and tracking systems; 2) systems to measure nuclear material in containers; 3) physical access control systems (portal monitors, metal detectors, magnetic card readers, hand geometry readers); 4) equipment to monitor nuclear materials in containers (bar-code readers, seals, motion detectors); and 5) equipment to locate and identify lost or stolen nuclear materials.[1] VNIIEF consists of two zones: the Industrial Zone and the Scientific Zone. Within the two zones there are 16 individual fenced and guarded areas; 10 in the Industrial Zone and six in the Scientific Zone, including the Reactor Site and the Testing Site. The Industrial Zone includes three central storage facilities. Located within the Scientific Zone, the Reactor Site contains two working research reactors. The Reactor Site in the Scientific Zone was the first area where MPC&A upgrades were completed. Work there began in 1997 and continued throughout 1999. Upgrades included access control to the perimeter and facility, physical inventories of nuclear material as well as improved accounting and tracking of nuclear material.[1,2] In the fall of 1997, MPC&A works were expanded to all sites that process or store highly enriched uranium (HEU) and plutonium.[2] As of July 1999, VNIIEF had completed a threat analysis and design for a comprehensive MPC&A system, which is now being implemented at all 16 sites. However, in September 1999, DOE halted new MPC&A contracts at VNIIEF, VNIITF, Zarechnyy (Penza-19), Lesnoy (Sverdlovsk-45), Trekhgornyy (Zlatoust-36), and Sarov (Arzamas-16) because DOE had not received the proper assurances (either physical access or photo or video confirmation) from Minatom that upgrades at these sites could be accounted for.[3] Contracts that were signed prior to September 1999 continue to be fulfilled by DOE. In May 2000, both sides agreed to a proposal that allowed new work, albeit limited in scope, to begin at VNIIEF and VNIITF.[4] For a detailed description of the MPC&A work performed at VNIIEF in 1997-1998, please see DOE's December 1997 document, United States/ Former Soviet Union Program of Cooperation on Nuclear Material Protection, Control, and Accounting: Partnership for Nuclear Security and DOE's September 1998 document, United States/ Former Soviet Union Program of Cooperation on Nuclear Material Protection, Control, and Accounting: Partnership for Nuclear Security. Sources: [1] Mark Mullen, Status Report on US/Russian Laboratory-to-Laboratory Cooperation in Nuclear Material Protection, Control, and Accounting, pp.2-4, Los Alamos National Laboratory, http://www.ippe.rssi.ru/mpca/l-l_cont_eng.html. [2] "Program for Upgrading Nuclear Materials Protection, Control, and Accounting at all Facilities within the All-Russian Institute of Experimental Physics (VNIIEF)," US Department of Energy website, http://www.nn.doe.gov/mpca/pubs/inmm/rusdef/rd115.htm. [3] GAO Report, Nuclear Nonproliferation: Limited Progress in Improving Nuclear Material Security in Russia and the Newly Independent States, GAO/RCED/NISAD-00-82, March 2000, p. 11, http://www.gao.gov. [4] Oleg Bukharin, Matt Bunn, Ken Luongo, Renewing the Partnership: Recommendations for Accelerated Action to Secure Nuclear Material in the Former Soviet Union (Washington, D.C.: RANSAC, August 2000), p. 76. {Entered 10/4/2000 GD} REACTORS: Seven reactors (five operational, two decommissioned) ["Nuclear Safety: Concerns with Nuclear Facilities and Other Sources of Radiation in the Former Soviet Union," GAO Report, 7 November 1995, GAO/RCED-96-4.] {Entered 2/12/01 GD}

REACTOR NAME: BIGR TYPE: uranium-graphite impulse, air cooled POWER: 2,500MJ per impulse FUEL: can use up to 7kg of 90% HEU STATUS: Operational ["Nuclear Safety: Concerns with Nuclear Facilities and Other Sources of Radiation in the Former Soviet Union," GAO Report, 7 November 1995, GAO/RCED-96-4.] {Entered 2/12/01 GD} REACTOR NAME: VIR-2M TYPE: solution impulse POWER: 81MJ per impulse FUEL: can use up to 7kg of 90% HEU STATUS: Operational ["Nuclear Safety: Concerns with Nuclear Facilities and Other Sources of Radiation in the Former Soviet Union," GAO Report, 7 November 1995, GAO/RCED-96-4.] {Entered 2/12/01 GD} REACTOR NAME: BIR-2M TYPE: uranium-metal impulse POWER: 5MJ per impulse FUEL: can use up to 90kg of 85% HEU STATUS: Operational ["Nuclear Safety: Concerns with Nuclear Facilities and Other Sources of Radiation in the Former Soviet Union," GAO Report, 7 November 1995, GAO/RCED-96-4.] {Entered 2/12/01 GD} REACTOR NAME: BR-1 TYPE: uranium-metal impulse POWER: 50MJ per impulse FUEL: can use up to 350kg of 90% HEU STATUS: Operational ["Nuclear Safety: Concerns with Nuclear Facilities and Other Sources of Radiation in the Former Soviet Union," GAO Report, 7 November 1995, GAO/RCED-96-4.] {Entered 2/12/01 GD} REACTOR NAME: GIR TYPE: Fast reactor with hybrid core STATUS: Operational [VNIIEF Web Site, http://www.vniief.ru/science/appresearch_2_e.html] {Entered 2/12/01 GD} REACTOR NAME: VIR-2 TYPE: soluble moderator COMMENTS: This reactor was shut down in 1978. [List of Research Reactors, Critical and Subcritical Assemblies Under Supervision of Gosatomnadzor, 1992.] REACTOR NAME: VIR-1 COMMENTS: Shut down in 1966. [List of Research Reactors, Critical and Subcritical Assemblies Under Supervision of Gosatomnadzor, 1992.] CRITICAL ASSEMBLIES: One CRITICAL ASSEMBLY NAME: FKBN-2M STATUS: Operational COMMENTS: VNIIEF describes this as a "facility for criticality and solid core testing." [VNIIEF web site, http://www.vniief.ru/science/appresearch_2_e.html] {Entered 2/12/01 GD}

AVANGARD ELECTROMECHANICAL PLANT (AVANGARD EMZ)

LOCATION: Sarov (formerly Arzamas-16), Nizhniy Novgorod Oblast, about 60km southwest of Arzamas. SUBORDINATION: Ministry of Atomic Energy (Minatom). Avangard falls under the supervision of the Nuclear Munitions Production Department. [Nuclear Business Directory (Moscow: IBR Corporation, 1995), p. 21.] {Checked 12/18/2000 GD} ADMINISTRATION: Director: Aleksandr Gustavovich Orlov [Gorodskoy Kurer online edition, http://infra.sar.nnov.ru/~courier/, No. 42, 19 October 2000] {Entered 1/3/2001 ES} Chief Engineer: Aleksandr Georgiyevich Potapov ["Novyye naznacheniya," Gorodskoy Kurer online edition, http://infra.sar.nnov.ru/~courier/, No. 41, 12

October 2000] {Entered 11/14/2000 GD} Chief Designer: G. Leshchinskiy ["Moskovskaya vstrecha," Gorodskoy Kurer online edition, http://infra.sar.nnov.ru/~courier/, No. 41, 12 October 2000] {Entered 12/12/2000 GD} ACTIVITIES: Avangard is one of four warhead fabrication and disassembly sites; the others are Lesnoy (Sverdlovsk-45), Trekhgornyy (Zlatoust-36), and Zarechnyy (Penza-19).[6] Avangard was created in 1946, during the same time as VNIIEF, as a production facility for the weaponry developed by VNIIEF. It was the first Soviet enterprise to mass-produce nuclear armaments. Avangard became an independent plant in 1957.[1] At this time, Avangard began to focus on nuclear warhead production. In 1962, Avangard began manufacturing security systems that are used at the Kremlin and other government buildings, and borders and customs check points.[7] Avangard reports to the Nuclear Munitions Production Department of Minatom.[2] Avangard currently dismantles old nuclear weapons and those removed from launchers under the START treaty.[1,3] As part of the conversion and restructuring of the Russian nuclear industry, assembly of nuclear weapons at the Avangard plant in Sarov ceased in the year 2000.[8] According to a 1995 Komsomolskaya pravda article, Avangard has the most efficient system for the assembly and dismantlement of nuclear warheads of all of Minatom's enterprises.[4] According to Bukharin, however, the site's dismantlement capacity is estimated to be small.[5] Avangard's conversion projects include development and production of dialysis machines, automobile engine filters, and security alarms (its most successful line).[3] In August 2000, the newly created 10-acre Avangard Technopark was commissioned in an area that was formerly part of the restricted zone of the Avangard plant (for more information, see the 8/30/2000 entry below).[9] In September 2001, the Russian Ministry of Atomic Energy informed the United States that Avangard will cease all nuclear weapons activities by the end of 2003.[10] For more information on recent developments at Avangard, please see the VNIIEF and Avangard Developments section. Sources: [1] Veronika Romanenkova, "Arzamas-16 khranit svoi sekrety," Segodnya, 20 April 1995, p. 9. [2] Nuclear Business Directory (Moscow: IBR Corporation, 1995), p. 21. [3] Kimberly Marten Zisk, "Arzamas-16: Economics And Security In A Closed Nuclear City," Post-Soviet Affairs, Vol. 11, No. 1, 1995, pp. 57-79. [4] Aleksandr Khokhlov, "Yadernaya moshch Rossii pogibayet v spokoynoy rabochey obstanovke," Komsomolskaya Pravda, 18 October 1995, pp. 1-2. [5] Oleg Bukharin, Safety and Security of Warhead dismantlement in Russia, (talk given at the AAAS Annual meeting, San Francisco, CA, 18-23 February 1994), p. 5. [6] Thomas B. Cochran, Robert S. Norris, Oleg Bukharin, Making the Russian Bomb: From Stalin to Yeltsin (Boulder: Westview Press, 1995), p. 50. [7] Vladimir Dernovoy, "Boyegolovki ot 'Avangarda,'" Krasnaya zvezda, No. 264, 17 December 1999, p. 4.{Entered 3/3/2000 SS} [8] O. Bukharin, H. Feiveson, F. Von Hippel, S. Weaver, M. Bunn, W. Hoehn, K. Luongo, "Helping Russia Downsize its Nuclear Complex: A Focus on the Closed Nuclear Cities," (Princeton: Princeton University, June 2000), p.14.{Modified 3/16/2000 JL} [9] Michael Wines, New York Times, 31 August 2000; in "Ex-Arms Plant Is Rededicated Near Moscow," 1 September 2000, Lexis-Nexis Academic Universe, http://web.lexis-nexis.com/universe. {Updated 12/21/2000 GD} [10] "Date Set for Closure of Russian Nuclear Weapons Plant. U.S. National Nuclear Security Administration Is Helping Make It Happen," National Nuclear Security Administration News Release, 27 September 2001. {Updated 11/29/2001 ES} MPC&A: The Avangard Electromechanical Plant participates in the US Department of Energy's MPC&A program. MPC&A upgrades at Avangard and Russia's three other assembly/disassembly facilities were scheduled to begin in 1998. While some portal monitors and other equipment have been sent to these facilities, US experts have not been given direct access to these sites. In September 1999, DOE established a policy that no new contracts for work with Avangard, Start Production Association (PO Start), the Elektrokhimpribor Combine, the Instrument-Making Plant, VNIIEF, and VNIITF would be signed until the issue of appropriate access was resolved.[1] In the summer of 2000, pilot projects were begun at VNIIEF and VNIITF. However, no new work at the assembly/disassembly facilities has been undertaken since September 1999.[2] As of February 2001, MPC&A upgrades at Avangard were still on hold.[3] Sources: [1] GAO Report, Nuclear Nonproliferation: Limited Progress in Improving Nuclear Material Security in Russia and the Newly Independent States, GAO/RCED/NISAD-00-82, March 2000, p. 11, http://www.gao.gov/new.items/r400082.pdf. [2] Oleg Bukharin, Matt Bunn, Ken Luongo, Reviewing the Partnership: Recommendations for Accelerated Action to Secure Nuclear Material in the Former Soviet Union (Washington, DC: RANSAC, August 2000), p. 76. {Entered 10/26/2000 GD} [3] Email correspondence with US Department of Energy official, 8 February 2001, RUS010208. {Entered 2/12/2001 GD} SAROV, VNIIEF, AND AVANGARD DEVELOPMENTS:

10/14/2003: TWO SAROV RESIDENTS CONVICTED IN PHONY PLUTONIUM DEAL CASE On 14 October 2003, Sarov's municipal court convicted two local residents who fraudulently offered to sell weapons-grade plutonium allegedly stolen from the closed city’s storage facility.[1,2,3,4] The court sentenced Sergey Denisenko, a 36-year old local police investigator, to seven years in prison for fraud, abuse of office, and forgery. It also sentenced Denisenko's accomplice, Valeriy Blinov, a 51-year old construction engineer, to six years in prison for fraud and illegal possession of weapons. According to media reports, Denisenko and Blinov posed as employees of an unidentified Sarov nuclear facility.[4,5,6,7,8,9] They met 54-year old Nizhniy Novgorod businessman Boris Markin, who was interested in purchasing weapons-grade plutonium to subsequently sell it to potential clients abroad.[1,3,4] To convince Markin that they had indeed access to nuclear material, Blinov introduced himself as a nuclear fuel specialist, while Denisenko presented himself in his former Russian Armed Forces major’s military uniform. He also showed Markin his former military officer ID card that he had kept after retiring from the army, on which he had inserted the fictitious name and job description of Vladimir Kulashov, head of “the special transportation department.” Denisenko and Blinov also showed Markin a fake container allegedly designed for shipping plutonium and supposedly with weapons-grade plutonium inside.[1,3,5,6,7,8,9,10] The three men agreed that Markin would pay a total of $750,000 for a container with several kilograms of plutonium, with a down payment of $50,000 that would be used to bribe facility security and organize the transportation of the plutonium out of Sarov.[7] After receiving the down payment, Denisenko and Blinov disappeared. [1,2,3,5,9,10] Markin, when he realized he had been deceived, went to the Nizhniy Novgorod Federal Security Service (FSB) department.[5,9,11] It is not clear whether Markin reached a deal with the FSB in exchange for information on the con men. However, according to Aleksandr Borodin, chief of the Sarov FSB directorate, Markin was ready to incur criminal liability (article 220 of Russia’s Criminal Code “Illegal handling of radioactive materials”) as long as he could recover the money he had spent.[6,8,9,11,12] The FSB had independently gathered some information about individuals attempting to sell a consignment of weapons-grade plutonium allegedly stolen from a secure storage site in Sarov.[1,2,6,10,11,13] In the spring of 2003, FSB agents arrested Denisenko and Blinov, and during a subsequent search at Blinov’s apartment found the fake container and technical documentation as well as a firearm and a significant quantity of ammunition.[1,3,4,9,11] In April 2003, the Sarov Prosecutor’s office charged Denisenko under Article 159, part 3, clause “b” of Russia’s Criminal Code (“Fraud”), Article 285, part 1 (“Abuse of official powers”) and Article 292 (“Forgery”). Blinov was charged under Article 159, part 3, clause “b” and Article 222, part 1 (“Unlawful possession of a weapon”).[1,3,4,10,13] In July 2003, Markin died in a hospital after a car accident, however, the investigators declared that his death was not related to the case.[5,6,8,9,11] Sources: [1] Zhanna Voronova, "V Nizhegorodskoy oblasti osuzhdeny moshenniki, pytavshiyesya prodat partiyu oruzheynogo plutoniya," RIA Novosti, 14 October 2003; in Integrum Techno, http://www.integrum.com. [2] Roza Magasumova, "Sud goroda Sarova vynes prigovor dvum moshennikam, prodavavshim pustoy konteyner pod vidom plutoniya," ITAR-TASS, 14 October 2003; in Integrum Techno, http://www.integrum.com. [3] Mikhail Bildyagin, "V Sarove naplutovali s plutoniyem," Nizhegorodskiy rabochiy, 16 October 2003; in Integrum Techno, http://www.integrum.com. [4] "V Nizhegorodskoy oblasti osuzhdeny moshenniki, pytavshiyesya prodat krupnuyu partiyu plutoniya," 14 October 2003, Rosbalt news agency; in Integrum Techno, http://www.integrum.com. [5] L. Kovaleva, "10 oktyabrya ozhidayetsya vyneseniye prigovora prestupnikam, pytavshimsya 'prodat' krupnuyu partiyu oruzheynogo plutoniya," Privolzhye news agency, 9 October 2003, http://www.nta-nn.ru. [6] Natalya Trefilova, "Pluty popalis na plutonii," Parlamentskaya gazeta, 13 November 2003; in Integrum Techno, http://www.integrum.com. [7] Fedor Sokolov, "'Yadernyye' zhuliki," Zakon. Finansy. Nalogi. (Nizhniy Novgorod), 14 October 2003; in Integrum Techno, http://www.integrum.com. [8] Maksim Shkolnik, "Krakh 'yadernykh' mozhennikov," Prospekt, 14 October 2003; in Integrum Techno, http://www.integrum.com. [9] Aleksey Gamzin, "Pochem plutoniy za kilo?" Prospekt, 21 October 2003; in Integrum Techno, http://www.integrum.com. [10] Yuliya Skugarevskaya, "Plutoniy navynos," Rossiyskaya gazeta, 15 October 2003; in Integrum Techno, http://www.integrum.com. [11] Roman Kryazhev, "Kliyent sozrel i pobezhal k chekistam," Novoye delo, 17 October 2003; in Integrum Techno, http://www.integrum.com. [12] Tatyana Vitebskaya, "Oruzheynyy plutoniy okazalsya rtutyu," Izvestiya, 11 October 2003; in Integrum Techno, http://www.integrum.com. [13] R. Filtsov, "Dvoye zhiteley Sarova obvinyayutsya v 'moshennichestve' za popytku prodat oruzheynyy plutoniy, yakoby pokhishchennyy iz spetskhranilishcha Yadernogo tsentra," Privolzhye news agency, 8 October 2003, http://www.nta-nn.ru. {Entered 12/16/2003 CC} 3/24/2003: MINISTERS RUMYANTSEV AND IVANOV VISIT SAROV On 24 March 2003, Minister of Atomic Energy Aleksandr Rumyantsev and Minister of Defense Sergey Ivanov visited Sarov.[1] Ivanov received an update on VNIIEF nuclear weapons research and development. He stated that VNIIEF's role in maintaining the reliability of Russia's nuclear arsenal is important and, therefore, should be supported "in every way."[2] Some sources claimed that the ministers came to Sarov to discuss a possible increase in state defense orders.[1] However, the VNIIEF press service did not confirm this information.[3] During a meeting with journalists, the ministers also announced that Minatom's closed cities will become open

eventually, but that it will happen in a "very distant future."[3] Sources: [1] R. Filtsov, "V yadernyy tsentr goroda Sarova pribyli ministr atomnoy energii Rossii Aleksandr Rumyantsev i ministr oborony Rossii Sergey Ivanov," Privolzhye information agency, http://www.nta-nn.ru/, 24 March 2003. [2] "Ministr oborony v Sarove," Krasnaya zvezda, No. 52, 25 March 2002; in Integrum Techno, http://www.integrum.com/. [3] R. Filtsov, "Sergey Ivanov i Aleksandr Rumyantsev v hode visita v Sarov soobshchili, chto v budushchem vse 'zakrytyye' goroda sistemy Minatoma budut otkryty," Privolzhye information agency, http://www.nta-nn.ru/, 25 March 2003. {Entered 4/4/2003 DA} 2/10/2003: FIRE AT AVANGARD DOES NOT INVOLVE URANIUM On 10 February 2003, a fire broke out in one of the Avangard Electromechanical Plant laboratories. It was reported that organic glass burst into flame in a drying chamber. Initial reports about the fire claimed the chamber contained some uranium-235 residue.[1] However, VNIIEF Chief Engineer Aleksandr Kovtun refuted these claims. He reported that the fire was quickly extinguished and that no radiation was released during the accident.[2,3] Two workers, who suffered carbon monoxide poisoning, were hospitalized.[2] Sources: [1] "V Sarove v odnoy iz laboratoriy zavoda 'Avangard' zagorelis ostatki Urana-235," Privolzhye information agency, 12 February 2003; in Integrum Techno, http://www.integrum.com/. [2] Yelena Mazanova, "Pozhar na tretyem proizvodstve," Gorodskoy kuryer online edition, http://www.courier.sarov.ru/, No. 296, 13 February 2003. [3] "Komissiya po delam GO i ChS ne podtverdila fakt goreniya urana vo vremya pozhara v Sarove," Privolzhye information agency, 13 February 2003; in Integrum Techno, http://www.integrum.com/. {Entered 3/12/2003 DA} 1/22/2003: VNIIEF NAMED BEST IN CONVERSION EFFORTS During his visit to Sarov, First Deputy Minister of Atomic Energy Igor Borovkov announced that VNIIEF is one of the most successful Minatom facilities in terms of implementing conversion and non-nuclear weapons programs, Privolzhye Information Agency reports. Borovkov also noted that VNIIEF has the highest salary scale among Minatom scientific institutes. The minimum salary of young specialists at VNIIEF, reportedly, equals 6,000 rubles (over $185 as of 22 January 2003). ["Minatom nazval yadernyy tsentr v Sarove odnim iz luchshikh predpriyatiy po osvoyeniyu neyadernykh vooruzheniy," Privolzhye Information Agency, 22 January 2003; in Integrum Techno, http://www.integrum.com/.] {Entered 3/13/2003 DA} 1/20/2003: SAROV DEVELOPMENT PROGRAM RECEIVES RECOGNITION The Sarov development program, administered by VNIIEF-Konversiya, was recognized as one of the best among regional and municipal innovation programs in a national contest organized by the Council of Federation of the Federal Assembly of the Russian Federation, State University of Management, and the Open Society Institute. Implementation of the program created nearly 400 new jobs. VNIIEF-Konversiya was established to promote conversion activities in Sarov. (For more information, see Vladimir I. Zhigalov, "Development of Small Innovative Companies in Sarov to Serve the Russian Market," in Successes and Difficulties of Small Innovative Firms in Russian Nuclear Cities: Proceedings of a Russian-American Workshop, 2002, at http://books.nap.edu/books/0309084210/html/57.html#pagetop.) [Natalya Panshina, "Programmy razvitiya Obninska i Sarova, a takzhe ryad drugikh innovatsionnykh programm otmecheny diplomami natsionalnogo konkursa," ITAR-TASS, 20 January 2003, http://www.itar-tass.ru/; in Integrum Techno, http://www.integrum.com/.] {Entered 3/12/2003 DA} 8/2002: "TOURIST" ATTEMPTS TO ILLEGALLY ENTER SAROV In late August 2002, the Sarov guard squad prevented an illegal entry into the city. Guards at the entrance checkpoint stopped a Zhiguli car suspecting that the driver, a resident of Sarov, was intoxicated. While inspecting his car, they found his companion, a resident of Nizhniy Novgorod, hiding in the trunk. The violator of Sarov's access regime explained that he had sought to visit a secret nuclear city out of curiosity and a love of adventure. The unlucky tourist was deported, while his friend may be fined and placed under surveillance. ["Nizhegorodskaya oblast. Ekstremalnyy turist pytalsya proniknut v Sarov v bagazhnike 'Zhiguley'," Regions.ru Web Site, http://www.regions.ru/, 5 September 2002; in Integrum Techno, http://www.integrum.com/.] {Entered 10/18/2002 DA} 12/19/2001: FSB: SAROV ATTRACTS FOREIGN INTELLIGENCE AND CHECHEN REBELS On 19 December 2001, Nizhniy Novgorod Oblast FSB Directorate Chief Vladimir Bulavin announced at a press conference that the directorate had prevented an attempt by a foreign diplomat to obtain information about ongoing scientific activities at VNIIEF in Sarov. According to Bulavin, there were several foreign intelligence agents trying to get highly classified information about military industry facilities among the 42 diplomats who visited Nizhniy Novgorod Oblast in 2001.[1] On 20 December 2001 (secret service appreciation day), Gorodskoy kurer published an interview with Colonel Nikolay Zelenkin, deputy chief of the Sarov FSB, about the increased attention that foreign intelligence agencies pay to Sarov. Zelenkin claims that foreigners collect every piece of information related to Sarov, including social and economic conditions. He believes that the main objective of foreign intelligence, especially that of the United States, is to shut down Avangard Electromechanical Plant and undermine the Russian nuclear industry in general, using scientific cooperation as

a cover. According to Zelenkin, nearly 10 delegations from different, mainly US, laboratories were denied access to Sarov in 2001 either by the FSB central office in Moscow or the Sarov FSB department. Talking about the importance of security measures at nuclear facilities, Zelenkin stated that Chechen militant leaders Khattab and Shamil Basayev intended to launch terrorist attacks on facilities in Sarov and Snezhinsk.[2] Sources: [1] "V 2001 godu UFSB po Nizhegorodskoy oblasti preseklo popytku inostrannogo diplomata poluchit informatsiu o razrabotkakh Vserossiyskogo nauchno-issledovatelskogo instituta eksperimentalnoy fiziki Rossiyskogo federalnogo yadernogo tsentra v gorode Sarov," Russian Nuclear Site, http://www.nuclear.ru/news/full/565.shtml, 19 December 2001. [2] N. Kocheshkova "Gosudarstvennyy vopros. 20 dekabrya - professionalnyy prazdnik chekistov," Gorodskoy kurer online edition, http://courier.sarov.ru/51/txt/2001/0101.htm, No. 51, 20 December 2001. {Entered 2/25/2002 DA} 12/4/2001: FSB CHIEF CHAIRS MEETING OF FSB REGIONAL COUNCIL IN SAROV On 4 December 2001, FSB Director Nikolay Patrushev participated in a meeting of the FSB regional council for the Volga Federal Okrug in Sarov. Presidential Envoy to the Volga Federal Okrug Sergey Kiriyenko took part in the meeting. Patrushev told Gorodskoy kurer that the council had discussed interaction between the FSB and the Presidential Envoy, and coordination of activities of the FSB at the okrug level. He also emphasized the importance of counterintelligence measures at nuclear and defense facilities to prevent terrorist acts and attempts by international terrorists to acquire WMD. According to Patrushev, in view of increased activity of foreign intelligence in the region, Sarov should remain a closed city. [Yelena Mazanova, "N.Patrushev: "Ukaz - ne dogma," Gorodskoy kurer online edition, http://www.courier.sarov.ru/49/txt/2001/0101.htm, 6 December 2001.] {Entered 2/19/2002 DA} 10/22/2001: MINATOM OFFICIALS VISIT SAROV, DISCUSS AVANGARD CONVERSION EFFORTS Nikolay Antonov, Director of the Minatom Nuclear Industry Conversion Department, and Yevgeniy Dudochkin, Director of the Minatom Nuclear Munitions Production Department, visited Sarov for one day in mid-October 2001, according to Gorodskoy kurer. Antonov and Dudochkin addressed efforts to convert Avangard to civilian production by 2003. According to Antonov, Minatom fully funded conversion programs at Avangard in 2001, but the plant only operated at 30% of production capacity for the year. The plant was expected to operate at a minimum of 75% of full capacity. Dudochkin stated that much work has already been done at Avangard towards conversion, but results may not appear for two to three years. Minatom believes that Avangard should focus on two or three high-technology activities, while Avangard Director Aleksandr Orlov says that it does not matter what Avangard manufactures, as long as the plant is commercially viable. Gorodskoy kurer also reported that wages at Avangard are too low to prevent workers from quitting. Workers at VNIIEF make two to three times as much as Avangard workers, according to the paper. ["V odinochku Avangard ne spravitsya," Gorodskoy kurer online edition, http://courier.sarov.ru, 25 October 2001.] {Entered 2/15/02 EC} 9/27/2001: NUCLEAR RELATED ACTIVITIES AT AVANGARD TO STOP BY END OF 2003 According to the US DOE National Nuclear Security Administration, Russia has confirmed its decision to cease all nuclear-weapon related production at the Avangard Electromechanical Plant by the end of 2003. ["Date Set for Closure of Russian Nuclear Weapons Plant," NNSA press release, http://www.nnsa.doe.gov/, 27 September 2001.] {Entered 10/3/2002 DA} 9/19/2001: AVANGARD SUFFERS FROM INSIDER THEFTS On 19 September 2001, Aleksandr Orlov, director of the Avangard Electromechanical Plant, told Gorodskoy kuryer that he suspected plant employees to be behind the recent theft of printed circuit boards worth 800,000 rubles (over $27,000 as of 19 September 2001) from computer-controlled machine tools. To prevent further thefts, the expensive equipment has been placed under a centrally supervised alarm system, and additional guards have been posted. In previous years, several insiders involved in precious metal thefts from Avangard have been caught and brought to trial. [Yelena Mazanova, "Odin den direktora zavoda," Gorodskoy kuryer, No. 39, 27 September 2001; in Integrum Techno, http://www.integrum.com/.] {Entered 11/28/2002 DA} 7/18/2001: NCI-SPONSORED LAPAROSCOPY CENTER OPENS IN SAROV On 18 July 2001 a Laparoscopy Center opened in Sarov under the auspices of the Department of Energy's Nuclear Cities Initiative. According to a National Nuclear Security Administration press release, the Center will provide new medical technology to the city, diversify the city's economy, and improve local and regional health care. The center could also potentially create a health business network and attract additional investment. The Medical College of Georgia, USA, played a lead role in developing the new Laparoscopy Center. Other partners in the $300,000 project were the Savannah River Site and the Rehabilitation Center Joint Stock Company of Sarov. ["Nuclear Cities Initiative Sponsored Laparoscopy Center Opens in Sarov, Russia," National Nuclear Security Administration press release, http://www.nnsa.doe.gov, 18 July 2001.] {Entered 9/25/2001 EC} 5/2001: SERIES OF INCIDENTS IN THE MILITARY UNIT GUARDING VNIIEF AND SAROV On 17 May 2001 Gorodskoy kurer reported on three incidents involving security guards in Sarov. On 2 May 2001 a private from the military unit that guards VNIIEF and Sarov shot and killed himself while on guard duty

at VNIIEF. His motives are not clear; the case is under investigation by military prosecutor's office. Another private, while on guard duty from 11 to 12 May 2001, fired a warning shot and then injured himself in a suicide attempt. He blamed hazing at the unit as the reason for his action; however, Gorodskoy kurer reported that there is no evidence for these allegations. This case is also under investigation. At the same military unit on 9 May 2001 a drunk contractor attacked a sentry, who, according to procedure, opened fire on the perpetrator. The injured contractor later was arrested by police. [N. Kocheshkova, "Samoubiystvo i samostrel v divizii," Gorodskoy kurer online edition, http://infra.sar.ru/~courier, No. 20, 17 May 2001.] {Entered 8/8/2001 RA} 1/2/2001 VNIIEF DIRECTOR ANNOUNCES PLANS TO REDUCE NUMBER OF NUCLEAR SPECIALISTS IN NUCLEAR LABS Only 12,000 nuclear specialists in the Sarov and Snezhinsk Federal Nuclear Centers combined are needed to fulfill government orders for 2001, announced VNIIEF Director Radiy Ilkayev on 2 January 2001. An estimated 2,000 specialists already eligible for retirement and 4,000 still under retirement age will be let go. According to Ilkayev, government funding stabilized in 2000, while VNIIEF revenues from conversion projects increased. An average institute salary is 3,700 rubles ($130 as of 2 January 2001). According to Ilkayev, salaries for nuclear specialists will gradually increase to $500 a month. Additionally, the leading 10% of nuclear specialists will be paid several times more than the average salary. Ilkayev stressed that VNIIEF's main goal is to ensure the steady development of the institute and increase production in order to increase wages and attract young specialists.[2] [Ye. Mazanova, "Na press-konferentsii, posvyashchennoy itogam raboty...," Gorodskoy kurer online edition, http://infra.sar.nnov.ru/~courier/, 4 January 2001.] {Entered 4/26/02 TH, Revised 5/24/02 ES} 1/2001: AVANGARD WANTS TO DEAL WITH FOREIGN COMPANIES DIRECTLY In January 2001 Avangard Deputy Director for International Scientific and Technology Relations Yuriy Zavalishin met with representatives from Nizhniy Novgorod Oblast administration and the state company Rosvooruzheniye (Rosvoorouzhenie) to discuss the possibility of Avangard having direct contacts with foreign customers. Arkadiy Volskiy, leader of the Union of Industrialists and Entrepreneurs, who is familiar with Avangard activities and has been assisting the enterprise in the international arena, endorsed Avangard's proposal. Avangard already has a number of contracts with the United States under the Nuclear Cities Initiative (NCI) to produce dialysis equipment and to develop and manufacture equipment for physical protection systems. A special document to approve Avangard's direct relations with foreign customers is under preparation. ["Na zavode Avangard," Informatsionnaya sluzhba EMZ "Avangard;" in Gorodskoy kurer online edition, http://infra.sar.ru/~courier, No. 5, 1 February 2001.] {Entered 8/6/2001 RA} 1/25/2001: MIKHAILOV SPEAKS ON WAGE INCREASE AT VNIIEF According to VNIIEF Scientific Director Viktor Mikhailov, in 1987 the average salary at VNIIEF was $250 per month; today it is $200. Recently, facing the continuous loss of skilled experts, the VNIIEF administration decided to increase the average wages and bonuses for health risk, secrecy, and overtime by 30%. "In two to three years we intend to reach the average salary of $400 per month," said Mikhailov. He emphasized that the increase in wages will allow the institute to keep old and attract new specialists essential for new areas of research, such as releasing nuclear energy using laser radiation, creating nanomaterials and superstrong magnetic fields, and nuclear energy safety. [E. Mazanova, "Poka platyat za 'zonu,'" Gorodskoy kurer online edition, http://infra.sar.nnov.ru/~courier, No. 4, 25 January 2001.] {Entered 8/1/2001 RA} 10/19/2000: NEW GENERAL DIRECTOR TALKS ABOUT AVANGARD REFORMS On 19 October 2000 Gorodskoy kurer published an interview with new Avangard General Director Aleksandr Orlov, where he stated that Avangard's structure will be reformed. "We will complete all work related to nuclear munitions by 2003; state defense orders keep decreasing." Avangard will be forced to lay off approximately 1,300 workers: 2880-2980 workers will be left in 2005, and only 3-5% of them will be working on defense orders. Orlov stressed the need to create new civilian enterprises to use the human and technical resources of Avangard. Orlov mentioned a joint US-German-Russian company that produces dialysis equipment (see the 23 March 2000 entry below) as a positive example of conversion at the facility. The director said that the short term goals for Avangard are to optimize its personnel and infrastructure during the transition period. [Olga Zaguskina, "Aleksandr Orlov: 'Tolko plokhaya loshad so starta v galop beryot.' 15 sentyabrya podpisan prikaz o naznachenii novogo generalnogo direktora zavoda 'Avangard,'" Gorodskoy kurer online edition, http://infra.sar.nnov.ru/~courier, No. 42, 19 October 2000.] {Entered 7/27/2001 RA} 9/3/2000: PRIVATE SHOT ATTEMPTING TO ENTER RESTRICTED ZONE On 3 September 2000 a private from a local military unit was detected by an alarm system while trying to get into restricted area No. 3a. The solder was shot on the run by the guards. The intentions of the private are unclear. The case is still under investigation. [N.Kocheshkova, "Proyti i pogoret," Gorodskoy kurer online edition, http://infra.sar.nnov.ru/~courier, No. 36, 7 September 2000.] {Entered 8/1/2001 RA} 8/2000: ANTITERRORIST EXERCISES IN SAROV During August 2000 representatives from the VNIIEF and Avangard security departments, the local police department, and Minatom participated in a series of antiterrorist exercises in Sarov. These exercises were to

test the preparedness of each unit. Security at VNIIEF and Avangard sites was strengthened, and all activities with nuclear devices and explosives at these sites were suspended during the exercises. Additional security measures were imposed throughout the city.[1] Nikolay Anoshin, chief of Sarov's department of internal affairs, noted that most of the city's recently solved crimes were committed by non-residents. The city is concerned about former construction contractors from outside the city who continue to use temporary passes to enter Sarov unsupervised. Anoshin is greatly opposed to the idea of allowing contractors to enter the city in their own vehicles.[2] Sources: [1] "Rezhim usilen vezde," Gorodskoy kurer online edition, http://infra.sar.nnov.ru/~courier, No. 35, 31 August 2000. [2] N. Kocheshkova, "Sluchaynost isklyuchena," Gorodskoy kurer online edition, http://infra.sar.nnov.ru/~courier, No. 36, 7 September 2000. {Entered 8/1/2001 RA} 8/30/2000: US SECRETARY OF ENERGY VISITS SAROV, ATTENDS COMMISSIONING CEREMONY OF NEW TECHNOPARK AT AVANGARD While visiting Sarov on 30 August 2000, US Secretary of Energy Bill Richardson attended the commissioning ceremony of the newly created 10-acre Avangard Technopark in an area that was formerly part of the restricted zone of the Avangard plant. Avangard Technopark will house a joint German-US venture that produces kidney-dialysis machines and supplies. Richardson said that the Department of Energy (DOE) committed $4.5 million in FY 2001 for conversion projects at the Avangard facility.[1] The funding is provided under DOE's Nuclear Cities Initiative (NCI) program. Richardson stated that a further sum of $8.5 million would come from private firms interested in business development projects in Sarov.[2] Sources: [1] Michael Wines, New York Times, 31 August 2000; in "Energy Secretary Visits Russia," RANSAC Nuclear News, 31 August 2000. [2] Olga Zaguskina, "Ministr energetiki SShA B. Richardson pribyl v Sarov 30 avgusta v soprovozhdenii glavy Minatoma Ye. Adamova," Gorodskoy kurer online edition, http://infra.sar.nnov.ru/~courier, No. 170, 9 September 2000.{Entered 9/14/2000 GD} 8/25/2000: MIKHAIL KASYANOV VISITS SAROV, VNIIEF On 25 August 2000, Prime Minister Kasyanov visited Sarov and VNIIEF. Most of his statements during the visit concerned Russian nuclear weapons complex issues. (For details, see the 8/25/2000 entry in the Closed Cities and General Weapons Facilities Developments section). Speaking about lifting the restricted entry regime for Sarov, Kasyanov favored the idea of limiting the city's restricted area to nuclear facilities only; the rest of the city should be opened up for business development, provided proper security measures are implemented. [Nataliya Kocheshkova "Mikhail Kasyanov: "K nalogovym lgotam otnoshus otritsatelno," Gorodskoy kurer online edition, http://infra.sar.nnov.ru, No. 35, 31 August 2000.] {Entered 9/18/00 OC} 7/27/2000: VNIIEF OFFICIAL DISCUSSES DEBT, AVERAGE SALARY On 27 July 2000, Sarov's online paper Gorodskoy kuryer reported that the current wage at VNIIEF averages 3,200 rubles ($115 as of 27 July 2000). According to VNIIEF Deputy Director for Economics Gennadiy Smirnov, the amount that VNIIEF owes to its creditors equals the monthly balance in its salary trust fund. ["Na tarife daleko ne uyedesh," Gorodskoy kuryer online edition, http://infra.sar.nnov.ru/~courier/, 27 July 2000.] {Entered 7/27/2000 SS} 3/23/2000: AVANGARD, LLNL SIGN NCI CONTRACT TO MANUFACTURE KIDNEY DIALYSIS EQUIPMENT On 23 March 2000, representatives from Lawrence Livermore National Laboratory (LLNL) and the Avangard Foundation, which represents the Avangard Electromechanical Plant, signed a contract to manufacture kidney dialysis equipment under the Nuclear Cities Initiative (NCI). Avangard facilities will be converted to support the manufacturing of dialysis equipment, which will create jobs for several hundred former weapons specialists. (For details, see the 23 March 2000 development in the Nuclear Cities Initiative file.) ["Russian Weapons Plant to Manufacture Medical Equipment," US Department of Energy Web Site, http://www.doe.gov, 24 March 2000.] {Entered 7/5/00 SS} 3/14/2000: EUROPEAN STATES DISCUSS CREATION OF EUROPEAN NUCLEAR CITIES INITIATIVE During the conference "Helping Russia Downsize its Nuclear Weapons Complex" held on 14 March 2000 in Princeton, New Jersey, the Italian-based non-governmental organization Landau Network-Centro Volta promoted the creation of a European Nuclear Cities Initiative (ENCI) to complement the US DOE's Nuclear Cities Initiative. Initially, the ENCI would be limited to two pilot cities, Snezhinsk (Chelyabinsk-70) and Sarov (Arzamas-16). For details, see the 14 March 2000 entry in the Nuclear Cities Initiative Developments section of the NIS Nuclear and Missile Database.) [Paolo Cotta Ramusino, Antonino Lantieri, and Maurizio Martellini, European Nuclear Cities Initiative (ENCI): Background Concepts and Tasks (Princeton, NJ: Russian American Nuclear Security Advisory Council, 14-15 March 2000).] {Entered 4/5/2000 SS}{Updated 7/21/00 SS} 12/30/99: SAROV OFFICIALS REPORT POPULATION GROWTH On 30 December 1999, the Moscow newspaper Vek published an interview with Sarov Mayor Gennadiy Karatayev, who reported that the city's birth rate is lower than its mortality rate. In spite of this, the number

of residents living in Sarov (Arzamas-16) has grown as residents from other regions in Russia and the Newly Independent States have sought to get permanent residence in the city, which has become well-known for its ability to pay pensions on time and its relatively reliable utility service. According to Karatayev, the Sarov administration is looking forward to further improving the city's financial situation, and the FY2000 municipal budget is already 160 million rubles larger than the FY1999 budget. Karatayev added that one-third of the city's public apartments are distributed free of charge to qualified residents who are waiting for housing. Other apartments are sold to residents for 30 to 100 percent of the apartment's value, and Sarov has also instituted a mortgage program to help residents buy housing. [Vladimir Babkin, "Otkrovennyye razgovory v sekretnom gorode," Vek, No. 1, 30 December 1999-13 January 2000.] {Entered 5/23/00 SS} 12/17/99: AVANGARD DIRECTOR REVIEWS RESTRUCTURING PROGRAMS In the 17 December 1999 issue of Krasnaya zvezda, Avangard General Director Yuriy Zavalishin reported that Avangard dismantled fewer warheads in 1999 than in 1998 because of insufficient financing. Avangard is currently reorganizing its operations but, as Zavalishin noted, Avangard is obligated to continue working with nuclear components and dismantling old warheads. Zavalishin added that dismantlement is more dangerous than assembling a new weapon because the condition of the old materials is not known. Zavalishin further noted that the security systems produced at Avangard are comparable to US-made security systems. Avangard plans to further develop these security systems and will also restructure its neutron fuse production technology to produce radiochemicals for the space industry. Eight years ago, Avangard began developing the technology to manufacture kidney dialysis machines. According to Zavalishin, Avangard's dialysis machine is very competitive with machines manufactured by US, German and Swiss companies and costs much less. Recently, Avangard received funding to develop the next generation of dialysis machines and production levels will be increased. [Vladimir Dernovoy, "Boyegolovki ot 'Avangarda,'" Krasnaya zvezda, No. 264, 17 December 1999, p. 4.] {Entered 3/1/2000 SS} 12/2/99: STATE DUMA TO PRESERVE INVESTMENT ZONES AROUND FEDERAL NUCLEAR CENTERS On 16 December 1999, Sarov's Gorodskoy kurer outlined federal legislation passed by the Duma on 2 December 1999 that allows the closed city (ZATO) investment zone to remain in place at Sarov (Arzamas-16).[1] Snezhinsk (Chelyabinsk-70) will also keep its ZATO investment zone.[2] The federal taxes collected in Sarov and Snezhinsk will remain in the two cities' municipal budgets and will be used to support VNIIEF and VNIITF.[1,2] The Duma voted to rescind the investment zone status at the remaining 40 ZATO investment zones.[1] The Duma approved the FY 2000 budget that allocates 2 billion rubles (approximately $75 million as of 16 December 1999) to Minatom conversion projects.[1] In his testimony before the Russian State Duma, Sarov City Duma Deputy Anatoliy Amelichev argued that proposed changes to the ZATO law would force foreign firms with investments in ZATO enterprises to close these enterprises.[3] Sarov and Snezhinsk delegates also successfully lobbied Duma deputies to include language in the budget stating that the Federal Nuclear Centers should receive regular funding and that federal funding should not be reduced.[1] Amelichev's visit to Moscow coincided with a meeting of the Association of Closed Cities (AZG), which developed a series of proposals to present to the government on federal financing for the ZATOs. AZG proposals included a ceiling on tax concessions for investors, giving up 4 billion rubles in federal subsidies, and changing the closed city status of smaller towns that are under the jurisdiction of the Ministry of Defense.[3] During negotiations with Sarov delegates, the Russian government promised to pay VNIIEF and Avangard for debts that it had accumulated during 1997-98, with payment to begin in December 1999.[1] The government also pledged to sign two presidential decrees: one on development and the creation of jobs at the Federal Nuclear Centers and a second promising social support for personnel of the Russian nuclear weapons complex.[1] Sources: [1] L. Saratova, "Chto pravitelstvo obeshchalo Sarovu," Gorodskoy kurer online edition, http://infra.sar.nnov.ru/~courier, No. 132, 16 December 1999. [2] "Gosduma RF podderzhala resheniye soglasitelnoy komissii po ZATO," Interfax, No. 2, 3 December 1999. [3] L. Saratova, "Yadernyye tsentry dolzhny zhit," Gorodskoy kurer online edition, http://infra.sar.nnov.ru/~courier, No.48, 2 December 1999. {Entered 2/4/2000 SS} 11/24/99: VNIIEF CONFERENCE EXAMINES SAFETY ISSUES Beginning on 24 November 1999, Sarov hosted a two-day scientific conference on safety issues related to nuclear weapons work, which coincided with the VNIIEF labor protection service's 50th anniversary. Participants included specialists and directors from nuclear weapons production enterprises and enterprises that produce nuclear weapons materials. Reports showing the frequency of injuries over the past 50 years concluded that "on the job" injuries declined by a factor of 20 during this period. The conference passed a resolution commending the labor protection service for the high level of operating safety that has been maintained, even during crisis situations. In addition, the conference approved measures to raise the prestige of the labor protection service, which included a proposal to the Russian government to create an award to honor labor protection service workers. [G. Prokhorov, "Bezopasnost truda i yadernoye oruzhiye," Gorodskoy kurer online edition, http://infra.sar.nnov.ru/~courier, No. 50, 16 December 1999.] {Entered 2/7/2000 SS} 11/13/99: NUCLEAR CITIES INITIATIVE TO CONTINUE IN THREE PILOT CITIES On 13 November 1999, US Assistant Secretary of Energy for Nuclear Nonproliferation and National Security

Rose Gottemoeller announced that sharp budget cuts will force the US Department of Energy to scale back the Nuclear Cities Initiative (NCI). In October 1999, the US Congress appropriated $7.5 million for the program, essentially halving NCI funding for FY 2000. According to Gottemoeller, NCI will continue its programs in the three pilot cities of Sarov, Snezhinsk, and Zheleznogorsk in spite of the budget reductions.[2] Congress's decision to cut NCI funding resulted from a report by the General Accounting Office, which stated that some NCI funds "appeared to be going to Russian scientists who were still working on weapons."[1] Congress also included a provision in FY 2000 NCI appropriations that requires Energy Secretary Bill Richardson to certify that Russia will close some nuclear weapons facilities. (For a copy of the GAO report, please see the Russia: Full-Text Documents: GAO Reports section of the NIS Nuclear and Missile Database.) Sources: [1] Walter Pincus, "US Pulls Nuclear Funding," Washington Post, 13 November 1999; in Moscow Times online edition, http://www.moscowtimes.ru , 13 November 1999.] {Entered 1/13/2000 SS} [2] Rose Gottemoeller, "Three Nuclear Cities," Washington Post, 27 November 1999, p. A24; in Lexis-Nexis Academic Universe, http://web.lexis-nexis.com. {Updated 1/19/2000 SS} 11/9/99: PNL DELEGATION IN SAROV TO DISCUSS INTERNATIONAL BUSINESS CENTER On 9 November 1999, representatives from Pacific Northwest National Laboratory (PNL) began a three-day visit to Sarov under the auspices of the Nuclear Cities Initiative (NCI) to discuss the proposed International Business Center with city officials. In an interview with Sarov's Gorodskoy kurer, Municipal Duma Chairman Anatoliy Amelichev reported that Sarov officials had observed a lack of visible large-scale achievements in the development of NCI, and he noted that the only NCI project to be financed and implemented was the open computing center. He noted that while concrete projects had been approved for Sarov, there is no financing for these projects yet. He stated that the city needs to be more actively involved in NCI activities, but it lacks the translators and other resources necessary to develop international contacts, and as a result VNIIEF's Center for International Cooperation and VNIIEF-Konversiya, which had been established to promote commercial contacts, had been leading the NCI program. Amelichev suppports the idea of moving VNIITF-Konversiya out of the institute's restricted area and charging it with functions similar to the proposed international development center. The municipal government has already designated a building for this purpose in downtown Sarov. [L. Saratova, "Dengi ochen lyubyat schet," Gorodskoy kurer online edition, http://infra.sar.nnov.ru/~courier/, No. 47, 25 November 1999.] {Entered 5/19/00 SS} 11/4/99: RYABEV: MINATOM RECEIVED FUNDING FOR CONVERSION PROJECTS On 4 November 1999, First Deputy Minister of Atomic Energy Lev Ryabev stated that Minatom had received funding from the federal budget for conversion projects. Minatom has approved an internal restructuring program that is to be implemented over the next four or five years and will include VNIIEF. The restructuring would also affect VNIIEF conversion work, which is subdivided into serial production and research and development work. VNIIEF representatives traveled to Minatom to defend the institute's conversion programs. According to VNIIEF's chief production engineer, who also took part in the delegation, VNIIEF programs are insufficiently funded, and the cash money promised to VNIIEF will be the first cash money it has received in the last decade. The money will be used to replace worn equipment and weapons designers will receive less than ten percent of the funds. [E.M., "Konversiyonnyy Rucheyek Minatoma," Gorodskoy kurer online edition, http://infra.sar.nnov.ru/~courier/, No. 44, 4 November 1999.] {Entered 2/7/2000 SS} 11/4/99: VNIIEF-KONVERSIYA OFFICIAL DISCUSSES NCI PROJECTS On 4 November 1999, Sarov's Gorodskoy kurer published an interview with VNIIEF-Konversiya's Economics Department Director Yelena Dyakova, who discussed the implementation of the Nuclear Cities Initiative (NCI). Dyakova divided NCI's activities into two spheres: projects designed to create new jobs and projects related to training and business consulting. During October and December 1998, VNIIEF and Avangard scientists submitted 50 proposals to visiting US delegations. Six proposals were selected, and in April 1999, the US officials agreed to allocate funds for three of them, including the creation of an open computing center (see development from 10/1/99 below), a laparotomy project, and a telemedicine project. Although NCI will supply Sarov with medical equipment for the laparotomy and telemedicine projects, Dyakova noted that NCI funds will not be used to pay salaries and other expenses or to rent office space. She added that Sarov and Russia will be responsible for these expenses, and she estimated that NCI financial contributions make up one to ten percent of the total amount of money Russia needs to fund the restructuring of its nuclear weapons complex. Other potential NCI projects include the establishment of an international business development center, development of titanium production, recycling of mercury lamps, and the creation of a "quick response" design bureau. [L. Sarova, "Nashi problemy reshat nam!" Gorodskoy kurer online edition, http://infra.sar.nnov.ru/~courier/, No. 44, 4 November 1999.] {Entered 5/19/00 SS} 10/1/99: OPEN COMPUTING CENTER IN SAROV TO USE IBM SUPERCOMPUTERS On 1 October 1999, US officials announced that a two-year old dispute concerning the sale of IBM supercomputers to VNIIEF had been resolved, and the computers will be used in an open computing center at Sarov. The United States wanted the computers, which IBM sold to VNIIEF without getting the proper export licenses, to be returned or "openly dedicated to nonweapons work." The open computing center is a joint project between the Russia's Ministry of Atomic Energy and the US Department of Energy, which contributed $2.3 million to the project under the Nuclear Cities Initiative. DOE Secretary Bill Richardson was present at the official opening of the center, which is expected to employ 80 persons within its first year and could create as

many as 650 new jobs over the next five years. According to VNIIEF's Director Dr. Radiy Ilkayev, the institute's staff has shrunk from 30,000 to 18,000 employees and 15 percent of the lab's workforce is employed in the civilian sector. Ilkayev estimated that VNIIEF receives $8 million in foreign assistance each year, with the United States contributing 86 percent of these funds. According to Ilkayev, VNIIEF needs roughly $40 million over the next three years to continue restructuring and increase the number of employees engaged in the civilian sector to 29 percent by 2002. [Judith Miller, "U.S. and Russia Find a Home for Disputed IBM Computers," NewYork Times online edition, http://www.nytimes.com, 1 October 1999. See also "Richardson, Adamov Advance Nuclear Cities Initiative," US Department of Energy Press Release, 1 October 1999, http://www.doe.gov/news/releases99/octpr/pr99267.htm] {Entered 10/12/99 SS} 10/99: SAROV RELEASES TAX DATA FROM JANUARY THROUGH OCTOBER 1999 As of October 1999, Sarov's State Tax Inspection Service (STIS) registered 1606 enterprises, including 144 firms registered in the Sarov investment zone. In comparison with January 1999, 26 fewer firms are operating in the investment zone (see development from 1/99 below). The total number of tax receipts collected from January through October 1999 was 513.5 million rubles ($20.3 million as of 1 October 1999), including 192.7 million rubles ($7.6 million as of 1 October 1999) collected in the investment zone. On average, each enterprise registered in Sarov paid 320,000 rubles ($12,600 as of 1 October 1999) in taxes. [RFNC-VNIIEF Quarterly Information Bulletin (Analytical Center for Non-proliferation, 2000) , No. 1, pp. 45-47.] {Entered 5/18/00 SS} 9/2/99: RYABEV: VNIIEF WILL NOT CUT JOBS In an interview with Sarov's Gorodskoy kurer on 2 September 1999, First Deputy Minister of Atomic Energy Lev Ryabev said that there would be no job reductions at VNIIEF. Ryabev was in Sarov for the opening session of the Scientific Technical Council (NTS) at VNIIEF. According to Ryabev, approximately 12,000 personnel work on military projects, although Minatom is working to redirect some of VNIIEF's work force towards civilian projects. The budget proposal for the year 2000 maintains the current level of funding for VNIIEF, and Ryabev added that 1.7 billion rubles ($66 million as of 2 September 1999) had been allocated for conversion work (presumably for all of Minatom), although he conceded that conversion efforts are becoming more dependent on US assistance. Ryabev reported that the Nuclear Cities Initiative (NCI) appropriates approximately $20 to $30 million yearly, and an Open Computing Center, which was funded under NCI, will provide approximately 100 jobs for VNIIEF specialists (see 10/1/99 development above). Sergey Krysov, who is on the Council of Directors for VNIIEF-Konversiya, was also present for the NTS opening session. According to Krysov, Konversiya projects created approximately 1000 jobs, but he added that at least 5000 positions must be created to ensure that the city of Sarov has a future. [Elena Mazanova, "Oruzhiye ubezhdeniya, stil raboty i neminuyemoye nakazaniye," Gorodskoy kurer online edition, http://infra.sar.nnov.ru/~courier, No. 35, 2 September 1999.] {Entered 11/18/99 SS} 8/26/99: MODERNIZATION OF RUSSIAN NUCLEAR WEAPONS CONTINUES On 26 August 1999 at a meeting with journalists at VNIIEF in connection with the 50th anniversary of the first Soviet nuclear test, Deputy Minister for Atomic Energy Lev Ryabev said that Russia's weapons are currently undergoing modernization in four different areas. The first area is safety, specifically the prevention of accidental detonations or launches. He noted that nuclear weapons have safety features that prevent their use if stolen by terrorists. The second area is extending the service life of Russia's current nuclear arsenal. The third is continuing research and development to maintain the nuclear arsenal in the event of a test ban (through laboratory modeling.) The fourth is improvement of nuclear weapons in view of the development of anti-missile defense systems. Ryabev also called for the formation of a smaller nuclear weapons complex, noting that Russia has already reduced its production of nuclear weapons more than ten-fold. Weapons assembly facilities will be cut from four to two, and industry staff from 75,000 to 35,000 by the year 2005. Ryabev commented that Russia has received $215 million from the United States, Japan, and the European Union to assist in conversion efforts. The cities of Sarov, Snezhinsk, and Zheleznogorsk are scheduled to receive an additional $20 million in 2000 from the United States for defense conversion. With regard to nuclear waste, Ryabev said "no nuclear wastes will be brought to Russia from abroad--only spent fuel from nuclear power stations, specifically uranium 235 and plutonium. Plutonium will be extracted from the spent nuclear fuel for energy purposes. The wastes will then be vitrified and returned to the sender country." ["Rossiya prodolzhayet sovershenstvovat yadernoye oruzhiye," Interfax, No. 2, 26 August 1999.] {Entered 9/10/99 CEM} 8/9/99: VNIIEF CONTRACTED TO EVALUATE CONVERSION PROGRAMS On 9 August 1999, the US Department of Energy's Office of Arms Control and Nonproliferation announced that it intends to issue two Nuclear Cities Initiative (NCI) contracts to VNIIEF. Under one eight-month contract, VNIIEF will assess past conversion projects and current capabilities at the Avangard Electromechanical Plant in Sarov to improve future conversion activities. The study will examine the principles and restrictions governing the conversion process, the types of alternative technologies that will be pursued after conversion, and the types of planning required. The contract also includes publication of quarterly information bulletins on the investment climate and business development in Sarov. Under the second, which runs for 12 months, VNIIEF will analyze acting and pending Russian federal legislation concerning nuclear weapons, the closed cities, and dual-use technology exports, and will assess their impact on nonproliferation. The assessment will include current laws governing investment, technology exports and taxation in Russia, as well as an examination on the

socio-economic conditions within the closed cities to help potential investors assess the current business climate within the closed cities. ["Russian Institute to Examine Nuke City Conversion Ability," Post-Soviet States & Eastern Europe Monitor, 9 August 1999, p. 17.] {Entered 12/3/99 SS} 7/5/99: SAROV CONDUCTS COUNTERTERRORIST EXERCISES From 5 to 10 July 1999, Sarov's Federal Security Service (FSB) conducted counter-terrorist exercises to simulate attempts to illegally enter the city. The exercises sought to check and strengthen counter-intelligence activities designed to protect nuclear installations and weapons facilities, to perfect the practical skills of special anti-terrorist subunits, and to improve the coordination between antiterrorist subunits and local lawenforcement bodies. On 13 July the head of Sarov's FSB, Aleksandr Borodin, held a press conference for journalists and representatives of local law enforcement bodies. FSB officials called the exercises a success and reported that the current security system had performed efficiently during the simulation. Five thousand law enforcement officials from Sarov, neighboring districts of Nizhniy Novgorod Oblast, and the Republic of Mordovia participated in the exercise. According to the RFNC-VNIIEF Quarterly Information Bulletin, Sarov's police uncovered several actual attempts to illegally enter the closed city during the exercises. FSB appeals for information about suspicious activities met with 200 responses from Sarov residents. [Analytical Center for Non-proliferation, RFNC-VNIIEF Quarterly Information Bulletin, No. 1, 2000, p. 64.] {Entered 5/24/00 SS} 7/99: RETRAINING PROGRAMS AND INVESTMENT PROJECTS ADDRESS UNEMPLOYMENT IN SAROV In July 1999, Atompressa reported that the official unemployment rate in Sarov (Arzamas-16) was 1.95 percent.[1] According to RFNC-VNIIEF Quarterly Information Bulletin, the unemployment rate in the first half of 1999 was 2.3 percent.[2] The Bulletin also reported that the number of Sarov residents who held jobs in the first half of 1999 had increased by 2.2 percent as compared to the first half of 1998.[2] In Sarov, a department of the Federal Employment Service and the municipal Duma's Coordinating Committee for Employment Assistance for the Populace have worked with private groups to lower unemployment levels in the city. Strategies to combat unemployment include retraining, the creation of civilian jobs at VNIIEF and Avangard, and the creation of new jobs and businesses in Sarov. According to Atompressa, roughly 250 residents undergo training at the municipal center for professional training, and the average course lasts two and a half months. Sarov spends roughly 3,000 rubles ($123 as of 7/1/99) per month for each person participating in the training program. From 1997 to the beginning of 1999, 84 specialists who had been employed at VNIIEF and Avangard underwent training to produce synthetic diamonds at VNIIEF. Other VNIIEF job creation programs focus on investment projects related to safety at nuclear power plants, equipment for the oil and gas complex, and isotope production. At Avangard, investment projects include manufacturing of medical equipment, radio communication components, radiation monitors, and equipment for nuclear power plants. Investment projects to create jobs in the city of Sarov include a thermal metal processing center, a "rehabilitation center," and cellular telephone communications. Between 1998 and 1999, Sarov officials predicted that investment projects would create 1,200 new jobs at VNIIEF, 150 new jobs at Avangard, and 40 jobs at the joint stock company VNIIEF-Konversiya. By 2000, these projects could create a total of 2,500 new jobs in Sarov. Continued funding for the production of medical equipment and other conversion projects could create approximately 500 new jobs at Avangard by 2005.[1] According to Sarov officials, lack of funding had forced the cancellation of some conversion projects at Avangard and VNIIEF.[2] Conversion work is carried out under the "Reconstruction and Development Program of Conversion of the State Enterprise EMZ Avangard from 1998-2005" and the nuclear industry's "Programs to Assist Employment for ZATO Residents." Funding sources include allocations from the federal budget, Minatom, taxes collected within the investment zone, and VNIIEF's own coffers.[1] Sources: [1] "Zanyatost v Sarove," Atompressa, No. 25, July 1999, p. 3. [2] Analytical Center for Non-proliferation, RFNC-VNIIEF Quarterly Information Bulletin, No. 1, 2000, pp. 25-29. {Entered 5/22/00 SS} 7/99: VNIIEF DEVELOPS SYSTEMS AND AMMUNITION FOR AIR FORCE In an article published in Voyennyy parad, VNIIEF Director Radiy Ilkayev and VNIIEF Development Head Stanislav Klimov reported that VNIIEF scientists are working with other Russian defense industry enterprises to develop ammunition and systems for the Air Force. Under the cooperation arrangement, VNIIEF scientists have designed warheads for the Khrizantema, Ataka, and Malyutka-2 anti-tank guided missile systems. VNIIEF also developed a warhead modernization program, which reportedly doubled the armor-penetrating ability of the Malyutka-2. VNIIEF also applied mathematical modelling to study jet formation processes and the performance of an explosive-formed penetrator against complex barriers. According to Voyennyy parad, VNIIEF is positioned to implement the entire development process from initial calculation to series production, which would decrease the expense and time associated with new conventional weapons development. [Rady Ilkayev and Stanislav Klimov, "VNIIEF: Development of Ammunition and Systems for Air Force," Voyennyy parad, No. 4, July/August 1999, pp. 34-35.] {Entered 11/12/99 SS} 6/18/99: VNIIEF PROPOSES USING NUCLEAR EXPLOSIONS FOR RADIOACTIVE WASTE DISPOSAL In an effort to address the problem of radioactive waste disposal, the All-Russian Scientific Research Institute of Experimental Physics, the Russian Federation Ministry of Defense Central Physical Technical Institute, and several other organizations have for the past three decades engaged in the development of nuclear explosion technology to dispose of highly radioactive wastes. The method, which entirely eliminates the waste, involves

the use of underground nuclear explosions. It requires the excavation of an underground chamber approximately 600m below the ground in an aluminosilicate rock mass with a low volatile content. Next, containers with highly radioactive waste are isolated with special stabilizing filters. Two to three nuclear explosive devices, with a cumulative yield of 60 to 100 kilotons (kT) of TNT, would then be detonated, and the resulting explosion and shock wave would result in the mixing and vitrification of the radioactive waste in the chamber. According to an 18 July 1999 article in Nezavisimoye voyennoye obozreniye, the explosion method is better than the traditional waste burial method in that it does not cost as much and does not require continuous monitoring, control, and security. The Novaya Zemlya nuclear test site has been identified as a possible location for such explosions. Since the detonation of nuclear devices, even for peaceful purposes, is not allowed under the Comprehensive Test Ban Treaty (CTBT), the authors of the proposal call for the amendment of the treaty. If implemented, the method could address the problem of naval radioactive waste disposal, as well as the mass removal of radioactive waste associated with the planned shutdown of nuclear power plants built in the 1970s and 1980s.(For an earlier item on this topic, please see the 5/6/97 item in this file. For more information on naval reactor waste, please see the Naval Nuclear Reactor Radioactive Waste section of the NIS Nuclear and Missile Database.) [Leonid Yevterev, Vladimir Klimenko, Varfolomey Korobushin, Vladimir Loborev, Anatoloy Panshin, "Klin klinom vyshivayut," Nezavisimoye voyennoye obozreniye, No. 23, 18-24 June 1999, p. 5.] {Entered 11/18/99 SK} 5/28/99: GENERAL ATOMICS CONCLUDES AGREEMENT WITH VNIIEF On 28 May 1999, General Atomics announced that it concluded an agreement with VNIIEF for exclusive rights to promote a high-temperature fluoride battery invented by VNIIEF on the Russian and world markets. The battery, which was first developed in 1995 under the auspices of the Moscow-based International Science and Technology Center (ISTC), increases the efficiency of prospecting and drilling oil deposits. According to Krasnaya zvezda, General Atomics has over twenty years' experience working with Russia in scientific and technical fields. [Vladimir Maryukha, "Mezhdunarodnyye orbity 'yadernykh' talantov berut nachalo v 'zakrytykh' gorodakh," Krasnaya zvezda, No. 118, 28 May 1999, p. 3] {Entered 9/28/99 SS} 5/18/99: VNIIEF HOLDS COLLECTIVE AGREEMENT CONFERENCE On 18 May 1999 VNIIEF held a "collective agreement" conference, which was closed to the press. During the conference, administration and employee deputies discussed the institute's internal issues. Prior to the conference, VNIIEF had fully paid out wages for the year of 1998, more than 9,000 employees had received all of their salaries up to date, and the wage arrears constituted no more than 0.7 months. The question of salary distribution, however, was not addressed: at VNIIEF the top 10 percent of the salaries constitute a sum that exceeds by 11 times the bottom 10 percent. The average salary in 1998 was 1,430 rubles ($96), by May 1999 it reached 2,000 rubles ($80), and by the autumn of 1999, the average salary was projected to go up to 2,500 rubles. All contract work accepted by the institute employees must contribute 30 percent of the compensation to VNIIEF management as "overhead." Many VNIIEF workers no longer have specific tasks to perform at work, which creates a situation of "hidden unemployment." Thus, the salaries paid out to many VNIIEF employees are de facto unemployment compensation payments. [Olga Zaguskina, "A u nas--tish da glad," Gorodskoy kurer, online edition, http://www.sar.nnov.ru:80/~courier/, 27 May 1999.] {Entered 7/12/99 KP} 3/13/99: ADAMOV WANTS TO KEEP NUCLEAR CENTERS AT BOTH SAROV AND SNEZHINSK Russian Minister of Atomic Energy Yevgeniy Adamov stated that he would prefer that Russia keep both federal nuclear centers at Sarov and at Snezhinsk open. In response to criticism that only one center should stay open, Adamov maintains that mutual control and competition between both centers is beneficial to the industry. [Yevgeny Tkachenko, ITAR-TASS, 13 March 1999; in "Minister Wants Russia To Keep Both Of Nuclear Centres," Lexis-Nexis Academic Universe, http://web.lexis-nexis.com/universe.]{Entered 5/4/99 SK} 3/10/99: VNIIEF AND ROSVOORUZHENIYE TO PRODUCE NON-NUCLEAR WEAPONS The general director of the Russian state company Rosvooruzheniye, Grigoriy Rapota, and the administration of VNIIEF met on 10 March 1999 to evaluate the first year of mutual cooperation on the production and export of non-nuclear high-precision weapons.[1,2] The meeting took place at Sarov, where Rapota also visited the production site and discussed additional cooperation with US firms and the Ukrainian arms manufacturer Tasko. Rosvooruzheniye will act as a mediator between the parties.[2] VNIIEF and Rosvooruzheniye aim to develop a base of international customers. VNIIEF has been cooperating with various enterprises to produce non-nuclear weapons since the early 1990s. The center has a closed cycle for manufacturing weapons, from research to production.[1] Sources: [1] NTV, 15 March 1999; in "Rosvooruzheniye, Nuclear Centre To Cooperate," Lexis-Nexis Academic Universe, http://web.lexis-nexis.com/universe. [2] NTV, 15 March 1999; in "'High-Precision Non-Nuclear Weapon' Project Said To Have Been Launched," Lexis-Nexis Academic Universe, http://web.lexis-nexis.com/universe. {Entered 4/29/99 SK} 2/24/99: VNIIEF SCIENTISTS TO DEVELOP 3D GRAPHICS FOR INTEL According to a 24 February 1999 report from Reuters, the California-based microchip manufacturer Intel plans to expand current operations in Sarov, where some 65 VNIIEF scientists are developing computer software for three-dimensional graphics. Intel first began the program under the US Department of Energy sponsored

program Initiatives for Proliferation Prevention (IPP), and according to DOE Assistant Secretary Rose Gottemoeller, the chip maker is hoping to increase the number of programmers to 200. ["Intel hiring Russian nucler scientists," Reuters, 24 February 1999; in CNET News.com, http://www.news.com/News, 24 February 1999.] {Entered 9/30/99 SS} 2/24/99: US TO APPROPRIATE $60 MILLION FOR CONVERSION AT RUSSIAN NUCLEAR CITIES Speaking at a press conference in Moscow on 24 February 1999, Rose Gottemoeller, US Assistant Secretary of Energy for Nuclear Nonproliferation and National Security, stated that the US government plans to appropriate $60 million for nonproliferation and conversion programs at 10 of Russia's closed nuclear cities over the next two years.[1,2] According to Gottemoeller, $30 million dollars will be appropriated in 1999, with roughly $15 million reserved for conversion projects at the closed cities and $15 million used to resolve problems related to nonproliferation of nuclear materials.[1,2] Gottemoeller added that the US DOE would appeal to Congress to renew funding for these programs in the FY 2000 Budget.[2] Initially, the US funding will focus on conversion work at the three largest nuclear cities, Sarov (Arzamas-16 ), Snezhinsk (Chelyabinsk-70), and Zheleznogorsk (Krasnoyarsk-26).[2] According to Interfax, funds will be used to establisha high-speed computing center at Sarov and a pharmaceutical center at Snezhinsk.[1] A telecommunications center will also be established.[2] Sources: [1] "SSHA vydelyat Rossii $60 mln na resheniye problem 'yadernykh' gorodov," Interfax, No. 3, 24 February 1999. [2] "SSHA vzyazlis za rossiyskiye yadernyye problemy," Segodnya, No. 42, 25 February 1999. {Entered 12/3/99 SS} 2/19/99: SAROV'S NUCLEAR WEAPONS ASSEMBLY WILL STOP BY 2000 As part of the conversion and restructuring of the Russian nuclear industry, assembly of nuclear weapons at the Avangard plant in Sarov will cease by the year 2000. [ITAR-TASS, 19 February 1999; in "Nuclear Weapons Plants To Be Wound Down," Lexis-Nexis Academic Universe, http://web.lexis-nexis.com/universe.] {Entered 2/25/99 SK} 1/99: SAROV RELEASES DATA ON TAXES COLLECTED IN 1998 According to the RFNC-VNIIEF Quarterly Information Bulletin, Sarov's State Tax Inspection Service (STIS) registered 1,588 enterprises as of 1 January 1999, including 170 firms in Sarov's investment zone. Approximately 80 percent of the registered enterprises work in the private sector. In 1998, 1,006 firms conducted business and the remaining firms "performed no economic activities." The Sarov budget received 510.8 million rubles ($24.4 million as of 31 December 1998) in taxes during 1998, including 158.8 million rubles ($7.6 million as of 31 December 1998) collected in the Sarov investment zone. In the wake of the August 1998 collapse of the ruble, many enterprises were unable to pay taxes and 103.7 million rubles ($5 million) in taxes went uncollected. As of 1 January 1999, VNIIEF and Avangard owed 38.6 million rubles ($1.8 million) in taxes. During 1998, STIS audited 318 enterprises and found 151 enterprises to be in violation of tax legislation. [RFNC-VNIIEF Quarterly Information Bulletin (Analytical Center for Non-proliferation, 2000), No. 1, pp. 41-44.] {Entered 5/18/00 SS} 12/24/98: AVANGARD DIRECTOR SPEAKS AT PARLIAMENTARY HEARING Sarov's Gorodskoy kurer reported on 24 December 1998 that Avangard director Yuriy Kuzmich Zavalishin attended a parliamentary hearing devoted to Russia's nuclear weapons complex, during which the Duma asked Zavalishin about investment zones operating in 10 of the closed nuclear cities. According to the deputies, investment activities generated 1.66 billion rubles ($82 million as of 24 December 1998) last year, with 32 percent of the funds supporting the so-called "city forming" industrial enterprises and 10 percent going towards the creation of new jobs. First Deputy Minister of Atomic Energy Lev Ryabev recommended placing the investment zones under Minatom's jurisdiction. The Duma approved several recommendations, including the confirmation of a development program for the Russian nuclear weapons complex from 1998-2005. Avangard also submitted requests for an exemption from property and profit taxes as well as a delay in military service obligations for its employees. Zavalishin also suggested that if the state budget will not fund production of weapons, then Avangard should be exempted from fees for late payment into the social insurance, pension, and mandatory federal medical insurance funds. [L. Saratova, "Gosduma pered zavodom v dolgu," Gorodskoy kurer online edition, http://www.sar.nnov.ru:80/~courier/, No. 51, 24 December 1998.] {Entered 9/30/99 SS} 12/3/98: VNIIEF CONVERSION PROGRAMS INCLUDE AIRPLANES AND LIGHT AIRCRAFT On 3 December 1998, Sarov's Gorodskoy kurer reported that VNIIEF has started to design and assemble light aircraft, which are cheaper to manufacture than airplanes but share similar control systems, two- and four-passenger airplanes, and helicopters with financial assistance from Sarov's Development Fund for Conversion Industries. According to Gorodskoy kurer, VNIIEF will test the first aircraft in May 1999 and if successful, it will accelerate development and production of the airplanes. In the initial production phase, VNIIEF plans to build fuselages for the light aircraft, ordering motors and wings from factories in Nizhny Novgorod Oblast. Light aircraft of this class are currently not produced in Russia. Similarly, in its airplane manufacturing process, VNIIEF will buy the motor and avionics from local enterprises, leaving room for potential cooperation with other enterprises. VNIIEF plans to manufacture the fuselage, wings, and parts of the shock absorbers for the planes. Helicopters built by VNIIEF will be based entirely on screw assembly, and each helicopter will be flight tested

and certified. [Mayya Soldatenkova and Dmitriy Pavlov. "Pervym delom, pervym delom deltalety," Gorodskoy kurer online edition, http://www.sar.nnov.ru:80/~courier/, No. 48, 3 December 1998.] {Entered 9/28/99 SS} 12/98: ESPIONAGE AT THE FEDERAL NUCLEAR CENTER The Federal Security Service (FSB) arrested an employee of the Federal Nuclear Center (VNIIEF) in Sarov (formerly Arzamas-16) who tried to sell technical documents on a non-nuclear weapon to Iraq and Afghanistan. According to reports, the Sarov employee initiated the espionage himself, and hoped to sell the technical secrets with the aid of a Moscow intermediary. The Sarov employee was arrested as he was preparing to approach a foreign agent, presumably either an Iraqi or Afghanistani. The Federal Security Service said that this was not the first such case at the nuclear center, and noted that the economic crisis in Russia may motivate some employees to improve their situation by selling secret information to certain members of foreign delegations visiting the center. [NTV, 18 December 1999; in "Nuclear Centre Worker Caught Selling Secrets," Lexis-Nexis Academic Universe, http://web.lexis-nexis.com/universe.] {Entered 4/30/99 SK} 11/98: SAROV HAS LOWEST UNEMPLOYMENT RATE OF TEN NUCLEAR CITIES In November 1998, the unemployment level in Sarov constituted only 1.6 percent (849 people, of whom 56 are former VNIIEF employees and 40 are former Avangard employees), which was the lowest level registered in the ten "nuclear cities;" the critical level of unemployment is considered to be 5 percent. The low rate was due to the existence of the tax-free investment zone in Sarov, according to Igor Zakharov, the department chief of the Federal State Employment Service. The unemployment rate in Sarov dropped from its peak of 1,303 unemployed individuals in March 1998, and the November 1998 statistics were comparable to the level observed in January 1998 when 857 people were registered as unemployed. Among the unemployed were many young people (390) and recent graduates from institutions of higher learning (over 100). The November unemployment rate reflected the aftermath of the August financial crisis as well as the end of seasonal jobs. The number of job openings has decreased and the nature of the available jobs is overwhelmingly "blue-collar." The situation, however, may change in the future: at the end of 1998 or in January 1999 Avangard EMZ plans to reduce its staff by 16 employees of "able-bodied age" and 50 to 60 persons of retirement age. The authorities at Avangard have also warned that staff may be reduced by another 130 employees in the first quarter of 1999. The city government has discussed creating a committee that would work on preventing possible critical situations that might result from fluctuations on the job market. However, the city still has enough funds to implement an employment policy: subsidizing job creation, advanced training, and providing financial assistance to the unemployed who initiate independent business ventures. An average of 250 people receive training in various specialties at the Vocational Training Center, which is financed by the money from the Employment Fund. The conversion support fund is used to create new jobs in the emerging commercial structures in the city, including 20 work places at Sarov Cellular Communications, 15 at International Shipments, 10 at EleGaz, 60 at the Metal Heat Treatment Center, 30 at VNIIEF-Konversiya, 10 at the Raduga Center for Production of Special Computer Equipment for VNIIEF, and 25 at the Bioprodukt Enterprise. In total, the existence of the investment zone has created about 200 new jobs in 1998. [ I. Muravyeva, "Bez raboty syt ne budesh," Gorodskoy kurer online edition, http://www.sar.nnov.ru:80/~courier/, 19 November 1998.] {Entered 6/8/98 KP} 11/98: RESEARCHER CRITICIZES LAX MPC&A PRACTICES AT VNIIEF In a letter to the editor of Yadernyy Kontrol, Aleksandr Bolsunovskiy, a senior researcher at the Insitute of Biophysics, expressed concern about MPC&A at Russian nuclear facilities. Bolsunovskiy referred to two accidents, one at VNIIEF and one at NZKhK, as evidence of lax MPC&A practices. In the VNIIEF accident, a scientist was working with 90 percent HEU alone, in direct contradiction to MPC&A guidelines. Bolsunovskiy argues that the proper procedures were disregarded because of the scientist's status. At NZKhK, a spontaneous chain reaction occurred in a tank containing dozens of kilograms of 90 percent HEU, though it was designed for uranium sludges containing no more than 36 percent U-235. Bolsunovskiy stated that this demonstrates a lack of safety culture and poor control and accounting procedures. He warned that institutes may be lulled into a false sense of security by Minatom's extensive efforts in this area, forgetting that more work needs to be done. [Aleksandr Bolsunovskiy, "Ob intervyu Yevgeniya Mishina i o probleme sokhrannosti yadernykh materialov," Yadernyy Kontrol, No.6, November-December 1998, p. 70.] {Entered 2/26/99 MS} 10/7/98: SAROV WEAPONS FACILITIES WORKERS JOIN PROTEST RALLY On 7 October 1998, a large number of Sarov weapons complex workers joined a nation-wide protest rally, organized by the Russian Communist Party and independent trade unions. The marchers, inspired predominantly by Communist sentiments, demonstrated against the policies of the Yeltsin administration, and condemned the wage arrears. Some speakers criticized the existence of the investment zone in Sarov. They blamed the tax breaks for Minatom's and the government's reluctance to pay city organizations. Others raised the issue of rapidly increasing financial inequalities among VNIIEF employees: a few have the income to buy foreign cars while others do not earn earn enough to pay for basic food. Sarov's representative in the State Duma, Communist Party member Ivan Nikitchuk, joined the speakers in criticizing the government for endangering Russia's nuclear potential. [Olga Zaguskina, "Sarov protestuyet: My umeyem rabotat i khotim dostoynoy zhizni," Gorodskoy kurer, online edition http://www.sar.nnov.ru:80/~courier/, 15 October 1998] {Entered 6/4/99, KP}

10/98: VNIIEF EMPLOYEES PARTICIPATE IN RUSSIAN ACADEMY OF MISSILE AND ARTILLERY SCIENCES REGIONAL CONFERENCE VNIIEF scientists presented 58 of the 110 reports at a regional conference of the Russian Academy of Missile and Artillery Sciences (RARAN) held in Sarov in October 1998. The reports dealt with a wide range of topics related to advanced conventional weapons. The Academy was founded in the mid-1990s to provide an association for both conventional and nuclear weapons scientists and a venue for the exchange of ideas between defense research institutes and enterprises. There are one hundred full members of the academy and two hundred corresponding members, with the number of members limited by government decree. The Academy consists of seventeen departments, including ballistics, precision guided munitions, and explosive devices and compounds. Four centers have been established by the academy; Volga Region (in Sarov), North-West Region (St. Petersburg), Siberian Region (Tomsk) and Urals Region (Izhevsk). Attending the conference from VNIIEF were Radiy Ilkayev, Director of VNIIEF, and Yuriy Faykov, First Deputy Chief Designer VNIIEF, among others. [Petr Galchenko, "Pushkari perekhodnogo perioda," Gorodskoy kurer, online edition http://www.sar.nnov.ru:80/~courier/22 October 1998.] {Entered 6/28/99 jl} 9/22/98: MINATOM AND DOE SIGN AGREEMENT ON CONVERSION AT RUSSIAN NUCLEAR WEAPONS FACILITIES On 22 September 1998, Russian Minister of Atomic Energy Evgeniy Adamov and US Secreatary of Energy Bill Richardson signed a five year agreement according to which the United States will allocate $30 million for the conversion of Russia's closed nuclear cities. The agreement affects ten of Russia's closed nuclear cities, including Krasnoyarsk-26 (Zheleznogorsk) and the Federal Nuclear Centers at Arzamas-16 (Sarov) and Chelyabinsk-70 (Snezhinsk). According to Minatom, the US-Russian agreement would facilitate the creation of 15,000 jobs in coordination with the Russian program "Reconstruction and Conversion of Enterprises of the Atomic Industry (the Nuclear Weapons Complex) in 1998-2000," which the Russian Government approved on 24 June 1998. Izvestiya reported that some of the US financial assistance will be used to stop the emigration of nuclear specialists to other countries. (For the complete text of this document please see the NCI Agreement file. For more information please see the NCI Overview.) [Maria Kalugina, "Amerikantsy platyat za konversiyu 'atomnykh gorodov' Rossii," Izvestiya online edition http://www.online.ru/rproducts/izvestia-izvestia-year/, 24 September 1998.] {Entered 12/2/99 SS} 9/7-10/98: VNIIEF EMPLOYEES JOIN NUCLEAR INDUSTRY PROTEST On 7 September 1998 4,700 VNIIEF employees waged a one-hour strike to protest payment arrears. The protesters expressed their rising despair at the current situation: wages for 1997 have not been paid, wages for 1998 have not been paid for five months, and wages and salaries have not been raised since 1996, despite rapid inflation.[1] Similar actions were initiated at 60 facilities across the industry, to be followed by the picketing of Minatom, Ministry of Finance, and the parliament in Moscow on 8-10 September. Nine Sarov citizens joined the picketers and represented the city in Moscow. As a result of the picketing, the protesters obtained a guaranteed promise of 317 million rubles (about $22 million) from Minister of Finance Mikhail Zadornov to cover September military spending obligations. The picketers and Zadornov signed a protocol of the meeting. Zadornov claimed that the revenues Sarov received from the tax breaks on the investment zone were equal to the government's debt to the city. Zadornov demanded that the protesters include a provision in the protocol stating that the trade unions supported the government's decision to cease the registration of new businesses in the investment zone. The protesters, however, refused to include that provision in the protocol. Communist Party leader Gennadiy Zuganov and Duma Chairman Gennadiy Seleznev also met with the protesters and discussed their demands that a law be passed that would guarantee a budget share for the military expenditures of Minatom.[2] Sources: [1] Olga Zaguskina, "Tochka kipeniya," Gorodskoy kurer, online edition, http://www.sar.nnov.ru:80/~courier/, 10 September 1998. [2] L. Saratova, "Zarplatnyye 'boi' 'yadernykh' profsoyuzov," Gorodskoy kurer, online edition, http://www.sar.nnov.ru:80/~courier/, 17 September 1998. {Entered 6/4/99, KP} 8/8/98: ADAMOV VISITS SAROV On 8 August 1998 Minister of Atomic Energy Yevgeniy Adamov visited the Federal Nuclear Center at Sarov to look at prospects for developing and restructuring VNIIEF, with particular emphasis on conversion activities. During a press conference, Adamov discussed issues such as personnel at VNIIEF, back wages, restructuring at Novaya Zemlya, and conversion of the Avangard Electro-Mechanical Plant. Adamov forecasted that by the end of 1999, 2,000-3,000 workers would be let go and 6,000 workers would be placed in other jobs or encouraged to take early retirement. The number of remaining employees would total 10,000 - 12,000. Adamov noted that 100 million rubles ($15.76 million at the 13 August 1998 exchange rate) in wage arrears had accumulated during a four-month period, although it was unclear which four months he was referring to. Adamov also mentioned a "triad" of conversion projects: conducting gas dynamic experiments at Novaya Zemlya, developing computer technology, and developing experimental modelling facilities at VNIIEF. [Vremya dlya priyezda ministra, Gorodskoy kurer, http://www.sar.nnov.ru:80/~courier/, 13 August 1998, No. 32.] {Entered 4/30/99 SK} 8/6/98: LEADERS OF VNIIEF AND VNIITF WORKERS' UNIONS VISIT MINISTER ADAMOV

Leaders of workers' unions for VNIIEF and VNIITF had a 1.5 hour meeting with Minister of Atomic Energy Adamov during the week of July 26. Adamov said that no money would be available to pay for military contracts until 10 October 1998 and that the Ministry of Finance had almost stopped payments to federal nuclear centers. According to Adamov, 40-45 percent of VNIIEF staff is sufficient for military programs. However, according to VNIIEF's union leaders, 70 percent of the Arzamas-16 staff is required for these programs. [N. Kocheshkova, "Opyat nichego ne obeshchayut," Gorodskoy kurer online edition, http://www.sar.nnov.ru:80/~courier/, no. 31, 6 August 1998. {Entered 11/13/98 CF} 8/3/98: VNIIEF DECLINES TO COMMENT ON US COURT DECISION As of 3 August 1998 the administration of VNIIEF declined to comment on media reports concerning the US court decision to fine IBM for the sale of supercomputers to a number of Russian laboratories, including VNIIEF, because no legal action was taken against VNIIEF by the US court. [Interfax, 5 August 1998; in "Russia: No Sarov Nuclear Center Comment on US Case on Computer Sale," FBIS-SOV-98-217.] {Entered 11/5/98 CF} 7/9/98: VNIIEF WORKERS VOTE FOR OPEN-ENDED STRIKE On 9 July 1998, VNIIEF workers approved plans to stage an open-ended strike, which will begin on 23 July 1998, to demand wage arrears and a pay raise. According to the worker organized strike committee, 8 thousand employees representing roughly one-half of VNIIEF's work force will take part in the protests. VNIIEF Director Radiy Ilkayev reported, however, that an insignificant number of non-essential employees have declared their intention to strike. According to Sarov's Gorodskoy kurer, workers voted to include calls for the resignation of the government and the president among their demands. [Olga Zaguskina, "Bastovat! reshila konferentsiya trudovogo kollektiva VNIIEF," Gorodskoy kurer online edition, http://www.sar.nnov.ru:80/~courier/, no. 57, 9 July 1998.] {Entered 10/14/99 SS} 7/23/98: WORKERS AT SAROV DEMAND WAGE ARREARS AND YELTSIN'S DISMISSAL On 23 July 1998 3,700 nuclear physicists of the Federal Nuclear Center at Sarov organized a rally to protest receiving only half of their monthly salaries since the beginning of 1998.[1,2] The plan for the three-hour warning strike included a meeting with VNIIEF Director Radiy Ilkayev and was organized so as not to interfere with the facilities' safety requirements.[1] During the protest action, the center's workers adopted a statement containing economic and political demands and calling for the dismissal of President Boris Yeltsin. In addition, the VNIIEF and VNIITF trade union leaders addressed a letter to the Russian Minister of Energy asking him to recognize the serious financial situation in the nuclear energy sector.[2] Sources: [1] "Federal Nuclear Center Workers To Go On Strike," Interfax, 23 July 1998. [2] "Protesters at Russian Nuclear Center Demand Yeltsin's Ouster," Interfax, 24 July 1998. {Entered 4/29/99 SK} 5/22-23/98: PRIME MINISTER KIRIYENKO VISITS SAROV On 22 May 1998, before a Security Council meeting on the strategic nuclear forces, Prime Minister Sergey Kiriyenko visited Sarov and VNIIEF to examine Russia's "nuclear shield" and familiarize himself with the situation in the investment zone in Sarov. The nuclear center experienced a serious financial crisis in 1997 when VNIIEF received only 30 percent of the defense spending allocated to the center by the defense budget. In 1997 the government owed 200 million rubles ($33.3 mln) to the nuclear complex of Arzamas-16 for defense orders.[1] To address the serious situation, Kiriyenko guaranteed future federal defense orders for the nuclear center as well as federal financing for the creation of new workplaces.[3] He expressed concern about significant federal budgetary losses that result from tax breaks given to the closed cities for the purpose of forming investment zones and encouraging commercial activity. Kiriyenko stated that in 1997 the federal budget lost 4-5 trillion rubles ($690-865 million) due to tax breaks given to the closed cities. He underlined the importance of avoiding misuses of the special tax status granted to the cities and stressed the need for a thorough economic analysis of the measure.[2] The tax breaks will be given to businesses that can demonstrate concrete results in creating new jobs in Sarov. Organizations who nominally keep their offices in Sarov because of the tax breaks but who do not invest in the city and do not create new jobs will no longer be exempt from federal taxes. Moreover, Kiriyenko emphasized the need for an overall efficient allocation of the scarce federal funds. He gave an example of a summer house settlement being guarded by an internal troops division as unacceptable waste and misuse of federal finances.[3] Sources: [1] Aleksey Zayko, "Premier proveril yadernyy shchit", Russkiy Telegraf, online edition http://www.mosinfo.ru, 26 May 1998 [2] Olga Zaguskina, "S. Kiriyenko: 'Nasha zadacha--sdelat maksimum togo, ne delat chego nelzya,'" Gorodskoy kurer, online edition, http://www.sar.nnov.ru:80/~courier/, No. 51, 28 May 1998. [3] Olga Zaguskina, "Zakaz dlya Yadernogo tzentra budet!" Gorodskoy kurer, online edition http://www.sar.nnov.ru:80/~courier/, No. 51, 28 May 1998. {Entered 6/4/99, KP} 4/21-5/19/98: VNIIEF SCIENTISTS AND ADMINISTRATION DISCUSS WAGES On 21 April 1998, VNIIEF employees voted to create a workers' council and elected nine of their colleagues to represent their their interests in collective bargaining with VNIIEF's administration. Workers officially presented their demands, which included payment of 1997 and 1998 wage arrears, regular payment of wages, and a pay

raise, to administrators on 28 April 1998. In its response given on 6 May 1998, the administration said that the demands could not be met, prompting employees to continue their dispute with VNIIEF. The worker's council and the administration have each appointed four persons to take part in a mediation commission to discuss a possible work slow-down and the minimum work level necessary to ensure the safety of Sarov and VNIIEF if workers strike. After meeting on 19 May 1998, the mediation group announced that the two groups were unable to reach an agreement. According to local press, the workers' council conducted a poll among employees to find out how many would take part in strikes, which could start in late May. [V. Yuferev, "Prelyudiya k zabastovke," Gorodskoy kurer online edition, http://www.sar.nnov.ru:80/~courier/, No. 50, 21 May 1998. ] {Entered 10/1/99 SS} 9/97: FEDERAL GOVERNMENT TRANSFERS MONEY TO VNIIEF AND VNIITF At the end of September 1997 the federal government transferred 150 billion rubles ($25,635,000 as of 16 September 1997) to VNIIEF and VNIITF. The two facilities received, respectively, 78 percent and 85 percent of the money they were owed for the first nine months of the year. ["Yadershchiki poluchili svoyu zarplatu," Rossiyskaya gazeta, 1 October 1997, p. 1.] {Entered 11/13/98 CF} 9/16/97: VNIIEF WORKERS PROTEST BUDGET PROBLEMS Seven thousand VNIIEF employees protested wage arrears on a central square of Sarov on 16 September 1997.[1] Despite the fact that Prime Minister Chernomyrdin had adopted a debt repayment plan in June, which took care of some debts, wage arrears have once again accumulated.[2] Sources: [1] "Novosti Minatoma Rossii," Atompressa, No. 271, September 1997, p. 1. [2] Vyacheslav Chebanov, "Premyer uekhal, problemy ostalis," Segodnya online edition, http://home.eastview.com/news/sg/, 13 September 1997. {Entered 11/13/98 CF} 7/1/97: FATAL ACCIDENT AT VNIIEF PROMPTS COMPREHENSIVE SAFETY CHECKS On 17 June 1997, VNIIEF senior staff member Aleksandr Zakharov was exposed to radiation while conducting a weapons-related experiment.[1] No radioactive aerosols were released from the facility at which the experiment was conducted.[2] Hospitalized at first in Sarov,[2] Zakharov was subsequently moved to Moscow's Clinic No. 6, which also treated Chornobyl clean-up crews.[3] The Segodnya newscast reported on 18 June 1997 that all experiments at the installation in question are done manually, usually by two individuals, but that Zakharov was one of five scientists permitted to conduct work alone. Scientists stated that Zakharov was exposed to levels of radiation higher than 1000 rem, twice the "critical" dose.[4] On 18 June 1997, a Minatom commission lead by Department of Emergency Situations Deputy Director Gennadiy Novikov began investigating the accident as well as ways gain access to and repair the damaged critical assembly.[5] On 19 June 1997, Minister for Civil Defense Affairs, Emergencies, and Liquidation of Consequences of Natural Disasters Sergey Shoygu flew to Sarov, bringing three pieces of equipment necessary to clean up the accident. Shoygu spent three hours at VNIIEF, and left after approving the clean-up plan.[6] Zakharov died on 20 June 1997. Doctors did not specify how high of a dose he received, citing ethical reasons.[7] At VNIIEF on 20 June 1997, the clean-up crew spent the day rehearsing clean-up operations using a remote controlled robot and a model of the damaged critical assembly.[8] The robot entered the irradiated chamber on 21 June 1997 and brought out two containers of radioactive materials.[9] On 24 June 1997, the robot dismantled the critical assembly using a remote-controlled suction device, thereby halting the chain reaction that began seven days earlier. Neutron flux levels fell by a factor of 10 million, reaching levels considered normal for this type of facility.[10] The investigative commission released its conclusions on 27 June 1997, stating that "human error and poor research procedures" were the cause of the accident. Earlier, an unidentified member of the commission had said that before his death, Zakharov had blamed "slippery gloves" for the accident,[11] but Minister of Atomic Energy Viktor Mikhailov stated Zakharov had admitted he had miscalculated.[12] According to Mikhailov, Zakharov did not have permission to conduct the experiment.[12] On 1 July 1997, RIA Novosti reported that VNIIEF suspended all activities at its research reactors and critical assemblies. RIA Novosti cited investigators as stating that the critical assembly involved in the accident had structural flaws, and the facility's safety procedures are not effective.[13] All division heads at VNIIEF have been ordered to submit new safety proposals by September.[11] Mikhailov ordered a safety check for all projects carried out at all Russian nuclear facilities.[13,14] Minatom spokesman Georgiy Kaurov stated that the safety check will take several months.[14] Sources: [1] Mikhail Osokin, Segodnya Newscast, NTV, 6/17/97; in "Television Report o Arzamas-16 Radiation Leak," FBIS-TEN-97-174, 6/23/97. [2] "Vybros radiatsii v Arzamase-16," Nezavisimaya gazeta, no. 109, 6/18/97. [3] Yuriy Lipatov, Segodnya Newscast, NTV, 6/18/97; in "Arzamas-16 Scientist Said To Have 'Made a Blunder'," FBIS-SOV-97-175, 6/24/97. [4] Irina Preobrazhenskaya, Segodnya Newscast, NTV, 6/18/97; in "Arzamas-16 Accident Site Poses No Threat to City," FBIS-SOV-97-175, 6/24/97. [5] "V Arzamase-16 prinyaty mery bezopasnosti," Nezavisimaya gazeta, no. 110, 6/19/97. [6] Mikhail Osokin, Segodnya Newscast, NTV, 6/19/97, in "Radiation Fear Played Down After Arzamas-16 Accident," FBIS-TEN-97-170, 6/19/97. [7] Aleksey Kandulugov and Aleksandr Stvolin, Segodnya Newscast, NTV, 6/20/97; in "TV Reports on Treatment of Arzamas-16 Radiation Victim," FBIS-SOV-97-176, 6/25/97. [8] Segodnya Newscast, NTV, 6/20/97; in "Scientists Use Special Robot To Deal With Arzamas-16 Leak," FBIS-TEN-97-174, 6/23/97.

[9] Segodnya Newscast, NTV, 6/21/97; in "Arzamas-16 Operation To Tackle Nuclear Accident Continues," FBIS-TAC-97-173, 6/22/97. [10] Anna Bakina, ITAR-TASS, 6/24/97; in "Nuclear Incident at Arzamas-16 Successfully Resolved," FBIS-SOV-97-175, 6/24/97. [11] "Nuclear Accident Blamed on Human, Procedural Errors," RFE/RL Newsline, vol. 1, no. 63, part 1, 6/30/97. [12] Andrey Kirillov, ITAR-TASS, 6/23/97; in "Minister Blames Nuclear Accident on Researcher's Mistake," FBIS-SOV-97-174, 6/23/97. [13] Gennadi Abalov, "Arzamas-16 Center Shuts Off Its Nuclear Units," RIA Novosti, 7/1/97. [14] "Russian nuclear minister orders safety check after fatal accident," AP, online version of article located at http://www.cnn.com/WORLD/europe/, 7/1/97. {Entered 7/9/97 LBN} 4/13/97: CADMIUM LEAK AT SAROV INJURES 43 A cadmium leak occurred at VNIIEF on 13 April 1997. The accident occurred when a vacuum line became unsealed. As a result, 43 persons were hospitalized, 15 of whom suffered serious respiratory problems. [ITAR-TASS, 7 July 1997; in "Chernomyrdin to Visit Nuclear Weapon Complex," FBIS-SOV-97-188]. {Entered 11/5/98 CF} 12/14/95: NEW MPC&A SYSTEM ESTABLISHED AT ARZAMAS-16 As part of the lab-to-lab MPC&A program established by the US Department of Energy between its laboratories and Russian nuclear institutes, three pilot projects were begun at the VNIIEF in Arzamas-16, the Kurchatov Institute in Moscow and the Institute of Physics and Power Engineering in Obninsk. The three projects were completed in December 1995. The program at Arzamas-16 included five main areas: computerization of accounting and tracking of materials, methods of measurement of fissile material radioactivity, automation, interlinking information subsystems, and exchange of data. ["Newsweek And Russian-American SUIK," Gorodskoy kurer, 12/14/95, p. 13; Mark Mullen, "Status Report on US-Russian Laboratory-to-Laboratory Cooperation in Nuclear Material Protection, Control, and Accounting," Los Alamos National Laboratory, 8/6/96.]{Added 11/26/96 KVY} 11/22/95: REPORT CLAIMS THAT ARZAMAS-16 HAS BEEN LEFT UNPROTECTED As a result of a debate over the legal basis for a Ministry of Atomic Energy directive from 12/95, the city of Sarov (Arzamas-16), location of the All-Russian Scientific Research Institute of Experimental Physics has been left unprotected. Any criminal or terrorist whose relatives live in Sarov can freely enter the city. [Yelena Mazanova, "Stop. Who Is It?" Smolenskiye novosti, 11/22/95, p. 1.] 8/17/95:VNIIEF PHYSICISTS PAID BACK WAGES It was reported that nuclear physicists employed by the Federal Nuclear Center were finally paid their back salaries. The average salary at VNIIEF was reported to be 400,000 rubles at the end of 1994. The scientists are reported to be manufacturing various items as part of the conversion process, including saucepans, dosimeters, tennis rackets, and fertilizer. [Nadezhda Popova, "Nuclear Engineers Weeding The Potato Beds," Rossiyskiye vesti, 8/17/95, p. 2; in "Problems In Formerly Prosperous Arzamas-16 Detailed," FBIS-SOV-95-169-S, 8/17/95.] 8/17/95: U-238 THEFT FROM ARZAMAS-16; CONFISCATION FROM BANKER According to municipal Duma Deputy Ivan Nikitchuk, eight kg of uranium-238 was stolen from Plant 3 of Arzamas-16, through a hole in the fence. Deputy Nikitchuk also stated that 10 kg of uranium-238 was taken from Sergey Demyanov, an administrator with the Sarov Business Bank. [Nadezhda Popova, "Nuclear Engineers Weeding The Potato Beds," Rossiyskiye vesti, 8/17/95, p. 2; in "Problems In Formerly Prosperous Arzamas-16 Detailed," FBIS-SOV-95-169-S, 8/17/95.] 7/18/95: US AGENCY SIGNS AGREEMENT TO ASSIST CONVERSION It was reported that the US Trade and Development Agency signed an agreement with M-C Power, Inc. to examine the feasibility of conducting a joint conversion project with VNIIEF to manufacture low-wattage molten carbonate fuel cells for sale in Russia. ["US Firm To Study Possible Fuel Cell Joint Venture," Post-Soviet Nuclear & Defense Monitor, 7/18/95, p. 3.] 7/7/95: UNION MEETING HELD CONCERNING PAY AND SOCIAL TENSION The employees of the Russian Federal Nuclear Center (FNC) in Arzamas-16 held an urgent union meeting indicative of strong social tension due to chronic delays in salary payments. Spontaneous and unsanctioned meetings and demonstrations are on the rise at the FNC. [Yadernyy kontrol, 7/95, p. 6.] 6/17/95: "SUIK" SECURITY SYSTEM IS CREATED AT ARZAMAS-16 A new physical protection and control system called SUIK has been developed in the Arzamas-16 nuclear center in collaboration with the US Lawrence Livermore National Laboratory on the basis of existing Russian and US technologies. Georgiy Skripka, technical supervisor of the complex, attested to a complete reliability of the new automated system which consists of 39 control procedures covering the entire technological chain. [Mikhail Rebrov, "Every Atom Is Accounted For," Krasnaya zvezda, 6/17/95, p. 3; Veronika Romanenkova, Segodnya, 5/11/95, p. 9.]

5/6/95: ARZAMAS-16 WILL INITIATE MODERN SECURITY MEASURES By the end of 1995, Arzamas-16 will be the site of a new monitoring system for nuclear materials that has been developed at the Kurchatov Institute using Russian and American equipment. The software is Russian and the hardware is American. The system constantly monitors and records the whereabouts of fissile material. The system is designed to require palmprints of all entering the facility, which would prevent outsiders from gaining access to top secret areas. [Andrey Kirillov, "Bullet-proof Waistcoat as Protection Against Radiation," Rossiyskaya gazeta, 5/6/95, p. 7; in "Nuclear Materials Security System Developed," FBIS-SOV-95-090.] 2/1/95: SPECIAL FORCES UNIT CREATED TO PROTECT NUCLEAR FACILITIES According to the 2/1/95 Edict by the Russian Commander of Internal Forces, battalions of special forces have been created to "ensure physical protection of nuclear facilities." The special forces will now service nuclear facilities at Chelyabinsk-70 (Snezhinsk), Zlatoust-36 (Trekhgornyy) and Arzamas-16 (Sarov). [O. Lastochkin, "BONifikatsiya Ozerska," Chelyabinskiy rabochiy, 4/14/95, p. 7.] 1/95: LOS ALAMOS SCIENTISTS TO INSTALL MC&A EQUIPMENT Scientists from Los Alamos National Laboratory will travel to Arzamas-16 to start installing equipment for a pilot program that will develop new MC&A systems in Russia. Five other US laboratories will participate in the program: Sandia, Lawrence Livermore, Oak Ridge, Brookhaven, and Pacific Northwest. ["Russia Accepts US Support On Nuke Material Controls, Safeguards," Post-Soviet Nuclear & Defense Monitor, 1/31/95, p. 4.] 9/94: NEWSPAPER REPORTS OF HEU THEFTS OCCURRING According to the Italian La Reppublica, 9.5 kg of enriched uranium was taken from Arzamas-16 to be sold for use in a nuclear bomb. The thieves were arrested, however, and the uranium seized. [Enrico Franceschini, "Artsamas (sic), Bomb City," La Reppublica, 9/13/94, p. 17; in JPRS-TND-94-019, "Uranium Theft From 'Closed' City Reported," 10/17/94, p. 26.] 3/25/93: GOVERNMENT APPROVES DECREE TO CREATE NUCLEAR ACCIDENT RESPONSE CENTERS On 25 March 1993, the Russian Cabinet of Ministers approved a resolution according to which the Ministry of Atomic Energy and the State Committee on Civil Defense Affairs, Emergencies, and Liquidation of Consequences of Natural Disasters are to create five "accident-technical centers" (ATCs) as part of an effort to improve Russia's emergency warning and response system as it relates to nuclear facilities. An ATC is to be created at each of the following locations: the All-Russian Scientific Research Institute of Experimental Physics (VNIIEF), the All-Russian Scientific Research Institute of Technical Physics (VNIITF), the Novovoronezh nuclear power plant, the Siberian Chemical Combine, and the V.G. Khlopin Radium Institute. The work of the ATCs is to be supported by the Ministries of Atomic Energy, Defense, the Economy, Transportation, Communications, and Health. [O sozdanii avariyno-tekhnicheskikh tsentrov dlya likvidatsii chrezvychaynykh situatsiy na obyektakh yadernogo kompleksa Rossiyskoy Federatsiy, Government Decree No. 246, 25 March 1993; in Sobraniye zakonodatelstva RF, No.22, 31 May 1999, pp. 5080-5081.] {Entered 6/24/99 LBN} 1992: LOS ALAMOS NATIONAL LABORATORY ESTABLISHES ASSISTANCE PROGRAM, STAFF AIDS WORKERS Los Alamos National Laboratory established an assistance program for Sarov (Arzamas-16) in 1992. In May 1992, the Sarov (Arzamas-16) staff threatened to strike because of nonpayment of salaries. In response, Los Alamos employees raised $500,000 for medical assistance to the Sarov staff. [Working Document to the Scientific and Technological Options Assessment Panel of the European Parliament, "Nuclear Safeguards and Nuclear Safety in the East," November 1996, pp. 24-25.] {Entered 10/3/97 JP}