(CNSNews.com) – The United States is the biggest funder of a U.N. program that helps countries to develop civilian nuclear technologies. Despite “dual-use” proliferation concerns, the program’s beneficiaries include Iran and Syria.

The Government Accountability Office has for years recommended that the U.S. government, as a result of those proliferation concerns, withhold a proportion of its funding to the program, but the State Department strongly opposes the move, arguing among other things that the U.S. must set a good example to other countries “by paying its contribution in full and on time.”

Between 1997 and 2007, the four countries currently designated as state-sponsors of terror – Iran, Syria, Sudan and Cuba – received more than $55 million in assistance from the International Atomic Energy Agency’s technical cooperation program, a senior GAO official told a House Foreign Affairs Committee hearing on nonproliferation policy last week.

The U.S. provides around one-quarter of the annual budget for the technical cooperation fund (TCF). The funding amounted in 2010 to $21 million in “voluntary contributions,” plus a further $10.3 million in “extra budgetary assistance.”

In written testimony before the March 17 hearing, Eugene Aloise, natural resources and environment director at the GAO, explained that the program forms a key part of the Vienna-based U.N. nuclear watchdog’s work, promoting peaceful uses of nuclear technology – including energy, health, food and agriculture – by providing equipment, training and other help to countries around the world.

Although most of the projects do not involve the transfer of sensitive materials and technologies, the GAO says proliferation concerns persist “because nuclear equipment, technology, and expertise can be dual-use – capable of serving peaceful purposes, such as the production of medical isotopes, but also useful in contributing to nuclear weapons development.”

Iran’s nuclear energy programs, suspected to be a front for a drive to acquire weapons capability, are at the heart of a decade-long, still-unresolved standoff with the international community. Despite this, Iran was appointed last December as head of the group of developing countries at the IAEA.

Syria’s suspected attempts to develop a nuclear weapons program were exposed after Israeli warplanes in 2007 bombed a remote site. Syria denied claims that it was working on a weapons program with North Korean help, but the IAEA still has questions about the presence of processed uranium particles found by inspectors at the bombed site.

According to the GAO, over the decade ending 2007, the IAEA technical cooperation program provided $15.57 million to Iran; $14.47 to Syria, $13.7 million to Cuba and $11.9 million to Sudan – a total of $55.69 million.

The hearing heard that back in 1997, the GAO recommended that the government withhold a proportional share of the U.S. contribution to the technical cooperation fund that would otherwise go to states of concern (defined at the time as those specified in the 1961 Foreign Assistance Act – Burma, Iraq, North Korea, Syria, Libya, Iran, Cuba and the Palestine Liberation Organization.)

Also in 1997, the GAO recommended that a U.S. interagency group systematically review all proposals for TC projects in countries of concern – before their approval by the IAEA – to determine whether the projects are consistent with U.S. nonproliferation goals.

But in its next report on the matter, in 2009, the GAO found that neither the State Department nor the IAEA had “sought to systematically limit or prevent TC assistance to … sponsors of terrorism,” according to Aloise’s testimony.

Two years on, Aloise said, there had been progress in some areas, including better tracking by the State Department of TCF proposals that may entail proliferation concerns.

However, the recommendation regarding the partial withholding of U.S. funding is still strongly opposed by the State Department, the committee heard.

“GAO continues to believe that Congress should give serious consideration to this matter,” Aloise said in his testimony, arguing that there was “a fundamental principle at stake.”

“As we described in our report, the United States has applied several types of sanctions limiting foreign assistance and trade to states it has designated as sponsors of terrorism and to other countries,” he said.

“To avoid the appearance of an inconsistent approach and to foster greater cohesion in U.S. policy toward such nations, we believe that it is fair for Congress to consider requiring State to withhold a share of the U.S. contribution to the TCF for program activities in countries that the United States chooses not to engage directly in trade, assistance, and other forms of cooperation.”

‘U.S. will anger states in the developing world’

In its written response to the GAO’s 2009 proposals, the State Department gave a number of reasons for its opposition, including:

-- withholding the money would be go against another GAO recommendation that encourages all countries to pay their technical cooperation fund contributions in full. “The United States needs to set an example by paying its contribution in full and on time,” it said. “Without this leverage, the U.S. will undermine its ability to persuade states with fewer financial resources to pay their share of the TCF.”

-- as TCF contributions are fungible – that is, they are not designated for or traceable to individual projects – withholding some money will not necessarily stop projects in the terror-sponsor countries, but rather cut into the overall funding. “By targeting the entire TCF, the U.S. will anger states in the developing world,” the department said.

-- none of the TC projects in state-sponsors of terrorism have been shown to have contributed to a weapons of mass destruction program, and there are adequate IAEA safeguards to prevent TC projects from contributing to a WMD program.

-- withholding money would negatively impact the ability of the United States to achieve other critical objectives within IAEA.

Another participant at the Foreign Affairs Committee hearing was Olli Heinonen, a former IAEA deputy director general and now senior fellow at the Belfer Center for Science and International Studies at Harvard Kennedy School.

In his prepared testimony, Heinonen said that “the IAEA needs to have a robust monitoring and evaluation program to ensure that its own technical cooperation support is not used for non-peaceful purposes.”

At an international nuclear conference in New York in May 2010, Secretary of State Hillary Clinton announced a campaign to raise $100 million over five years to broaden access to peaceful uses of nuclear energy.

“Historically, the United States has been the single largest contributor to the IAEA’s technical cooperation programs,” the State Department said in a fact sheet issued at the time.

“These programs enable more than 100 states to enjoy the benefits of peaceful uses of nuclear energy. In addition to its assessed annual contribution to the IAEA, the United States provides more than $20 million each year in extra budgetary funding for IAEA technical cooperation programs alone, about 25 percent of the total contributions.

“The new U.S. pledge is in addition to this long-standing support, and it represents a significant addition to our current annual commitment to the IAEA’s technical cooperation fund,” it said.

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