UPDATE 3-U.S.-Russian civilian nuclear deal boosts 'reset'

Tue Jan 11, 2011 2:36pm EST

Related Topics

* Nuclear deal allows wider cooperation, joint ventures

* Medvedev says it should be treated as "business"

* Russia says controls 20 pct of U.S. uranium reserves

* Long-stalled deal part of wider U.S.-Russia "reset"

(Adds Medvedev, Rosatom head quotes)

By Steve Gutterman

MOSCOW, Jan 11 (Reuters) - A long-stalled civilian nuclear cooperation agreement between Russia and the United States entered into force on Tuesday in a milestone for the "reset" in relations between the former Cold War foes.

The so-called 123 Agreement took effect with an exchange of diplomatic notes between Deputy Russian Foreign Minister Sergei Ryabkov and U.S. Ambassador to Russia John Beyrle in a brief ceremony in Moscow.

"This is really good work. It should not be politicized as sometimes happened in the history of Russian-American relations, but treated as business. Then we will achieve good results," Russian President Dmitry Medvedev said.

The agreement, signed in 2008 but shelved by the White House amid acrimony over Russia's war with U.S. ally Georgia, was revived by President Barack Obama as part of his campaign to improve ties and bolster trade and security cooperation.

It creates a legal framework for closer cooperation between the United States and Russia on civilian nuclear research, production and trade, and both sides said it would help fight nuclear weapons proliferation.

Sergei Kiriyenko, head of Russia's nuclear power firm Rosatom, told Medvedev after the signing that the United States was "a key market" for Rosatom, which supplies over 40 percent of U.S. nuclear fuel under a programme called 'Megatons to Megawatts'.

Kiriyenko said in 2010 Rosatom struck contracts worth close to $5 billion in excess of what was covered under the 20-year-old programme. Following the acquisition of miner Uranium One UUU.TO, the Russian firm now controlled 20 percent of U.S. deposits.

DEVELOPING REACTORS

Beyrle said Russia and the United States could cooperate in developing new reactors, fuels and other technology that would lessen the risk that dangerous nuclear materials could fall into the wrong hands.

The agreement will also help the nations implement a deal signed last month calling for conversion of Russian research reactors to the use of low-enriched uranium fuel instead of high-enriched fuel that can be used to make weapons.

It permits the transfer -- subject to U.S. licensing decisions -- of non-restricted technology, material and equipment including reactors and components for nuclear research and power production.

The deal will also allow nuclear energy joint ventures between Russian and U.S. companies and could potentially give Russia the right to reprocess spent nuclear fuel that originated in the United States.

It comes into force amid expectations that Russian lawmakers will soon vote to ratify New START, a strategic nuclear arms limitation pact that is central to the "reset" and won approval in the U.S. Senate last month.

The speaker of Russia's lower house of parliament said on Tuesday that lawmakers were likely to vote their final approval of the treaty by the end of January. (Additional reporting by Gleb Bryanski) (Editing by Guy Faulconbridge and Mark Trevelyan)

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