October 25, 2013

Assistance to Foreign Atomic Energy Activities

  • Antony Dnes

    Chair in Economics, University of Hull in the UK
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The primary component of the supplemental notice of proposed rulemaking (SNOPR) is a revision of trading destinations that moves 80 countries into the SA category while newly awarding GA status to merely three trading partners. The DOE describes its approach as based on effectively reducing threats, supporting nuclear trade, and providing transparent, cost-effective regulation, but it does not seem the DOE has fully considered the costs of the proposed regulation. These costs will be incurred by firms as they deal with the extra paperwork and procedures resulting from the change, even in cases where they are eventually allowed to trade. 

Lesser changes proposed in the SNOPR include removing distinctions between US persons and others in reviewing allowable trading, focusing instead on the degree of foreign control exercised in a proposed transfer. Sensibly, the case-by-case approach here recognizes the export-security tradeoff in eschewing a rigid categorization, in contrast to approach over the GA-SA list. Exemptions are also detailed in the SNOPR for such things as published basic scientific research and transfer of fission material because these cannot add anything to the militarization of nuclear equipment and assistance. Transfer of material to lawful permanent residents of the United States is also derestricted by the SNOPR, as this appears to have caused unnecessary difficulties in trade activities. The SNOPR allows technology transfers to citizens or nationals of specific authorized destinations when these people are lawfully employed in the US nuclear industry, subject to vetting and a confidentiality agreement preventing unauthorized disclosure of the technology. Special nuclear material that could be easily adapted to military use continues to be firmly controlled and requires a specific authorization for all foreign destinations. 

Compared with the earlier NOPR, the DOE responded to three areas of concern over the regulatory process, foreign destinations, and specific activities. The DOE recognizes the main area of concern to be its reconstruction of the list of destinations, and it argues that the main purpose in carrying out a revision is to cope with an outdated list of GA and SA destinations. Several countries have ceased to exist since the previous list was constructed and new, acceptable destinations have resulted from geopolitical realignment.2 There will be 47 generally authorized destinations, with each country having a 123 Agreement with the United States and an acceptable International Atomic Energy Association (IAEA) safeguards regime, including countries such as Canada, Japan, and the EURATOM signatories. Mexico will be included in the list for certain activities for the first time by the SNOPR. Previously there was a great deal of criticism over Mexico’s former exclusion, particularly given the existence of the US-designed and supplied Laguna Verde station.3 China, India, and Russia continue to be excluded. 

The DOE received comments on its earlier NOPR claiming that the then proposed regulation had a net that would also catch some activities that were unlikely to produce militarily adaptable nuclear material. The DOE therefore appended to the SNOPR a list of reactor equipment subject to export control, specifying what activities would be targeted. The DOE came under criticism for its earlier proposal to abandon a fast-track system for approving transfers of nuclear equipment and expertise in cases of urgent safety-related international demand. The DOE has now backtracked and aims to retain the fast-track system for these cases, which are essentially aid related. 

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