On 23 February 2015 the Department of Energy (DOE) published a Final Rule in the Federal Register (80 Fed. Reg. 9359) (Final Rule) to amend the Part 810 Regulations (10 C.F.R. Part 810), which govern the export and re-export of unclassified nuclear technology and assistance. This Final Rule is the first comprehensive updating of the Part 810 Regulations since 1986, and reflects many of the changes that were included in two prior proposed rulemakings: (i) the Notice of Proposed Rulemaking (NOPR), published in the Federal Register (76 Fed. Reg. 55278) on 8 September 2011; and (ii) the Supplemental Notice of Proposed Rulemaking (SNOPR) published in the Federal Register (78 Fed. Reg. 48629) on 2 August 2013. Our summary of the NOPR can be found here, and our summary of the SNOPR can be found here.
The purpose of the Final Rule is to update the Part 810 Regulations to reflect changes in the global civil nuclear market, while carefully determining which destinations and activities can be generally authorized and which will require a specific authorization, and assuring that the determinations are consistent with U.S. national security, diplomatic, and trade policy. As described below, DOE made only a few changes to the Final Rule that differ from those changes proposed in the SNOPR. The Final Rule takes effect on 23 March 2015. On 20 February 2015, DOE issued a guidance document for the amended Part 810 Regulations, which can be found here.
Some of the most significant changes in the Final Rule include the following:
- List of generally authorized destinations: Like the earlier proposals, the Final Rule eliminates the list of “restricted countries” that previously required specific authorization and proposes a positive list of countries that would be generally authorized for nuclear power-related activities. DOE takes the same approach to the list of generally authorized countries, with certain notable changes:
- The SNOPR included three new countries that were previously restricted (Kazakhstan, Ukraine, and the United Arab Emirates) as generally authorized destinations, which were set forth in a new Appendix A to the rule. The Final Rule continues to include these three new countries, and also includes Croatia and Vietnam within the list of generally authorized destinations. The SNOPR removed a number of other countries that previously were generally authorized. The Final Rule maintains these changes, and also removes Thailand from the list as its Section 123 Agreement with the United States has expired. The Final Rule also notes that although Norway’s Section 123 Agreement with the United States has also expired, Norway will remain generally authorized as it is in the process of negotiating a renewal.
- DOE clarified the availability of general authorizations for Ukraine, imposing a requirement in § 810.14 for persons about to begin any generally authorized activity involving Ukraine to notify DOE at least ten days prior to beginning such activity. DOE stated that although Ukraine has entered into a Section 123 Agreement with the United States, transfers of nuclear technology and assistance to areas that are not under control of the Government of Ukraine due to recent geopolitical developments could present a proliferation risk, and a case-by-case non-inimicality determination is needed for transfers to those areas. Following the 10-day notification, the Secretary may invoke the authority in § 810.10(c) to revoke the general authorization for the activities at issue involving Ukraine if he determines that such activities are inimical to the interests of the United States at that time.
- DOE clarified that any pending specific authorization request for a destination that is now generally authorized in the Final Rule, namely Croatia, Kazakhstan, Ukraine, United Arab Emirates, and Vietnam, should be withdrawn starting on the effective date of the rule (25 March 2015).
- The Final Rule includes Mexico and Chile on the list of generally authorized countries, with certain limitations. As noted in the SNOPR, these countries are only generally authorized to the extent the activities fall under specified International Atomic Energy Agency (IAEA) programs (including the support of the existing Laguna Verde nuclear power units in Mexico and the replacement of highly enriched uranium in certain research reactors in Mexico and Chile.) Thus, the general authorization for Mexico, for example, apparently would not extend to a new unit to be built at the Laguna Verde site. As in the SNOPR, another addition to the list of generally authorized destinations was the IAEA itself.
- The Final Rule deletes Peru and Bangladesh from the list because their Section 123 Agreements have expired.
- DOE continued to decline to move India, Russia, or China to the generally authorized list for the same reasons as articulated in the SNOPR, including “diplomatic and national security reasons, and in the case of India, for legal considerations.”
- Unreported deemed exports: The Final Rule provides guidance on previously unreported deemed exports and deemed re-exports. As set forth in the Preamble to the Final Rule, companies that have previously made unreported generally authorized transfers of Part 810-controlled technology to employees who are nationals of countries now subject to specific authorization requirements under the Final Rule are required to provide information required by Section 810.11 of the Final Rule for each transfer to any foreign national who will continue to have access to Part 810-controlled technology by 24 August 2015 (180 days after the date of publication of the Final Rule). DOE stated that many companies with employees who are nationals of countries now subject to specific authorization requirements under the Final Rule may not have previously reported transfers of Part 810-controlled technology to such individuals under the prior rule, and that in many cases the technology transfers have already occurred. This provision requires companies to report this information to DOE, but does not appear to require companies to affirmatively apply for specific authorizations for ongoing transfers to such employees.
- General authorization for certain deemed exports: Similar to the SNOPR, the Final Rule establishes a new general authorization for certain deemed exports:
- As set forth in the SNOPR, to the extent the transfer of nuclear power-related technology or services to a foreign national in the United States requires specific authorization, such deemed exports would be generally authorized if those foreign nationals are working at an Nuclear Regulatory Commission (NRC) licensed facility, are lawfully employed by or contracted to work for nuclear industry employers in the United States, have been granted unescorted access in accordance with NRC regulations at an NRC licensed facility, and have executed a confidentiality agreement to prevent unauthorized disclosure of nuclear technology. In the Final Rule, DOE rejected commenters’ proposals to expand the general authorization to include foreign nationals working in the United States at a non-NRC licensed facility, as well as NRC-cleared individuals working in the United States for a U.S. company who are no longer working at the NRC-licensed facility, but who require access to Part 810-controlled information.
- As in the SNOPR, the general authorization would not cover the specifically authorized activities set forth in § 810.7 (renumbered from the current § 810.8), which involve enrichment, reprocessing, and other sensitive activities.
- Foreign nationals and dual nationals: As in the SNOPR, the Final Rule also implements DOE policy to revise the definition of foreign national to exclude permanent resident aliens (greencard holders) and protected individuals under the Immigration and Naturalization Act, principally U.S. asylees and U.S. refugees. This change is consistent with the definitions under the Commerce Department’s Export Administration Regulations and the State Department’s International Traffic in Arms Regulations. As in the SNOPR, DOE declined to resolve how dual nationals would be treated under the Part 810 Regulations, instead opting to continue to address the subject on a case-by-case basis, considering all countries of an individual’s allegiance (citizenship or permanent residency) rather than adopting the Commerce Department’s approach of accepting a dual national’s most recent country of citizenship or permanent residence.
- General authorization for radiological emergencies and operational safety: As in the SNOPR, the Final Rule maintains the “fast track” general authorization for certain emergency and operational safety activities at any safeguarded or NRC-licensed facility. Specifically, the Final Rule retains § 810.6(c)(1) for imminent radiological emergencies posing a significant danger to the health and safety of the off-site population, which in DOE's assessment cannot be met by other means. The Final Rule also retains the general authorization for operational safety, including § 810.6(c)(2) for existing safeguarded civilian nuclear reactors outside the United States in countries with safeguards agreements with the IAEA or an equivalent voluntary offer, and § 810.6(c)(3) for existing, proposed, or new-build civilian nuclear facilities in the United States. In response to comments requesting clarification on whether probabilistic risk assessments (PRAs) for existing nuclear power plants in foreign countries should be generally authorized, DOE confirmed that PRAs are generally authorized activities within the definition of “operational safety” for destinations typically requiring specific authorization. Apart from a slight change to § 810.6(c)(1), these provisions remain unchanged from the SNOPR.
- Definition of reactor technology: As in the SNOPR, DOE was responsive to comments requesting additional clarity as to what constitutes reactor technology and consistency with other nuclear export control regulations. Section 810.2 now explicitly references 10 CFR Part 110, Appendices A through K, and O, “for an illustrative list of items considered to be especially designed or prepared for certain listed nuclear activities,” and the definition of nuclear reactor in § 810.3 is also consistent with the NRC regulations in 10 CFR Part 110.
- Transportation and storage activities: In its 2011 NOPR, DOE proposed to include storage and transportation of irradiated nuclear materials, including specially designed containers therefor, within the scope of the Part 810 Regulations. As in the SNOPR, DOE eliminated these items from the scope of the Final Rule.
- Fundamental research: The Final Rule contains the same definition of “fundamental research” as the SNOPR, which excludes the results of such “fundamental research” from the scope of the Part 810 Regulations and is more consistent with the general approach taken by the Commerce and State Departments. In response to comments regarding the burdens imposed on academic and scientific research, DOE states that “applied research and development...have always been within the scope of part 810 controls”, and that applied research “will not be generally authorized because it can be applied to a facility that could be involved in the production of special nuclear material.” Presumably, DOE intended to clarify that there are forms of applied research that are not eligible as “fundamental research”- specifically, applied research that is not intended to be shared broadly with the public and/or is proprietary.
- Publicly available information and technology: As in the SNOPR, DOE replaced the current more detailed definition of “public information” with more general definitions of “publicly available information” and “publicly available technology.” In response to proposals from commenters to include information that will be or is eligible for unlimited release within the definition of “public information” in the Final Rule, DOE stated that it considers information published in academic journals or otherwise available to the general public to fall within the definition of “publicly available technology” for the purposes of exports and deemed exports prior to actual publication as long as the information has been appropriately authorized for release and there is clear intent to publish all results. DOE stated that this subject will be dealt with in more detail in the proposed Process Improvement Program (PIP).
- “Use” Technology: The 2011 proposed rulemaking included a definition of “use” that mirrored the definition in the Commerce Department’s Export Administration Regulations, which requires all elements of the “use” definition to be met in order to qualify as “use” technology. As in the SNOPR, the Final Rule changes this approach by using the word “or” instead of “and,” which results in technology being considered “use” technology if it meets any one of the elements in the “use” definition. This approach results in a broader definition of “use” than what is set forth in the Export Administration Regulations.
- Savings clause: Like the SNOPR, the Final Rule includes a savings clause, but expands the transition period from 90 to 180 days. The Final Rule provides that persons engaging in activities that were generally authorized under the regulations before the Final Rule took effect on 25 March 2015, but that require specific authorization under the Final Rule, must request specific authorization by 24 August 2015, and may continue their activities until DOE acts on the request.
- Authorizations by other agencies: As in the SNOPR, the Final Rule now excludes from its scope exports authorized by the Commerce and State Departments (in addition to the NRC). This language would permit other agencies, such as the Commerce Department, to authorize transactions subject to the jurisdiction of multiple agencies to avoid the need for authorizations or licenses from multiple agencies.
A number of issues continue to remain notably unchanged in the Final Rule. As in the SNOPR, the Final Rule does not include specific criteria for determining when foreign nuclear technology modified in the United States is “Americanized” and therefore subject to the Part 810 Regulations, and did not grant commenters’ requests to add a de minimis threshold for assessing U.S. content in foreign technology or items. As in the SNOPR, DOE explained that a mechanistic approach is not appropriate for Part 810 coverage determinations for authorization of cooperative enrichment enterprises and other technology transfers by collaborative enterprises. However, in response to comments, DOE discussed a list of factors it will consider when making coverage determinations on a case-by-case basis, including but not limited to: technology to be transferred, the significance of the technology to the production of special nuclear material, end user destination, and end use duration of the activity such as single transfer or an ongoing activity.
Further, DOE rejected commenter’s requests to add the term “control-in-fact” to the definition in § 810.3 and include in § 810.2(a)(2) a clarification that “licensees, contractors, or subsidiaries under the direction, supervision, responsibility or control” of persons described by the rule are within the scope of the Part 810 Regulations only if the technology transferred is of U.S. origin. DOE reiterated the need to review the specific fact pattern of the activity that includes the transfer of Part 810-controlled technology, which in some cases may not match the stated governance or “control” of the company, but which is specific to the technology transfer in question.
As in the SNOPR, the Final Rule also did not grant commenters’ requests to add a general authorization for marketing and sales information, or an automatic mechanism for including countries with new 123 Agreements on the list of generally authorized countries.
We are still evaluating the guidance document that DOE just released, but one interesting point to note is that the Guidance tells those who have been operating under a specific authorization and are moving to a general authorization that they must file a report terminating their specific authorization.