Any transaction involving either a change of control in or above an entity that holds a license issued by the U.S. Nuclear Regulatory Commission (NRC) or transfer of licensed assets to a new owner cannot close without prior NRC review and approval of a license transfer. This includes any transaction in the direct corporate chain above a licensee—no matter how far removed. Similar restrictions are also in place for most Agreement State licensees.
Many companies involved in the mining industry hold radioactive materials licenses (e.g., soil density gauges), and the parent company often does not know about the license transfer requirements, or even that a subsidiary holds a license.
The NRC “strongly cautions” that if a license transfer occurs without NRC approval, the matter will be referred for investigations and enforcement. Potential enforcement actions can include civil penalties or suspending the licensee. The willful failure to obtain prior NRC approval of the change of control may further result in referrals to the Department of Justice for consideration of criminal prosecution under the provisions of the Atomic Energy Act.
Whether companies involved in a transaction—from the ultimate parent company down to the lowest subsidiary—holds a radioactive materials license should be an initial question during due diligence. If a license is present, the parties should consider making NRC approval of the license transfer a condition to closing. In any event, a license transfer application should be submitted following the appropriate guidance and in enough time to obtain approval prior to closing. NRC review and approval, on average, takes about two to three months.