On March 25, 2015, a reissued version of the U.S. Department of Energy (“DOE”) regulations on “Assistance to Foreign Atomic Energy Activities,” 10 C.F.R. Part 810 (“Part 810” or “the DOE Regulations”), go into effect. The DOE Regulations control the provision outside the United States of technology and other assistance related to nuclear projects, including civil nuclear power projects. The rule issued on February 23, 2015 (“Final Rule”) finalizes amendments that have been under consideration since 2011. The changes to the DOE Regulations affect, in particular, the authorization and reporting requirements that apply to parties engaging in activities within the scope of Part 810. Most importantly, certain activities previously eligible for a general authorization now require specific approval from DOE. Parties engaging in activities affected by this change are required to request specific authorization by August 24, 2015.
Several different sets of U.S. regulations control the exportation of nuclear-related items or activities, as follows:
- The International Traffic in Arms Regulations, 22 C.F.R. Part 120et seq., enforced by the U.S. Department of State, which control the export/reexport of nuclear weapons and related technical data;
- The regulations at 10 C.F.R. Part 110 (“Part 110” or “the NRC Regulations”), enforced by the U.S. Nuclear Regulatory Commission, which control the export/retransfer of nuclear material and equipment;
- Part 810, enforced by DOE, which controls the provision abroad of nuclear-related technology or assistance; and
- The Export Administration Regulations, 15 C.F.R. Part 730 et seq. (“EAR”), enforced by the U.S. Department of Commerce, which control the export/reexport of “dual use” goods, software, and technology.
Part 810 applies to “persons subject to U.S. jurisdiction,” which include not only U.S. citizens/permanent residents and U.S. companies but also licensees, contractors, or subsidiaries under their direction, supervision, responsibility, or control. Activities within the scope of the DOE Regulations may only proceed pursuant to general or specific authorizations. Activities that are eligible for general authorizations are subject to post-transaction reporting obligations requiring that a report be submitted to DOE within 30 calendar days of beginning the activity. Generally authorized activities do not, however, require pre-transaction approval from DOE. Activities not eligible for a general authorization require specific authorization from DOE before the activities may permissibly proceed.
Prior to the publication of the Final Rule, the DOE Regulations had not been comprehensively updated since 1986. DOE first published a proposed rule to update Part 810 in September 2011. Based on the numerous comments that DOE received from the public in response to that proposed rule, DOE published a supplemental proposed rule in August 2013. The Final Rule, published on February 23, 2015, notes that the extensive revisions to Part 810 are designed to ensure that the regulations remain “effective and efficient” in light of increasing commercial nuclear activities.
The Final Rule includes changes to virtually every section of the DOE Regulations. Some of these changes merely update the DOE Regulations to reflect longstanding interpretations applied by DOE but not explicitly reflected in the regulations. Others have a more substantive effect on the regulatory requirements that apply to parties engaging in Part 810-regulated activities. In some cases, these changes create new specific authorization requirements for activities that were previously generally authorized. Parties engaging in activities that were previously eligible for a general authorization but are now subject to a specific authorization requirement due to the revised DOE Regulations must submit a specific authorization request to DOE by August 24, 2015. Provided such an authorization request is submitted by that date, parties may continue to engage in these activities until DOE acts on the specific authorization request.
Below we list some of the key changes to the DOE Regulations presented in the Final Rule.
1. Clarifying the Scope of the DOE Regulations
Historically, parties have often struggled with the threshold question of whether their activities are subject to the DOE Regulations. The provision describing the scope of the prior DOE Regulations stated only that general or specific authorization was required to engage in the production outside the United States of Special Nuclear Material (i.e., plutonium, uranium-233, or uranium enriched above 0.711 percent by weight in the isotope uranium-235). While Part 810 previously listed certain activities deemed to be within their scope, the list was high-level and did not indicate which aspects of a particular activity would be controlled.
The revised DOE Regulations provide further clarity on this issue. For example, DOE has historically interpreted certain activities involving civilian nuclear reactors to be within the scope of Part 810 because Special Nuclear Material is a by-product of the nuclear reaction used to generate power. This was not expressly stated anywhere in the prior version of the DOE Regulations. The revisions to these regulations, however, clarify where DOE draws the line today and formalizes what had already become a de facto basis for analysis for many companies. The new language is similar to language that the NRC uses to describe which nuclear equipment is subject to Part 110. Specifically with regard to civil nuclear reactors, the revisions add language to Part 810 stating that activities for the development, production, or use of the following are within the scope of Part 810:
- components within or attached directly to the reactor vessel,
- the equipment that controls the level of power in the core, and
- the equipment or components that normally contain or come in direct contact with or control the primary coolant of the reactor core.
Furthermore, although it is not included in the text of Part 810, DOE clarified in its commentary in the Final Rule that activities related to the steam turbine generator portion of a boiling water reactor are not subject to Part 810 and are controlled under the EAR.
2. Revising the Countries Eligible for the Country-Based General Authorization
Arguably the most significant changes to the DOE Regulations are the revisions to the scope of a general authorization for assistance to certain countries. Previously, Part 810 included a list of countries that were not eligible for the country-based general authorization provided at § 810.7(h) (“Excluded Country List”). So long as a nuclear-related activity did not involve one of those excluded countries (or certain highly-restricted technologies or activities), the activity was eligible for a general authorization and did not require specific authorization from DOE.
Under the revised DOE Regulations, this approach is reversed. Now, the country-based general authorization found in § 810.6(a) is available only for countries that appear on a list provided in an Appendix to the Regulations (“Eligible Country List”). In other words, the reissued DOE Regulations contain a positive list of countries eligible for the general license, rather than a negative list of countries not eligible.
In some cases (e.g., Croatia (as part of the former Yugoslavia), Kazakhstan, the United Arab Emirates, Vietnam), countries previously on the Excluded Country List and subject to a specific authorization requirement for Part 810-controlled activities are now eligible for the country-based general authorization under the revised DOE Regulations. On the other hand, numerous countries (e.g., Jordan, Malaysia, New Zealand, Singapore) that were previously eligible for the country-based general authorization are now subject to a specific authorization requirement. In its commentary in the Final Rule, DOE advised that these changes reflect an updated assessment of the nuclear proliferation risks that exist around the world. Finally, although Mexico and Chile were not previously identified on the Excluded Country List, under the new DOE Regulations the eligibility of these countries for the country-based general authorization is limited to activities related to specific International Atomic Energy Agency agreements.
3. Creating Ukraine Reporting Requirements
In the previous version of the DOE Regulations, Ukraine was identified on the Excluded Country List and was not eligible for the country-based general authorization. In light of actions taken by Ukraine to prevent nuclear proliferation (as well as the U.S. Government’s concern about Ukraine’s ability to sustain its nuclear program without support from the Russian Federation during the ongoing dispute between those two countries), DOE included Ukraine in the new Eligible Country List. Thus, many nuclear-related activities involving Ukraine no longer require specific authorization from DOE.
Nevertheless, DOE expressed concerns in its commentary in the Final Rule about tensions between Russia and Ukraine and, particularly, the Government of Ukraine’s lack of control over certain territories. To address these risks, the revised DOE Regulations include new requirements for (i) pre-activity notifications to be submitted to DOE 10 days before engaging in a generally authorized activity involving Ukraine, and (ii) post-activity reports to be submitted to DOE within 10 days of transferring any nuclear technology to Ukraine. DOE made clear in the Final Rule that the pre-activity notification requirement is designed to provide DOE with information necessary to assess whether the activity raises proliferation concerns. If DOE has concerns, it can bar the activity from occurring under the general authorization and impose a specific authorization requirement. The requirement to submit post-activity reports within 10 days is shorter than the 30 day requirement that applies to generally authorized activities involving other countries.
4. Formalizing the Deemed Export Rule
The previous version of the DOE Regulations did not explicitly address the release of technology to non-U.S. nationals (so-called “deemed exports”). Nevertheless, DOE has long maintained that such releases (whether within or outside of the United States) were subject to the DOE Regulations. Pursuant to DOE practice, if the recipient of Part 810-controlled technology or assistance was a national of a country not eligible for the general authorization, then the release of technology or assistance to that recipient would require specific authorization from DOE. For dual-nationals, DOE traditionally considered whether eithernationality would trigger a specific authorization requirement.
DOE’s revisions to Part 810 explicitly confirm DOE’s pre-existing position on deemed exports. For non-U.S. nationals who are nationals of a country not listed on the Eligible Country List, a specific authorization request before the transfer may proceed. In its commentary in the Final Rule, DOE explicitly affirmed its approach of considering “all countries of an individual’s allegiance” (e.g., both nationalities of dual-nationals) when making determinations of whether specific authorizations are required. Thus, if an individual is a national of two countries, one of which is not on the Eligible Country List, then specific authorization from DOE is required before Part 810-controlled technology is released to that individual.
The revised DOE Regulations also provide instructions for requesting specific authorization for deemed exports. Under the new regulations, an application for specific authorization to transfer Part 810-controlled technology to a non-U.S. national must include a description of the technology to be transferred, the purpose of the transfer, background information about the foreign national, a copy of any confidentiality agreement safeguarding nuclear technology, and a signed statement from the non-U.S. national certifying that he or she will comply with Part 810’s requirements.
5. Creating a General Authorization for Deemed Exports to Certain Employees of NRC Facilities
The revised DOE Regulations include a new general authorization authorizing the transfer of nuclear technology to non-U.S. nationals of countries not on the Eligible Country List who work at an NRC-licensed facility. To qualify for this general authorization, the non-U.S. national must have been granted unescorted access at an NRC-licensed facility in accordance with NRC regulations.
Parties that engage in any activities subject to Part 810 (including activities that occur within the United States but involve non-U.S. national employees or contractors) should carefully review the revised DOE Regulations to determine whether their activities are subject to new specific authorization requirements or are eligible for new general authorizations. If any ongoing activities are now subject to a specific authorization requirement because of the changes to Part 810, a request for specific authorization must be submitted to DOE by August 24, 2015.