On 7 September 2011, the Department of Energy (DOE) published a proposed rule in the Federal Register to amend the Part 810 Regulations (10 C.F.R. Part 810), which govern the provision by U.S. persons of unclassified technology, services, and assistance to foreign nuclear activities (76 Fed. Reg. 55278). The proposed rule makes substantial revisions to the scope and requirements of the Part 810 Regulations. U.S. companies, organizations, and universities involved in the nuclear industry, as well as non-U.S. companies involved in the U.S. nuclear industry, should review this rule carefully to determine how the proposed changes would affect their activities and what enhancements would need to be made to their compliance programs. The proposed rule does not address a number of important issues that affect U.S. and non-U.S. entities involved in the nuclear industry. Interested parties have been invited to provide comments to the DOE on the proposed rule. Such comments must be submitted by 7 November 2011, 60 days after the rule's publication in the Federal Register. Companies engaged in the nuclear industry should review the rule carefully and consider submitting comments to the DOE.
I. Overview The Part 810 Regulations, which have not been updated significantly since 1986, enables the DOE to control the export of nuclear technologies and services by U.S. persons to foreign destinations. The proposed revisions update and clarify several provisions in the current regulation. These changes provide additional clarity regarding the scope of activities covered under the Part 810 Regulations and the regulatory requirements associated with the provision of assistance to foreign persons related to such activities.
Notably, the proposed rule explicitly states that so-called "deemed exports," or transfers of covered nuclear-related technology to foreign persons located in the United States, are subject to the Part 810 Regulations, and sets forth specific information required for "deemed export" authorization requests. In addition, the proposed rule removes the "Restricted Countries" list and instead includes a new positive list of countries eligible for general authorization. This list includes certain countries that were previously restricted and does not include certain countries that previously were generally authorized.
II. Summary of proposed changes The key revisions proposed by the 7 September rule are as follows:
A. Scope of the Part 810 Regulations
- The proposed changes would clarify the activities that are controlled under the Part 810 Regulations, and would expressly include technology and services related to nuclear reactors (such as nuclear power reactors), storage and movement of irradiated nuclear materials (including specially designed containers therefor), and processing of high-level radioactive waste. The proposed rule clarifies that the Part 810 Regulations apply to all activities of the nuclear fuel cycle after uranium/thorium mining and milling, from uranium conversion to reprocessing or nuclear waste disposal.
- Activities specifically excluded from the scope of the Part 810 Regulations include uranium and thorium mining and milling and nuclear fusion reactors (when not used in support of systems involving hydrogen isotope separation).
- In addition, "public information" and "basic scientific research", which currently are authorized for transfer under general authorization under the Part 810 Regulations, would be exempted entirely from the scope of the Part 810 Regulations.
B. Deemed exports
- Consistent with current DOE practice, the proposed rule now formally states that the Part 810 Regulations apply to transfers of technology to foreign nationals located in the United States, in addition to assistance and technology provided to foreign persons located outside of the United States. The DOE formally has confirmed that foreign nationals who are legal permanent residents of the U.S. (green card holders) or are protected asylees or refugees are not considered "foreign persons" and do not require specific authorization.
- For transfers of technology to foreign nationals that require specific authorization (based on the nationality of the employee or the technology at issue), the rule contains a list of information that must be provided for the foreign national at issue, including background information regarding the employee, a description of the technology, the purpose of the proposed release, and copies of confidentiality agreements and assurances from the foreign national regarding compliance with the Part 810 Regulations.
C. Generally authorized activities
- The proposed rule explicitly identifies a list of countries and facilities that are eligible for a general authorization, meaning that no prior written authorization from the DOE is required before engaging in the covered activity. Currently, the Part 810 Regulations instead identify a list of "restricted countries" for which a specific authorization is required, meaning that U.S. persons must receive approval from the DOE prior to engaging in the covered activity.
- This list of generally authorized countries appears to be based on the countries that have Section 123 Agreements for Peaceful Nuclear Cooperation with the United States, with the exception of China, India, and Russia.
- Certain countries that currently are considered to be "restricted countries" would be eligible for general authorization under the proposed rule, including Kazakhstan, Ukraine, and the UAE (all of which have Section 123 Agreements with the United States).
- However, certain countries that currently are eligible for general authorizations (as a result of not being identified as "restricted countries") do not appear on the proposed list of countries eligible for general authorization, including Mexico and the Philippines.
- The proposed rule would revise the description of the scope of activities that may be conducted under a general authorization, simplifying the list of activities currently set forth in the Part 810 Regulations. As a result, under the proposed rule, U.S. persons would be generally authorized to engage in the production of nuclear material involving eligible foreign countries, provided that no sensitive nuclear technology is transferred and that the activities do not involve "specifically authorized activities" (as discussed below).
- The proposed rule also would remove the reporting requirements associated with activities involving the generally authorized countries.
D. Specifically authorized activities
- The proposed rule removes the list of "Restricted Countries" previously set forth in 10 C.F.R. 810.8(a) for which specific authorizations are required prior to engaging in the production of special nuclear material in those countries. As noted above, the proposed rule instead contains a list of countries that are eligible for general authorization.
- The rule also simplifies the types of activities for which a specific authorization generally is required. The proposed rule simply states that unless generally authorized under the Part 810 Regulations, U.S. persons require specific authorization before engaging directly or indirectly in the production of special nuclear material outside of the United States.
- The proposed rule does contain a new definition for "specifically authorized nuclear activities" that provides information regarding the types of activities that would require specific authorization under the revised Part 810 Regulations. These activities include the provision of assistance, including the transfer of technology, to foreign persons related to:
- Uranium isotope separation (uranium enrichment), plutonium isotope separation, or isotope separation of any other elements (including stable isotope separation) when the technology or process can be applied directly or indirectly to uranium or plutonium;
- Fabrication of nuclear fuel containing plutonium, including preparation of fuel elements, fuel assemblies, and cladding thereof;
- Hydrogen isotope separation and heavy water production;
- Production accelerator-driven subcritical assembly systems;
- Production reactors; and
- Reprocessing of irradiated nuclear fuel or targets containing special nuclear material.
- While these activities have been reorganized from the current format, they generally appear to capture all of the activities currently subject to specific authorizations.
- However, activities related to "research reactors" no longer appear in the list of activities subject to specific authorizations.
The proposed rule contains a revised list of factors that will be considered by the DOE when determining whether to grant a specific authorization request.
- New factors include whether:
- the country or the authorities of the territory involved is/are in good standing with its/their acknowledged nonproliferation commitments;
- the recipient is duly authorized by the country's government or the authorities of the territory involved to receive and operate the technology sought to be transferred; and
- the transfer is part of an existing cooperative enrichment enterprise or the supply chain of such an enterprise.
- The proposed rule also sets forth additional considerations for applications involving the export of sensitive nuclear technology, including whether:
- the recipient country has in force an Additional Protocol;
- the IAEA has identified the country as being in breach of their obligations under safeguards agreements;
- the country is adhering to the Nuclear Suppliers Group Guidelines; and
- the country adheres to international safety conventions related to nuclear or other radioactive materials or facilities.
- The rule states that the DOE may grant a specific authorization request for activities related to the enrichment of source material and special nuclear material, provided that the DOE receives certain assurances from the foreign government of the country in which the foreign recipient is located.
- Finally, the proposed rule states that specific authorizations issued by the DOE generally will have a time limit of no longer than five years.
E. Information required for specific authorization requests
- The proposed rule requires applicants for specific authorizations to provide the approximate monetary value of the project for which they are requesting specific authorization.
- Applications for specific authorizations related to enrichment of fissile material must submit information that demonstrates that:
- The proposed transfer will avoid the transfer of information related to enabling design or manufacturing technology related to such items, as far as practicable; and
- The applicant will share with the recipient only information required for the regulatory purposes of the recipient country or territory or to ensure the safe installation and operation of a resulting enrichment facility, without divulging enabling technology.
F. Definitions of relevant terms
- The proposed rule adds and revises a number of definitions in the Part 810 Regulations, including for "technology," "technical assistance," and "technical data" subject to the Part 810 Regulations.
- These definitions appear to be identical to those set forth in the Export Administration Regulations (EAR). For example, "technology" means information related to the "development," "production," or "use" of any facility or activity listed in 810.2(c). The definitions for "development," "production," and "use" are identical to those set forth in the EAR as well.
III. Outstanding questions and issues
The proposed rule does not address a number of important issues that affect U.S. and non-U.S. nuclear companies, including:
- Treatment of dual national employees – the proposed rule does not address how foreign persons who are citizens of multiple countries would be treated under the Part 810 Regulations. For instance, would a dual citizen of Canada and China be treated as a Canadian citizen or Chinese citizen?
- Deemed re-exports – the proposed rule does not formally address how the release of U.S.-origin technology or services subject to the Part 810 Regulations in a foreign country to a citizen of a third country would be treated under the Part 810 Regulations. For example, would the release of Part 810 controlled information to a citizen of India who is employed in France be considered a deemed export to India?
- Visits to nuclear power plants in the United States by foreign nationals – the proposed rule does not provide clear guidance regarding visits to a nuclear power plant by foreign persons, such as benchmarking or assist visits for sharing best practices. For instance, is a tour normally provided to the public not considered to be a deemed export? Is a visit to the control room or inside the containment structure considered to be a deemed export?
- "Americanization" of foreign technology – the proposed rule does not address or provide criteria for assessing when foreign nuclear technology used or modified in the United States becomes "Americanized" and, therefore, subject to the DOE Part 810 Regulations.
- "Foreignization" of U.S.-origin technology – the proposed rule does not address or provide criteria for assessing when U.S.-origin nuclear technology subject to the Part 810 Regulations is sufficiently transformed in a foreign country such that the technology no longer is considered to be subject to the Part 810 Regulations.
- No de minimis rule for commingled technology – the proposed rule does not address whether the Part 810 Regulations would cover foreign produced technology that is commingled with U.S.-origin technology subject to control under the Part 810 Regulations, and does not set forth a de minimis level for U.S. content in such foreign produced technology beyond which the foreign produced technology would be subject to the Part 810 Regulations.