New Proposed Department of Energy Rules to Clarify and Update Part 810
By Shannon MacMichael and Michael Lieberman
of Steptoe & Johnson, LLP1
I.
Introduction
Since April 2010, when former U.S. Secretary of Defense Robert Gates announced an ambitious
export control reform initiative,2 the U.S. Government has made slow, but steady progress in
rationalizing its system of strategic trade controls. Although initially met with some skepticism
given the checkered history of such efforts, in the past two years the administration has proposed
major reorganizations of the U.S. Munitions List and the Commerce Control List, submitted
proposals for significant exceptions and clarifications to the Export Administration Regulations,
and established an Export Enforcement and Coordination Center. Until recently, this initiative
has paid scant attention to an area long considered in need of reform – civilian nuclear exports.
Yet a new rule proposed by the U.S. Department of Energy (DoE) would entail a significant
change to the way in which U.S. persons assist and participate in foreign atomic energy
activities.3 The proposed change would affect Part 810 to Chapter 10 of the Code of Federal
Regulations (CFR), which implements Section 57b of the Atomic Energy Act of 1954 (AEA), as
amended by the Nuclear Non-Proliferation Act of 1978 (42 U.S.C. 2077(b)). This statute seeks
to balance the objectives of promoting peaceful nuclear trade and cooperation while protecting
U.S. interests in nonproliferation and national security.
The AEA prohibits U.S. persons from directly or indirectly participating in the development or
production of any “special nuclear material”4 outside of the United States unless: 1) specifically
authorized under a bilateral agreement (i.e., a “123 agreement”); or 2) authorized by the
Secretary of Energy upon a finding that such activity “will not be inimical to the interest of the
United States.”5 The new rule seeks to modernize Part 810 in response to political, economic
and technological developments, and also to bring key definitions into line with those of the
Nuclear Suppliers Group guidelines. In addition to these substantive changes, the new rule will
also address certain practices which had developed under the existing regulations, but were not
addressed in Part 810.
Last revised in 1986, Part 810 continues to apply to “all persons subject to the jurisdiction of the
United States” (“U.S. persons”) who engage in or assist in producing “special nuclear material”
outside the United States by transferring relevant technology to foreign persons or who transfer
1
Shannon MacMichael (smacmichael@steptoe.com) and Michael Lieberman are associates at the law firm of
Steptoe & Johnson, LLP in Washington, DC. The views expressed are those of the authors.
2
Business Executives for National Security (Export Control Reform), Remarks as Delivered by Secretary of
Defense Robert M. Gates, Washington DC, Tuesday, April 20, 2010, available at
http://www.defense.gov/speeches/speech.aspx?speechid=1453 (Mar. 13, 2012).
3
76 Fed. Reg. 55278 (September 7, 2011).
4
§ 11(aa) of the Atomic Energy Act, P. L. 83-703, defines “special nuclear material” as “plutonium, uranium
enriched in the isotope 233 or in the isotope 235, and any other material which the Commission, pursuant to the
provisions of section 51, determines to be special nuclear material….”
5
Id. at § 57(b).
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such technology in the United States to foreign nationals.6 It also applies to licensees,
contractors and subsidiaries operating under the control or direction of U.S. persons.
II.
Clarification of Activities Controlled Under Section 810.2
One of the most anticipated changes in the proposed rule is the clarification of activities
regulated under Part 810. Whereas the current rule provides an illustrative list of rather vaguelydescribed activities, the proposed revision to Section 810.2 provides a more specific and concrete
list. These include:
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Conversion and purification of uranium and thorium from milling plant concentrates and
in all subsequent steps of the nuclear fuel cycle
Nuclear fuel fabrication
Activities involving nuclear reactors
Hydrogen isotope separation and heavy water production
Reprocessing of irradiated nuclear materials
Storage of irradiated nuclear materials
Processing of high level radioactive waste
Other related activities as determined by the Secretary of Energy and published in the
Federal Register
The list specifically excludes activities exclusively related to uranium and thorium
mining/milling and nuclear fusion reactors in and of themselves. Moreover, exports subject to
the jurisdiction of the Nuclear Regulatory Commission remain outside the scope of the new rule.
III.
Specification of “Generally Authorized Activities”
Probably the most controversial proposed change is the removal of a general authorization to
export to over 70 countries.7 In the process of moving from a list of “restricted countries” to a
positive list, DoE has substantially decreased the number of countries that qualify for a general
authorization. If the proposed regulations are adopted, specific authorizations to export would
need to be obtained for all of these new countries. Specific authorizations would be required for
exports of technology to these countries as well as hiring of foreign nationals from these
countries to work for U.S. companies in the nuclear field. While most of these countries are not
presently important nuclear trading partners, any future potential for cooperation and trade will
face increased licensing burdens.
Proposed Section 810.6 provides a list of countries, including facilities located therein, with
which U.S. persons may engage in the production of nuclear material. Such activity may not
6
Note that this definition is broader and less specific than the definition of “U.S. Person” in other export control
regulations. See, e.g., 15 C.F.R. Part 772.1 (defining “U.S. Person” to mean U.S. citizens, U.S. permanent residents,
refugees, asylees and juridical persons organized under the laws of the United States or any jurisdiction thereof, or
any person physically present in the U.S.); 31 C.F.R. Part 560 (essentially the same).
7
Nuclear Energy Institute, Comments on Proposed Rule on Assistance to Foreign Atomic Energy Activities, (RIN
1994-AA02) at 2, available at www.regulations.gov, Document ID DOE-HQ-2011-0035-0031 (Mar. 13, 2012)
(“NEI Comments”).
2
involve “sensitive nuclear technology” or activities that require “specific authorization” as
described in the proposed rule at Section 810.7 (discussed below). “Sensitive nuclear
technology” is defined as non-publicly available information that is “important” to the
development of a uranium enrichment, nuclear fuel reprocessing or heavy water facility.
All such activities, moreover, are limited to unclassified information, and cannot in any event be
provided if the person providing assistance knows or has reason to know that the activity is
meant to facilitate the development of a nuclear explosive device. See proposed 10 C.F.R. §
810.8(c).
The countries that appear on the proposed Section 810.6 general authorization list largely consist
of those countries with which the United States has entered into 123 agreements (with the
exception of China, India and Russia, which have 123 agreements with the United States, but do
not appear on the Section 810.6 list).8 The change to a positive list marks an important revision
from the current Part 810, which lays out a list of “restricted countries” requiring specific
authorization, and matches the approach already taken by the NRC, removing the potential for
confusion. See 10 C.F.R. § 810.8. Notably, some countries that are currently “restricted”, for
example Kazakhstan and the UAE, would appear on the new general authorization list. This
change likely reflects the fact that the United States and these countries have entered into 123
agreements since the last Part 810 revision in 1986.
Definition of “Specifically Authorized Nuclear Activities”
IV.
As proposed Section 810.7 provides, all activities not generally authorized require a specific
authorization from the Secretary of Energy. The new rule would require a specific authorization
for assistance related to the following types of activities, as provided in the proposed definition
of “specifically authorized nuclear activities” at proposed Section 810.3:
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Uranium enrichment, plutonium isotope separation, or isotope separation of any other
elements if the technology or process is applicable to uranium or plutonium;
Fabrication of nuclear fuel containing plutonium, including preparation of fuel elements,
fuel assemblies, and cladding;
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.
For all such activities, including activities involving countries on the general authorization list, a
license from the Secretary of Energy is required.
8
See 123 Agreements for Peaceful Cooperation, available at
http://nnsa.energy.gov/aboutus/ourprograms/nonproliferation/treatiesagreements/123agreementsforpeacefulcooperat
ion (Mar. 13, 2012).
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V.
Factors Relevant to the Grant of Specific Authorization
The new rule further lays out factors that the DoE will consider when reviewing an application
for activities requiring specific authorization. These factors include, among others, whether:
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There is a 123 agreement in force;
The country is in good standing with its nonproliferation commitments;
The technology recipient is authorized by its country’s government to obtain and operate
the technology sought to be transferred, and whether there are sufficient controls in place
to achieve nonproliferation objectives;
The technology is available from other sources; and
The transfer involves an existing cooperative enrichment undertaking, or is part of the
supply chain of such an enterprise.
For transfers of “sensitive nuclear technology”, the Secretary will also consider whether, inter
alia:
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The recipient country is in full compliance with the Nuclear Nonproliferation Treaty;
The country has ratified and implemented the IAEA Additional Protocol or functional
equivalent;
The country is adhering to Nuclear Supplier Group guidelines and implementing
effective export controls identified by UN Security Council Resolution 1540; and
The country is abiding by international nuclear safety treaties and conventions.
Any authorization for transfer of “sensitive nuclear technology” requires the concurrence of the
Department of State and consideration by the Department of Commerce, the Department of
Defense, and the Nuclear Regulatory Commission. Licenses are typically available for a period
of five years.
VI.
Deemed Exports
The proposed rule also explicitly provides for what is already current DoE practice in treating the
provision of assistance, technology or information to foreign nationals as an export to the foreign
national’s home country. This means that companies must obtain a license from the DoE if they
wish to provide information or technology to foreign national employees from countries not
generally authorized under Section 810.6, or that involves activities that require specific
authorization, even if the foreign national is working in the United States. The proposed rule
preamble explains that these provisions are “intended to address situations comparable” to the
deemed export rules of the Export Administration Regulations (EAR) maintained by the
Department of Commerce at 15 C.F.R. 734.2(b)(2).
The proposed rule also establishes new procedures for obtaining specific authorization to release
technology to foreign nationals from restricted countries or involving technology requiring
specific authorization. These new procedures are significant in that they no longer require
assurances from the home country of the foreign national. Instead, the new procedures require a
signed undertaking by the foreign national that he/she will comply with Part 810 and not disclose
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the technology without DoE’s prior consent or use the technology for any nuclear explosive
device or in furtherance of any military purpose. This change has been proposed as a result of
the difficulty that the United States has often faced in obtaining written assurances from foreign
governments when a national has left their jurisdiction and is no longer subject to their control
for practical purposes. Applications for such licenses under the proposed rule must also contain
background information on the employee, a description of the information or technology, a
confidentiality agreement and other information, as specified in proposed Section 810.11.
An ambiguity in the new rule is how DoE will treat dual nationals who have both U.S. and
foreign citizenship (permanent residents and “protected individuals”, e.g., asylees, are treated as
U.S. nationals). Notwithstanding DoE’s stated intention to make the rule “comparable” to the
EAR’s deemed export rule, which generally speaking treats dual nationals according to their
latest citizenship or state of permanent residency, such treatment is not clear from the proposed
rule. As written, a dual Indian-U.K. citizen, for example, would not necessarily be eligible to
work on generally authorized activities in the U.S. as an employee of a U.S. company, since
India is not on the proposed Section 810.6 country list.
VII.
Conclusion
In providing heightened specificity to the scope of activities regulated by Part 810 and by
providing a number of important clarifying definitions, the proposed rule may in some instances
ease the regulatory burden of compliance with Part 810.
At the same time, industry commenters have raised numerous issues with the proposed rule.
Among them are the lack of specific licensing requirements or procedures for dual nationals; the
treatment of deemed reexports; the absence of a definition for “specially designed or prepared”;
an overly broad definition of defined terms such as “reprocessing”; the inclusion of technologies
not related to the production of “sensitive nuclear material” as defined; the addition of 70 new
countries to the list for which a specific authorization is required; and the lack of a de minimis
rule for U.S.-origin technology that is incorporated into foreign technology.9
Given the complexity of the rule and the technologies it covers, DoE is expected to undertake
additional analysis as it prepares to finalize the rule. In light of the changes already proposed
and the likelihood of potentially substantial revision, there can be little doubt that the new rule
will represent a significant change to the existing controls on nuclear technology.
9
See, e.g., NEI Comments, passim.
5