[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5370 Introduced in House (IH)]

<DOC>






114th CONGRESS
  2d Session
                                H. R. 5370

  To provide for restrictions related to nuclear cooperation with the 
          People's Republic of China, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 26, 2016

Mr. Sherman (for himself and Mr. Fortenberry) introduced the following 
 bill; which was referred to the Committee on Foreign Affairs, and in 
 addition to the Committee on Energy and Commerce, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL


 
  To provide for restrictions related to nuclear cooperation with the 
          People's Republic of China, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``U.S.-China Nuclear Cooperation and 
Nonproliferation Act of 2016''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) A report issued in 2001 by the Department of Defense 
        found that ``China supplied Pakistan with nuclear material and 
        expertise and has provided critical assistance in the 
        production of Pakistan's nuclear facilities''. China is also 
        alleged to have provided Pakistan with 50 kilograms of highly 
        enriched uranium, and designs for a nuclear weapon.
            (2) An unclassified report submitted to Congress in 2011 by 
        the Director of National Intelligence found that Chinese 
        entities ``continue to supply a variety of missile-related 
        items to multiple customers, including Iran and Pakistan''. 
        Previous reports by the Director of National Intelligence have 
        confirmed that Chinese entities have provided support for the 
        missile program of North Korea.
            (3) China has failed to bring to justice Li Fangwei, also 
        known as Karl Lee, who has been indicted in the United States 
        on charges of providing sensitive missile technology to Iran. 
        According to a report from the Congressional Research Service, 
        ``concerns persist about Chinese willingness as well as ability 
        to detect and prevent illicit transfers'' of dual-use and 
        sensitive nuclear and missile items.
            (4) At a May 12, 2015, hearing, members of the Committee on 
        Foreign Relations of the Senate raised concerns that China may 
        have diverted to its nuclear submarine program reactor cooling 
        pumps produced by the Curtiss-Wright Corporation, thereby 
        bolstering the stealth of its submarines, and violating the 
        Previous Nuclear Cooperation Agreement (as that term is defined 
        in section 3(4)).
            (5) Similarly, at a July 16, 2015, hearing before two 
        subcommittees of the Committee on Foreign Affairs of the House 
        of Representatives, witnesses testified that China had likely 
        diverted technology from its civilian nuclear program to its 
        military programs, and had failed to undertake sufficient 
        efforts to prevent the transfer of sensitive dual use and other 
        controlled items.
            (6) China has announced plans to provide Pakistan with 
        nuclear reactors, in addition to those China had already agreed 
        to construct prior to 2004, in violation of its 2004 
        commitments to the Nuclear Suppliers Group (NSG).
            (7) Five members of the Chinese People's Liberation Army 
        have been indicted in the United States on charges of hacking 
        into the computer networks of Westinghouse and stealing United 
        States intellectual property, including the design of nuclear 
        power plants.
            (8) China has announced plans to export nuclear power 
        plants based on technology acquired legally from Westinghouse, 
        one of China's primary commercial partners under its current 
        and previous nuclear cooperation agreements with the United 
        States. While China has committed not to export United States-
        origin technology without a marketing license from 
        Westinghouse, there is no definition of ``United States-origin 
        technology'' in statute or regulation, thereby complicating 
        efforts by the United States to control the transfer of United 
        States-origin nuclear technology.
            (9) China General Nuclear Power Company, a state-owned 
        nuclear power provider, has been indicted in the United States 
        on charges of unlawfully producing special nuclear material 
        outside the United States without the authorization of the 
        Department of Energy.
            (10) China's plans to reprocess United States-origin spent 
        nuclear fuel raises the risk that China could divert plutonium 
        to military purposes, thereby enabling it to produce additional 
        nuclear weapons that threaten the United States and its allies.
            (11) Secretary of Energy Ernest Moniz told the Wall Street 
        Journal, in Beijing on March 17, 2016, that the United States 
        does not ``support large-scale reprocessing'', and China's plan 
        to proceed with a commercial-scale reprocessing facility 
        ``certainly isn't a positive in terms of nonproliferation''.
            (12) China's pursuit of commercial plutonium reprocessing 
        will increase the likelihood that Japan expands its own 
        commercial reprocessing program, and that South Korea will 
        increase efforts to initiate such a program of its own. Growing 
        stockpiles of plutonium in East Asia increase the chances of 
        military diversion and theft, thereby raising the risk of 
        nuclear proliferation, nuclear terrorism, and interstate 
        nuclear conflict. It is in the interest of the United States to 
        prevent the stockpiling of plutonium in East Asia.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means the Committee on 
        Foreign Relations of the Senate and the Committee on Foreign 
        Affairs of the House of Representatives.
            (2) China.--The term ``China'' means the People's Republic 
        of China.
            (3) Chinese person.--The term ``Chinese person'' means--
                    (A) an individual who is a citizen or national of 
                China; and
                    (B) an entity organized under the laws of China or 
                otherwise subject to the jurisdiction of the Government 
                of China.
            (4) Previous nuclear cooperation agreement.--The term 
        ``Previous Nuclear Cooperation Agreement'' means the Agreement 
        for Cooperation Between the Government of the United States of 
        America and the Government of the People's Republic of China 
        Concerning Peaceful Uses of Nuclear Energy, concluded July 23, 
        1985.
            (5) United states.--The term ``United States'' means the 
        several States, the District of Columbia, and any territory or 
        possession of the United States.
            (6) United states person.--The term ``United States 
        person'' means any United States citizen, any alien lawfully 
        admitted to the United States for permanent residence, any 
        entity organized under the laws of the United States or any 
        jurisdiction within the United States, and any person in the 
        United States.
            (7) United states-china nuclear cooperation agreement.--The 
        term ``United States-China Nuclear Cooperation Agreement'' 
        means the Agreement for Cooperation Between the United States 
        and the Government of the People's Republic of China that was 
        submitted to the appropriate congressional committees under 
        section 123 of the Atomic Energy Act of 1954 (42 U.S.C. 2153) 
        on April 21, 2015, and which entered into force on October 29, 
        2015.

SEC. 4. NOTICE REGARDING TRANSFERS OF NUCLEAR TECHNOLOGY TO CHINA.

    The Secretary of Energy shall, not later than 5 days after 
receiving an application for the proposed transfer of nuclear 
technology to China under section 57b. of the Atomic Energy Act of 1954 
(42 U.S.C. 2077(b)), including an application for specific 
authorization to be provided for in a subsequent arrangement under 
section 131 of that Act (42 U.S.C. 2160), notify the appropriate 
congressional committees of the receipt of such application. The notice 
shall describe with particularity the items contained in the proposed 
transfer of nuclear technology.

SEC. 5. APPROVAL FOR TRANSFER OF UNITED STATES-ORIGIN TECHNOLOGY 
              WHEREVER LOCATED.

    (a) Approval.--Section 57b. of the Atomic Energy Act of 1954 (42 
U.S.C. 2077(b)) is amended--
            (1) by striking ``b. It shall be unlawful'' and inserting 
        ``b.(1) It shall be unlawful'';
            (2) by striking ``(1) as specifically'' and inserting ``(A) 
        as specifically'';
            (3) by striking ``(2) upon authorization'' and inserting 
        ``(B) upon authorization''; and
            (4) by adding at the end the following new paragraph:
    ``(2) The requirements for authorization under paragraph (1) shall 
apply to any United States-origin technology that may be used in the 
development or production of special nuclear material, and items 
derived from such United States-origin technology, regardless of the 
nationality of the ownership of such technology or the location of the 
technology outside the United States.''.
    (b) Definition of United States-Origin Technology.--Not later than 
90 days after the date of the enactment of this Act, the Secretary of 
Energy shall issue, as part of the regulations issued pursuant to 
section 57b. of the Atomic Energy Act of 1954 (42 U.S.C. 2077(b)), a 
definition of items covered by the term ``United States-origin 
technology'' in paragraph (2) of such section, including items derived 
from such technology. The term shall include items developed by United 
States persons or persons subject to the jurisdiction of the United 
States, and items developed with the participation of the United States 
Government, including large, passive light water reactors.

SEC. 6. ADDITIONAL REQUIREMENT FOR APPROVAL OF RETRANSFERS OF UNITED 
              STATES-ORIGIN TECHNOLOGY.

    In addition to the requirements applicable to transfers of items 
under section 57b. of the Atomic Energy Act of 1954 (42 U.S.C. 
2077(b)), any request for authorization to transfer United States-
origin technology (as defined pursuant to section 5(b) of this Act) 
from China, or with the significant participation of Chinese persons 
not located in the United States, to a country other than the United 
States or China, shall be denied unless the applicant can demonstrate--
            (1) significant ongoing participation by United States 
        persons in the transfer;
            (2) in the case of nuclear reactors and reactor components, 
        significant United States content involved in, or attendant to, 
        the proposed transfer; and
            (3) in the case of the transfer of technology developed 
        with the participation of the United States Government, timely 
        and adequate reimbursement of the United States Government for 
        any grants or loans provided by the United States Government to 
        entities involved in the development of the technology.

SEC. 7. STATEMENT OF POLICY ON CHINA-PAKISTAN NUCLEAR COOPERATION.

    It is the policy of the United States--
            (1) to oppose the provision by China of assistance in the 
        construction of any nuclear reactor in Pakistan other than the 
        first 2 reactors constructed at Chasma, which were consistent 
        with the conditions concerning China's participation in the 
        Nuclear Suppliers Group; and
            (2) to assist Pakistan with the acquisition and development 
        of sufficient electrical power to meet its domestic 
        requirements for electrical power through means other than 
        nuclear power.

SEC. 8. ADDITIONAL NOTIFICATION REQUIREMENTS.

    (a) Notification of Presidential Determination.--
            (1) Notification.--Not later than 30 days after the 
        President makes a determination described in paragraph (2), the 
        President shall notify the appropriate congressional committees 
        of that determination.
            (2) Determination.--A determination described in this 
        paragraph is a determination that the Government of China, 
        persons acting on behalf of the Government of China, or Chinese 
        persons have, since the entry into force of the United States 
        China Nuclear Cooperation Agreement--
                    (A) retransferred any United States nuclear items 
                to a third country without the permission of the United 
                States Government;
                    (B) diverted or attempted to divert United States 
                nuclear items to military use;
                    (C) stolen or attempted to steal United States 
                nuclear items;
                    (D) failed to undertake measures necessary to 
                prevent transfers of goods, services, and technology 
                described in section 2(a) of the Iran, North Korea, and 
                Syria Nonproliferation Act (Public Law 106-178; 50 
                U.S.C. 1701 note), or to make substantial progress in 
                efforts to prevent such transfers;
                    (E) failed to undertake measures to enforce the 
                sanctions provided for in United Nations Security 
                Council Resolution 2270, adopted on March 2, 2016, and 
                previous resolutions concerning North Korea;
                    (F) refused to adhere to the Nuclear Supplier Group 
                guidelines regarding the export of any new civilian 
                nuclear reactors, regardless of any prior or future 
                contract obligations; or
                    (G) otherwise violated the terms and conditions of 
                the United States-China Nuclear Cooperation Agreement, 
                or any authorization issued by the United States 
                Government concerning transfers of United States 
                nuclear items.
    (b) Plan of Corrective Action.--Not later than 60 days after the 
President makes a determination described in subsection (a), the 
President shall provide to the appropriate congressional committees a 
plan of corrective action to--
            (1) address the activity described in subsection (a) that 
        was the subject of the determination;
            (2) mitigate any damage to the national security of the 
        United States because of such activity; and
            (3) prevent further such activity.
    (c) Measures Authorized.--At any time the President may, if the 
President determines it is necessary to address activity described in 
subsection (a) that was the subject of a determination under that 
subsection, impose any measures authorized by law, including--
            (1) measures authorized by the International Emergency 
        Powers Act (50 U.S.C. 1701 et seq.); and
            (2) suspension of cooperation with China under the United 
        States-China Nuclear Cooperation Agreement.
    (d) Definition.--In this section, the term ``United States nuclear 
items'' means any items that are transferred to China under--
            (1) the United States-China Nuclear Cooperation Agreement;
            (2) section 57b. of the Atomic Energy Act of 1954 (42 
        U.S.C. 2077(b)); or
            (3) part 110 of title 10, Code of Federal Regulations.

SEC. 9. IMPLEMENTATION OF AGREED MINUTE.

    The President may not bring into effect the procedures described in 
the section of the Agreed Minute to the United States-China Nuclear 
Cooperation Agreement that appear under the heading ``Technology and 
Information Exchanges'' unless the President, at least 60 days of 
continuous session of Congress before those procedures become 
effective--
            (1) provides to the appropriate congressional committees 
        the details concerning the implementation of those provisions; 
        and
            (2) certifies to the appropriate congressional committees 
        that those procedures protect the national security of the 
        United States to an extent that is equal to or greater than 
        those procedures provided for under parts 110 and 810 of title 
        10, Code of Federal Regulations.

SEC. 10. REPROCESSING UNDER THE UNITED STATES-CHINA NUCLEAR COOPERATION 
              AGREEMENT.

    (a) Sense of Congress.--It is the sense of Congress that the United 
States should encourage countries in East Asia to forgo the 
commencement of spent nuclear fuel reprocessing activities, as part of 
a mutual effort to prevent the spread of separated plutonium in the 
region.
    (b) Implementation of Reprocessing Consent Rights Under 
Agreement.--The President shall not agree to the reprocessing, 
recycling, or other alteration in form or content of nuclear material, 
as described in Article 6.2 of the United States-China Nuclear 
Cooperation Agreement, at any facility to which the International 
Atomic Energy Agency (IAEA) safeguards are not applied, unless, for 
each proposed facility at which such activity will take place, the 
President certifies to the appropriate congressional committees that--
            (1) the President has made a formal request to the IAEA to 
        apply safeguards to the facility;
            (2) the IAEA has refused the request described in paragraph 
        (1); and
            (3) the arrangements and procedures under which such 
        reprocessing, recycling, or other alteration in form or content 
        will occur--
                    (A) include a requirement that nuclear material 
                transferred pursuant to the United States-China Nuclear 
                Cooperation Agreement and nuclear material used in or 
                produced through the use of such material--
                            (i) not be commingled with any other 
                        nuclear material;
                            (ii) be clearly marked as United States-
                        obligated nuclear material;
                            (iii) be stored in separate facilities from 
                        any other nuclear material; and
                            (iv) be available for inspection 
                        immediately and without prior notice upon 
                        request by the IAEA or either party to the 
                        Agreement; and
                    (B) are sufficient to detect in a timely manner--
                            (i) the diversion for military purposes of 
                        nuclear material transferred pursuant to the 
                        United States-China Nuclear Cooperation 
                        Agreement and nuclear material used in or 
                        produced through the use of such material; and
                            (ii) the transfer to facilities or 
                        locations not agreed to by the United States of 
                        nuclear material transferred pursuant to the 
                        United States-China Nuclear Cooperation 
                        Agreement and nuclear material used in or 
                        produced through the use of such material.
    (c) Notification Required.--If the President issues a certification 
described in subsection (b), the President shall include with that 
certification a detailed description of--
            (1) the facility at which the reprocessing, recycling, or 
        other alteration in form and content will take place;
            (2) the safeguards applied to the facility;
            (3) the measures that will be undertaken to secure and 
        prevent the theft or diversion to military purposes of any 
        separated plutonium that will result from the activities at the 
        facility;
            (4) the amounts of materials to be processed at the 
        facility;
            (5) the amount of processed fissile material that may be 
        stockpiled as a result of the activities at the facility, and 
        the estimated period of time that it may be stockpiled prior to 
        its civilian use in a nuclear reactor; and
            (6) the risks to the national security of the United States 
        that are posed by the potential diversion of nuclear material 
        at the facility.

SEC. 11. REPORTS.

    (a) Initial Report.--
            (1) In general.--No later than 90 days after the date of 
        the enactment of this Act, the President shall submit to the 
        appropriate congressional committees a report on China's 
        history of compliance with the peaceful use and 
        nonproliferation provisions of the Previous Nuclear Cooperation 
        Agreement.
            (2) Elements.--The report required under paragraph (1) 
        shall include--
                    (A) a detailed examination of every suspected or 
                alleged violation of the Previous Agreement;
                    (B) the response by China to any inquiries by the 
                United States regarding any such suspected or alleged 
                violation of the Previous Agreement;
                    (C) an assessment of the likelihood of future 
                violations under the terms of the United States-China 
                Nuclear Cooperation Agreement; and
                    (D) an assessment of the potential advantages that 
                a large civil nuclear infrastructure or program may 
                provide to China as it seeks to meet its future nuclear 
                weapons requirements.
    (b) Annual Intelligence Report.--
            (1) In general.--Not later than April 15, 2017, and 
        annually thereafter, the President shall submit to the 
        appropriate congressional committees a report on the status of 
        the United States-China Nuclear Cooperation Agreement and 
        compliance by China with the Agreement.
            (2) Elements.--The report required under paragraph (1) 
        shall include, at a minimum--
                    (A) a detailed examination of every suspected or 
                alleged violation of the Agreement by China that may 
                have occurred during the preceding calendar year;
                    (B) the response by China to any inquiries by the 
                United States regarding any such suspected or alleged 
                violation;
                    (C) an accounting of the specific roles played in 
                the civil and military nuclear programs of China by all 
                Chinese persons visiting United States nuclear labs and 
                facilities;
                    (D) an assessment of whether China or any entity 
                acting on its behalf has targeted any United States 
                nuclear-related private-sector or governmental 
                entities, enterprises, or assets for any form of cyber 
                trespass, theft, or attack, or has taken specific 
                actions pursuant to such targeting by any entity;
                    (E) an assessment of the risks of diversion of 
                special nuclear material transferred pursuant to the 
                Agreement, the likely consequences of such diversion, 
                and steps taken to avert any potential diversion;
                    (F) an assessment of the potential military utility 
                of diverted civil nuclear technology;
                    (G) an assessment of any civil or criminal law 
                enforcement actions taken by China against any entities 
                or individuals within its government or its 
                jurisdiction that have--
                            (i) violated nonproliferation or peaceful 
                        use requirements of the Agreement or any other 
                        bilateral or multilateral nuclear agreement to 
                        which China is a party;
                            (ii) committed any cyber trespass, theft, 
                        or attack on any United States nuclear-related 
                        private sector or governmental entities, 
                        enterprises, or assets; or
                            (iii) conducted any cyber trespass or cyber 
                        exploitation against any private sector nuclear 
                        entities, enterprises, or assets for commercial 
                        gain; and
                    (H) a description of the extent to which the 
                Government of China has honored requests by the United 
                States for enforcement of legal action against any 
                entities or individuals described in subparagraph (G), 
                including requests by the United States for 
                extradition.
    (c) Form.--The reports required under subsections (a) and (b) may 
be submitted in classified form, but shall also contain an unclassified 
executive summary and may contain an unclassified annex.
    (d) Annual Exports Report.--Not later than April 15, 2017, and 
annually thereafter, the President shall submit to the appropriate 
congressional committees a report that--
            (1) identifies all export licenses issued in the preceding 
        calendar year pursuant to the United States-China Nuclear 
        Cooperation Agreement, including, at a minimum for each 
        license, the license applicant, the items licensed and their 
        value, the proposed end user of the items, and the term of the 
        license; and
            (2) assesses China's progress in strengthening, 
        implementing, and enforcing laws to ensure that restricted 
        dual-use technology is not transferred to countries of 
        proliferation concern.
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