[Federal Register Volume 60, Number 160 (Friday, August 18, 1995)]
[Rules and Regulations]
[Pages 43002-43005]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20553]



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DEPARTMENT OF ENERGY

10 CFR Part 810

RIN 1992-AA20


Assistance to Foreign Atomic Energy Activities

AGENCY: Department of Energy.

ACTION: Final Rule.

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SUMMARY: The Department of Energy (DOE) is amending its regulations 
concerning unclassified assistance to foreign atomic energy activities. 
This action removes Argentina, Brazil, Chile, and South Africa from the 
list of countries for which specific authorization by the Secretary of 
Energy is required. The effect of the action is to enable U.S. firms 
and individuals to provide assistance to civilian nuclear power 
reactor-related activities in these countries under the general 
authorization. The amendment is consistent with U.S. foreign policy 
commitments and reflects the significant progress made by these four 
countries on matters related to nuclear nonproliferation.

DATES: This amendment is effective on August 18, 1995.

FOR FURTHER INFORMATION CONTACT: Mr. Zander Hollander, Export Control 
Operations Division, NN-43, Office of Arms Control and 
Nonproliferation, U.S. Department of Energy, 1000 Independence Ave., 
S.W., Washington, D.C. 20585, Telephone (202) 586-2125; or Robert 
Newton, Esq., Office of the General Counsel, U.S. Department of Energy, 
1000 Independence Ave., S.W., Washington, D.C. 20585, Telephone (202) 
586-0806.

SUPPLEMENTARY INFORMATION:

1. Background

    10 CFR Part 810 implements section 57 b.(2) of the Atomic Energy 
Act of 1954, as amended by section 302 of the Nuclear Non-Proliferation 
Act of 1978 (NNPA) (42 U.S.C. 2077 (b)(2)). This section requires that 
U.S. persons who engage directly or indirectly in the production of 
special nuclear material outside the United States be authorized to do 
so by the Secretary of Energy. Pursuant to the Part 810 regulations, 
assistance by U.S. persons to nuclear power reactor-related activities 
outside the United States is generally authorized for countries not 
identified in section 810.8(a). Inclusion of a country on the list 
means that even nuclear power reactor-related assistance requires the 
Secretary of Energy's specific authorization. Section 810.8(a) notes 
that countries may be removed from or added to this list by amendments 
published in the Federal Register. Such actions are based on U.S. 
foreign policy and national security considerations.
    The intent of removing Argentina, Brazil, Chile, and South Africa 
from the section 810.8(a) list of countries is to:
     Recognize that Argentina, Brazil, and Chile in 1994 
brought into force for their national territories the 1967 Treaty for 
the Prohibition of Nuclear Weapons in Latin America and the Caribbean 
(Treaty of Tlatelolco) and that Argentina and South Africa have become 
party to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) 
and members of the Nuclear Suppliers Group.
     Recognize that Argentina and Brazil have completed 
ratification of the Quadripartite Safeguards Agreement with the 
International Atomic Energy Agency [IAEA] and the Brazilian- Argentine 
Agency for Accounting and Control of Nuclear Materials for the 
application of IAEA safeguards on all of their nuclear activities, that 
South Africa has completed its own full-scope safeguards agreement with 
IAEA, and that Chile also has IAEA safeguards agreements covering its 
nuclear facilities.
     Enable U.S. firms and individuals to compete more 
effectively against foreign competition to provide assistance to the 
safeguarded Argentine, Brazilian, Chilean, and South African civilian 
nuclear power programs.
     Reduce unnecessary paperwork and time-consuming U.S. 
Government reviews of proposals by U.S. firms and individuals to 
participate in Argentine, Brazilian, Chilean, and South African 
civilian nuclear power reactor-related activities. 

[[Page 43003]]


2. Regulatory Changes

    The following change is made to section 810.8 Activities Requiring 
Specific Authorization:
    Argentina, Brazil, Chile, and South Africa are deleted from the 
list of countries in section 810.8(a).

3. Statutory Requirements

    Pursuant to section 57 b. of the Atomic Energy Act, with the 
concurrence of the Department of State and after consultations with the 
Departments of Defense and Commerce, the Arms Control and Disarmament 
Agency, and the Nuclear Regulatory Commission, the Secretary of Energy 
has determined that removal of Argentina, Brazil, Chile, and South 
Africa from the list of countries in section 810.8 (a) of 10 CFR Part 
810 will not be inimical to the interests of the United States.

4. Procedural Matters

A. Review Under Executive Order 12866

    Today's regulatory action has been determined not to be a 
``significant regulatory action'' under Executive Order 12866, 
``Regulatory Planning and Review,'' (58 FR 51735, October 4, 1993). 
Accordingly, today's action was not subject to review under the 
Executive Order by the Office of Information and Regulatory Affairs.

B. Review Under the Regulatory Flexibility Act

    The rule was reviewed under the Regulatory Flexibility Act, P. L. 
96-354 (42 U.S.C. 601-612) which requires preparation of a regulatory 
flexibility analysis for any regulation that will have a significant 
economic impact on a substantial number of small entities, i.e., small 
businesses and small government jurisdictions. This action amends 
regulations in a manner to expedite the current process of 
authorization for U.S. persons to conduct certain activities in other 
countries; thus, it imposes no economic burden upon small entities 
subject to those regulations and, on balance, should reduce economic 
burdens on small businesses who will be able to compete for work in 
these four countries without undergoing unnecessary paperwork and time-
consuming U.S. Government reviews. DOE, accordingly, certifies that 
there will not be a significant and adverse economic impact on a 
substantial number of small entities and that preparation of a 
regulatory flexibility analysis is not warranted.
C. Review Under the National Environmental Policy Act

    The rule eliminates the requirement for U.S. persons to file an 
application for authorization to assist civilian nuclear power reactor 
programs in four countries that until now required review and approval 
by the Secretary of Energy. The amendment permits U.S. companies 
seeking to do business in these four countries to compete with foreign 
companies without the time-consuming application procedure that has 
often put them at a disadvantage. Argentina, Brazil, Chile, and South 
Africa are now parties to international arrangements established for 
nuclear nonproliferation purposes and have shown by their actions that 
requests to assist their nuclear power industries no longer require a 
case-by-case analysis. Implementation of this rule affects only 
application procedures and will not result in environmental impacts. 
DOE has, therefore, determined that this rule is covered under the 
Categorical Exclusion found in paragraph A.6 of Appendix A to Subpart 
D, 10 CFR Part 1021, which applies to the establishment of procedural 
rulemakings. Accordingly, neither an environmental assessment nor an 
environmental impact statement is required.

D. Review Under Executive Order 12612

    Executive Order 12612 requires that regulations be reviewed for any 
substantial direct effects on States, on the relationship between the 
national Government and the States, or in the distribution of power 
among various levels of government. If there are sufficient substantial 
direct effects, the Executive Order requires the preparation of a 
Federalism assessment to be used in decisions by senior policy makers 
in promulgating or implementing the regulation. The rule will not have 
a substantial direct effect on the traditional rights and prerogatives 
of States in relationship to the Federal Government. Preparation of a 
Federalism assessment is, therefore, unnecessary.

E. Review Under Executive Order 12778

    Section 2 of Executive Order 12778 instructs each agency to adhere 
to certain requirements in promulgating new regulations and reviewing 
existing regulations. These requirements, set forth in sections 2(a) 
and (b)(2), include eliminating drafting errors and needless ambiguity, 
drafting the regulations to minimize litigation, providing clear and 
certain legal standards for affected conduct, and promoting 
simplification and burden reduction.
    Agencies are also instructed to make every reasonable effort to 
ensure that the regulation: specifies clearly any preemptive effect, 
effect on existing Federal law or regulation, and retroactive effect; 
describes any administrative proceedings to be available prior to 
judicial review and any provisions for the exhaustion of such 
administrative proceedings; and defines key terms. DOE certifies that 
today's rulemaking meets the requirements of sections 2(a) and (b) of 
Executive Order 12778.

5. Review of Comments

    DOE published a Proposed Rule of this amendment in the Federal 
Register on August 29, 1994 (59 FR 44381). Written comments were 
received from seven parties. These comments have been available for 
public inspection in the DOE Reading Room during consideration of this 
Final Rule.
    Six of the seven commenters strongly favored the Proposed Rule, 
which is now published as a Final Rule. The one unfavorable commenter 
found the amendment ``premature'' and cited various factors as relevant 
to his belief that ``it is still too early to conclude that none of the 
(countries) constitutes a proliferation risk.'' A summary of the 
critical comments and DOE responses follow:
     Brazil has a uranium enrichment program run by the 
Brazilian Navy and it would be a ``blow to nonproliferation for a 
United States citizen to participate in such a program.''
    DOE response: U.S. firms or individuals require specific 
authorization under Part 810 to participate in enrichment, 
reprocessing, plutonium fuel fabrication, heavy water production, and 
large research/test reactor activities in all foreign countries, 
whether or not the country is on the section 810.8 list. Such 
participation is given the closest scrutiny from a nonproliferation 
perspective.
     U.S. citizens should not participate in South Africa's 
nuclear program until South Africa reveals the outside assistance it 
received for its nuclear weapons program.
    DOE Response: South Africa, now a member in good standing of the 
international nonproliferation community, has been very forthcoming in 
its public disclosures concerning its abandoned nuclear weapons 
activities and has declared it did not receive foreign assistance. The 
commenter offers no evidence to the contrary.
     The four countries do not have effective export control 
systems. 

[[Page 43004]]

    DOE response: Even assuming that one or more of the four countries 
has an export control system less effective than that of the United 
States, the kinds of U.S. technology that would become available to 
them under general authorization are technologies related to a peaceful 
nuclear power program. Further, U.S. firms supplying such technologies 
under general authorization must have a commitment from the recipient 
not to retransfer the technology to a country on the section 810.8 list 
without prior U.S. Government consent. Moreover, the technologies most 
useful to a would-be proliferant--enrichment, reprocessing, plutonium 
fuel fabrication, heavy water production, and large research/test 
reactor activities--will continue to require specific authorization by 
the Secretary of Energy. Finally, as adherents to the NPT and/or the 
Treaty of Tlatelolco, the four countries are committed to deny 
assistance to would-be proliferants.
     Continuing to require specific authorizations even for 
U.S. nuclear power reactor-related assistance to these countries would 
enable the United States to track their nuclear programs.
    DOE response: Removal of these countries from the list will still 
permit DOE to remain aware of their nuclear programs since U.S. firms 
and individuals providing assistance under general authorization still 
must report such assistance to the Department.
     The examples of Iraq, North Korea, Iran, and Libya show 
that countries violate their NPT pledges.
    DOE response: In contrast to Iraq, North Korea, Iran, and Libya, 
the four countries being removed from the section 810.8 list have in 
recent years acted in a manner that confirms their nonproliferation 
commitments.
    As for the comments favoring removal of the four countries from the 
section 810.8 list, the following excerpts summarize their tenor and 
arguments. The Department finds these arguments largely persuasive:
    One commenter said: ``It is important to accord affirmative 
recognition to countries that take the necessary steps to support the 
world's non-proliferation regime. It is especially important now, as 
the extension conference for the Treaty on the Non-Proliferation of 
Nuclear Weapons NPT approaches, to provide concrete evidence that 
benefits do flow to countries that accept full-scope safeguards.'' (The 
conference took place in April 1995.)
    A second commenter said: ``No reason remains to treat (the four 
countries) under Part 810 in the same way we treat such terrorist-
supporting and demonstrably untrustworthy countries as Iraq and North 
Korea . . . If the Department fails to (remove the four countries from 
the list), U.S. credibility as a serious participant in the formulation 
of international nuclear nonproliferation policy will be the clearest 
loser.''
    A third commenter said: ``Failure to implement the proposed rule 
will force customers in those countries' emerging markets to deal with 
non-U.S. suppliers and will deny the economic as well as the 
nonproliferation policy benefits that would accrue to the United 
States.''
    A fourth commenter said: ``For the world community to understand 
that the United States backs up its commitments, these countries must 
be allowed to receive United States assistance under a DOE general 
authorization. Furthermore, such action will demonstrate that the 
United States abides by Article IV of the Treaty on the Non 
Proliferation of Nuclear Weapons (NPT). Failure to provide prompt and 
clear recognition to these four countries would only assist those 
opponents of the upcoming NPT extension conference who will argue that 
the Treaty is just an excuse for the nuclear 'haves' to discriminate 
against the `have nots'. . . The removal of these four countries from 
the Part 810.8(a) list is also a necessary step to enable U.S. vendors 
to compete more effectively in those markets against their European and 
Asian competitors.''
    A fifth commenter said: ``The proposed rule would help ensure that 
U.S. firms have an equal opportunity to compete for business in the 
civilian nuclear power industry in four very important overseas 
markets. Three of these --Argentina, Brazil, and South Africa--have 
been identified as key emerging markets under the Clinton 
Administration's National Export Strategy, and it is widely anticipated 
that the U.S. will enter into a free-trade agreement with Chile in the 
near future. The proposed rules will bring U.S. export control policies 
into line with the practices of other supplier nations. It also will 
eliminate a substantial paperwork burden on U.S. exporters.''
    A sixth commenter said: `` Other countries, such as Ukraine, will 
be watching DOE's actions to determine if participation in 
international forums brings with it reciprocal benefits . . . Approval 
of the proposal would also send a message to potential proliferators 
that they will be further marginalized from the international community 
if they continue to act outside of accepted nonproliferation norms.''

List of Subjects in 10 CFR Part 810

    Foreign relations, Nuclear energy, Reporting and recordkeeping 
requirements.

    Issued in Washington, D.C., August 15, 1995.
Kenneth E. Baker,
Acting Director, Office of Nonproliferation and National Security.

    For the reasons set out in the preamble, Part 810 of Title 10 of 
the Code of Federal Regulations is amended as set forth below:
PART 810--ASSISTANCE TO FOREIGN ATOMIC ENERGY ACTIVITIES

    1. The authority citation for Part 810 continues to read as 
follows:

    Authority: Secs. 57, 127, 128, 129, 161, and 223, Atomic Energy 
Act of 1954, as amended by the Nuclear Non-Proliferation Act of 
1978, Pub. L. 95-242, 68 Stat. 932, 948, 950, 958, 92 Stat. 126, 
136, 137, 138, (42 U.S.C. 2077, 2156, 2157, 2158, 2201, 2273); Sec. 
104 of the Energy Reorganization Act of 1974, Pub. L. 93-438; Sec. 
301, Department of Energy Organization Act, Pub. L. 95-91.

    2. Section 810.8 paragraph (a) is revised to read as follows:


Sec. 810.8  Activities requiring specific authorization

* * * * *
    (a) Engaging directly or indirectly in the production of special 
nuclear material in any of the countries listed below:

Afghanistan
Albania
Algeria
Andorra
Angola
Armenia
Azerbaijan
Bahrain
Belarus
Burma (Myanmar)
Cambodia
China, People's Republic of
Comoros
Cuba
Djibouti
Georgia
Guyana
India
Iran
Iraq
Israel
Kazakhstan
Korea, People's Democratic Republic of
Kuwait
Kyrgyzstan
Laos
Libya
Mauritania
Moldova
Monaco
Mongolian People's Democratic Republic
Mozambique
Niger
Oman 

[[Page 43005]]

Pakistan
Qatar
Russia
Saudi Arabia
Syria
Tajikistan
Turkmenistan
Ukraine
United Arab Emirates
Uzbekistan
Vanuatu
Vietnam
Zambia
Zimbabwe

    Countries may be removed from or added to this list by amendments 
published in the Federal Register.
* * * * *
[FR Doc. 95-20553 Filed 8-17-95; 8:45 am]
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