[Federal Register Volume 63, Number 27 (Tuesday, February 10, 1998)]
[Notices]
[Pages 6733-6736]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3308]
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DEPARTMENT OF ENERGY
Proposed Subsequent Arrangement Concerning Reciprocal
Arrangements for Exchanges of Information and Visits Under the
Agreement for Cooperation for the Peaceful Uses of Nuclear Energy
Between the Government of the United States and the Government of the
People's Republic of China
AGENCY: Office of Arms Control and Nonproliferation, Department of
Energy.
ACTION: Notice.
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SUMMARY: Notice is hereby given of the intent of the Government of the
United States and the Government of the Peoples Republic of China to
establish mutually acceptable reciprocal arrangements for exchanges of
information and visits to material, facilities, and components subject
to the Agreement for Cooperation Between the Government of the United
States and the Government of the People's Republic of China concerning
the Peaceful Uses of Nuclear Energy, signed July 23, 1985 (``the
Agreement'').
The framework for executing the proposed exchanges is established
in a Memorandum of Understanding (MOU) dated June 23, 1987, which has
been initialed by the two Governments and is reproduced at the end of
this Notice. The Department of Energy will issue a second Notice of
Proposed Subsequent Arrangement, which may contain additional pertinent
information, after the Memorandum of Understanding is signed by the two
Governments.
SUPPLEMENTARY INFORMATION:
Procedural Background
In order to carry out the 1985 U.S.-China Agreement for Cooperation
in the Peaceful Uses of Nuclear Energy, the President is required under
P.L. 99-183 to make a certification to Congress on three matters and to
submit to Congress a detailed report on China's nonproliferation
policies and practices. The President must certify that (A) the
reciprocal arrangements made pursuant to Article 8 of the Agreement
have been designed to be effective in ensuring that any nuclear
materials, facilities or components provided under the Agreement shall
be utilized solely for intended peaceful purposes as set forth in the
Agreement; (B) the Government of the People's Republic of China has
provided additional information concerning its nuclear nonproliferation
policies and that, based on this and all other information available to
the United States Government, the People's Republic of China is not in
violation of paragraph (2) of section 129 of the Atomic Energy Act; and
(C) the obligation to consider favorably a request to carry out
activities described in Article 5 (2) of the Agreement shall not
prejudice the decision of the United States to approve or disapprove
such a request.
The President made these certifications on January 12, 1998, and
forwarded them to the Congress on January 13, 1998.
House Report 99-382 (November 20, 1985), concerning Public Law 99-
183, specified that it was the expectation of the House Committee on
Foreign Affairs that at the time the President made these
certifications, details concerning the reciprocal arrangements under
Article 8 of the Agreement would ``be submitted to the Congress for
review as a `subsequent arrangement' under section 131a of the Atomic
Energy Act of 1954.'' That section of the Atomic Energy Act mandates,
inter alia, that subsequent arrangements are to be issued by the
Secretary of Energy or his designee, after obtaining the concurrence of
the Department of State and after consultation with the Arms
[[Page 6734]]
Control and Disarmament Agency, the Nuclear Regulatory Commission, and
the Department of Defense. Notice of any proposed subsequent
arrangement must be published in the Federal Register, together with a
determination by the Secretary of Energy that such arrangement will not
be inimical to the common defense and security. A proposed subsequent
arrangement may not take effect before fifteen days after publication.
(The responsibilities of the Secretary of Energy have been delegated to
the Director of the Department's Office of Arms Control and
Nonproliferation.)
This Notice announces the intent of the United States Government to
enter into reciprocal arrangements for exchanges of information and
visits under Article 8 of the Agreement, as specified below. It
concludes that the reciprocal arrangements, as provided for in the
Agreement and, upon its entry into force, in the U.S.-China Memorandum
of Understanding of June 23, 1987, are not inimical to the common
defense and security.
Proposed Reciprocal Arrangements
The President has certified that the reciprocal arrangements made
pursuant to Article 8 of the Agreement have been designed to be
effective in ensuring that any nuclear material, facilities, or
components provided under the Agreement shall be utilized solely for
the intended peaceful purposes as set forth in the Agreement. The
arrangements agreed to by the United States and the People's Republic
of China are set forth in the MOU initialed by the two Governments on
June 23, 1987.
In assessing the arrangements established under Article 8 of the
Agreement, it is important to bear in mind the three main factors
considered in their negotiation. These are:
The fact that China is a nuclear weapon state;
The nature and scope of cooperation contemplated in the
Agreement; and
The range and extent of activities included under the
reciprocal arrangements for exchanges of information and visits
mutually agreed between the parties.
China's Status as a Nuclear-Weapon State
China is a nuclear weapon state and possesses dedicated facilities
to produce fissile material for its nuclear weapons program. There is,
therefore, little if any reason for it to contemplate using its civil
nuclear program to support a nuclear weapons purpose. Moreover, the
potential costs of diverting U.S.-supplied civil nuclear material or
facilities would be disproportionately high relative to any benefit
that could possibly accrue to China. Without doubt such an action would
terminate nuclear cooperation by the United States and more generally
would do far-reaching damage to U.S.-Chinese relations.
China's nonproliferation credentials would be severely damaged and
its credibility and standing in the international community as a whole
would be undermined. There has been no evidence to suggest that China
has in any way employed its existing nuclear power stations at Quinshan
and Daya Bay to support its nuclear weapons program, even though China
has modernized and somewhat expanded its nuclear forces since these
facilities began operating in 1993 and 1994, respectively.
The Agreement does not require the application of IAEA safeguards
on U.S. nuclear exports to China. Neither the Nuclear Non-Proliferation
Treaty (NPT) nor U.S. law requires the application of such safeguards
on nuclear transfers between nuclear weapon states. NPT safeguards
applied by the IAEA are intended to help prevent nuclear proliferation,
that is, the spread of nuclear weapons beyond the five acknowledged
nuclear weapon states at the time the Treaty was negotiated, a group
that include both the United States and China. NPT safeguards are
required only on certain equipment and material exported to non-nuclear
weapon states. Nor does U.S. law require the application of bilateral
safeguards on U.S. exports to a nuclear weapon state. As in the case of
the NPT, this reflects the reduced proliferation concerns that apply to
transactions with states that already ``legally'' possess nuclear
weapons.
However, the United States as a matter of law requires additional
controls and assurances with respect to its nuclear exports.
Consequently, the United States requires of all recipients additional
bilateral assurances concerning U.S. nuclear transfers. These controls
and assurances cover the peaceful use, reprocessing, enrichment,
retransfer, physical security, alteration in form or content, and
storage of U.S. nuclear exports. These assurances are generally given
with reference to specific transactions that are being proposed under
Nuclear Regulatory Commission authorization.
Chinese compliance through the Agreement will be confirmed with the
reciprocal visits, exchanges, and general information about nuclear
fuel cycle activities. In addition, the fact that violation of the
Agreement would cause termination of the U.S. nuclear cooperation with
China, is a strong deterrent to misuse of U.S. exports.
Scope of Cooperation
The second factor relevant to assessing the reciprocal arrangements
under Article 8 of the Agreement relates to the nature and scope of the
cooperation contemplated in that document. The Agreement establishes
the basis for cooperation on nuclear nonproliferation and on current
and advanced light water nuclear power reactor technologies, including,
in part, safety, fuels, and materials; nuclear steam supply systems;
irradiation technology; and other areas to which the parties may later
agree. The Agreement is thus focused on cooperation in which the most
likely transfers are related to nuclear power reactors and nuclear
fuel. The only special nuclear material that may be transferred in
significant quantities under the Agreement is low-enriched uranium,
which is not directly usable for nuclear explosives or other military
purposes. Reprocessing of spent fuel subject to the Agreement could
occur only with prior U.S. consent. Were the United States ever to
consider granting such consent, it would give careful consideration to
what additional verification arrangements would be required. The
Agreement does not contemplate the transfer of sensitive nuclear
technology, facilities, or components. Any such transfer would require
amendment to the Agreement and, as in the case of reprocessing spent
fuel, would be subject to U.S. approval, which would only be given, if
at all, subject to satisfactory provisions for verification of use and
disposition.
Furthermore, the Nuclear Regulatory Commission must review any
specific export of material or equipment subject to its export approval
authority. This will provide added assurance that transfers under the
Agreement will be carefully scrutinized to ensure the effectiveness of
arrangements to verify that they are used for exclusively peaceful
purposes.
Activities Under Article 8
The third factor relevant to assessing the reciprocal arrangements
under Article 8 is an evaluation of the extent to which these
arrangements can achieve the objectives identified for them under the
Agreement. In the case of the NPT, IAEA safeguards are applied in non-
nuclear weapon states party to the NPT with the objective of deterring
the diversion of a significant quantity of nuclear material by
achieving a high probability of detection of such
[[Page 6735]]
diversion. For this purpose, quantitative material accountancy,
accompanied by containment and surveillance measures, are applied. In
the case of the U.S.-China Agreement, the objective is to enable the
United States to ensure that the materials and facilities transferred
from the United States under the Agreement are used exclusively for
peaceful purposes in China.
The arrangements mutually agreed by the parties pursuant to Article
8 of the Agreement are based on well accepted and widely applied
principles of verification. They are also consistent with the measures
applied by the United States to verify bilateral assurances under other
agreements for cooperation. The keys to effective verification are
information and access--access to all information deemed relevant to
the establishment of a complete inventory of items subject to
verification; the ability to secure any additional necessary
information; the right to obtain such additional information on site to
ensure that the inventory of items is complete; and the right
periodically to visit the locations of such material and equipment to
ascertain not only the accuracy of the inventory, but that all items on
the inventory are being used for agreed peaceful purposes. As noted,
the nature of the particular measures employed is a function of the
objective to be achieved and will differ from agreement to agreement.
The provisions agreed in the MOU of June 23, 1987, satisfy these
criteria. To meet the objective of ensuring that any transferred
facilities, materials, or components are not used for any nuclear
explosive device, for research on or the development of such devices,
or for any military purpose (Article 5(3)), and to provide for
exchanges of information and visits to material, facilities and
components subject to the agreement (Article 8(2)), the MOU establishes
arrangements with adequate scope to provide the United States with full
knowledge of items that are subject to the Agreement, where they are
located, and how they are being used by the recipient.
Information is provided under the MOU in several ways. When
transfers of material, facilities, or components take place, the
recipient is required to confirm receipt through diplomatic channels in
a specified period of time. Information is also to be provided at the
request of either party for the subject material, facilities, and
components. To provide a technical basis for evaluating compliance, the
information includes isotopic composition, physical form, and quantity
of material; locations where materials, facilities, or components are
used or stored; and information on the operation of facilities
including, for reactors, loading, and thermal energy generated.
Together these stipulations on information access and exchange provide
the basis for establishing a comprehensive inventory of items covered
by the Agreement and for periodically checking and updating the
inventory not only of items transferred, but of material produced
through the use of such items.
Access in the form of on-site presence is also provided for and the
opportunity during such visits ``to observe . . . the utilization and
operation'' of transferred items will help to confirm information that
has been provided regarding inventory and use. The frequency of visits
is specified as annually for reactors, and not more than two years
between visits for other items. In the case of reactors on the U.S.
inventory, visits can be scheduled to coincide with reactor fueling,
thus offering an opportunity to learn the most about reactor operation.
Since transfers of facilities other than reactors are not contemplated
by the Agreement, this approach provides the basis for an effective
verification arrangement.
Finally, the MOU includes agreement that, ``When either party
identifies special circumstances, the parties shall consult . . . for
the purpose of making mutually acceptable arrangements for the addition
or reduction of visits . . . to ensure that the objectives of Article
8(2) are fulfilled.'' It further provides that, ``Either party may
request a revision of these arrangements including the frequency,
occasion, or content of visits at any time. . . .'' The arrangements
call for access in the form of visits, rather than the inspections that
form a part of IAEA safeguards. In addition, the routine frequency of
access to reactors is less than under IAEA safeguards practice.
However, it must be recalled that as a nuclear weapon state, China is
not required by law to place U.S. nuclear exports under IAEA safeguards
and, because China's incentive to misuse U.S. supplies for nuclear
explosive purposes is extremely low, the need for visits more often
than annually is absent. Moreover, the wording in the MOU concerning
special circumstances, or the revision of arrangements regarding
visits, leaves the door open to gaining additional access when
uncertainties exist for which early resolution is important to
continued confidence in the cooperation Agreement.
A summary assessment of the peaceful use assurances was previously
provided by the Executive Branch to the Congress in 1985. That summary
includes the following paragraph:
The proposed agreement with China contains provisions that
assure that nuclear material, facilities and components supplied by
the United States will not be misused. In addition to articles 8(2)
and 5(2), which are discussed in this memorandum, there are
commitments that these items will not be used for any military or
explosive purpose, will not be retransferred without U.S. consent,
and will be subject to agreed levels of physical security. All these
provisions will continue in effect as long as the item in question
remains in China, even if the agreement itself expires. Moreover,
the agreement expressly excludes cooperation in sensitive
technologies, nor does it in any way require that technology of
military or strategic significance be transferred. While it provides
a framework for potential U.S. nuclear exports, it does not commit
the United States to export any item. Taken together, these
provisions establish a regime for nuclear cooperation that is
suitably stringent and appropriate for reciprocal dealing with a
nuclear-weapons state.
In his letter of January 12, 1998, transmitting the certifications
required by P.L. 99-183 to the Speaker of the House of Representatives,
the President of the Senate, and the Chairmen of the Senate Committee
on Foreign Relations, and the House Committee on International
Relations, the President declared, with respect to the reciprocal
arrangements under Article 8 of the Agreement:
* * * These arrangements will provide the United States with the
right to obtain all the information necessary to maintain an
inventory of the items subject to the Agreement. This will include
information on the operation of facilities subject to the Agreement,
the isotopic composition, physical form and quantity of material
subject to the Agreement and the places where items subject to the
Agreement are used or kept. The arrangements also provide the United
States with the right to confirm through on-site visits the use of
all items subject to the Agreement. Finally, the arrangements apply
as long as the provisions of Article 8(2) of the Agreement continue
in effect, that is, as long as items subject to the Agreement remain
in China's territory or under its jurisdiction or control. My
determination that these arrangements have been designed to be
effective in ensuring that items provided under the Agreement are
utilized for intended peaceful purposes is based on consideration of
a range of factors, including the limited scope of nuclear
cooperation permitted under the Agreement, U.S. export-control
procedures that will apply to any transfers to China under the
Agreement, the fact that the People's Republic of China is a
nuclear-weapon state and that the safeguards of the IAEA or their
equivalent are not required by the Atomic Energy Act for agreements
for cooperation with nuclear weapon states.
[[Page 6736]]
In light of these considerations, I have determined that the
reciprocal arrangements, as provided in the Agreement and, upon its
entry into force, in the U.S.-China Memorandum of Understanding of June
23, 1997, are not inimical to the common defense and security.
The text of the U.S.-China Memorandum of Understanding of June 23,
1987, follows.
Memorandum of Understanding
The Government of the United States of America and the Government
of the People's Republic of China (the ``parties'').
Desiring to implement 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,
signed July 23, 1985, and entered into force December 30, 1985 (the
``Agreement''), on the basis of mutual respect for sovereignty, non-
interference in each other's internal affairs, equality and mutual
benefit, and Desiring to exchange experience, strengthen technical
cooperation between the parties, ensure that the provisions of the
Agreement are effectively carried out, and enhance a stable, reliable,
and predictable nuclear cooperation relationship,
Have established the following arrangements:
1. Each party shall invite personnel designated by the other party
to visit the material, facilities and components subject to the
Agreement, affording them the opportunity to observe and exchange views
on, and share technical experience in, the utilization or operation of
such items. Opportunities to visit shall be accorded annually to
reactors including their auxiliary storage pools for the fuel. Such
annual visits shall be arranged at the time of reactor fueling if it
occurs. Opportunities to visit all other items shall not be less often
than every two years. When either party identifies special
circumstances, the parties shall consult, at the request of either
party, for the purpose of making mutually acceptable arrangements for
the addition or reduction of visits under such circumstances in order
to ensure that the objectives of Article 8(2) are fulfilled.
2. When material, facilities or components are transferred pursuant
to the Agreement, the recipient party shall confirm receipt to the
supplier party through diplomatic channels within 30 days after the
arrival of the material, facilities or components in the territory of
the recipient party. At the request of either party, the parties shall
exchange information on the material, facilities and components subject
to the Agreement. Such information shall include the isotopic
composition, physical form, and quantity of the material, and places
where the material, facilities or components are used or kept. It shall
also include information on the operation of the facilities subject to
the Agreement which in the case of a reactor shall cover thermal energy
generated and loading. The parties shall seek to resolve any
discrepancies through diplomatic channels. The information shall be
treated as confidential.
The above arrangements fulfill the requirements of Article 8(2) of
the Agreement for the types of peaceful nuclear activities pursuant to
the Agreement that each party had planned as of the date of entry into
force of the Agreement. These arrangements shall enter into force upon
signature and shall remain in force so long as the provisions of
Article 8(2) continue in effect. Either party may request a revision of
these arrangements, including the frequency, occasion or content of
visits, at any time; any revision shall be made by mutual agreement.
Done at this day of ,
1987 in the English and Chinese languages, both equally authentic.
FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA:
FOR THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA:
Dated: February 3, 1998.
For the Department of Energy.
Leonard S. Spector,
Director, Office of Arms Control and Nonproliferation.
[FR Doc. 98-3308 Filed 2-9-98; 8:45 am]
BILLING CODE 6450-01-P