[Federal Register Volume 64, Number 187 (Tuesday, September 28, 1999)]
[Notices]
[Pages 52355-52359]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-25182]


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NUCLEAR REGULATORY COMMISSION


Final Standard Review Plan on Foreign Ownership, Control, or 
Domination

AGENCY: Nuclear Regulatory Commission.

ACTION: Final Standard Review Plan.

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SUMMARY: The NRC is issuing its Final Standard Review Plan (SRP) on 
Foreign Ownership, Control, or Domination. The SRP documents procedures 
and guidance used by the staff to analyze applications for reactor 
licenses, or applications for the transfer of control of such licenses, 
with respect to the limitations contained in sections 103 and 104 of 
the Atomic Energy Act of 1954, as amended, and the Commission's 
regulations in 10 CFR 50.38 against issuing a license for a production 
or utilization facility to an alien or an entity that is owned, 
controlled, or dominated by foreign interests.

EFFECTIVE DATE: The SRP was approved by the Commission on August 31, 
1999.

ADDRESSES: Examine copies of comments received on the interim SRP, 
which preceded the final SRP, and copies of the attachments as stated 
in the final SRP at: The NRC Public Document Room, 2120 L Street, N.W. 
(lower level), Washington, D.C.

FOR FURTHER INFORMATION CONTACT: Steven R. Hom, Office of the General 
Counsel, U.S. Nuclear Regulatory Commission, Washington, D.C. 20555, 
telephone (301) 415-1537, e-mail srh@nrc.gov.

SUPPLEMENTARY INFORMATION: The SRP on Foreign Ownership, Control, or 
Domination, attached hereto, contains the review procedures used by the 
staff to evaluate applications for the issuance or transfer of control 
of a production or utilization facility license in light of the 
prohibitions in sections 103d and 104d of the Atomic Energy Act and in 
10 CFR 50.38 against issuing such reactor licenses to aliens or 
entities that the Commission ``knows or has reason to believe'' are 
owned, controlled, or dominated by foreign interests. The procedures 
expressly provide for requests for additional information and 
consideration of a negation action plan if the information described in 
10 CFR 50.33(d) initially required to be provided in an application 
indicates that there may be some degree of foreign control of the 
applicant. The SRP also sets forth substantive guidance consistent with 
existing Commission precedent on what may constitute foreign control. 
This SRP supersedes Section III.3 of NUREG-1577, Standard Review Plan 
on Power Reactor Licensee Financial Qualifications and Decommissioning 
Funding Assurance (Draft Report for Comment) (containing review 
procedures regarding foreign ownership) in its entirety.
    An earlier interim version of the SRP was published in the Federal 
Register on March 2, 1999 (64 FR 10166) for public comment. Four sets 
of comments were received from the Nuclear Energy Institute (NEI), 
AmerGen Energy Company, LLC (AmerGen), Florida Power and Light Company 
(FPL), and PECO Energy (PECO). These comments, and the staff's response 
to them, are set forth below.

Comments and Responses

NEI and FPL

    NEI stated that, in general, the criteria and review process 
outlined in the interim SRP provide an ``appropriate degree of 
regulatory flexibility.'' In addition, NEI specifically provided its 
view that ``a foreign entity should be allowed to own a significant 
share of a nuclear power plant,'' provided that special nuclear 
material is not under the control of the foreign entity, the foreign 
entity has no control over the day-to-day nuclear activities at the 
plant, and ownership would not be inimical to the common defense and 
security. Further, NEI stated its belief that foreign ownership of a 
licensee's parent company ``should be allowed unless the foreign entity 
has legal control over the conduct of licensee activities involving 
common defense and security.'' Such control can be ``overcome'' by 
``special arrangements, such as special operating committees, which 
vest effective control and operation of licensed activities with U.S. 
citizens,'' according to NEI.1
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    \1\ NEI also stated its support for amendment of the Atomic 
Energy Act to remove the foreign ownership prohibition, while 
preserving the authority to protect the common defense and security.
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    FPL stated that it ``supports the approach set forth in the SRP.'' 
It also stated that it endorses NEI's comments.
Response
    Section 103d of the Atomic Energy Act of 1954, as amended, provides 
that no license may be issued to an alien, or to a corporation owned, 
controlled, or dominated by an alien, foreign corporation, or foreign 
government. As the SRP now indicates, a (U.S.) applicant that is 
partially owned by a foreign entity may still be eligible for a license 
under certain conditions. However, the intent of NEI's comment that a 
foreign entity ``should be allowed to own a significant share of a 
nuclear power plant'' is not entirely clear. If NEI is suggesting that 
a foreign entity may become a direct owner of a substantial percentage 
of the facility, its position would not appear to be consistent with 
the Commission's interpretation of the statute, even if the foreign 
entity is only a co-owner. In Public Service Co. of Indiana (Marble 
Hill Nuclear Generating Station, Units 1 and 2), ALAB-459, 7 NRC 179, 
200-01 (1978), the Appeal Board held that each proposed co-owner of a 
nuclear facility must be an applicant for a license. Accordingly, each 
co-owner is subject to the foreign ownership or control prohibition 
contained in the Act.
    NEI's other major comment (i.e., that foreign ownership of a 
licensee's parent company should be allowed unless the foreign entity 
has legal control over common defense and security activities, which 
control is not overcome by special arrangements such as limiting such 
activities to U.S. citizens) appears to go beyond the guidance in the 
SRP that deals with foreign parent companies. The SRP states that 
(based on the Commission's determinations in the Hoffmann-LaRoche and 
initial Cintichem matters discussed in the attachments to the SRP), an 
applicant with a foreign parent will not be eligible for a license, 
unless the Commission knows that the foreign parent's stock is largely 
owned by U.S. citizens, and certain conditions or ``special 
arrangements'' are imposed, such as having only U.S. citizens within 
the applicant's organization be responsible for special nuclear 
material. NEI has not presented any compelling argument why the 
scenario it set forth, which is devoid of any indication of ultimate 
control of the parent by U.S. stockholders, is consistent with the 
statutory prohibition on foreign control, in light of the Commission's 
interpretation in the Hoffmann-LaRoche and initial Cintichem 
matters.2
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    \2\ However, for situations involving an applicant's proposed 
acquisition of less than a 100% interest in a reactor, see the 
discussion below in response to AmerGen's comments.
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AmerGen

    AmerGen commented that the SRP should provide more detailed 
guidance by establishing ``safe harbors'' with respect to certain types 
of ownership and/or operating arrangements.

[[Page 52356]]

Specifically, AmerGen noted that although the SRP states that the 
Commission has not determined a specific threshold of stock ownership 
above which it would be concluded that the (foreign) owner would have 
control, it may be appropriate to establish a threshold below which 
there would be a presumption of no control, at least absent foreign 
involvement in management or operation. In addition, AmerGen stated 
that it might be helpful for the SRP to discuss specific types of 
activities in which a foreign entity could engage in connection with 
the operation of a reactor, and acknowledge that the statute does not 
preclude foreign nationals from ``holding senior management positions 
with an applicant and/or managing and supervising licensed activities 
at a reactor site.'' AmerGen also stated that in the guidance section 
of the SRP, the SRP should discuss specific arrangements involving 
foreign entities that the Commission has found acceptable with the 
imposition of certain conditions, and confirm that similar situations 
would be eligible for ``safe harbor'' treatment.
    Noting the discussion in the SRP that provides that further 
consideration is required concerning the ownership of a less than 100 
percent interest in a reactor by a U.S. company which has a foreign 
parent, AmerGen stated its opinion that relevant precedents should be 
addressed (suggesting Marble Hill and Cintichem). AmerGen also stated 
that additional guidance would be helpful concerning the ``further 
consideration,'' and concerning what additional information may be 
required from an applicant for such consideration. Finally, AmerGen 
believes the SRP should expressly confirm that where a particular 
applicant has recently been approved by the NRC subject to the 
imposition of certain license conditions, no material changes in the 
ownership or management of the applicant have since occurred, and the 
applicant agrees to similar conditions in connection with a subsequent 
application, the applicant will essentially receive summary approval.
Response
    In general, it is recognized that articulating ``safe harbors'' in 
the SRP would be beneficial to license applicants by removing some 
degree of uncertainty from the license application process. However, in 
light of the perhaps limitless creativity involved in formulating 
corporate structures and arrangements, the difficulty in prescribing 
safe harbors is being able to account for every potential fact or 
circumstance that could be present in any given situation, which fact 
or circumstance may not be addressed in the stated safe harbor 
criteria, but which could still be material to a determination of 
foreign ownership or control.
    Regarding AmerGen's suggestion that a stock threshold be considered 
below which there would be presumptive non-control absent foreign 
involvement in management or operation, it is notable that while 
earlier drafts of the Atomic Energy Act contained a stock threshold 
(five percent) above which foreign ownership would have been barred, 
the final version of the Act, of course, does not. Thus, Congress 
declined to establish any threshold. Also, other statutes such as the 
Public Utilities Holding Company Act, while establishing thresholds 
above which control is presumed, are silent on ``safe harbors.'' At 
least until further experience is gained in this area, the flexibility 
of the SRP in this regard should be maintained.
    Concerning AmerGen's comment on stating permissible activities that 
a foreign entity or foreign nationals could engage in regarding the 
operation or management of a reactor, it should be noted at the outset 
that the statutory prohibition applies to the issuance of licenses. 
Thus, as long as foreign entities or nationals are not engaged in 
activities requiring a license, the foreign control prohibition does 
not apply specifically to them. This is not to say that the actual 
licensee--the entity which does have control over licensed activities--
is unrestricted in its use of foreign entities or personnel. As 
provided in the Act, no license may be issued if issuance would be 
inimical to the common defense and security. Entering into this 
analysis would be the licensee's use of foreign entities or personnel. 
Because AmerGen's comment potentially involves considerations of the 
common defense and security, it would not appear that any meaningful 
purpose would be served for the SRP to attempt to simply list 
activities or positions in an organization that would presumptively not 
trigger the prohibition on foreign ownership or control when it would 
still be necessary to conduct a full separate analysis of whether a 
certain degree of foreign involvement would be inimical to the common 
defense and security.
    With respect to AmerGen's comment that the SRP should discuss 
specific arrangements involving foreign entities that the Commission 
has found acceptable, the agency's dockets presently provide access to 
this information, which constitutes a substantial amount of material 
(agreements, organizational charts, by-laws, etc.) specific to each 
application which cannot be incorporated into the SRP, as a practical 
matter, due to their volume. Commission statements and analyses 
regarding applications involving the Babcock & Wilcox/McDermott and 
Union Carbide/Cintichem matters, which provide essentially a historical 
perspective and summary of the Commission's views on the foreign 
ownership prohibition, and which are more difficult to locate due to 
their age, are in a form that is more easily included as part of the 
SRP. These analyses were not published in the Federal Register notice 
requesting comments on the SRP, but are to be attachments to the SRP as 
indicated in Section 6, ``References,'' of the SRP.
    For situations involving an applicant which has, directly or 
indirectly, a foreign parent but which is seeking to acquire less than 
a 100% interest in a reactor, the attached version of the SRP has been 
expanded in response to AmerGen's comments concerning the ``further 
consideration'' that is required. The SRP includes new proposed 
language providing that ``further consideration'' will be given to: (1) 
The extent of the proposed partial ownership of the reactor; (2) 
whether the applicant is seeking authority to operate the reactor; (3) 
whether the applicant has interlocking directors or officers and 
details concerning the relevant companies; (4) whether the applicant 
would have any access to restricted data; and (5) details concerning 
ownership of the foreign parent company. The new language should 
provide applicants with a clear understanding of what facts will be 
considered and what type of information may need to be submitted.
    Regarding AmerGen's interest in the SRP expressly confirming that a 
previously approved applicant will survive foreign ownership scrutiny 
where there have been no material changes since the last application 
and the same conditions are imposed, the agency intends to apply the 
law uniformly and consistently and not act in an arbitrary manner. 
Thus, there appears to be no necessity in essentially restating this 
principle specifically in the context of the SRP.

PECO

    PECO commented that, at least in the context of making a non-
inimicality finding with respect to the common defense and security, 
``some degree of deference should be applied'' when the

[[Page 52357]]

relevant foreign applicant is from a country with close ties to the 
United States. In addition, PECO stated its opinion that the focus of a 
foreign control review as set forth in the SRP should be on ``who 
exerts control over the `safety and security' aspects of the licensee's 
operations.'' With specific reference to section 3.2 of the SRP, PECO 
recommended that where a license condition is necessary to limit those 
responsible for special nuclear material, the limitation should apply 
to officers and senior management of the applicant, rather than 
officers and employees, which latter term is used in the present SRP.
Response
    As pointed out in SECY-98-252, ``Preliminary Staff Views Concerning 
Its Review of the Foreign Ownership Aspects of AmerGen, Inc.'s Proposed 
Purchase of Three Mile Island, Unit 1'' (Oct. 30, 1998), previous 
Commission decisions regarding foreign ownership or control did not 
appear to turn on which particular nation the applicant was associated 
with. Although the broader required finding of non-inimicality to the 
common defense and security may be based, in part, on the nation 
involved, the SRP concerns the specific foreign ownership prohibition 
and is not intended to cover all common defense and security issues, as 
stated in Section 1.1 of the SRP. Thus, no changes in consideration of 
PECO's first comment appear warranted.
    Regarding PECO's second comment, it is true that the exertion of 
control over the ``safety and security aspects'' of reactor operations 
(interpreting that phrase broadly for the purpose of this discussion) 
can be an important factor in the foreign ownership or control 
analysis. However, it may not be the only important factor, given that 
the statute does not limit the foreign control prohibition to only 
those applicants who intend to be actively engaged in operation of the 
plant, or intend to ``exert control'' over operations. A statement of 
the ``focus'' of the analysis would appear to be somewhat premature at 
this time, given the limited experience the Commission has had in this 
area.
    With respect to PECO's last comment concerning personnel 
responsible for special nuclear material, the term ``employees'' was 
used by the Commission in a previous condition of approval that 
required those responsible for special nuclear material to be U.S. 
citizens.3 It appears reasonable to seek to ensure that all 
those employees responsible for special nuclear material have at least 
U.S. citizenship, not just senior management, when there is some issue 
of foreign control, and PECO has not provided a compelling reason why 
there should be any departure from a prior Commission decision.
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    \3\ See letter from L. Manning Muntzing, Atomic Energy 
Commission, to General Atomic Company (Dec. 14, 1973), incorporating 
by reference letter from General Atomic Company to L. Manning 
Muntzing, Atomic Energy Commission (Dec. 14, 1973) with attachment 
(General Atomic Company Resolution of the Standing Committee of the 
Partnership Committee Adopted at a Meeting Thereof Held on December 
14, 1973).
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Approval by the Commission

    In approving the final SRP, the Commission approved new additional 
guidance (incorporated in the last paragraph of section 3.2 of the SRP) 
reflected in the foregoing response to AmerGen's comments concerning 
applicants seeking to acquire less than 100% of a reactor who have 
ultimate foreign parents. Also, the Commission directed that one 
additional change be made from the previous interim SRP, namely, the 
addition of a new footnote in Section 3.2 of the SRP.

    Dated at Rockville, Maryland, this 21st day of September, 1999.

    For the Nuclear Regulatory Commission.
Annette L. Vietti-Cook,
Secretary of the Commission.

Final Standard Review Plan on Foreign Ownership, Control and 
Domination

1. Areas of Review

1.1  General
    The NRC is issuing this Standard Review Plan (SRP) to describe the 
process it uses to review the issue of whether an applicant for a 
nuclear facility license under sections 103 or 104 of the Atomic Energy 
Act of 1954, as amended (AEA or Act), is owned, controlled, or 
dominated by an alien, a foreign corporation or a foreign government. 
This SRP will be used as the basis for such reviews in connection with 
license applications for new facilities, or applications for approval 
of direct or indirect transfers of facility licenses.
    Where there are co-applicants, each intending to own an interest in 
a new facility as co-licensees, each applicant must be reviewed to 
determine whether it is owned, controlled, or dominated by an alien, 
foreign corporation or foreign government. If a co-licensee of an 
existing facility owns a partial interest in the facility and is 
transferring that interest, the acquirer must be reviewed to determine 
whether it is owned, controlled, or dominated by an alien, foreign 
corporation or foreign government.
    The foreign control determination is to be made with an orientation 
toward the common defense and security. However, this SRP does not 
address all matters relating to the determination of whether issuance 
of a license to a person would be inimical to the common defense and 
security.
    This SRP reflects current NRC regulations and policy.
1.2 Relevant Statutory And Regulatory Provisions
    Sections 103d and 104d of the Act provide, in relevant part, that 
no license may be issued to:

    Any corporation or other entity if the Commission knows or has 
reason to believe it is owned, controlled, or dominated by an alien, 
a foreign corporation, or a foreign government. In any event, no 
license may be issued to any person within the United States if, in 
the opinion of the Commission, the issuance of a license to such 
person would be inimical to the common defense and security or to 
the health and safety of the public.

    (Section 103d also states that no license may be issued to an 
alien.)
    Section 184 of the Act provides, in relevant part:

    No license granted hereunder and no right to utilize or produce 
special nuclear material granted hereby shall be transferred, 
assigned or in any manner disposed of, either voluntarily or 
involuntarily, directly or indirectly, through transfer of control 
of any license to any person, unless the Commission shall, after 
securing full information, find that the transfer is in accordance 
with the provisions of this Act, and shall give its consent in 
writing.

    10 CFR 50.33(d), in relevant part, provides:
    Each application shall state:

(d)(1) If applicant is an individual, state citizenship.
(2) If applicant is a partnership, state name, citizenship and address 
of each partner and the principal location where the partnership does 
business.
(3) If applicant is a corporation or an unincorporated association, 
state:
    (i) The state where it is incorporated or organized and the 
principal location where it does business;
    (ii) The names, addresses and citizenship of its directors and of 
its principal officers;
    (iii) Whether it is owned, controlled, or dominated by an alien, a 
foreign corporation, or foreign government, and, if so, give details.
(4) If the applicant is acting as agent or representative of another 
person in filing the application, identify the

[[Page 52358]]

principal and furnish information required under this paragraph with 
respect to such principal.

    10 CFR 50.38 provides:

    Any person who is a citizen, national, or agent of a foreign 
country, or any corporation, or other entity which the Commission 
knows or has reason to believe is owned, controlled, or dominated by 
an alien, a foreign corporation, or a foreign government, shall be 
ineligible to apply for and obtain a license.

    10 CFR 50.80 provides, in pertinent part:

    (a) No license for a production or utilization facility, or any 
right thereunder, shall be transferred, assigned, or in any manner 
disposed of, either voluntarily or involuntarily, directly or 
indirectly, through transfer of control of the license to any 
person, unless the Commission shall give its consent in writing.
* * * * *
    (c) * * * [T]he Commission will approve an application for the 
transfer of a license, if the Commission determines:
* * * * *
    (2) That the transfer of the license is otherwise consistent 
with applicable provisions of the law, regulations, and orders 
issued by the Commission pursuant thereto.

2. Information To Be Submitted by Applicant

2.1 Information Required By Regulation
    At the time the applicant submits its application for a license or 
for approval of the transfer of a license, the applicant must submit 
information sufficient to comply with 10 CFR 50.33(d).
2.2  Additional Information
    If the reviewer, based on the information required to be submitted 
by 10 C.F.R. 50.33(d), has reason to believe that the applicant may be 
owned, controlled, or dominated by foreign interests, the reviewer 
should request and obtain the following additional information:
    1. If the applicant's equity securities are of a class which is 
registered pursuant to the Securities Exchange Act of 1934, copies of 
all current Securities and Exchange Commission Schedules 13D and 13G, 
which are required to be filed by owners of more than 5% of such a 
class with the Securities and Exchange Commission, the security issuer 
(applicant), and the exchange on which the issuer's securities are 
traded.
    2. Management positions held by non-U.S. citizens.
    3. The ability of foreign entities to control the appointment of 
management personnel.
2.3  Negation Action Plan
    If applicable under Section 4.4 infra, the applicant should also 
submit a Negation Action Plan, which is described in detail in Section 
4.4.

3. Acceptance Criteria

3.1  Basic Statutory and Regulatory Limitations
    License applications for new facilities or applications for 
approval of transfers of licenses required in the case of proposed new 
ownership of existing facilities may involve foreign entities proposing 
to own all or part of a reactor facility. Sections 103d and 104d of the 
AEA prohibit the NRC from issuing a license to an applicant if the NRC 
knows or has reason to believe that the applicant is owned, controlled, 
or dominated by an alien, a foreign corporation, or a foreign 
government (or is an alien, in the case of section 103d).
    Likewise, under 10 CFR 50.38,

    Any person who is a citizen, national, or agent of a foreign 
country, or any corporation, or other entity which the Commission 
knows or has reason to believe is owned, controlled or dominated by 
an alien, a foreign corporation, or a foreign government, shall be 
ineligible to apply for and obtain a license.
3.2  Guidance On Applying Basic Limitations
    The Commission has not determined a specific threshold above which 
it would be conclusive that an applicant is controlled by foreign 
interests through ownership of a percentage of the applicant's stock. 
Percentages held of outstanding shares must be interpreted in light of 
all the information that bears on who in the corporate structure 
exercises control over what issues and what rights may be associated 
with certain types of shares.
    An applicant is considered to be foreign owned, controlled, or 
dominated whenever a foreign interest has the ``power,'' direct or 
indirect, whether or not exercised, to direct or decide matters 
affecting the management or operations of the applicant. The Commission 
has stated that the words ``owned, controlled, or dominated'' mean 
relationships where the will of one party is subjugated to the will of 
another. General Electric Co., 3 AEC at 101.
    A foreign interest is defined as any foreign government, agency of 
a foreign government, or representative of a foreign government; any 
form of business enterprise or legal entity organized, chartered, or 
incorporated under the laws of any country other that the U.S. or its 
possessions and trust territories; any person who is not a citizen or 
national of the U.S.; and any U.S. interest effectively controlled by 
one of the above foreign entities.
    The Commission has stated that in context with the other provisions 
of Section 104d, the foreign control limitation should be given an 
orientation toward safeguarding the national defense and security. 
Thus, an applicant that may pose a risk to national security by reason 
of even limited foreign ownership would be ineligible for a 
license.4
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    \4\ In any event, a license would not be issued to any person if 
the Commission found that issuance would be inimical to the common 
defense and security or to the health and safety of the public. See, 
e.g., sections 103d and 104d of the AEA. Pursuant to this provision, 
the Commission has the authority to reject a license application 
that raises a clear proliferation threat, terrorist threat, or other 
threat to the common defense and security of the United States.
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    Even though a foreign entity contributes 50%, or more, of the costs 
of constructing a reactor, participates in the project review, is 
consulted on policy and cost issues, and is entitled to designate 
personnel to design and construct the reactor, subject to the approval 
and direction of the non-foreign applicant, these facts alone do not 
require a finding that the applicant is under foreign control.
    An applicant that is partially owned by a foreign entity, for 
example, partial ownership of 50% or greater, may still be eligible for 
a license if certain conditions are imposed, such as requiring that 
officers and employees of the applicant responsible for special nuclear 
material must be U.S. citizens.
    Where an applicant that is seeking to acquire a 100% interest in 
the facility is wholly owned by a U.S. company that is wholly owned by 
a foreign corporation, the applicant will not be eligible for a 
license, unless the Commission knows that the foreign parent's stock is 
``largely'' owned by U.S. citizens. If the foreign parent's stock is 
owned by U.S. citizens, and certain conditions are imposed, such as 
requiring that only U.S. citizens within the applicant organization be 
responsible for special nuclear material, the applicant may still be 
eligible for a license, notwithstanding the foreign control limitation. 
If the applicant is seeking to acquire less than a 100% interest, 
further consideration is required. Further consideration will be given 
to: (1) the extent of the proposed partial ownership of the reactor; 
(2) whether the applicant is seeking authority to operate the reactor; 
(3) whether the applicant has interlocking directors or officers and 
details concerning the relevant companies; (4) whether the applicant 
would have any access to restricted data; and (5) details concerning 
ownership of the foreign parent company.

[[Page 52359]]

4. Review Procedures

4.1  Threshold Review and Determination
    The reviewer should first analyze all of the information submitted 
by the applicant sufficient to comply with 10 CFR 50.33(d), as well as 
other relevant information of which the reviewer is aware, to determine 
whether there is any reason to believe that the applicant is an alien 
or citizen, national, or agent of a foreign country, or an entity that 
is owned, controlled, or dominated by an alien, a foreign corporation, 
or foreign government. If there is no such reason to believe based on 
the foregoing information, no further review is required and the 
reviewer should proceed to make a recommendation regarding whether 
there is any foreign control obstacle to granting the application. On 
the other hand, if there is any reason to believe that the applicant 
may be owned, controlled, or dominated by foreign interests, the 
reviewer should request and obtain the additional information specified 
in Section 2.2.
4.2  Supplementary Review
    If it is necessary to obtain the additional information specified 
in Section 2.2, the reviewer should consider the acceptance criteria 
above, and consult with the Office of the General Counsel on Commission 
precedent. Information related to the items listed below may be sought 
and may be taken into consideration in determining whether the 
applicant is foreign owned, controlled, or dominated. The fact that 
some of the below listed conditions may apply does not necessarily 
render the applicant ineligible for a license.
    1. Whether any foreign interests have management positions such as 
directors, officers, or executive personnel in the applicant's 
organization.
    2. Whether any foreign interest controls, or is in a position to 
control the election, appointment, or tenure of any of the applicant's 
directors, officers, or executive personnel. If the reviewer knows that 
a domestic corporation applicant is held in part by foreign 
stockholders, the percentage of outstanding voting stock so held should 
be quantified. However, recognizing that shares change hands rapidly in 
the international equity markets, the staff usually does not evaluate 
power reactor licensees to determine the degree to which foreign 
entities or individuals own relatively small numbers of shares of the 
licensees' voting stock. The Commission has not determined a specific 
threshold above which it would be conclusive that an applicant is 
controlled by foreign interests.
    3. Whether the applicant is indebted to foreign interests or has 
contractual or other agreements with foreign entities that may affect 
control of the applicant.
    4. Whether the applicant has interlocking directors or officers 
with foreign corporations.
    5. Whether the applicant has foreign involvement not otherwise 
covered by items 1-4 above.
4.3  Supplementary Determination
    After reviewing the additional information specified in Section 
2.2, if the reviewer continues to conclude that the applicant may be an 
alien or owned, controlled, or dominated by foreign interests, or has 
some reason to believe that may be the case, the reviewer shall 
determine:
    1. The nature and extent of foreign ownership, control, or 
domination, to include whether a foreign interest has a controlling or 
dominant minority position.
    2. The source of foreign ownership, control, or domination, to 
include identification of immediate, intermediate, and ultimate parent 
organizations.
    3. The type of actions, if any, that would be necessary to negate 
the effects of foreign ownership, control, or domination to a level 
consistent with the Atomic Energy Act and NRC regulations.
    On the other hand, if the reviewer determines after reviewing the 
additional information specified in Section 2.2 that there is no 
further reason to believe that the applicant is an alien or owned, 
controlled, or dominated by a foreign person or entity, no additional 
review is necessary.
4.4  Negation Action Plan
    If the reviewer continues to conclude following the Supplementary 
Determination that an applicant may be considered to be foreign owned, 
controlled, or dominated, or that additional action would be necessary 
to negate the foreign ownership, control, or domination, the applicant 
shall be promptly advised and requested to submit a negation action 
plan. When factors not related to ownership are present, the plan shall 
provide positive measures that assure that the foreign interest can be 
effectively denied control or domination. Examples of such measures 
that may be sufficient to negate foreign control or domination include:
    1. Modification or termination of loan agreements, contracts, and 
other understandings with foreign interests.
    2. Diversification or reduction of foreign source income.
    3. Demonstration of financial viability independent of foreign 
interests.
    4. Elimination or resolution of problem debt.
    5. Assignment of specific oversight duties and responsibilities to 
board members.
    6. Adoption of special board resolutions.

5. Evaluation Findings

    The reviewer should verify that sufficient information has been 
provided to satisfy the regulations and this Standard Review Plan. In 
consideration of the guidance of this Standard Review Plan, the 
reviewer should then draft an analysis and recommendation, based on the 
applicable information specified in Sections 2 and 4 above, concerning 
whether the reviewer knows, or has reason to believe that the applicant 
is an alien, or is a corporation or other entity that is owned, 
controlled, or dominated by an alien, a foreign corporation, or foreign 
government, and whether there are conditions that should be imposed 
before granting the application so as to effectively deny foreign 
control of the applicant.

6. References

    1. Sections 103, 104, and 184 of the Atomic Energy Act of 1954, 
as amended (42 USC 2133, 2134, and 2234).
    2. Part 50 ``Domestic Licensing of Production and Utilization 
Facilities'' of Title 10 of the Code of Federal Regulations (10 CFR 
Part 50).
    3. General Electric Co. and Southwest Atomic Energy Associates, 
Docket No. 50-231, 3 AEC 99 (1966).
    4. Letter from W. Dircks to J. MacMillan (Dec. 17, 1982) (Re: 
Babcock & Wilcox/McDermott) (attached).
    5. Letter from N. Palladino to A. Simpson (Sept. 22, 1983) w/
attachment (Re: Union Carbide/Cintichem) (attached).

[FR Doc. 99-25182 Filed 9-27-99; 8:45 am]
BILLING CODE 7590-01-P