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Up & Atom

On October 11, the US government issued its long-awaited US Policy Framework on Civil Nuclear Cooperation with China. Those hoping that the policy announcement would revive stalled applications for exports of technology or equipment to China or open a pathway for future exports were mostly disappointed. While the announcement effectively revived stalled applications, the new policy framework “presumptively denies” all applications to transfer new technology to China, including any exports of technology or equipment for small modular reactors (SMRs) and non–light-water advanced reactors.

For more than a year, the US government has been conducting an internal review of US nuclear trade with China, which is currently the largest commercial nuclear reactor market in the world. While the review was underway, essentially all applications for exports of technology under the National Nuclear Security Administration (NNSA) and equipment and materials under the US Nuclear Regulatory Commission (NRC) were placed on indefinite hold.

Under the newly announced policy framework, there is a presumption of approval—“contingent on non-derogatory end-user checks”—for amendments or extensions for light-water reactor technology transferred prior to January 1, 2018. Exports of certain light-water reactor equipment supporting continued projects also have a presumption of approval. The good news ends there.

The policy framework announces a presumption of denial for any small modular reactor (SMR) or non–light-water advanced reactor technology export to China. This presumption likely means that the US government will not approve any transfers to China for any advanced reactor application. And consistent with current practice, NNSA flatly announced that exports of source codes “will not be approved.” NNSA also announced that there is a presumption of denial for any new technology transfer application filed after January 1, 2018. The policy framework also announces a policy to closely scrutinize requests to the NRC to export equipment or components “[r]elated to direct economic competition with the United States.”

NNSA’s announcement is another in a recent trend of US government actions demonstrating that international nuclear technology transfer, especially to China, is being closely scrutinized. For example, the National Defense Authorization Act of 2016, signed by President Barack Obama in November 2015, explicitly clarified that NNSA had authority to impose civil penalties for violations of US nuclear export controls. And recent legislation expanded the Committee on Foreign Investment in the United States’ jurisdiction over investments in or transfers of certain critical technologies, which includes specified nuclear technologies. We will continue to follow these important developments.