The US House of Representatives and Senate recently passed the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) as part of the reconciled conference report for the Fiscal Year 2018 National Defense Authorization Act (NDAA). The president signed the bill on August 13 and new legislation will take effect on a rolling basis. Although several broad based changes will affect all industries, the nuclear industry will be relieved that the final bill addresses the concerns the industry raised at the outset when the original bill created challenges for US companies’ ability to compete in international trade. However, the industry still needs to monitor the anticipated regulatory implementation as the US Department of Treasury drafts new regulations. Other agencies, including the US departments of Commerce (DOC) and Energy (DOE) will implement their policy and regulatory changes to address FIRRMA. Morgan Lewis discussed the potential steps nuclear companies could take to be ready for any changes resulting from FIRRMA in a previous Up & Atom post.
Christopher Ford, assistant secretary of the Bureau of International Security and Nonproliferation at the US State Department, spoke on July 11 at the Project on Nuclear Issues (PONI) 2018 Summer Conference on nuclear technology transfer to China. PONI is a program hosted by the Center for Strategic and International Studies to further discussions on nuclear technology’s role throughout the world. Dr. Ford discussed how China’s explicit national policy of removing barriers between its civilian and military industries affects US export control policy for certain commercial nuclear technologies. This speech is important because, in our view, it publicly articulates the policy toward China that the US government has been implementing behind the scenes for some time.
The US Department of Energy’s National Nuclear Security Administration (NNSA) recently posted new guidance “to highlight and explain continuing obligations relating to [10 CFR] Part 810, especially as they relate to post-employment activities such as independent consulting or employment by a nuclear related company.” Based on prior NNSA statements, this guidance is a direct response to recent criminal cases, which highlighted for NNSA that retirees from US nuclear companies might not be aware of their continuing obligations to protect Part 810-controlled information. The training does a good job of summarizing Part 810’s requirements, and is a good step towards protecting US national security and non-proliferations interests, but the slide deck contains a few statements that require clarification.
The US Department of Commerce (DOC) issued a Final Rule on April 5 to add a new Export Control Classification Number (ECCN) to the Commerce Control List (CCL) for targets used for tritium production. The new ECCN, “1A231” requires a license for shipments of the targets, components used for production of the targets, and the associated technology for all destinations except those that are members of the Nuclear Suppliers Group (NSG) (except China). However, the Final Rule actually reduces the restrictions on these components and related technology from the level of previous control.
ECCN 1A231 defines the affected targets as those “made of or containing lithium enriched in the lithium-6 isotope ‘specially designed’ for the production of tritium through irradiation, including insertion in a nuclear reactor” or components “specially designed” for such targets. A Technical Note in the ECCN states that components “specially designed” for “target assemblies for the production of tritium may include lithium pellets, tritium getters, and specially-coated cladding.” The new rule also adds the related “production” and “use” technology for ECCN 1A231 to existing ECCNs 1E001 and 1E201.
Classified information is slowly creeping into the day-to-day operations of businesses that have never before needed to comply with the strict requirements that accompany this information. And the questions being asked do not have intuitive answers: Can you refuse to hire an applicant who was arrested for drunk driving if the job requires obtaining a security clearance and accessing classified information? Can your company accept a $25 million loan from a European company if you handle classified government contracts? How frequently do your cleared employees need to be given training on handling classified information? How do you handle an internal investigation involving classified information if you do not hold a clearance?
The British government has determined that its exit from the European Union also must include withdrawal from the European Atomic Energy Community (Euratom). According to a British government white paper, the 2008 EU Amendment Act provides that: "A reference to the EU in an Act or an instrument made under an Act includes ... a reference to [Euratom]."
Senator Benjamin Cardin (D-MD), along with a bipartisan group of senators that includes John McCain (R-AZ), Marco Rubio (R-FL), Lindsey Graham (R-SC), Amy Klobuchar (D-MN), and Dick Durbin (D-IL), introduced S.94, the “Counteracting Russian Hostilities Act of 2017.” While widely reported on for its proposed sanctions on the Russian Federation for cyberattacks on the United States, S.94 also contains a little-discussed provision aimed at civilian nuclear trade with Russia.
Section 209 of the bill would penalize any person who makes an investment that directly and significantly contributes to enhancing the ability of the Russian Federation to construct civil nuclear power plants. While the bill certainly covers the construction of civil nuclear plants in Russia, it is broadly phrased in a manner that could cover Russia’s construction of civil nuclear plants in other countries as well. The restriction on investments is limited to nuclear power plant construction, but the bill also would penalize any person who sells, leases, or provides goods, services, technology, information, or support to the Russian Federation that “could directly and significantly facilitate the maintenance or expansion of the construction, modernization, or repair of civil nuclear plants by the Russian Federation.” The dollar threshold for investments or goods, services, etc. is $1 million per transaction and $5 million per 12-month period.