The US Department of the Treasury’s Committee on Foreign Investment in the United States (CFIUS) published proposed rule changes on May 21 addressing when parties must notify the Committee of proposed transactions. The current regulations require parties to file a notice when the target US business is classified by one of 27 North American Industry Classification System (NAICS) Codes. The proposed regulations would rely on the US export control regulations and regimes – and not on NAICS codes – to determine when parties must notify CFIUS. In short, although the proposed changes represent an expansion of the potential industries affected by the mandatory declaration requirements through the elimination of the 27 NAICS codes, they narrow the focus for the nuclear industry to those foreign persons (and the countries where they are located) that are subject to export licensing requirements.
The US Supreme Court issued its decision on June 17 in the case of Virginia Uranium, Inc. v. Warren. The Court affirmed the decision of the US Court of Appeals for the Fourth Circuit, which held that the Atomic Energy Act does not preempt Virginia’s statutory prohibition on uranium mining. This decision is important to the nuclear industry because it considers the extent to which state and local governments may insert themselves into the field of radiological safety by enacting “bottleneck” laws purporting to regulate antecedent activities.
As confirmed by an April 21, 2017 Defense Nuclear Facility Safety Board report, the Department of Energy (DOE) initiated the first in a series of long-awaited shipments of liquid Highly Enriched Uranium (HEU or target residue material) from Ontario, Canada’s Chalk River reactor to DOE’s Savannah River Site in Aiken, South Carolina. The target residue material stems from the legacy Atoms for Peace program, where the United States provided HEU for use, in part, as target material to be irradiated for the production of medical isotopes in foreign research reactors. Irradiating this target material and extracting the medical isotopes, including molybdenum-99 as in the case of the Chalk River reactor, left a residual solution containing significant quantities of HEU. Due to proliferation concerns, the United States wants the HEU returned for safeguarding and disposal.
Russia recently suspended or terminated its nuclear agreements with the United States, further deteriorating diplomatic relations between the two countries. Russia’s actions place on hold or end certain collaboration efforts between the two nations on peaceful uses of nuclear technologies. However, these actions do not suspend or terminate the umbrella US-Russia nuclear cooperation agreement (123 Agreement) that both countries entered into under Section 123 of the US Atomic Energy Act. Accordingly, the US government has a legal basis to authorize nuclear exports to Russia, and vice versa. Political forces, however, make those exports uncertain.
First, on October 3, 2016, Russia rejected the Obama administration’s alternative proposal for the disposition in both the United States and Russia of 34 metric tons each of surplus weapons-grade plutonium. This agreement, which originated in 2000 and was revised in 2010, is known as the Plutonium Management and Disposition Agreement. The United States intended to fabricate the mixed-oxide fuel in a facility under construction at the Savannah River Site in South Carolina. However, because of increasing cost estimates for that facility and other strategic reasons, US President Barack Obama proposed to Russian President Vladimir Putin an alternative “dilution and disposal” path for US plutonium. On October 3, President Putin rejected the alternative and suspended the agreement, stating that he would consider reinstating it if the United States agreed to several conditions, such as reducing military presence in countries that border Russia and canceling financial sanctions against Russia.