The NRC is codifying a sea change to its regulations regarding foreign ownership, control, or domination (FOCD) of utilization or production facilities. On April 26, 2026, the NRC issued a direct final rule and a companion proposed rule to relax its FOCD restriction by exempting countries that are members of the Organisation for Economic Co-operation and Development (OECD) and the Republic of India. This rule change implements statutory changes to FOCD restrictions made by the 2024 Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy (ADVANCE) Act. The changes mark a meaningful shift toward increasing accessibility for foreign investment in the US commercial nuclear power sector. Because increasing nuclear power generation is critical to supplying electric power to meet soaring demand, these changes are expected to allow greater access to capital and partnerships with foreign companies.
Background
Since the enactment of the Atomic Energy Act of 1954 (AEA), the Atomic Energy Commission (AEC) and later, the NRC, have drawn a bright—and rigid—line that prohibited the FOCD of production and utilization facilities. That prohibition has been viewed as a limitation aimed at protecting the United States from security risks associated with foreign control over nuclear technology and infrastructure. The NRC implements the FOCD restriction via Section 50.38 of its regulations. While this restriction reflected the geopolitical realities of its time, it has increasingly sat in tension with a globalized energy market and the capital-intensive demands of modern nuclear development.
Beginning with the SEFOR decision, 3 AEC 99 (1966), the AEC and NRC have taken a “totality of the circumstances” approach to determine whether a foreign entity would have the power to direct the actions of a US licensee. Most recently, the NRC has enforced the AEA’s FOCD prohibition with rigor in the context of new reactor licensing, as illustrated by its denial of the application for Calvert Cliffs Unit 3 and significant license conditions for South Texas Project (STP) Units 3 and 4. Together, these cases underscore the NRC’s historically strict interpretation of FOCD and its willingness either to deny licenses outright or to impose substantial structural and governance constraints to ensure compliance with the statutory requirements.
ADVANCE Act Changes to FOCD
Enacted in 2024, the ADVANCE Act changed how FOCD is assessed and managed rather than treated as a near-categorical barrier. In doing so, it opens the door to new investment structures and international partnerships for the proposed buildout of new nuclear facilities within the United States. Under Section 301 of the ADVANCE Act, the AEA’s FOCD restriction no longer applies to members of the OECD as of July 9, 2024, or the Republic of India. As a result, citizens or nationals of these countries, foreign corporations or entities either incorporated in or controlled by the government of these countries, or a citizen or national of one of these countries are now eligible to obtain an NRC license for a utilization facility, subject to certain exclusions for persons or entities subject to sanctions under Section 231 of the Countering America’s Adversaries Through Sanctions Act or included on the List of Specially Designated Nationals and Blocked Persons maintained by the US Department of the Treasury.
The NRC therefore revised section 50.38 to include the list of 36 members of the OECD and the Republic of India, excluding entities subject to the listed sanctions on July 9, 2024. The NRC identified at least one qualifying entity from the Republic of Turkey subject to Section 231 sanctions; as such, Turkey is excluded from the list of countries qualifying for the FOCD exception.
But the ADVANCE Act did not create a blanket authorization. Congress did not disturb the “inimicality” requirement that already exists in the AEA. Thus, the Commission must still affirmatively find that issuing the license is “not inimical to (1) the common defense and security; or (2) the health and safety of the public” before it issues a license to foreign persons or entities listed in the ADVANCE Act.
The NRC’s Direct Final and Proposed Rules
The NRC concurrently issued a direct final rule and companion proposed rule because it considers the changes to be non-controversial. The amendments are effective July 7, 2026. If, however, the NRC receives significant adverse comments on the direct final rule by May 26, 2026, then it will withdraw the direct final rule, treat the comments received as comments on the companion proposed rule, and address those comments in a subsequent final rule. Absent “significant modifications” that require republication, the NRC will not initiate a second comment period associated with this regulatory action. A comment is “significant and adverse” if (1) the comment opposes the rule and provides reason sufficient to require a substantive response, (2) raises a relevant issue serious enough to warrant a substantive response to clarify or complete the record, or (3) causes the NRC to make a substantive change to the rule.
Impact on Applicants and Licensees
Applicants and licensees from OECD countries and India will benefit from increased clarity and predictability regarding FOCD compliance. The NRC’s regulatory analysis concludes that the rule provides qualitative benefits by facilitating foreign investment in the US nuclear sector, improving clarity for investors, and maintaining national security through continued inimicality review. We note, however, that a significant question remains unaddressed in the final rule—the status of dependent territories that may have OECD membership through their sovereign member state.
How We Can Help
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