Good Practice in the Compliance and Licensing of Nuclear Exports Title: Good Practice in the Compliance and Licensing of Nuclear Exports Produced by: World Nuclear Association Published: August 2015 Report No. 2015/006

© 2015 World Nuclear Association. Registered in England and Wales, company number 01215741

This report reflects the views of industry experts but does not necessarily represent those of any of the World Nuclear Association’s individual member organizations. Contents

Executive Summary 1

1. Introduction 3

2. An International Industry 4

3. The Export Control Regime 6

4. Good Practice in Compliance 22

5. Good Licensing Practice 24

6. Developing Regulator-Industry Cooperation 26

7. Streamlining the Export Control Regime 29

8. Summary of Recommendations 32

Appendix: The Export Control Survey and Results 33 Abbreviations

AFCONE African Commission on Nuclear Energy ASNO Australian Safeguards and Non-Proliferation Office CAEA Chinese Atomic Energy Authority CFR US Code of Federal Regulations CoCom Coordinating Committee for Multilateral Export Controls COSTIND Commission of Science, Technology and Industry for National Defence of China C-TPAT US Customs-Trade Partnership against Terrorism DoC US Department of Commerce DoE US Department of Energy EC European Council EU European Union EURATOM European Atomic Energy Community IAEA International Atomic Energy Agency INCOTERMS International Commercial Terms (published by the International Chamber of Commerce) IP Intellectual property ISO International Organization for Standardization IT Information technology ITER International Thermonuclear Experimental Reactor KINAC Korea Institute of Nuclear Nonproliferation & Control LWR Light water reactor METI Ministry of Economy, Trade and Industry of Japan NPT Treaty on the Non-Proliferation of Nuclear Weapons NRC US Nuclear Regulatory Commission NSG Nuclear Suppliers Group PHWR Pressurized heavy water reactor SCOMET Special Chemicals, Organisms, Materials, Equipment and Technology UAE United Arab Emirates UK United Kingdom of Great Britain and Northern Ireland UNODA United Nations Office for Disarmament Affairs UN SC United Nations Security Council USA United States of America USSR Union of Soviet Socialist Republics WMD Weapon(s) of Mass Destruction Executive Summary

Nuclear energy is making a growing contribution to a reconfigured low-carbon electricity supply system around the world. Trade in nuclear fuel, reactor systems and components has the potential to reach $40 billion a year, but despite the removal of many technical barriers to trade in other strategic sectors, governments continue to impose strict controls on nuclear exports.

In this report, the World Nuclear Association maps the strategic export control landscape and identifies examples of good practice by suppliers and export control authorities. We propose a number of measures for streamlining licensing and for improving communication with the industry.

Export controls aim to preclude states and unauthorized entities from acquiring materials, equipment and technology that could be used to make a nuclear or radiological weapon. The world nuclear industry contributes to countering this threat through robust internal compliance programs at company level to ensure that transactions do not involve suspect parties. Export control authorities should be able to recognize good practice by extending authorized (or trusted) economic operator status to companies that apply diligently a robust and comprehensive internal compliance program to their operations.

Most export control authorities do not issue general export licences for nuclear-related items, even though they do issue such licences for certain non- nuclear dual-use items, which places the nuclear industry at a disadvantage in comparison with the aerospace and defence industries.

The degree of scrutiny accorded to nuclear technology should be risk-based. A nuclear power reactor poses a relatively low technology risk with respect to proliferation. The same is true for components, spare parts, and maintenance or repair services for an existing nuclear facility that is subject to international safeguards. Under a risk-based approach the export of components and complete power reactors should be made possible under general authorization, without a prior individual licence, to another country that is a participating state in the Nuclear Suppliers Group (NSG), subject to notification being provided to the national authorities of the exporting and importing countries concerned. Within free trade areas, like the European Union’s single market, shipments should be notifiable but otherwise unrestricted.

Nuclear fuel assemblies are composed of fissile material and therefore pose a greater proliferation risk than a nuclear reactor itself (which cannot operate without fuel). However, as nuclear fuel is normally made of low-enriched uranium it should not be subject to a requirement for licence approval prior to shipment between NSG participating states, as they have accepted International Atomic Energy Agency (IAEA) monitoring. There should be general authorization for low-enriched fuel exports with a simple reporting requirement to the strategic goods control authorities of the countries involved in the shipments.

Enrichment and reprocessing technologies are associated with a higher proliferation risk and there is thus greater justification for licensing each transaction through an individual application for export.

Resources can be better employed if exporters and governments made greater use of risk assessment. Destinations of concern could be checked out (‘red

1 flagged’), while those that are already under international safeguards would be accepted as eligible to be fast-tracked.

The trade and investment agreements between the EU and Canada and the EU and the USA, which is being negotiated currently, offer a mechanism to address the technical barriers to trade in the nuclear sector in future. The same considerations could apply once the Trans-Pacific Partnership comes into force.

The NSG should do more to exchange information and engage with the industry. A forum for industry-regulator cooperation in the export control and counter-proliferation area involving the relevant inter-governmental organizations including the IAEA, NSG, Wassenaar Arrangement and the UN Office for Disarmament Affairs would be useful. An industry-driven road map for streamlining the international export control regime endorsed by the relevant inter-governmental organizations would make an excellent starting point.

The World Nuclear Association is ready to collaborate in building an effective and efficient export control regime, based on improved communication and a more internationally consistent approach.

2 1 Introduction

The civil nuclear power industry control authorities. In the first half of operates under a special 2013 the World Nuclear Association international regulatory regime surveyed its membership to designed to ensure a high level understand better the complexities of safety and to safeguard its in practice of obtaining export (and technology against misuse. An import) licences and clarify the main overarching regulatory framework issues associated with compliance. is provided by the International It was sent to 62 organizations and Atomic Energy Agency (IAEA) but 20 returns were received – a 32 authority for controlling international percent response rate – covering trade in nuclear technology, goods 12 countries. This survey and a and services lies with national summary of its results are included in governments. Inevitably there are the Appendix. differences in regulation and a web of bilateral and multilateral The report concludes with some agreements has been built up since suggestions for measures to the 1950s. Such variations may streamline licensing and to improve introduce additional compliance communication with the industry. It is costs for global supply chains which hoped that this paper will contribute can then hamper the development of to building a more collaborative an open international trading system. and internationally consistent export control regime. The aim of this report is to map the strategic export control landscape This paper does not consider issues and identify examples of good relating to export restrictions that are practice by suppliers and export area or country specific.

3 An International 2 Industry

Nuclear power is making a growing According to International Trade contribution to supplying low-carbon Centre trade statistics, the estimated energy worldwide. There are 438 value of world exports of radioactive operable reactors in 30 countries. chemical elements, including natural Another ten countries are building or and enriched uranium, thorium, planning to build reactors. Over 60 fabricated and irradiated fuel, and percent of the world’s people already radioisotopes in 2013 amounted to live in countries where nuclear- $13 billion.1 The export of natural generated electricity is being supplied. uranium accounts for well over By 2030 the population benefiting one half of this international trade. from nuclear power will most likely Natural uranium is mined in around have risen from 3.4 billion to around 20 countries. It is converted into 5.5 billion, even after allowing for the a suitable form for enrichment fact that a few countries (Germany, for by companies including AREVA, example) have decided to phase out Cameco, the China National Nuclear the technology. The spread of nuclear Corporation, ConverDyn, RosAtom’s technology from the mature industrial TVEL and Westinghouse. There are economies to emerging markets is four major suppliers of enriched well underway. uranium to the world market – AREVA, RosAtom’s Techsnabexport International trade in nuclear (TENEX), URENCO and the US components has the potential to Enrichment Corporation (USEC) reach $30 billion a year. There are – and several domestic suppliers today ten consolidated technology in Argentina, Brazil, China, India, vendors offering their technology Iran, Japan and Pakistan. Twelve and services across much of the fuel fabricators supply low-enriched nuclear fuel cycle. They are AREVA, fuel assemblies, of which AREVA, Candu Energy, China National Cameco, Global Nuclear Fuel (a Nuclear Corporation and the Chinese partnership of General Electric, State Nuclear Power Technology Toshiba and Hitachi), TVEL and Corporation, GE and Hitachi, Korea Westinghouse are the largest. Electric Power Corporation, Mitsubishi Heavy Industries, the Nuclear Power Competitive pressures are Corporation of India, RosAtom and encouraging the localization of Toshiba/ Westinghouse. In addition, manufacturing, joint ventures other significant technology vendors and international procurement are active in the international market, of systems and components for including Babcock & Wilcox, China nuclear applications. As a result, General Nuclear, Doosan and Škoda. production is located in several Each has developed a supply chain jurisdictions with materials, semi- that is increasingly global in scope. processed and finished fabrications The World Nuclear Association’s perhaps crossing several borders report The World Nuclear Supply prior to reaching the final destination Chain: Outlook 2030 (2014) lists for assembly and installation. 240 major independent suppliers of Services are also performed in nuclear grade structures, systems, different countries either as a result components and services. While the of sub-contracting or through the 1 UN COMTRADE/ ITC trade statistics for commodity product group HS 2844. industry remains weighted towards participation of specialist divisions of Fifteen countries account for 95 percent domestic markets, the leading the same transnational corporation of uranium and nuclear fuel exports: vendors are, for the most part, or industrial group. Globalization, Kazakhstan, France, Netherlands, internationally diversified in terms in short, is as much a part of the the USA, Canada, Germany, Namibia, Uzbekistan, Russia, Belgium, Ukraine, of the corporate make-up and their civil nuclear scene as it is in other South Africa, Sweden, the UK and China. supplier base. industries.

4 The rapid development of telecommunication has facilitated the intangible transfer of information while the growing amount of personal travel means that people can carry knowledge with them on electronic devices. Knowledge management processes are required within organizations to protect intellectual property and ensure compliance with export controls, but also to facilitate learning and share experience, especially in relation to safety. Though these objectives are not incompatible they call for active management.

Lastly, despite the development of regional free trade areas, such as the EU, the North American Free Trade Area, the Asia-Pacific Economic Cooperation area and others, export controls on nuclear technology, reactor components and radioactive materials are still exercised exclusively on a national basis. This situation is unlikely to change in the foreseeable future but, the World Nuclear Association believes, steps can be taken by both suppliers and export control authorities to facilitate legitimate trade and exchange.

5 The Export Control 3 Regime

The national and international 3.1 Background dimensions of export control have Initially the United States was unwilling evolved since the 1950s and to share its expertise with its Second present a complex, and sometimes World War allies, and others, but confusing, picture. The international within a few years came to the view background to the strategic export that it was preferable to control the control regime is outlined in the transfer of nuclear technology. Having first section. There follows a brief developed an early lead in the design description of some of the main of atomic reactors for commercial national and regional control use in the 1950s, there was interest regimes. Lastly, the key compliance from other countries to learn from requirements are explained. the US experience. Accordingly President Dwight D. Eisenhower Strategic export controls are part of spoke of finding “the way by which the authorities’ armoury to prevent the miraculous inventiveness of man weapons of mass destruction from shall not be dedicated to his death, being acquired by unauthorized but consecrated to his life”, in a entities. They complement the speech to the United Nations in 1953. other elements of non-proliferation/ counter-terrorism strategy to protect The Atoms for Peace program in the the public against such threats and 1950s and 1960s provided financial to pursue and prosecute those and technical assistance, training responsible.2 and nuclear fuel to many countries, including India, Pakistan, Israel, Iran, Implementing the strategic export Japan, South Africa, Argentina and control regime is achieved through a Brazil. An International School of number of measures: Nuclear Science and Engineering • Legislation to establish the was set up in 1955 at the Argonne appropriate competencies and National Laboratory, Illinois, to train enforcement processes; foreign scientists and engineers. • Regulation to define the technologies, goods, services and It sparked a similar initiative from materials to be controlled (a control the Soviet Union in 1955 to share list); its nuclear technology for peaceful • Export licensing of defined purposes. The German Democratic technologies, goods, services and Republic, Bulgaria, Czechoslovakia, materials; Hungary, Poland, Romania and China were provided with technical • Border control activities assistance for research and (intelligence gathering, detection, development. The Joint Institute of inspection, interception, etc.); Nuclear Research at Dubna, north of • Financial sanctions on specified Moscow, was set up in 1956 by the parties; and, USSR with its partners from Central • Awareness-raising measures, and Eastern Europe, China, North public information and industry Korea, Mongolia and Vietnam; Cuba outreach activities. joined in 1976.

This World Nuclear Association In parallel, the International report focusses on the export Atomic Energy Agency (IAEA) was 2 See, for example, the UK Government’s Strategy for Countering International licensing measures and makes established in 1957 to serve as an Terrorism: Pursue, prevent, protect, recommendations on this area and intergovernmental forum for scientific prepare (March 2009) London: Cm 7547. on related industry outreach. and technical cooperation in the

6 peaceful use of nuclear technology It sought to provide a common and to provide international interpretation of Article III.2 of the safeguards against its misuse. All non- NPT, which requires governments to nuclear weapons states that are IAEA control nuclear materials and certain members are required to conclude other materials and equipment. The a comprehensive safeguards Zangger Committee agreed a list of agreement with the agency to ensure goods that ‘trigger’ the requirement that fissionable materials are not to introduce export controls and diverted for military purposes. This assurances that the importing state obligation was strengthened through implements IAEA safeguards: the so- the adoption of the Treaty on the called ‘trigger list’. The guidelines (or Non-proliferation of Nuclear Weapons ‘common understandings’) are not (NPT). States already possessing legally binding. nuclear weapons were not obliged to accept IAEA safeguards but most The Nuclear Suppliers Group (NSG) opened up their civil nuclear facilities was set up in 1974 by a number of to IAEA inspectors voluntarily. States countries adhering to the NPT to that do not accept IAEA surveillance issue guidelines on safeguarding and inspection are excluded from and controlling the international international cooperation and trade trade in nuclear and related dual-use involving nuclear technology. technology, equipment and materials. The NSG’s guidelines originally The creation of IAEA safeguards included two elements: a ‘trigger list’ enabled nuclear exports and which was more comprehensive than cooperation between the Cold War that of the one maintained by the blocs for the first time, with the US- Zangger Committee, and ‘guidelines’ organized Coordinating Committee for which set out the circumstances Multilateral Export Controls (CoCom) under which nuclear exports could relaxing its embargo on nuclear take place. exports provided that the exports would be subject to international In the early 1990s, as the international safeguards.3 Thus, the trade control community became more aware of framework began to facilitate as well the existence of clandestine nuclear as restrict nuclear cooperation. weapons development programs in certain countries, the NSG IAEA member states are expected guidelines were revised to address to introduce laws and regulations the risk that a state could covertly to control the management of import strategic technologies. The nuclear technology, nuclear-related guidelines concerning the trigger 3 CoCom was established in 1949 with a 4 activities and nuclear materials. list (part 1 of the guidelines) were secretariat in Paris. The founding members These norms cover the control of broadened to require the application were the USA, the UK, Netherlands, imports and exports, amongst other of full-scope safeguards as a Luxembourg, France and Belgium. Other countries joined later: Australia, Canada, elements. After the NPT came into condition of export. A second ‘dual- Denmark, Western Germany, Greece, Italy, force in 1970 several signatories use list’ was added (part 2 of the Japan, Norway, Portugal, Spain and Turkey. It formed an informal intergovernmental guidelines) covering technologies was disbanded in 1994 and was superseded whose export would not trigger a by the Wassenaar Arrangement, whose grouping in 1971, known as the NPT secretariat is hosted by Austria. CoCom Exporters Committee or Zangger requirement for IAEA safeguards maintained three lists: an international Committee (after its first chairman, but which would nonetheless munitions list, an international atomic energy Dr. Claude Zangger), to agree which require a licence from the national list and an international (industrial) list covering ‘dual-use’ goods. technologies, such as uranium authority in the exporting state. The 4 IAEA, 2012, Guidance for sates implementing enrichment technology, radioactive guidelines were also updated to comprehensive safeguards agreements and sources and fissionable materials, include a ‘Non-Proliferation Principle’, additional protocols, IAEA Services Series No. should be covered by export controls. whereby an exporting country’s 21, Vienna: p. 9.

7 government must satisfy itself that as to states that are not members that the transfer of technology or of the NSG. States can choose export of goods and services will to adhere to the NSG guidelines not contribute to the proliferation of without participating in the NSG. nuclear weapons or pose a risk of Most trade of nuclear technologies, nuclear terrorism. If there is doubt equipment and materials is either concerning an importing country’s between countries that participate in government’s intentions to comply the NSG or involves a participating with its commitments under the NPT state as either a buyer or a seller, (or other equivalent treaties), then although there are some notable the transfer or export concerned exceptions.5 must be prohibited. In some cases the exporting country’s government The NSG and Zangger guidelines are may request assurances from the disseminated by the IAEA. importing country’s government that the goods or technology to In addition to the Zangger and be supplied will not be used to NSG regimes, all governments are make a weapon. As the NSG is not required to take measures to prohibit linked to the NPT, or to any other unauthorized entities and individuals body of international law, these from acquiring or using nuclear measures were not legally binding on weapons and sensitive materials participating states. and technology, under UN Security Council Resolution 1540 of 2004. Under the NSG arrangements, International cooperation mechanisms countries producing the defined under the Convention on the Physical technologies, software, equipment Security of Nuclear Materials (1987) and materials may only export and the International Convention for these to those countries that have the Suppression of Acts of Nuclear accepted the full-scope safeguards Terrorism (2007) have also been applied by the IAEA to their established for detecting, countering nuclear facilities (unless alternative and punishing acts of theft and exceptional arrangements are smuggling of materials; the unlawful agreed). The NSG’s participating release of radioactive sources or governments have agreed a system detonation of devices; and of sabotage for notifying each other of any or attacks on nuclear facilities. The decisions to restrict exports to a conventions oblige states to safeguard particular country. They apply the all radioactive and nuclear materials guidelines to each other as well (including military stocks); to return

Participating governments of the Nuclear Suppliers Group (48 countries) North America: Canada, Mexico, Europe: Austria, Belarus, Belgium, United States of America Bulgaria, Croatia, Cyprus, Czech South America: Argentina, Brazil Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, 5 China, Japan, Kazakhstan, Australian Safeguards and Non-Proliferation Asia: Iceland, Ireland, Italy, Latvia, Lithuania, Office, 2009, Nuclear Trade outside the Republic of Korea, United Arab Luxembourg, Malta, Netherlands, Norway, Nuclear Suppliers Group, Briefing Paper: p. Emirates (nominated) 1. States with civil nuclear capability outside Poland, Portugal, Romania, Russian the NSG include three which have never been Federation, Serbia, Slovakia, Slovenia, NPT signatories (Israel, India and Pakistan) Spain, Sweden, Switzerland, Turkey, and the Democratic People’s Republic of Korea, which withdrew from the NPT in 2003. Ukraine, United Kingdom Namibia, a significant exporter of uranium, is Africa: South Africa Oceania: Australia, New Zealand expected to apply for NSG membership.

8 all stolen materials and devices to to the full safeguards applied to the country of origin; to prosecute or nuclear facilities. extradite terrorist suspects; and to render assistance in a crisis. The current control regime provides a ‘triple lock’ to prevent misuse A large number of countries have and the proliferation of nuclear agreed an ‘Additional Protocol’ with weaponry (see Figure 1). It controls the IAEA, since 1997. The model the cross-border transfer of sensitive protocol is aimed at strengthening technology7 and the transport8 the safeguards system and places of dual-use goods, equipment additional reporting requirement on and fissile materials to preclude IAEA member states. Article 2 (a) illicit trafficking and prevent their (ix) requires governments to provide acquisition and application by information on the export of nuclear unauthorized entities or persons. equipment and certain non-nuclear materials (IAEA members states are Governments have tended to obliged to report on nuclear material emphasize the first ‘lock’ (on the transfers as part of the general items to be controlled) – that is, the safeguards regime). If requested, trigger list. But arguably it is the third governments must also provide lock (on who is licensed to acquire information on imports.6 It should be and use the technology) that is noted that although natural uranium most important. IAEA safeguards

(uranium oxide, U3O8) is a controlled provide the necessary reassurance material and must be protected in respect of trigger list exports. But according to prudent practice, it is safeguards are not relevant for the not capable of undergoing fission exports of dual-use technology to until after it is converted into uranium unsafeguarded sites, and although dioxide, UO2. Uranium mines may IAEA inspectors have the right to be inspected by the IAEA under the go to any location under the terms terms of the Additional Protocol, but of the Additional Protocol, some the mines and mills are not subject other verification mechanism might

6 IAEA, 1997, Model Protocol additional to agreements between the IAEA and States for the application of safeguards, INFCIR/540. Annex II of the Additional Protocol specifies Sensitive the equipment and non-nuclear materials that Transfer Technology should be reported to the IAEA in the event of their export or import. 7 Technology is defined by the NSG as the information necessary for the development, Duel-use Goods production or use of controlled items. Transport What is controlled & Equipment It may take the form of ‘technical data’ (e.g., blueprints, calculations, diagrams, formulae, models or specifications) or ‘technical assistance’ (e.g. knowledge and Fissile skills, instruction and training, or consulting Trafficking Materials services). The 1996 Wassenaar Arrangement For what purpose on Export Controls for Conventional Arms and Dual-use Goods and Technologies has Acquisition and the same definition but provides additional Application by examples of what constitutes technical data To Prevent and technical assistance. Unauthorised Entities By which end-user or Persons 8 Transport may include trans-shipment under which the goods do not move out of a transport hub but are handed over from one Figure 1: The ‘triple lock’ of the export control regime carrier to another.

9 be needed to provide sufficient Among the participating states of of all and then examine those of confidence. The UN Security Council’s the NSG, a number have a similar the other major nuclear exporting 1540 Committee, which is charged approach to assessing export countries. with examining the implementation of licence applications and to export SC 1540, has considered this problem. controls, using similar definitions United States of America The Committee proposed that the final and classifications, restricted party The USA developed a set of control recipient of the exported controlled lists, and end-user certification, lists and other measures, each of item should be required to state and on re-exportation. These states which are managed by different what use it will make of it. Therefore, include Canada, the EU member agencies: the Departments of Energy the Committee suggested, the states, Japan and the USA, and and Commerce and the Nuclear export licence should include although there are differences in Regulatory Commission. tougher end-user controls, with their national export control regime, end-user certificates, and ‘catch-all’ the similarities indicate a high The following tables summarize the clauses that require the exporter to degree of consistency. regulations and control lists, and verify the reliability of the end-user’s their legal basis, for the countries intentions. Catch-all clauses also 3.2 National and regional and regions most involved in require exporters to consider the trading nuclear goods and services potential for proliferation posed by export control regimes their supply of technology, goods and The USA played a key role in internationally. services, even if some items to be establishing the international delivered do not appear on a control strategic export control regime and Three regulatory authorities manage list. In effect, the exporter is required its own legislation both predated it the nuclear export control system in to undertake a degree of verification and provided the basic parameters the USA: commensurate with the proliferation for the international system. We • The National Nuclear Security risk posed by the export. therefore describe its regime first Administration, Department of

United Sates of America NSG Guidelines on Legal Base Licensing Authority Control List Export of Trigger Lists items: Atomic Energy Act (1954) Nuclear Regulatory Commission • Source material (e.g. natural uranium, thorium, etc.) as amended 10 CFR Part 110 • Special fissionable material e.g.( enriched uranium, Sections 123, 127, 128 with plutonium, etc.) and Bureau of Industry & Security, • Nuclear reactor equipment & components International Emergency Department of Commerce • Non-nuclear materials for reactors (e.g. graphite, Economic Powers Act Export Administration Regulations deuterium, etc.) (1977) – Commerce Control List • Reprocessing plant & equipment for irradiated fuel Category 0 • Fabrication plant & equipment for nuclear fuel elements • Isotope separation plant & equipment for source & fissionable material • Heavy water and deuterium plant & equipment • Uranium/ Plutonium conversion plant & equipment Transfer of nuclear technology (including information, Atomic Energy Act National Nuclear Security technical data, technical assistance & training) relating (1954) Section 57b as Administration, Department of to the above items amended by Nuclear Energy 10 CFR Part 810 Nonproliferation Act (1978) Section 302 Export of dual-use materials, equipment, assemblies, International Emergency Bureau of Industry & Security, parts and components, test and production equipment, Economic Powers Act Department of Commerce software and technology (1977) Export Administration Regulations – Commerce Control List

10 Energy (DoE): DoE regulates the • The Bureau of Industry and technology to determine that the Security, Department of Commerce export of such technology is not (DoC): through the Export inimical to US national security Administration Regulation, issued or its commercial interests. under the International Emergency Sensitive nuclear technology that Economic Powers Act, DoC requires specific authorization regulates dual-use materials, before it can be released includes components and technology. isotope separation, fabrication of The DoC has its own control list nuclear fuel containing plutonium, of technologies/items and its heavy water production and own list of states and entities reprocessing of irradiated fuel. The (persons/organizations) with whom DoE may decide that a Section commerce is restricted (including 123 Agreement (arising from a Cuba, Iran, DPR Korea and section of the Atomic Energy Russia). Act) is required between the USA and the recipient’s government The Department of Energy (DoE) to provide an assurance that the updated parts of the regulations in technology will not be misused March 2015 to generally authorize for weapons purposes; such the transfer of nuclear technology agreements take around two years for peaceful purposes to a range to be concluded and although the of destinations and to exempt Congress is only asked to consider publicly available technology and 9 the agreement, it can strike one fundamental research from controls. down if it is not happy with it. A 123 Agreement is a reciprocal Exports to nuclear facilities that agreement and it binds the US as are subject to IAEA safeguards are routinely approved. A general licence much as the foreign country and is available for the export of special can thus be linked to the provision nuclear material and deuterium of American technical assistance to countries that are not on the to a country wishing to develop embargoed or restricted lists. Reactor nuclear power (as envisaged in components (for LWRs and PHWRs) the Atoms for Peace program). may be exported under a general DoE is introducing an e-license licence to most other NSG countries: system but has opted out of Austria, Belgium, Bulgaria, Canada, collaborating with the proposed Chinese Taiwan, Cyprus, the Czech Export Enforcement Coordination Republic, Denmark, Estonia, Finland, Agency and the adoption of a France, Germany, Greece, Hungary, single control list. Ireland, Italy, Japan, Republic of • The Nuclear Regulatory Korea, Latvia, Lithuania, Luxembourg, Commission (NRC): regulates Malta, Netherlands, New Zealand, the export of nuclear materials Philippines, Poland, Portugal, and reactor equipment and Romania, Slovakia, Slovenia, Spain, components, fuel fabrication, Sweden, Switzerland, and the UK, etc. for all foreign destinations to along with Indonesia. A facility export 9 ensure that these are not exported US Federal Register Vol. 80, No. 35 of 23 licence is required for a complete or February 2015 on Assistance to Foreign to restricted or embargoed essentially complete nuclear reactor. Atomic Energy Activities. destinations as listed under US 10 Austria, Belgium, Bulgaria, Croatia, Cyprus, Federal Regulations 10 CFR Part The transfer of non-sensitive nuclear Czech Republic, Denmark, Estonia, Finland, 110 (these include India, Pakistan, technology is generally authorized France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, 10 Israel, Iran, Libya, Syria, Cuba and to the member states of the EU, Netherlands, Poland, Portugal, Romania, DPR Korea). Argentina, Australia, Brazil, Canada, Slovakia, Slovenia, Spain, Sweden and the UK.

11 Chinese Taiwan, Colombia, Egypt, destinations are similar but not The USA is a party to the North Indonesia, Japan, Kazakhstan, identical, with a number on one American Free Trade Agreement of Morocco, Norway, Republic of Korea, list but not the other: Argentina, 1994 with Canada and Mexico, but South Africa, Switzerland, Turkey, the Australia, Brazil, Croatia, Kazakhstan, nothing in that agreement prevents United Arab Emirates and Vietnam Mexico, New Zealand, Norway, any party to the agreement from (some restrictions apply to Chile, Philippines, South Africa, Ukraine, taking action relating to national Mexico and Ukraine). This covers UAE and Vietnam. A small number policies or international agreements the production or development of other NSG participating states respecting the non-proliferation of of conversion, enrichment, fuel are not on either US list and specific nuclear weapons (Part 8, Article 2102). fabrication, reprocessing and reactor authorization of exports to these development technologies, provided destinations is required: Belarus, Australia that no sensitive nuclear technologies China, Iceland, Russia and Serbia. Australia is a major exporter of are involved. It facilitates bidding by uranium and has instituted a tough US companies for projects abroad, The US control lists are very similar control regime to ensure that its as they will no longer have to obtain to the NSG’s trigger list and dual-use exports do not facilitate proliferation. an export licence before they can list. Changes made to the US lists are prepare a tender. It also enables the often later incorporated into the NSG The licensing authority for uranium exchange of technical information lists. The information required from an exports is the Ministry of Resources, between a company’s units located applicant includes: company name, Energy and Tourism. It works with in different countries, as long as they address and contact information; the Australian Safeguards and are on the authorized list. product to be exported; quantity Non-Proliferation Office (ASNO) at and unit of measure (i.e., lbs., kg); the Department of Foreign Affairs & As is clear from the above, the countries of origin; intermediate and Trade, whose mission is to ensure USA’s lists of generally authorized end-user information. that all uranium is exported solely for

Australia NSG Guidelines on Legal Base Licensing Authority Control List Export of Trigger Lists items: Nuclear Non-proliferation Ministry of Resources, Energy • Source material (e.g. natural uranium, thorium, etc.) (Safeguards) Act (1987) & Tourism in association with as amended the Australian Safeguards and • Special fissionable material e.g.( enriched Schedule 1 and Customs Non-Proliferation Office (ASNO), uranium, plutonium, etc.) (Prohibited Exports) Department of Foreign Affairs & Trade Regulations 1958 as amended • Nuclear reactor equipment & components Customs Act (1901) Defence Export Control Office, • Non-nuclear materials for reactors (e.g. graphite, Customs (Prohibited Department of Defence deuterium, etc.) Exports) Regulations 1958 Defence & Strategic Goods List • Reprocessing plant & equipment for irradiated fuel as amended (2011) Part 2 Category 0 with • Fabrication plant & equipment for nuclear fuel and the Australian Safeguards and elements Nuclear Non-proliferation Non-Proliferation Office (ASNO), • Isotope separation plant & equipment for source (Safeguards) Act (1987) Department of Foreign Affairs & Trade & fissionable material as amended • Heavy water and deuterium plant & equipment • Uranium/ Plutonium conversion plant & equipment Transfer of nuclear technology (including Customs Act (1901) Defence Export Control Office, information, technical data, technical assistance & Customs (Prohibited Department of Defence training) relating to the above items Exports) Regulations 1958 Defence & Strategic Goods List Export of dual-use materials, equipment, as amended (2011) Part 2 Category 0 assemblies, parts and components, test and and with the production equipment, software and technology Nuclear Non-proliferation Australian Safeguards and Non- (Safeguards) Act (1987) Proliferation Office (ASNO), as amended Department of Foreign Affairs & Trade

12 peaceful, non-military purposes in the shipment subject to the necessary accordance with Australia’s nuclear permit having been granted. cooperation agreements. The items in Group 3 may be exported A completed ASO106 form or under General Export Permit No 43 ASO110 (ASNO) is a prerequisite to of 2 May 2012 to certain ‘eligible obtaining the export licence. The type destinations’, which includes the of information required is: Name of majority of other NSG countries: exporter, destination (organization Argentina, Australia, Belgium, Bulgaria, and facility), type of permit, the Czech Republic, Denmark, Finland, description of goods, third party France, Germany, Greece, Hungary, involvement (organization and facility Ireland, Italy, Japan, the Republic of if applicable), methods of verification Korea, Luxembourg, the Netherlands, of goods, confirmation of readiness New Zealand, Norway, Poland, of destination country/organization to Portugal, Spain, Sweden, Switzerland, receive goods, an ASNO approved Turkey, Ukraine, the UK and the USA. transport security plan (depending on category of nuclear shipment). The following information has to be included in an application: The Australian Customs and Border applicant; exporter; consignee (both Protection issue export approval intermediate if applicable and final); contingent on the appropriate approvals description of goods (including from the agencies being issued. quantity and value); origin of material; intended end use and end-user; Canada planned shipping dates (broad Canada was an early proponent of range); packaging information; end- the peaceful use of atomic energy use statement from the consignee and advocate of strong counter- or purchaser. Additional information proliferation measures internationally. and supporting documentation: technical description of goods/ The Canadian Nuclear Safety technology; end-use assurances; end- Commission has the authority to use certificates; international import licence an import or export. The Trade certificates; import licences; informal Controls and Technical Barriers Bureau end-use assurance documents; issues an export permit. The Canadian delivery verification certificates; and Border Services Agency will approve US export authorization (if applicable).

Canada NSG Guidelines on Legal Base Licensing Authority Export of Trigger Lists items Export and Import Permits Act (1985, Trade Controls and Technical Barriers amended 2013) Bureau of the Department of Foreign Export Control List SOR 89-202 (15 Affairs, Trade and Development in March 2013) Group 3 association with Canadian Nuclear Transfer of nuclear technology Export and Import Permits Act (1985, Safety Commission (including information, technical data, amended 2013) technical assistance & training) relating Export Control List SOR 89-202 (15 to the above items March 2013) Group 4 Export of dual-use materials, equipment, assemblies, parts and components, test and production equipment, software and technology

13 China in the 1980s. It now plays mainly a The European Council has set up In the 1980s and prior to joining the guiding role and is jointly responsible a common export control regime to IAEA in 1984 China exported nuclear with the CAEA for drawing up the bring about uniform and consistent technology to Algeria and Pakistan Nuclear Export Control List. The list application of member states’ export without applying international is practically identical to the NSG’s controls and to provide a ‘level playing safeguards. China was invited to trigger list. field’ for EU exporters. The first join the NSG after acceding to the Council Regulation was promulgated NPT in 1992 but did not do so until The General Administration of in 1969 and was reformed in 2000 2004.11 The system for export control Customs is the enforcement bureau (EC No 1334/2000). But after further appears quite complex and reflects a for export control in China. amendment the Council recast the history of changing policy priorities as regulation in the interest of clarity. A China has reformed its economy and European Union single export control list was adopted which applies to every EU member integrated internationally. One of the three pillars of the original state. The model control list has European Economic Community was The control lists are published by the been copied by some other non-EU establishment of EURATOM in 1958 Commission of Science, Technology countries. to encourage the development of & Industry for National Defence atomic energy for peaceful purposes, (COSTIND) in association with China The Council Regulation has been along with the creation of a single Atomic Energy Authority (CAEA) for incorporated into the national internal market. In practice, national nuclear technologies and related legislation and regulations of each governments and the European goods and services, and by the member state, usually with no further Ministry of Commerce (MOFCOM) in institutions share responsibility for changes. relation to nuclear dual-use items. In energy policy and in overseeing the practice this means that an exporter nuclear industry. Member states The information required in an must obtain authorization from retain legal authority for the control application includes: the export several authorities in sequence. of exports of dual-use items in country, the exporting company, order to safeguard public policy the importing country, the recipient COSTIND was established by the and public security. The European company, the contract (as a proof State Council in order to re-organize Council retains the right to review for the commercial transaction, the high-technology sector so as the operation of member states’ INCOTERMS, country code, the to enable defence manufacturers export controls insofar as these affect value and date), company profile, to diversify into civilian production exports from the EU as a whole. project description, the nature of the

China NSG Guidelines on Legal Base Licensing Authority Control List Export of Trigger Lists items Foreign Trade Law (1994) Commission of Science, Technology & as amended Industry for National Defence (COSTIND) Regulations on the Control of in association with Nuclear Export (1997) China Atomic Energy Authority (CAEA) as amended Nuclear Export Control List promulgated Transfer of nuclear technology Regulations on the Import & Export under Decree 230 (1997 & revised 2004) (including information, technical Control of Technologies (2001) of the State Council data, technical assistance & training) as amended relating to the above items Export of dual-use materials, Regulations on the Export Control of Ministry of Commerce (MOFCOM) equipment, assemblies, parts and Nuclear Dual-use Items & Related in association with components, test and production Technologies (1998) General Administration of Customs (GAC) equipment, software and technology as amended Measures on the Administration of Export Licences on Sensitive Items & Technologies

14 European Union NSG Guidelines on Legal Base Licensing Authority Export of Trigger Lists items Council Regulation (EC) No 428/2009 of 5 EU Member States Transfer of nuclear technology May 2009 setting up a Community regime for EU Member States (including information, technical data, the control of exports, transfer, brokering and technical assistance & training) relating transit of dual-use items to the above items and the national law of the Member State Export of dual-use materials, EU Member States As amended by Regulation (EU) No 1232/2011 equipment, assemblies, parts and of 16 November 2011 components, test and production Annex 1 Category 0 for Nuclear Materials, equipment, software and technology Facilities and Equipment item, technical data, the name of the the relevant safety authority and/ export controller in charge, routing or the police. It is a high degree of of the goods, end-user certificate control to exercise within the single and perhaps additional documents internal market, in which each depending on the individual case. member state is subject not only to IAEA safeguards but also to those In principle, an EU-based supplier exercised by EURATOM. of natural and depleted uranium and nuclear fuels is not required A general authorization for export to obtain an export licence for a is valid from the EU to a number of shipment to a safeguarded nuclear destinations (Argentina, Australia, power plant within the EU. All other Canada, Iceland, Japan, Republic nuclear exports, however, require an of Korea, New Zealand, Norway, individual licence from the national South Africa, Switzerland, Turkey and export control authority. the USA) for certain dual-use items, but this provision does not apply to Nuclear exports to another EU nuclear technologies (Category 0). member state may also require In addition, the European Economic official verification of the import. In Area, which creates a single market some cases, the exporting member embracing the EU member states, state requires a certificate, a delivery Iceland, Liechtenstein and Norway, verification statement or a declaration guarantees equal rights and of the foreign end-user issued by the obligations to economic operators, competent authority of the importing implying that in principle strategic member state that the dual-use export controls should be harmonized. items shall not be used for military Another EU partner state, Switzerland, purposes or any purpose connected has been a long-standing partner with chemical, biological or nuclear in the EURATOM research program weapons or missiles capable of and in the ITER project to build an delivering such weapons, together experimental fusion reactor, giving its with information about the specific enterprises an equal right to bid for use of the dual-use items, and a tenders and grants. declaration that such dual-use items shall not be subsequently exported Simplification and streamlining without permission. Transfer or nuclear transfers within the EU is transit involving nuclear materials a priority and could be achieved and radioactive sources within the through an extension of the existing EU may also require a licence from provisions for general licences, the 11 China joined the Zangger Committee in 1998.

15 introduction of a project licence, components and systems for nuclear harmonized administrative practices, power plants. and closer inter-governmental and Community cooperation through Under its agreement with the NSG, EURATOM. The EU has already the Indian government agreed to simplified the terms and conditions institute a national export control of transfer of defence-related system for nuclear-related material, products within the European equipment and technology. The single market to enable importers control list of SCOMET items mirrors to be certified for a general transfer the NSG trigger list closely. licence. This enables their EU-based suppliers to transfer items without Japan having to apply for an individual Japan was one of the founders of export licence. The importing the NSG in 1975. It is a key supplier company must demonstrate that its of reactor components and is active internal compliance program has in providing technical assistance provisions in place to handle any to developing countries in Asia on re-export activity. It simplifies the nuclear technology. strategic export control regime for transnational operation taking place The Ministry of Economy, Trade and within the EU. Industry (METI) is the competent authority administering export India controls. Within METI, under the For over three decades nuclear trade Trade and Economic Cooperation with India was embargoed following Bureau, is the Trade Control its nuclear explosive test in 1974. Department, which has four divisions. The country remains outside the Of the four, the Security Export NPT and has therefore not been able Licensing Division is responsible for to join the NSG due to objections issuing export licences. METI issues from some of the participating a single control list as a Ministerial governments. However India has Ordinance. agreed to apply safeguards to its civilian facilities under an agreement Required information must include: brokered by the USA in 2008 with recipient and user details (name of the NSG and has started to export company, address and company

India NSG Guidelines on Legal Base Licensing Authority Control List Export of Trigger Lists items Atomic Energy Act (1962) Department of Atomic Energy (DAE) Transfer of nuclear technology Control List of Special Chemicals, (including information, technical data, Organisms, Materials, Equipment technical assistance & training) relating & Technologies (SCOMET) control to the above items list issued 2000 and updated 2013 Category 0 Export of dual-use materials, Foreign Trade (Development & Ministry of Commerce & Industry, equipment, assemblies, parts and Regulation) Act (1992) Section 5 Director General of Foreign Trade components, test and production and Weapons of Mass Destruction Control List of Special Chemicals, equipment, software and technology and their Delivery Systems Organisms, Materials, Equipment & (Prohibition of Unlawful Activities) Technologies (SCOMET) issued 2000 Act (2005) and updated 2013 Category 4

16 Japan NSG Guidelines on Legal Base Licensing Authority Control List Export of Trigger Lists items Foreign Exchange & Foreign Trade Control Department, Ministry Trade Act (1949) of Economy, Trade & Industry (METI) as amended Ordinance No 49 (1991) of the Export Control Order Appended Ministry Specifying to Goods and Table 1 Item 2 (Cabinet Order 71 Technologies Pursuant to the of 2008) Provisions of the Appended Table Transfer of nuclear technology (including Foreign Exchange & Foreign 1 of the Export Control Order and information, technical data, technical Trade Act (1949) the Appended Table of the Foreign assistance & training) relating to the above as amended Exchange Order items Foreign Exchange Order Article (i.e. the control list) 17 Item 2 (Cabinet Order 237 of 2008) Export of dual-use materials, equipment, Foreign Exchange & Foreign assemblies, parts and components, test Trade Act (1949) and production equipment, software and as amended technology Export Control Order Appended Table 1 Item 2 (Cabinet Order 71 of 2008)

Kazakhstan NSG Guidelines on Legal Base Licensing Authority Control List Export of Trigger Lists items Law on Export Control of Arms, Ministry of Industry & New Transfer of nuclear technology Military Hardware and Dual-use Technologies, Department for Export (including information, technical data, Goods (1996) Control & Licensing technical assistance & training) relating Law on Export Control No. 300-III Government Decision No. 1282 on to the above items (2007) Approval of the Schedule of Products as amended subject to Export Control Export of dual-use materials, Government Decree No. 578 on equipment, assemblies, parts and Licensing Rules for Export & Import components, test and production (2007) equipment, software and technology

details); reason for the application; in the NSG lapsed in the 1990s. with Russia, Armenia, Belarus and subject technology or component and Following invitations to attend, the Kyrgyzstan. A single list of goods its purpose of use; when and how country participated for the first time subject to prohibition or restriction on these technology or component would as an independent state in 2002. import or export within the Eurasian be provided and where to be used; Since then it has emerged as the Customs Union and with third reference to the NSG guideline; and world’s leading uranium exporter. countries was agreed by the Eurasian the effective period of the contract. Economic Commission in 2012, but Kazakhstan is in the process of at this time the list excludes items Kazakhstan establishing a common economic covered by the NSG Guidelines (and Although a successor state of the space as part of its membership therefore responsibility for controls USSR, Kazakhstan’s participation of the Eurasian Customs Union remains with the national authorities).

17 Republic of Korea participate when the country declared The Republic of Korea has recently its independence and the USSR was entered the international market as dissolved in 1991. a supplier of reactor technology. The country joined the NSG in 1996. The Federal Service for Technical and Export Control (formerly the USSR’s State Technical Commission The Nuclear Export Control Division (GosTekhKomissiya), formed in of the Korea Institute of Nuclear 1973) is responsible for the licensing Nonproliferation and Control (KINAC) of dual-use items and protecting provides technical expertise and sensitive state information. It administrative support on licensing to assumed responsibility for strategic the NSSC. The export control system export controls from the Ministry of is called YesTrade and is managed by Industry & Trade’s Export Control the Korea Strategic Trade Institute. Department in 2004. Export control lists are issued by the government The basic information required for after consultation with the State an application is the applicant’s Duma (parliament) and industry. details, end-use, place of origin, and commodity information (such As with Kazakhstan, Russia is as tariff code, control number, value, in the process of establishing a specification, etc.). Supporting common economic space as part documentation, such as import of its membership of the Eurasian certificate, catalogs, etc., is also Customs Union. A single list of goods required. subject to prohibition or restriction on import or export within the Eurasian Russian Federation Customs Union and with third As a leading exporter of nuclear countries was agreed by the Eurasian technology since the 1950s, the Economic Commission in 2012, but Soviet Union was an early supporter at this time the list excludes items of safeguards and was among the covered by the NSG Guidelines (and founding nations of the NSG. The therefore responsibility for controls Russian Federation continued to remains with the national authorities).

Republic of Korea NSG Guidelines on Legal Base Licensing Authority Control List Export of Trigger Lists items Foreign Trade Act (2007) Ministry of Trade, Industry & Energy as amended (MOTIE), Nuclear Safety & Security Articles 19 & 20 Commission (NSSC) Presidential Enforcement Decree No Consolidated Public Notice for the 20257 (2007) Export & Import of Strategic Goods Transfer of nuclear technology (including Technology Development Promotion No 08-118 information, technical data, technical Act (2001) assistance & training) relating to the as amended above items Presidential Enforcement Decree No 17305 (2001) Export of dual-use materials, equipment, Foreign Trade Act (2007) assemblies, parts and components, test as amended and production equipment, software and Articles 19 & 20 technology Presidential Enforcement Decree No 20257 (2007)

18 Russian Federation NSG Guidelines on Legal Base Licensing Authority Control List Export of Trigger Lists items Federal Law No 114 on Military- Ministry of Defence, Federal Service Transfer of nuclear technology Technical Co-operation of the Russian for Technical & Export Control (including information, technical data, Federation with Foreign States (1998) technical assistance & training) relating Resolution of the Government No to the above items 973 (2000 on the Export & Import of Nuclear Materials, Equipment, Special Non-Nuclear Materials & Related Technology Export of dual-use materials, Federal Law No. 183 on Export Control equipment, assemblies, parts and (1999) components, test and production Resolution of the Government No 462 equipment, software and technology (2001) on Export Control of dual- application facilities and materials as well as respective technologies used for nuclear purposes

South Africa fissionable materials, of nuclear plant South Africa has ratified the South Africa has a large mineral for processing, using or producing Pelindaba Treaty of 1996 on the mining industry and is an exporter of such materials and of nuclear Nuclear-Weapon-Free Zone in Africa, uranium. During the apartheid period, technology generally. which prohibits nuclear explosive the country developed a significant devices in Africa and the dumping of capability in all elements of the nuclear The South African Council for the radioactive wastes. The treaty set up fuel cycle and in manufacturing Non-proliferation of Weapons of an African Commission on Nuclear and testing atomic weapons. South Mass Destruction was formed under Energy (AFCONE) to encourage Africa acceded to the NPT in 1991 the auspices of the Ministry of Trade cooperation in the peaceful use of and joined the NSG in 1995 having and Industry in 1995 to identify those nuclear energy at a regional and dismantled its weaponry. goods that should be controlled and sub-regional level and to ensure to register those persons who have the compliance by states adhering The Department of Minerals and custody of controlled goods. It issues to the treaty of their obligations to Energy is responsible for the control import and export permits for dual- apply IAEA safeguards. AFCONE of experts of source and special use items. works with the African Union, whose

South Africa NSG Guidelines on Legal Base Licensing Authority Control List Export of Trigger Lists items Nuclear Energy Act (1999) Department of Minerals & Energy Sections 34 & 35 Government Notice 207 of 27 February 2009 Transfer of nuclear technology (including Nuclear Energy Act (1999) Department of Minerals & Energy information, technical data, technical Sections 34 & 35 Government Notice 207 of 27 assistance & training) relating to the February 2009 above items Export of dual-use materials, equipment, Non-proliferation of Weapons of The South African Council for the assemblies, parts and components, test Mass Destruction Act (1993) Non-proliferation of Weapons of and production equipment, software and Mass Destruction technology Government Notice 20 of 3 February 2010

19 aim, amongst other objectives, is for multiple shipments; the export of this sort and provision exists for the integration of African economies. control authority may consider that such a general licence within the South Africa is also a member of the an assurance is needed from the European Union’s regulation. The Southern African Customs Union, importing country’s government Union General Export Authorization with Botswana, Lesotho, Namibia and (e.g. a Note verbale) on the use to (EU001) permits exports of some Swaziland. However, the Southern be made of the exported item by the dual-use items but not those in African Customs Union maintains the end-user prior to issue of the licence. Category 0 (nuclear technologies right of its member states to restrict • Project licence – may be issued and materials) to Argentina, Australia, imports and exports. where a substantial project Canada, Iceland, Japan, Republic of involving capital expansion or Korea, New Zealand, Norway, South 3.3 Key compliance repair of a facility would otherwise Africa, Switzerland, Turkey and the USA. There also exists a Community requirements require multiple applications by an exporter; the licence would be General Licence for intra-Community The brief overview presented above normally granted for a specified trade but its application to nuclear shows that the majority of countries period of time. technology is restricted to source engaged in exporting nuclear goods materials (and some special fissile • Global licence – covers goods and services are applying control materials such as low enriched and services that are being lists derived from the NSG, even uranium) and their related technology exported as part of a government- if some, like India, are not able to and software. to-government agreement and participate in the NSG’s meetings. To is issued to the exporter (who a large extent, the definition of what The trade and investment agreement is under contract to one of the items are subject to export controls between the EU and Canada and government parties) on the basis has been standardized globally. This between the EU and the USA – the of a declaration by the exporter provides something of a level playing Trans-Atlantic Trade and Investment through a streamlined procedure. field for the industry, though there are Partnership which is being negotiated differences in interpretation. currently – offer a mechanism to National and regional export control address the technical barriers to trade regimes vary in terms of the types of Differences exist in the way licensing in the nuclear sector in future and licence they are prepared to issue, as is handled – in terms of the types of establish a reciprocal export control can be seen in the Appendix. licence that may be applied for and in regime including a common control terms of the time taken by the export list and list of authorized destinations. Most export control authorities control authority to authorize the The same considerations could apply surveyed in this report do not issue export concerned. The World Nuclear once the Trans-Pacific Partnership general export licences for nuclear- Association survey throws light on comes into force between the USA related items, even though they licensing experience in practice. and its partners (e.g. Australia, do issue such licences for certain Canada and Japan). non-nuclear dual-use items. This Export licences can take one of policy puts the nuclear industry at a several generic forms: Almost all NSG participating disadvantage in comparison with, for countries control nuclear exports • General licence – applies to a instance, the aerospace and defence through the issue of individual broad category of controlled items industries. In a globalized world licences, whereby an exporter is and requires a simple declaration economy transnational companies permitted to deliver a specified item by the exporter for the goods, need to be able to undertake to a single end-user. Some export services, etc., to be exported; technology transfer and move sub- control authorities issue multi-annual it is normally granted under a components and people from one export licences for the export of the streamlined procedure or requires division to another across national same item to the same customer. no prior authorization or even borders. A general licence that Licences for multiple shipments of subsequent notification. allowed a company this freedom to the same item to the same customer • Individual licence – requires an transfer technology, sub-components are also available. application from the exporter for the and people between specified export of defined goods, services, jurisdictions would be very helpful. Re-export of an item after its delivery etc. to a specified destination and/ At the moment Canada and the USA – for further manufacturing work to or an end-user but may be granted are able to offer general licences be performed or assembly or testing

20 – is hampered by an over-reliance on governments that profess to have individual licensing. removed trade barriers between themselves. (This figure excludes the Individual licensing of technology applications made by the exporter’s transfer also deters international many suppliers under their sub- collaboration in tendering, potentially contracts.) reducing the opportunities for obtaining best value in bidding for Greater usage of general licences work and the cross-fertilization of and project licences need not good practice and the diffusion of diminish the depth of information innovation. These barriers have been that governments are required eased to a degree in the USA by the to supply to the IAEA under the general authorization for the transfer Additional Protocol since export of non-sensitive nuclear technology control authorities will continue to the majority of NSG participating to receive such information in the states and to the IAEA. application for a project licence or if a requirement for notification of an Only the USA, among the countries export (or import) has been included surveyed, provides exporters with under a general licence. the opportunity to apply for a single individual licence covering the supply There has been an increasing of a complete reactor (plus the initial tendency for governments to fuel-loading and supply of spare centralize export licensing of all parts), in effect granting a project dual-use technology, goods and licence. In other jurisdictions this services within a single agency type of licence is not issued and and to revise older legislation that so exporters must apply for several mandated responsibility to the main individual licences. For one on- nuclear regulatory body. It is probably going nuclear construction project no accident that those licensing outside the USA this has required the authorities achieving the quickest exporter to make 700 applications response time to export applications and obtain an equal number of are ones where licensing has been import certificates; all of these from centralized within the trade ministry.

21 Good Practice in 4 Compliance

Good practice in export control instances where the State judges compliance by businesses can that broader publicity would be complement the multi-lateral and bi- appropriate. lateral counter-proliferation efforts by 5. Promote the adoption of due- governments. diligence and information sharing within the supply chain and with At its plenary meeting in Prague other business partners within the in June 2013 the NSG discussed boundaries of legitimate protection the measures that constitute good of business and company practice in compliance; the document information. can be found on its website. 6. Incorporate counter-proliferation Exporters and others, such as measures and export control shippers, freight-forwarders, brokers compliance into existing corporate and bankers, it is suggested, should social responsibility statements. undertake the following practices:12 7. Encourage relevant industry-wide 1. Implement internal systems to trade and professional bodies ensure due-diligence checks are to recognize the importance of carried out on potential customers supporting and encouraging the and business partners and the counter-proliferation effort and the goods, software and technology measures set out herein. that they wish to acquire, utilizing public information such as early 8. Foster an open and transparent warning lists, red-flag checklists relationship with appropriate and questionnaires provided by government and regulatory the United Nations, States and authorities. other parties with an interest in supporting the multilateral counter- Adoption of these examples of good proliferation effort, and to consult practice will, in the view of several, with the appropriate government but not all, NSG governments, authorities as necessary. enhance active commercial sector’s support for non-proliferation by 2. Monitor, collate and vet enquiries reducing the risk of inadvertent within the scope of due diligence, supply of controlled items to illicit relating to the acquisition of weapons programs. An internal proliferation sensitive goods, compliance program would normally software and technology. offer a related competency-based 3. Consult government export control training program for personnel, sub- authorities before having any contractors and suppliers. dealings with entities identified as being of proliferation concern The World Nuclear Association has either from public sources, from not yet endorsed these practices corporate monitoring systems although they were discussed or from contact with relevant with the association prior to being competent authorities in states considered by the NSG. Nonetheless themselves. they provide a platform for further 4. Implement best efforts to share dialogue between the industry and information about attempts to the NSG participating governments. procure items for illicit weapons The good practice set out in the NSG of mass destruction programs document provides the basis for with security and other relevant agreeing many of the key features 12 See business partners and others in were satisfied that an exporter’s

22 internal compliance programs was sufficiently robust and comprehensive as to meet the general obligations to safeguard nuclear technology, goods and services, both nationally and internationally, then such companies could be classified as a ‘trusted economic operators’.

Trusted or Authorized Economic Operator status is already available under programs run by the US and EU customs authorities to control security during the transport of goods against theft, fraud and other crime at ports and along international supply chains.13 Since such programs are already being implemented by the customs service of several NSG participating countries, it should be possible to extend the model to provide a more effective system of control over nuclear exports, potentially at a reduced resource cost to both governments and companies. The costs and benefits to companies of gaining a registration could vary considerably and it would be important that participation in this type of program was voluntary.

13 The US Customs-Trade Partnership against Terrorism (C-TPAT) extends to imports not to exports and therefore the requirements for license exception would differ.

23 Good Licensing 5 Practice

Export controls aim to preclude Most NSG participating governments states and unauthorized entities operate an on-line application system from acquiring materials, equipment and in Japan this is integrated into and technology that could be used a single consolidated system for to make a nuclear or radiological customs and port-handling control. weapon. They are not intended to hinder legitimate trade and The export control authority normally exchanges of information or persons. assigns a named case officer to Governments recognize this point handle an application for an export and in many cases have instituted licence. However, in some countries, target response times to applications for example, the UK, the case officer for export licences so as to provide is allocated a case on the basis of greater certainty to the exporter overall workload irrespective of the and avoid unnecessary delay. nature of the goods or technology Good communication between the being exported, whereas in others exporter and the licensing authority an application for the nuclear will assist both parties in assessing sector would be handled by a the proliferation risk attached to the specialist team. The World Nuclear transfer. Inter-agency communication Association’s survey provides is also important, as several no indication on which system is agencies may be involved in export more efficient, but one respondent control, including the customs and stated that the UK system could be border services. improved if case officers received better training. The World Nuclear Association’s survey shows quite a range of It should also be noted that specialist response times for applications. case officers will be better placed to administer a risk-weighted export The fastest response and approval control system. An export licensing times are reported to be achieved system that treats all dual-use items in Japan and the Republic of Korea on the control list as posing a similar (around 15 days). The next shortest level of proliferation risk will tend approval times involve intra-EU to encourage the licensing officials exports, where 30 days seems to to be risk-averse and to give each be typical. application a similar degree of

Summary of responses:

How long does it take to gain an authorization? (calendar days) Equipment, parts Software/ Material and components Technology Dual-use items 15-120 days 15-90 days 10-60 days Items for civil nuclear 15-90 days 15-90 days 30-90 days power stations (sensitive) Items for uranium 90-180 days N/A 90-365 days enrichment, re-processing or heavy water (very sensitive) An additional 12 months are required if a government-to-government assurance is needed

24 scrutiny. But in such a system the official does not need to possess specialist technical expertise and the profile for the job can be downgraded.14 Moving to a risk- weighted approach will demand more expertise from the officials, but it will also allow them to concentrate their attention on those transactions that potentially pose a higher risk.

Almost all respondents highlighted the long delays involved in securing a government-to-government assurance on the ultimate recipient’s use of the technology, goods or services where that is called for.

One respondent from Germany suggested that the approval time for non-nuclear dual-use items was quicker than for nuclear dual-use items. Since the questionnaire was concerned with nuclear exports this comment cannot be verified. But the likelihood is that nuclear exports are indeed examined more thoroughly than other types of dual-use exports. The finding fits into the general perception within governments that ‘nuclear’ poses risks that are not found in other strategic industries.

14 A lower level post will look like a cheaper option for the public administration but it passes on a higher cost in terms of delay to the private sector as the non-specialist case officer must seek advice on technical matters from officials in other government agencies.

25 Developing Regulator- 6 Industry Cooperation

Fuller collaboration between markets. Governments have more industry and government is critical resources than companies to monitor to strengthening the strategic export events and trends around the world control regime and nuclear security but lack specialist knowledge of more generally. The ‘triple lock’ on industry sectors and technological nuclear exports implies a shared developments. The resources for responsibility for safeguarding investigating a particular end-user or the technology from misuse, to potential weak links in the supply and which both industry and the public logistical chains are always going authorities can contribute. For the to be constrained and governments industry ‘compliance’ implies the must be prepared to provide existence of clearly communicated guidance on where they consider requirements on what must be the risks lie in relation to specific done and what types of activity destinations and end-users (who may are prohibited. From the viewpoint be hiding behind ‘front companies’). of the export control authority, an application for an export licence A related issue is that the method needs to be accompanied by used by export control authorities sufficient information to enable a to determine the degree of risk is determination to be made on the not clear to exporters. Canada, for basis of the proliferation risk involved. example, provides general export Both parties require information to be licences for nuclear technology, able to: goods and services to a number of eligible destinations. There are also • Screen customers to check if they banned destinations, as a result are legitimate end-users or agents of UN Security Council mandates. of a legitimate end-user; But it appears that certain other • Understand the range of potential destinations are worthy of greater applications of the product and to scrutiny, even when the country ‘red flag’ proposed transactions is a fellow NSG government and where the end-use is unclear; signatory to the NPT. In such cases, • Have confidence that the supply the export control authority may and logistics chain is secure request that the foreign ministry against diversion; obtain an end-user certificate that has been certified by the government • Identify suspicious enquiries, concerned, which is usually a endorsements and paperwork; long-drawn out process unless a • Have confidence that an exporter’s nuclear cooperation agreement is in internal compliance program is place. The implication is that NSG adequate to undertake the above participating governments do not activities. apply the same level of export control in practice. Mutual recognition that Assessing the risk of diversion or another government’s controls on misappropriation is central to the the re-export of strategic imports are licensing process and will depend adequate is patchy. upon the quality of information available to the exporter and Thus there is no accepted calculus to the export control authority. for risk assessment as such; the Companies can be expected to risk is adduced, it appears, from be knowledgeable about their intelligence that arouses suspicion customers and suppliers but may about an organization’s activities lack information about the overall or from geo-political factors. Little situation pertaining in unfamiliar advice appears to be offered by

26 governments on how companies technology transfer and IP theft, could in practice rate the proliferation money laundering, etc. This, in risk posed by their products in turn, calls for close and continuing relation to potential destinations and communication between industry and end-users. government over the size and nature of proliferation risk. Furthermore, there needs to be much closer liaison between the export A number of further points were control function of government and raised by World Nuclear Association the diplomatic and security wings. members in the survey responses. The latter functions appear unaware Some areas on the NSG trigger that the long delays experienced list are treated by export control in obtaining government-to- authorities as being indicative rather government assurances have than definitive, according to several detrimental effect on cross-border respondents. This has led to some cooperation in nuclear new differences in interpretation most build and the refurbishment of notably between Germany and the existing nuclear power plants. The UK/France. The UK and France tend process of checking whether such to subject more items to control than assurances are necessary needs to does the German export control be streamlined and the agreement authority. It is also claimed that that of what should be fairly standard US rules under the Code of Federal assurances, particularly between Regulation Part 810 are unclear.15 NSG member countries, should be afforded far greater priority. The The policy on electronic transfers of improvement of the processes technology needs to be examined involved in inter-governmental at international level to scope out cooperation in export control could a more consistent and coherent be built upon the closer cooperation strategy – this is particularly so on being achieved between national issues such as: server location security services in combatting (including cloud computing); use international terrorism, illicit trafficking of laptops, hand-held devices, etc., and customs fraud. The regular abroad; access by third party IT bilateral exchange of information support services and encryption of between countries on exports-imports material. An international internal is another area where cooperation compliance standard would assist between NSG participating states is companies evaluate the degree of possible. security provided by their procedures for data storage on such devices Thirdly, the application of the and could offer the reassurance ‘catch-all’ clause within the export necessary to government agencies licensing regime will not be effective and the international community. It without a robust and comprehensive could permit authorized company internal compliance program at employees, such as sales personnel exporting companies. The degree of or maintenance technicians for protection provided by the ‘catch-all’ example, to access controlled clause will only be as good as the information and data remotely degree of due-diligence exercised while travelling between eligible by the company through its internal destinations. compliance program to ensure that its supply chain and customer Improved communication between 15 Pillsbury Winthrop Shaw Pittman, 2012, base is secure – against illicit industry and governments is central Report for the Nuclear Energy Institute on trafficking of materials, unauthorized to the counter proliferation effort. The Nuclear Export Controls.

27 advice on good practice issued by 2012 recognized the need to some NSG governments provides a integrate safety and security and framework for establishing the scope to strengthen dialogue between of responsibility borne by industry governments and industry. The IAEA but this must be complemented by International Conference on Nuclear better communication within and Security in July 2013 noted the between governments and between potential for industry to contribute governments and industry. There is to develop, foster and maintain a also a role for communication at the nuclear security culture.17 At the international level given the fact that event, the World Nuclear Association the nuclear industry is a global one. called for: • Greater harmonization between In recent years there have been states in setting their security efforts made to reach out to the regulations, thus helping to industry by some NSG participating remove the challenge for industry governments and the United of concurrent compliance with Nations Office for Disarmament differing regulations; Affairs (UNODA). These outreach • A stakeholder forum involving events have enabled the nuclear international trade associations, industry and other sectors such as international standards aerospace, chemicals, biotechnology, development organizations, and transportation, logistics and finance inter-governmental organizations to to discuss compliance and due- review and exchange information diligence issues with the international on good practice in the field of community.16 Amongst its findings nuclear security; UNODA noted: • A standing invitation for • There is broad agreement among representative international companies that, despite business business associations to observe competition, non-proliferation- and make representations to the related information-sharing is in the IAEA Nuclear Security Guidance interest of all private sector actors; Committee on the development of • There is a need to enhance a nuclear security implementing and non-proliferation culture within technical guides; organizations and across industry • The encouragement of industry sectors; outreach and dialogue by • Industry requires clearer, regulatory bodies and state standardized and harmonized agencies of IAEA member states. legislation, particularly regarding export control lists, to facilitate The World Nuclear Association hopes compliance without hampering that the international community business procedures; can find a way to establish a forum • There was broad agreement that for industry-regulator cooperation cooperation between industry in the export control and counter- 16 See Report to the UN Security Council on the and regulators needs to be further proliferation area, which will involve ‘Wiesbaden Process’ of 23 December 2014 enhanced. the relevant inter-governmental to be found at . security held in Seoul in March UNODA. 17 Ministerial Statement issued at the conclusion of the IAEA Nuclear Security Summit on 5 July 2013; to be found at .

28 Streamlining the Export 7 Control Regime

The safeguards regime on nuclear In addition, the current strategic facilities, technology, equipment export control regime as it applies and materials overseen by the IAEA to nuclear technology, goods and is the backbone of the international services is out of step with the counter-proliferation system. One procedures applied in some other element of the regime is the control sectors, such as defence equipment. of exports and imports by national This results in the generation of governments, which are obliged multiple applications for individual to report specified transfers to export licences that consumes the IAEA. Governments are also management time unnecessarily concerned to ensure that recipients and creates a higher workload for in importing countries do not misuse government officials, which may the technology, equipment and detract from their efforts to assess materials, and this obligation has higher risk transactions. been strengthened by the adoption of Security Council Resolution 1540. Streamlining the export control The World Nuclear Association system is essential for effective recognizes that export control compliance. Companies must be compliance is part of the overall able to direct their efforts to those system to secure nuclear technology areas where a proliferation risk exists from misuse. and be relieved of the administrative, management and investigative But many governments appear to burden of compliance with a licensing have added an unnecessary layer process where the proliferation risk of scrutiny to the licensing process is already controlled by like-minded given the fact that in many instances governments. The adoption of a IAEA safeguards on nuclear facilities risk-weighted approach to assessing already exist. In principle, exports proliferation will enable companies to recipients whose facilities and export control authorities are under safeguards should to deploy their resources more not be considered a significant effectively. A model risk-weighting proliferation risk. To be sure, exports approach has been proposed by to unsafeguarded facilities – in the reactor vendor and nuclear fuel states that have not acceded to supplier AREVA. Figure 2 shows an the NPT or, say, to nuclear power adapted version of this proposal. plant construction sites – must be checked out thoroughly. In all cases A nuclear power reactor poses a the crucial factor is the status of the relatively low technology risk with recipient: does the recipient operate respect to proliferation. The same a safeguarded facility or not? In is true for components, spare parts, the case of exports associated and maintenance or repair services with the construction of a nuclear for an existing nuclear facility that is power plant a government will subject to IAEA safeguards. Therefore, wish to assure itself that the plant under a risk-based approach the in question will be placed under export of components and complete safeguard on its commissioning. power reactors should be unrestricted They will also want to check out the within free trade areas like the EU, status of intermediate recipients subject notification at the time of and system integrators, who may shipment. It should also be possible be assembling the sub-modules of to export components under general the planned plant from components authorization, without a prior licence, to arriving from varying locations and another country that is a participating suppliers. state in the NSG, subject to notification

29 concentrations, suitable for some Technology Risk nuclear explosive devices, and there is thus greater justification for licensing each transaction through an individual application for export. A Reprocessing Individual Licence risk-based approach would suggest Enrichment that individual applications for export Exports licences should be applied even General Banned between NSG participating states to Nuclear Fuel or maintain a strong level of confidence Project between states that they remain Power Licence committed to the goals of the Nuclear Reactors Notification Non-proliferation Treaty. Nuclear Facility In the case of countries that are not Components participating in the NSG and which Free Destination Non- have not ratified the NPT, all exports Trade NSG Embargoed Risk NPT of nuclear technology, goods and Area services should be subject to prior Facility under licensing on a case-by-case basis. IAEA Safeguards States under a trade embargo relating to nuclear technology are, of Figure 2: Model for a risk-based export control regime course, subject to a ban on relevant exports. being provided to the strategic goods Nuclear fuel assemblies are control authorities of the exporting and composed of fissile material and An issue could arise from the importing countries concerned. therefore pose a greater proliferation possibility that a recipient of an risk than a nuclear reactor itself exported controlled item might in Thus companies engaged in (which cannot operate without turn re-export this. But much of international trade in nuclear fuel). However, as nuclear fuel is the international trade in nuclear technologies, good and services normally made of low enriched technology, goods and materials should be able to obtain a general uranium it should not be subject to takes place between NSG licence to undertake their business in a requirement for licence approval participating states. Therefore, in accordance with the reporting (and prior to shipment within the NSG, principle, these governments operate monitoring) conditions of the licence, as these states have accepted a system of export control already. where the destination for a controlled IAEA monitoring under the agency’s Where this is not the case, the export is to another NSG participating safeguards arrangements. Thus exporting country and the importing state. A project licence should be there should be general authorization country may conclude a nuclear required from the export control for low-enriched fuel exports with a cooperation agreement (known as a authority of the state in which the simple reporting requirement to the “123 Agreement” in the USA), which reactor vendor is domiciled for the strategic goods control authorities commits the parties to peaceful supply of a complete (or substantially of the countries involved in the collaboration in using nuclear complete) nuclear reactor to another shipments. technology under IAEA safeguards. NSG participating state. There will often be a pre-existing Reprocessing technology is level of government-to-government If the exporter was certified (by the associated with the highest assurance regarding the general customs service or an independent proliferation risk since it involves usage of nuclear technology. body) as operating a robust and isotope separation from used nuclear comprehensive internal compliance fuel that could potentially be diverted Extending the trusted economic program, the export control authority to military applications. Similar operator program to embrace export would have the assurance that the considerations apply to enrichment control compliance also has the requisite notifications were being technology, which could be used potential to strengthen the overall provided. to enrich uranium to higher fissile strategic export control regime. As

30 the customs service already audits operator status to companies and companies on their compliance would bolster confidence in the with other aspects of customs and risk-weighted model outlined above. border control, the extension of this (An export control authority would type of program to cover export not be expected to automatically licensing compliance could prove accept certification to the standard cost-effective in many cases, though as sufficient basis to award trusted not all companies would wish to economic operator status and would take this up. Such an arrangement be free to exercise its discretion in should facilitate transactions taking this regard.) place between units within the same company or industrial group and A number of other companies between companies undertaking whose products are subject to repeat business. the obligations arising from SC 1540, along with the World Nuclear The Stimson Center, a US-based Association, are seeking to define think tank focused on international the common principles of the export peace and security issues, has control regime and to clarify, simplify suggested that industry-driven and standardize the interpretation of consensus standards could the existing corpus of regulations and be developed to demonstrate guidance governing dual-use goods. compliance with international principles and guidelines and A compliance system that core national requirements.18 The strengthens the capability of the International Organization for business community in preventing Standardization (ISO) has developed proliferation will provide greater a series of standards for risk assurance among governments management (ISO 31000 series) and that the strategic export control a standard for internal compliance regime is working effectively. programs relating to dual-use goods Defining an international standard and strategic technologies could be for compliance related to dual-use developed within this framework. goods and strategic technologies Such an exercise would have to will take several years. Nevertheless, involve a range of industries, not embarking upon a common track to simply the nuclear sector. Under strengthening and streamlining the the ISO system, organizations international export control regime, are certified to a standard by an with an industry-driven road map independent accredited auditor. An endorsed by the inter-governmental international standard would provide organizations (e.g. IAEA, NSG and the benchmark for export control UNODA), would be an excellent authorities to award trusted economic starting point.

18 Stimson Centre, 2015 (forthcoming), Managing across Boundaries Initiative: Proposal for the development of voluntary consensus standards for nuclear safety and security. The proposal is intended to support the goals of the Nuclear Security Summit.

31 Summary of 8 Recommendations

Nuclear export and import licensing to their potential to contribute to has tended to focus on what is proliferation (some governments to be controlled, that is, upon the have already moved in this items on the control list. But, in direction); principle, if the recipient is bone • Extend the remit of trusted or fide, then, for many controlled items authorized economic operator the export in question should not programs run by the customs pose a proliferation risk and could service to embrace export control be licensed routinely. The degree of compliance; scrutiny of an application should be • Make greater use of general exercised proportionately. and project licensing to reduce the volume of applications and Drawing upon this examination of individual licences issued; good practice and the survey of World Nuclear Association member • Reduce the delays in obtaining companies, it is proposed that the government-to-government nuclear and similar industries should: assurances; • Define the core elements for a • Examine the policy on electronic harmonized and non-distortive transfers of technology to scope export control regime and prepare out a more consistent and coherent a road map for its implementation export control strategy. by industry and the export control authorities; Governments, inter-governmental • Develop an international standard organizations and industry should: of export control compliance • Strengthen their communication relating to dual-use goods and on rating the size and nature of strategic technologies that meets proliferation risk from technologies the expectations articulated in and on identifying illicit Security Council Resolution 1540 procurement; on countering proliferation and • Promote good practice in export IAEA and NSG guidance, and control licensing and compliance against which performance and through international, regional and competence may be assessed national outreach; objectively; • Agree an industry-driven road map • Embody the practices described for streamlining the international in the statement on good practice export control regime. in compliance issued by some NSG participating states into their It is evidently important for internal compliance programs and companies involved in the nuclear into such an international standard. sector to apply with due diligence their best efforts to integrate safety NSG participating governments and security objectives into their should: operations and procedures. Effective • Adopt a risk-weighted model compliance with export controls for strategic export controls and is part of this effort to maintain rate control list items according international and national security.

32 Appendix The Export Control Survey and Results

In 2013 the World Nuclear Association surveyed its members with the following questions on experiences of export control:

1. What is the export control authority in your country?

2. Where can you find out information about export controls?

3. How do you find out that an item requires an export licence?

4. Have you found that countries interpret the Dual-Use list in different ways? If yes, please give examples.

5. How do you know which type of licence e.g. open, global, individual, your export control authority would allow you to apply for?

5.1 Does your country provide a specific export licence for a) spare parts; b) intra-company exports?

5.2 Is it possible for your company to apply for a long-term export licence, for example, for a long-term project?

6. Please describe the process for acquiring an individual or global licence or equivalent?

6.1 What is the process for completing an application?

a) Is there an application form? Yes   No

b) Is the application form available electronically? Yes   No

c) Where can the application form be found?

d) What information needs to be included in an application?

6.2 What is the process for submitting an application?

a) Can this be done online? Yes   No

b) Do you receive an acknowledgement from the Yes   No export control authority?

c) Do you receive an indication of the time it will take to approve the application? If so, what timescale is normally given?

6.3 Does the export control authority allocate a specific person to deal with your application?

6.4 Please describe the procedure used by the export control authority to resolve questions or obtain clarification

6.5 Does the export authority provide any explanation if a licence is refused or issued with conditions?

33 7. How long does it take to gain an authorization? (~weeks/months)

Equipment, parts Software/ Material and components Technology Dual-Use Items Items for civil nuclear power stations (sensitive) Items for uranium enrichment, re-processing or heavy water (very sensitive)

8. Please describe the process for registering to use a general licence. Please set out the conditions attached to the general licences you have registered to use

9. Importing a) Have you imported items that were subject to Yes   No another country’s export controls? b) Did you require a licence to import such items? Yes   No c) If yes, please provide information on the import licensing process you have to follow?

10. Re-export Controls a) Have you had to go back to the original licencee in Yes   No order to re-export goods or technologies to a third country? b) If so, which countries were involved? c) What was the process? d) Were there any difficulties?

11. What are the three main factors that can create complications when applying for an export licence?

12. Are there any actions your company thinks that World Nuclear Association should pursue to try and simplify and/or streamline the process of nuclear related export controls? a) Within the World Nuclear Association? b) With individual governments? c) With the Nuclear Suppliers Group? d) With other organisations (please specify)?

13. Are there any further issues surrounding nuclear related export controls and the licensing process for either the physical exports of equipment, materials, electronic transfers of technology, or any solutions you might find useful and would like to mention?

34 Multiple Multi-shipment: Yes Multi-shipment: Yes in the case of same end-user Multiannual: Yes Types of Multiple Licence Available Types Project General: No Project: No General: No Project: No General: No Project: No General: No Project: No The requirement for all other approvals and information related to the export be in place prior to granting of the Export Licence taken to obtain the Time above Limited capacity within government to expedite the required actions The timeframe Control by customs Return of documents from customs and a verification of delivery causes delay Harmonization of standards and interpretations of those standards Determining what classification product/ technology fits under in the Export CNSC and DFAIT guides Cycle time for clarification with the export authority Key Issues Key 1. 2. 3. 1. 2. 3. 1. 2. 3. Allocated Licensing Official Yes and face E-mails to face meetings resolve issues as required Yes Communication through mail, letters or phone Yes and phone E-mail communication Yes Letters, e-mails or phone calls In need of contact. Licensing Processing Time 3 months for sensitive 3 months+ for very sensitive 15 days for non- sensitive Dual-use material: 6 weeks to 2 months Open policy countries: standard 10 working days Other countries: 8 weeks Dual-use items: 30 days Others depend on the government- to-government assurance On-line Licensing Yes No Yes Yes Ministry of Resources, Energy & Tourism Defence Export Control Office, Department of Defence Trade Controls and Trade Barriers Technical Bureau of the Department of Foreign and Affairs, Trade Development Canadian Nuclear Safety Commission State Office for Nuclear Safety (SONS) – nuclear items Ministry of Industry and (MIT) – all dual- Trade use items Licensing Authority 1. 2. Ministry of the Brussels- Capital Region 1. 2. 1. 2. Summary of Survey Results Country Australia Belgium Canada Czech Republic

35 Multi-shipment: N/A Multiannual: Yes (up to 2 years) Multiple Multi-shipment: Yes Multi-shipment: Yes General: No Project: No Types of Multiple Licence Available Types Project General: No Project: No General: No Project: No Exchange of note verbale (government to government assurance) sometimes takes a ridiculous amount of time when compared to the rest of the export authorization procedure Deciding, when it is necessary to have export licence (especially technology transfers) Mistakes in the application resulting from misunderstanding with suppliers and customers The licensing process for low risk exports take too long and require significant administrative effort Customer’s difficulties in providing the end-user Statement Duration of the exchange diplomatic notes required in Germany it takes for the Inter- Time agency Export Committee to consider applications for Category 0 to get the end-user- Time certificate from the customer. Multiple licences required for one project 1. 2. Key Issues Key 1. 2. 3. 1. 2. 3. 4. Allocated Licensing Official No. Telephone conversations or e-mail Yes. Yes. Questions are transferred electronically via application BAFA’s system (ELAN). Applicant’s answers are loaded into the ELAN system as a pdf file 1-2 weeks If a note verbale is required several months Licensing Processing Time 6-12 weeks Between 6 weeks and 9 months for nuclear goods (2-4 weeks for intra- sensitive EU). Very materials: up to 12 months. 4 months for nuclear dual-use items to non-EU countries (4 weeks intra-EU). 4-6 weeks (third countries) for non-nuclear dual- use items On-line Licensing No Yes Licensing Authority Service des Biens à Double Usage (SBDU) Ministère du Redressement Productif Ministry for Foreign Affairs Ministry for Foreign Bundesamt für Wirtschaft und Ausfuhrkontrolle (BAFA) France Country Finland Germany

36 Multiple Multi-shipment: under certain Yes conditions ( e.g. an internal compliance program for a Bulk Export Licence) Multiannual: Yes Multi-shipment: Yes Multiannual: No (except for technology transfer agreements) Types of Multiple Licence Available Types Project General: No Project: No General: Yes General: Yes for dual-use items; No for ‘trigger list’ items Project: No Diplomatic process which occurs in the form of an exchange of assurances/ notes verbale is required before an application can be made for an export licence and is required in every export licence application No open general licence It is difficult to know if the export needs a licence Preparation for enormous materials to submit METI and complicated and time- consuming procedures The time for processing of nuclear related export controls where re-export is undertaken Differing interpretation of the classification of items Electronic transfers Technology Business travels with computer Correct information on the end-use statement Key Issues Key 1. 2. 3. 4. 1. 2. 1. 2. 3. 4. Allocated Licensing Official Yes Yes Phone calls and e-mails in if need of further contacting Yes The application of export licence is automatically assigned to personnel in charge based on the types of goods. phone calls E-mails, or personal visits in need of further contacting Yes Communication is by letter and phone Licensing Processing Time 2-4 weeks If a government- to-government assurance is needed then 3-4 months Within 15 days (excluding days of additional technical evaluation and an arrangement with the related administrative agency or field survey when needed) Dual-use: Standard 1 month On-line Licensing Yes The NACCS (Nippon Automated Cargo and Port Consolidated System) is an on- line system Yes No Swedish Safety Radiation Authority (SSM) for Category 0 Swedish Nuclear Inspectorate Power (SKI) Inspectorate of Strategic Products (ISP) Swedish Agency for Non-Proliferation & Export Control Licensing Authority Security Export Licensing Control Division, Trade Department, Ministry and Trade of Economy, Industry Ministry of Trade, Industry Ministry of Trade, former Ministry & Energy, of Knowledge & Economy) Strategic Korea YesTrade, Institute Nuclear Trade Safety & Security Commission 1. 2. Country Japan Republic of Korea Sweden

37 Multiple Multi-shipment: Yes Multiannual: Yes (up to 5 years) Multi-shipment: for selected Yes destinations Multiannual: for selected Yes destinations (up to 5 years) Types of Multiple Licence Available Types Project General: No Project: No General: Yes Project: Yes Timing of Receipt and Timing willingness of End-User to provide End-User Undertakings Government to Assurances (timing) Lack of available technical documentation to support application (security-related issues) Agreeing a satisfactory description of technology to be transferred during company-to-company negotiations that is sufficiently descriptive for the export licensing authority and the importing state on the one hand and is not so specific that it provides no room for expanding discussions on the other Case officers may lack sufficient knowledge about nuclear technology Foreign country approvals Foreign may take months few complications Generally, with getting or renewing an export licence Key Issues Key 1. 2. 3. 4. 5. 1. 2. Allocated Licensing Official Yes A case worker. Communication through PDFs through SPIRE Yes Many licensing agents available, one gets allocated to an available one Licensing Processing Time Sensitive nuclear technology & items: 1-3 months but up to 18 months for non-EU destinations; and 4-8 weeks within the EU Dual-use nuclear equipment, parts & components: 20-60 days Very sensitive Very materials: 3-6 months, depending on end- user country On-line Licensing Yes Yes Nuclear Regulatory Commission Bureau of Industry & Department of Security, Commerce National Nuclear Security Administration, Department of Energy Licensing Authority Export Control Organization, Department for Business, Innovation and Science 1. 2. 3. Country United Kingdom USA

38

World Nuclear Association +44 (0)20 7451 1520 Tower House www.world-nuclear.org 10 Southampton Street [email protected] London WC2E 7HA United Kingdom

The World Nuclear Association is the international organization supporting the people, technology and enterprises that comprise the global nuclear energy industry.

Our membership encompasses uranium mining, conversion, enrichment and fuel fabrication; reactor vendors; major nuclear engineering, construction, and waste management companies; and the majority of the world’s nuclear generation. Other members provide international services in nuclear transport, law, insurance, brokerage, industry analysis and finance.

This report maps the strategic export control landscape and identifies examples of good practice by suppliers and export control authorities. It proposes a number of measures for streamlining licensing and for improving communication with the industry.

Good Practice in the Compliance and Licensing of Nuclear Exports © 2015 World Nuclear Association. Registered in England and Wales, company number 01215741