02-29513. Protocol Additional to the Agreement Between the United States of America and the International Atomic Energy Agency Concerning the Application of Safeguards in the United States of America (short title “U.S. Additional Protocol”)

AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Notice of inquiry.

SUMMARY:

On May 9, 2002, the President transmitted the Protocol Additional to the Agreement Between the United States and the International Atomic Energy Agency (IAEA) for the Application of Safeguards in the United States of America (hereinafter referred to as the U.S. Additional Protocol), signed by the United States in 1998, to the Senate for its advice and consent to ratification. The requirements of the U.S. Additional Protocol would supplement the existing Agreement Between the United States of America and the International Atomic Energy Agency for the Application of Safeguards in the United States (U.S.-IAEA Safeguards Agreement) by expanding the declaration, reporting and on-site access requirements of the U.S.-IAEA Safeguards Agreement to capture elements of the domestic nuclear fuel-cycle additional to those covered by the present U.S.-IAEA Safeguards Agreement. These elements include mining and milling of nuclear materials, nuclear-related equipment manufacturing, nuclear-related imports and exports, nuclear fuel cycle research and development not involving nuclear material, and forms of nuclear material not currently subject to the U.S.-IAEA Safeguards Agreement. The Department of Commerce, in consultation with other Executive Branch agencies, is working to reach an understanding of the universe of commercial locations that would be affected by implementation of the Additional Protocol. This Notice of Inquiry is part of an effort to collect information to estimate the potential impact that the implementation of the U.S. Additional Protocol will have on U.S. industry and to gain a better understanding of the universe of locations that may be affected by implementation, should the Additional Protocol enter into effect.

DATES:

Comments are due on or before January 21, 2003.

ADDRESSES:

Written comments (four copies) should be submitted to Willard Fisher, Regulatory Policy Division, Office of Exporter Services, Bureau of Industry and Security, U.S. Department of Commerce, 14th Street and Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230. In order to meet the due date for comments, single copies may be faxed to [phone], provided that you follow up by submitting the appropriate number (four copies) of written comments.

FOR FURTHER INFORMATION CONTACT:

For questions on the U.S. Additional Protocol, contact Brandon Williams, Treaty Compliance Division, Office of Nonproliferation Controls and Treaty Compliance, Bureau of Industry and Security, U.S. Department of Commerce, Phone: [phone]. For questions on the submission of comments, contact Willard Fisher, Regulatory Policy Division, Office of Exporter Services, Bureau of Industry and Security, U.S. Department of Commerce, Phone: [phone].

SUPPLEMENTARY INFORMATION:

Background

The requirement for a comprehensive international safeguards system to prevent the spread of nuclear weapons was first established by the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). The NPT was signed by the United States on July 1, 1968, and entered into force on March 5, 1970. The treaty banned nuclear weapon states (NWS) from transferring nuclear weapons to non-nuclear weapon states (NNWS) or assisting NNWS to acquire such weapons, and stipulated that each non-nuclear weapon State Party to the NPT would undertake to accept safeguards as set forth in an agreement to be negotiated and concluded with the IAEA. Although the NPT required the establishment of safeguards, the formulation of detailed provisions for a model NPT Safeguards Agreement was not completed by the IAEA until 1971. These safeguards were designed to provide assurance that the nuclear material of States Parties which had not already developed nuclear weapons would not be diverted from peaceful use to making nuclear weapons.

During deliberations of the NPT, several major industrialized nations expressed concern that the absence of requirements for IAEA safeguards in NWS would place NNWS at a commercial and industrial disadvantage in developing nuclear energy for peaceful purposes. Specifically, the NNWS were concerned that application of safeguards would interfere with the efficient operations of their commercial activities and would possibly compromise industrial and trade secrets as a result of access by IAEA inspectors to their facilities and records. In order to allay these concerns, the United States voluntarily offered in 1967 to permit the IAEA to apply safeguards to all nuclear facilities in the United States except only for those associated with activities of direct national security significance. Since then, the other four NWS recognized under the NPT (China, France, the Russian Federation and the United Kingdom) have also agreed to subject all or part of their civil nuclear activities to IAEA safeguards.

The U.S.-IAEA Safeguards Agreement was signed on November 18, 1977, and entered into force on December 9, 1980. At that time the United States submitted to the IAEA a list of more than 200 eligible facilities for which safeguards could be applied if selected by the IAEA. This list included facilities licensed by the NRC and eligible Department of Energy facilities. The United States has added additional facilities to the eligible facilities list since that time. Under the U.S.-IAEA Safeguards Agreement, about a dozen commercial facilities have been selected for inspection since 1980.

Although the U.S.-IAEA Safeguards Agreement is based on the model safeguards agreement developed by the IAEA, the terms of the U.S. offer and the obligations of NNWS party to the NPT differ in several respects. First, the U.S. offer excludes nuclear facilities associated with activities of direct national security significance and does not contain any limitations on use of nuclear material by the United States. Also, the United States decides which U.S. facilities are eligible for safeguards and the IAEA decides which eligible facilities will be selected for application of safeguards, although the IAEA need not select any. Furthermore, the United States has made separate commitments to provide to the IAEA, for safeguards purposes, information on exports of nuclear material.

In the aftermath of the 1991 Persian Gulf War, international inspectors determined that Iraq had been engaged in a clandestine nuclear weapon development program at locations not directly subject to IAEA safeguards, despite inspections. The international community determined that the safeguards system needed to be strengthened and negotiated a model Additional Protocol to amend existing bilateral safeguards agreements. The model Additional Protocol requires enhanced information collection and access to provide IAEA inspectors with greater ability to detect clandestine nuclear activities in NNWS, and covers almost all of a state's nuclear fuel cycle. The United States, as a NWS party to the NPT, is not obligated to accept IAEA safeguards on its nuclear activities. However, the United States voluntarily signed the U.S. Additional Protocol on June 12, 1998. By submitting itself to the same safeguards on all of its civil nuclear activities that NNWS parties to the NPT are subject to, the United States intends to demonstrate that adherence to the model Additional Protocol does not place other countries at a commercial disadvantage. In this Additional Protocol, the United States accepts all of the measures of the Model Protocol except where their application would result in access by the IAEA to activiites with direct national security significance to the United States or to locations or information associated with such activities.

On May 9, 2002, the President transmitted the U.S. Additional Protocol to the Senate for its advice and consent to ratification. The U.S. Additional Protocol will not enter into force until the United States notifies the IAEA that the statutory and constitutional requirements for entry into force have been met. These requirements include ratification, implementing legislation, and issuance of regulations.

Declarations submitted under the U.S. Additional Protocol would provide the IAEA with information about additional aspects of the U.S. nuclear fuel cycle, including mining and milling of nuclear materials, nuclear-related equipment manufacturing, nuclear-related imports and exports, research and development not involving nuclear material, and other nuclear material activities not currently subject to the U.S.-Safeguards Agreement. There are no routine inspections under the Additional Protocol, but IAEA inspectors may be provided access (referred to as “complementary access”) to the U.S. nuclear fuel cycle where there is a question or an inconsistency about the completeness or correctness of the U.S. declaration, which could relate to declared or undeclared industrial locations. Access to industrial locations is predicated upon an IAEA request for clarification of a declaration and may be exercised by the IAEA with a minimum of 24-hours notice. As with the U.S.-IAEA Safeguards Agreement, the IAEA would not be required to seek access to any U.S. locations. In carrying out responsibilities delegated to it for implementation of the U.S. Additional Protocol, the Department would apply a philosophy of ensuring compliance while minimizing intrusion and the burden on commercial activities.

Discussion and Request for Comments

The U.S. Additional Protocol is based on the model Additional Protocol (INFCIRC/540) which is organized into eighteen different Articles. INFCIRC/540 is available on the IAEA website (www.iaea.org). Article 2 describes the information required in a U.S. declaration to be submitted to the IAEA and in periodic reports and updates. The Department recognizes that some of this information is already being reported by commercial entities to U.S. Government agencies under U.S. Government regulations but is seeking to gain a better understanding of the number and type of locations that may be impacted by the declaration requirements of the U.S. Additional Protocol in order to refine estimates of the potential burden on U.S. industry and design future information collection systems. Where practical, the intent is to avoid redundancy in reporting required under an existing legislative mandate. However, in some of these instances, the Additional Protocol may require more information than is currently being provided, such as mining capacity or the scale of operations of equipment manufactured but not exported. Such cases would require additional submission of information. Also, for example, in cases where the data has been previously collected by voluntary survey, submissions to the Department would be mandated under the U.S. Additional Protocol. Data submissions related to activities such as public and private research and development are expected to comprise predominantly information previously unreported under any existing regulatory authority. There are some instances, such as the U.S. right to exclude activities or locations with direct national security significance under the U.S. Additional Protocol, where the model Additional Protocol, designed for NNWS, does not have relevance in the United States. This notice takes those instances into account.

It is the intent of the Department, by publishing this Notice of Inquiry, to gauge the scope of the impact of the Additional Protocol, both in newly reportable entities and additional impacts on those already reporting similar information under existing regulations. Information received will be used by the Executive Branch agencies who are given responsibility to implement the Additional Protocol a better understanding of the universe of commercial locations that will be affected. It would be most useful for the Department to receive comments on: (1) Estimated numbers of commercial locations that would be subject to reporting under the specific declaration elements and (2) whether this information is already reported to U.S. Government agencies and if so, to whom. For the purpose of this Notice of Inquiry, commercial locations are those not owned by or leased to the U.S. Government. The Department also welcomes discussion regarding: (1) Any concerns with the potential release of proprietary or confidential business information; (2) what information should not be subject to disclosure; (3) the type of information that could best satisfy the Additional Protocol requirements; (4) redundancy of reporting and data requirements; (5) the degree to which impacted companies would have new reporting requirements; and (6) the burden, including cost estimates, represented by requirements for companies to collect and report new information both initially and for annual updates. The specific elements to be reported to the IAEA in the U.S. declaration and a general discussion of the expected sources of this information are described below.

1. Research and Development Activities (Public and Private)

Article 2.a(i) of the model Additional Protocol requires a general description and information specifying the location of nuclear fuel cycle-related research and development activities not involving nuclear material, carried out anywhere, that are funded, specifically authorized or controlled by, or carried out on behalf of, the government of the United States. Article 2.b(i) requires this information for nuclear fuel cycle-related research and development activities not involving nuclear material that are not funded, specifically authorized or controlled by, or carried out on behalf of, the government of the United States. General description requirements are expected to include brief information regarding the fuel cycle stage to which the project is related, title of the project, the project number or other unique designation, description of work being performed, objectives of the project, degree of project completion, and intended application of the project results.

For the purpose of the Additional Protocol, “nuclear material” is defined as any source or special fissionable material (i.e., enriched, natural, and depleted uranium and thorium—processed beyond the raw ore stage; i.e., mill products and subsequent materials) it does not include ore or ore residue. “Nuclear fuel cycle-related research and development activities” are defined in the Additional Protocol as those activities which are specifically related to any process or system development aspect of any of the following: conversion (from one chemical species to another) of nuclear material, enrichment of nuclear material, nuclear fuel fabrication, reactors, critical facilities, reprocessing of nuclear fuel, processing (not including repackaging or conditioning not involving the separation of elements, for storage or disposal) of intermediate or high-level waste containing plutonium, high enriched uranium or uranium-233.

Declaration requirements exclude activities related to theoretical or basic scientific research or to research and development on industrial radioisotope applications, medical, hydrological and agricultural applications, health and environmental effects and improved maintenance.

2. Operational Activities of Safeguards Relevance

Article 2.a(ii) of the model Additional Protocol requires information identified by the IAEA on operational activities of safeguards relevance at facilities and locations outside facilities where nuclear material is customarily used. In the United States, this element will apply only at nuclear facilities where the IAEA is applying safeguards in the United States and where agreed to by the United States Government. At the present time, only four facilities are subject to safeguards. Examples of such operational activities include, but are not limited to, nuclear material transfers, empty spent fuel cask transfers, crane movement records, reactor fuel production, isotope production, and maintenance activities. A “facility” is defined in the Additional Protocol as a reactor, critical facility, conversion plant, fabrication plant, reprocessing plant, isotope separation plant or separate storage installation, or any location where nuclear material in amounts greater than one effective kilogram is customarily used.

The Department expects that these activities are subject to license by the NRC and the collection of this information will be the responsibility of the NRC.

3. Nuclear Facility Site Descriptions and Site Maps

Article 2.a(iii) of the model Additional Protocol requires a general description of each building on a site, including the building's use and, if not apparent from that description, its contents. In the United States, this element will apply only in instances where the United States has provided to the IAEA the relevant design information. Under the terms of the U.S.-IAEA Safeguards Agreement, the U.S. has provided such information on the nuclear facilities that have been inspected in the United States. The description is expected to include a building number or other unambiguous identification, approximate size of the building (i.e., number of floors and total area), use of the building, and the main contents of the building. A map of the site is also required.

A “site” is defined in the model Additional Protocol as that area delimited by the United States in the relevant design information for a facility, including a closed-down facility, and in the relevant information on a location outside facilities where nuclear material is customarily used, including a closed-down location outside facilities where nuclear material was customarily used (this is limited to locations with hot cells or where activities related to conversion, enrichment, fuel fabrication or reprocessing were carried out). A “site” also includes all installations, co-located with the facility or location, for the provision or use of essential services, including: hot cells for processing irradiated materials not containing nuclear material; installations for the treatment, storage and disposal of waste; and buildings associated with specified activities identified by the United States under Article 2.a(iv) (see discussion below under Equipment Manufacturers).

The Department expects that the collection of information pertaining to facilities licensed by the NRC will be the responsibility of the NRC. However, the definition of “site” extends beyond areas involving nuclear material activities.

4. Equipment Manufacturers

Article 2.a(iv) of the model Additional Protocol requires a description of the scale of operations for each location engaged in certain nuclear-related manufacturing and/or assembly activities described in detail in Annex I to the model Additional Protocol and listed below (items a-s). The activities relate to equipment and non-nuclear material listed in Annex II to the model Additional Protocol. Scale of operations could mean, for example, approximate production capacity and capacity utilization during a declaration period. Although information is already being reported to the U.S. Government on the export of such equipment, the Department is not aware of any regulatory authorities currently collecting information on the scale of operations for manufacturing such equipment.

The model Additional Protocol requires declaration and reporting for the following nuclear-related manufacturing activities which are focused primarily on the manufacture of items “especially designed or prepared” for uranium enrichment (a-k) or other items related to the nuclear fuel cycle:

(a) The manufacture of centrifuge rotor tubes or the assembly of gas centrifuges that are especially designed or prepared for the separation of isotopes of uranium;

(b) The manufacture of gaseous diffusion barriers with thin, porous filters which are especially designed or prepared for the enrichment of uranium;

(c) The manufacture or assembly of laser-based isotope separation systems especially designed or prepared for enrichment of uranium;

(d) The manufacture or assembly of electromagnetic isotope separators especially designed or prepared for enrichment of uranium;

(e) The manufacture or assembly of columns or extraction equipment especially designed or prepared for enrichment of uranium;

(f) Uranium oxidation systems (chemical exchange) especially designed or prepared for enrichment of uranium;

(g) Fast-reacting ion exchange resins/adsorbents (ion exchange) especially designed or prepared for enrichment of uranium;

(h) Ion exchange columns (ion exchange) for isotope separation especially designed or prepared for enrichment of uranium;

(i) Ion exchange reflux systems (ion exchange) for isotope separation especially designed or prepared for enrichment of uranium;

(j) The manufacture of aerodynamic separation nozzles or vortex tubes especially designed or prepared for enrichment of uranium;

(k) The manufacture or assembly of uranium plasma generation systems especially designed or prepared for enrichment of uranium;

(l) The manufacture of zirconium tubes especially designed or prepared for use in a reactor;

(m) The manufacture or upgrading of heavy water or deuterium in which the ration of deuterium to hydrogen atoms exceeds 1:5000;

(n) The manufacture of nuclear grade graphite at a purity level better than 5 parts per million boron equivalent and with a density greater than 1.50 g/cm ³

(o) The manufacture of flasks for irradiated fuel;

(p) The manufacture of reactor control rods especially designed or prepared for the control of the reaction rate in a nuclear reactor;

(q) The manufacture of criticality safe tanks and vessels especially designed or prepared for use in a reprocessing plant;

(r) The manufacture of irradiated fuel element chopping machines especially designed or prepared for use in a reprocessing plant; and

(s) The construction of hot cells with a cell or interconnected cells totaling at least 6 cubic meters in volume with shielding equal to or greater than the equivalent of 0.5 meters of concrete, with a density of 3.2 g/cm ³ or greater, outfitted with equipment for remote operations.

5. Uranium and Thorium Mines and Mills

Article 2.a(v) of the model Additional Protocol requires information on the location, operational status and the estimated annual production capacity of uranium mines and concentration plants and thorium concentration plants, and the current annual production of such mines and concentration plants in the United States. Uranium and thorium concentration plants engage in the processing and milling of ore. Currently, the Department of Energy collects information via the Energy Information Agency regarding uranium mines. This includes some but not all of the required information regarding ore processing. The NRC licenses uranium and thorium mills, and the Department expects the collection of this information to be the responsibility of the NRC. Information on mine production capacity represents new reporting requirements under the Additional Protocol.

6. Source Material Not Suitable for Fuel Fabrication or Isotopic Enrichment

Article 2.a(vi) of the model Additional Protocol requires information on natural and depleted uranium in quantities greater than 10 metric tons or on thorium in quantities greater than 20 metric tons. The Department expects that these activities are subject to license by the NRC and the collection of this information will be the responsibility of the NRC.

7. Nuclear Material Exempted From Safeguards

Article 2.a(vii) of the model Additional Protocol requires information on nuclear material declared by the United States but exempted from safeguards by arrangement with the IAEA. There is no such material in the United States. If there were, the Department expects that the nuclear material would be subject to license by the NRC, and the collection of this information would be the responsibility of the NRC.

8. Waste for Which Safeguards Have Been Terminated

Article 2.a(viii) of the model Additional Protocol requires information on the location or further processing of intermediate or high-level waste containing plutonium, high-enriched uranium or uranium-233 on which IAEA safeguards have been terminated. High-enriched uranium means uranium containing 20 percent or more of the isotope uranium-235. There is no nuclear material in the United States on which IAEA safeguards have been terminated.

9. Export and Import of Specified Equipment and Non-Nuclear Material

Article 2.a(ix) of the model Additional Protocol requires information on the export and import of certain nuclear-related equipment and non-nuclear material listed in Annex II to the model Additional Protocol and listed below (items a-m). These items are subject to export license by the NRC and the Department expects the collection of this information will be the responsibility of the NRC. The Department is not aware of any current regulatory authority for collecting information on imports of such equipment and non-nuclear material. There will be no routine reporting requirements for import data since the submission of import data is upon specific request by the IAEA. The equipment and non-nuclear material subject to Article 2.a(ix) are described in Annex II to the U.S.-IAEA Additional Protocol and include:

(a) Reactors and equipment including complete nuclear reactors, and specially designed reactor pressure vessels, reactor fuel charging and discharging machines, reactor control rods, reactor pressure tubes, zirconium tubes, primary coolant pumps;

(b) Non-nuclear materials for reactors including deuterium and nuclear grade graphite;

(c) Specially designed irradiated fuel element chopping machines, dissolvers, solvent extractors and solvent extraction equipment, chemical holding or storage vessels, plutonium nitrate to oxide conversion system, plutonium oxide to metal production system;

(d) Specially designed equipment that seals the nuclear material within the cladding, and any other which normally comes in direct contact with, or directly processes, or controls, the production flow of nuclear material;

(e) Specially designed gas centrifuges and assemblies and components especially designed or prepared for use in gas centrifuges;

(f) Specially designed gas diffusion assemblies and components especially designed or prepared for use in gas diffusion enrichment;

(g) Specially designed or prepared systems, equipment and components especially designed for use in aerodynamic enrichment plants;

(h) Specially designed or prepared systems, equipment and components for use in chemical exchange or ion exchange enrichment plants;

(i) Specially designed or prepared systems, equipment and components for use in laser-based enrichment plants;

(j) Specially designed or prepared systems, equipment and components for use in plasma separation enrichment plants;

(k) Specially designed or prepared systems, equipment and components for use in electromagnetic enrichment plants;

(l) Specially designed or prepared equipment for plants for the production of heavy water, deuterium and deuterium compounds; and

(m) Specially designed or prepared systems for the conversion of uranium ore concentrates to UO₃, conversion of UO₃ to UF₆, conversion of UO₃ to UO₂, conversion of UO₂ to UF₄, conversion of UF₄ to UF₆, conversion of UF₄ to U metal, conversion of UF₆ to UO₂, and conversion of UF₆ to UF₄.

10. Ten-Year General Plans

Article 2.a(x) of the model Additional Protocol requires information regarding general plans for the succeeding ten-year period relevant to the development of the nuclear fuel cycle (including planned nuclear fuel cycle-related research and development activities) when approved by the appropriate authorities in the United States. The Department expects that the Department of Energy will be the approving authority for these plans and will be responsible for the collection of such data.

11. Activities Related to a “Site”

Article 2.b(ii) requires, upon specific request by the IAEA, a general description of activities and the identity of the person or entity carrying out activities at a particular location which has not been included as part of a “site” but which the IAEA considers may be functionally related to the activities on a “site” declared under 2(a)(iii) The U.S. Government will review such requests on a case-by-case basis. This provision relates only to element 3 above, where the United States has provided site descriptions and site maps.

Submission of Comments

All comments must be submitted to the address indicated in this notice. The Department requires that all comments be submitted in written form.

The Department encourages interested persons who wish to comment to do so at the earliest possible time. The period for submission of comments will close January 21, 2003. The Department will consider all comments received before the close of the comment period. Comments received after the end of the comment period will be considered, if possible, but their consideration cannot be assured. The Department will not accept comments accompanied by a request that a part or all of the material be treated confidentially because of its business proprietary nature or for any other reason. The Department will return such comments and materials to the persons submitting the comments and will not consider them. All comments submitted in response to this notice will be a matter of public record and will be available for public inspection and copying.

The Office of Administration, Bureau of Industry and Security, U.S. Department of Commerce, displays public comments on the BIS Freedom of Information Act (FOIA) web site at http://www.bis.doc.gov/​foia. This office does not maintain a separate public inspection facility. If you have technical difficulties accessing this web site, please call BIS's Office of Administration, at [phone], for assistance.

Dated: November 14, 2002.

James J. Jochum,

Assistant Secretary for Export Administration.