[Federal Register Volume 64, Number 187 (Tuesday, September 28, 1999)]
[Notices]
[Pages 52355-52359]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-25182]
-----------------------------------------------------------------------
NUCLEAR REGULATORY COMMISSION
Final Standard Review Plan on Foreign Ownership, Control, or
Domination
AGENCY: Nuclear Regulatory Commission.
ACTION: Final Standard Review Plan.
-----------------------------------------------------------------------
SUMMARY: The NRC is issuing its Final Standard Review Plan (SRP) on
Foreign Ownership, Control, or Domination. The SRP documents procedures
and guidance used by the staff to analyze applications for reactor
licenses, or applications for the transfer of control of such licenses,
with respect to the limitations contained in sections 103 and 104 of
the Atomic Energy Act of 1954, as amended, and the Commission's
regulations in 10 CFR 50.38 against issuing a license for a production
or utilization facility to an alien or an entity that is owned,
controlled, or dominated by foreign interests.
EFFECTIVE DATE: The SRP was approved by the Commission on August 31,
1999.
ADDRESSES: Examine copies of comments received on the interim SRP,
which preceded the final SRP, and copies of the attachments as stated
in the final SRP at: The NRC Public Document Room, 2120 L Street, N.W.
(lower level), Washington, D.C.
FOR FURTHER INFORMATION CONTACT: Steven R. Hom, Office of the General
Counsel, U.S. Nuclear Regulatory Commission, Washington, D.C. 20555,
telephone (301) 415-1537, e-mail srh@nrc.gov.
SUPPLEMENTARY INFORMATION: The SRP on Foreign Ownership, Control, or
Domination, attached hereto, contains the review procedures used by the
staff to evaluate applications for the issuance or transfer of control
of a production or utilization facility license in light of the
prohibitions in sections 103d and 104d of the Atomic Energy Act and in
10 CFR 50.38 against issuing such reactor licenses to aliens or
entities that the Commission ``knows or has reason to believe'' are
owned, controlled, or dominated by foreign interests. The procedures
expressly provide for requests for additional information and
consideration of a negation action plan if the information described in
10 CFR 50.33(d) initially required to be provided in an application
indicates that there may be some degree of foreign control of the
applicant. The SRP also sets forth substantive guidance consistent with
existing Commission precedent on what may constitute foreign control.
This SRP supersedes Section III.3 of NUREG-1577, Standard Review Plan
on Power Reactor Licensee Financial Qualifications and Decommissioning
Funding Assurance (Draft Report for Comment) (containing review
procedures regarding foreign ownership) in its entirety.
An earlier interim version of the SRP was published in the Federal
Register on March 2, 1999 (64 FR 10166) for public comment. Four sets
of comments were received from the Nuclear Energy Institute (NEI),
AmerGen Energy Company, LLC (AmerGen), Florida Power and Light Company
(FPL), and PECO Energy (PECO). These comments, and the staff's response
to them, are set forth below.
Comments and Responses
NEI and FPL
NEI stated that, in general, the criteria and review process
outlined in the interim SRP provide an ``appropriate degree of
regulatory flexibility.'' In addition, NEI specifically provided its
view that ``a foreign entity should be allowed to own a significant
share of a nuclear power plant,'' provided that special nuclear
material is not under the control of the foreign entity, the foreign
entity has no control over the day-to-day nuclear activities at the
plant, and ownership would not be inimical to the common defense and
security. Further, NEI stated its belief that foreign ownership of a
licensee's parent company ``should be allowed unless the foreign entity
has legal control over the conduct of licensee activities involving
common defense and security.'' Such control can be ``overcome'' by
``special arrangements, such as special operating committees, which
vest effective control and operation of licensed activities with U.S.
citizens,'' according to NEI.1
---------------------------------------------------------------------------
\1\ NEI also stated its support for amendment of the Atomic
Energy Act to remove the foreign ownership prohibition, while
preserving the authority to protect the common defense and security.
---------------------------------------------------------------------------
FPL stated that it ``supports the approach set forth in the SRP.''
It also stated that it endorses NEI's comments.
Response
Section 103d of the Atomic Energy Act of 1954, as amended, provides
that no license may be issued to an alien, or to a corporation owned,
controlled, or dominated by an alien, foreign corporation, or foreign
government. As the SRP now indicates, a (U.S.) applicant that is
partially owned by a foreign entity may still be eligible for a license
under certain conditions. However, the intent of NEI's comment that a
foreign entity ``should be allowed to own a significant share of a
nuclear power plant'' is not entirely clear. If NEI is suggesting that
a foreign entity may become a direct owner of a substantial percentage
of the facility, its position would not appear to be consistent with
the Commission's interpretation of the statute, even if the foreign
entity is only a co-owner. In Public Service Co. of Indiana (Marble
Hill Nuclear Generating Station, Units 1 and 2), ALAB-459, 7 NRC 179,
200-01 (1978), the Appeal Board held that each proposed co-owner of a
nuclear facility must be an applicant for a license. Accordingly, each
co-owner is subject to the foreign ownership or control prohibition
contained in the Act.
NEI's other major comment (i.e., that foreign ownership of a
licensee's parent company should be allowed unless the foreign entity
has legal control over common defense and security activities, which
control is not overcome by special arrangements such as limiting such
activities to U.S. citizens) appears to go beyond the guidance in the
SRP that deals with foreign parent companies. The SRP states that
(based on the Commission's determinations in the Hoffmann-LaRoche and
initial Cintichem matters discussed in the attachments to the SRP), an
applicant with a foreign parent will not be eligible for a license,
unless the Commission knows that the foreign parent's stock is largely
owned by U.S. citizens, and certain conditions or ``special
arrangements'' are imposed, such as having only U.S. citizens within
the applicant's organization be responsible for special nuclear
material. NEI has not presented any compelling argument why the
scenario it set forth, which is devoid of any indication of ultimate
control of the parent by U.S. stockholders, is consistent with the
statutory prohibition on foreign control, in light of the Commission's
interpretation in the Hoffmann-LaRoche and initial Cintichem
matters.2
---------------------------------------------------------------------------
\2\ However, for situations involving an applicant's proposed
acquisition of less than a 100% interest in a reactor, see the
discussion below in response to AmerGen's comments.
---------------------------------------------------------------------------
AmerGen
AmerGen commented that the SRP should provide more detailed
guidance by establishing ``safe harbors'' with respect to certain types
of ownership and/or operating arrangements.
[[Page 52356]]
Specifically, AmerGen noted that although the SRP states that the
Commission has not determined a specific threshold of stock ownership
above which it would be concluded that the (foreign) owner would have
control, it may be appropriate to establish a threshold below which
there would be a presumption of no control, at least absent foreign
involvement in management or operation. In addition, AmerGen stated
that it might be helpful for the SRP to discuss specific types of
activities in which a foreign entity could engage in connection with
the operation of a reactor, and acknowledge that the statute does not
preclude foreign nationals from ``holding senior management positions
with an applicant and/or managing and supervising licensed activities
at a reactor site.'' AmerGen also stated that in the guidance section
of the SRP, the SRP should discuss specific arrangements involving
foreign entities that the Commission has found acceptable with the
imposition of certain conditions, and confirm that similar situations
would be eligible for ``safe harbor'' treatment.
Noting the discussion in the SRP that provides that further
consideration is required concerning the ownership of a less than 100
percent interest in a reactor by a U.S. company which has a foreign
parent, AmerGen stated its opinion that relevant precedents should be
addressed (suggesting Marble Hill and Cintichem). AmerGen also stated
that additional guidance would be helpful concerning the ``further
consideration,'' and concerning what additional information may be
required from an applicant for such consideration. Finally, AmerGen
believes the SRP should expressly confirm that where a particular
applicant has recently been approved by the NRC subject to the
imposition of certain license conditions, no material changes in the
ownership or management of the applicant have since occurred, and the
applicant agrees to similar conditions in connection with a subsequent
application, the applicant will essentially receive summary approval.
Response
In general, it is recognized that articulating ``safe harbors'' in
the SRP would be beneficial to license applicants by removing some
degree of uncertainty from the license application process. However, in
light of the perhaps limitless creativity involved in formulating
corporate structures and arrangements, the difficulty in prescribing
safe harbors is being able to account for every potential fact or
circumstance that could be present in any given situation, which fact
or circumstance may not be addressed in the stated safe harbor
criteria, but which could still be material to a determination of
foreign ownership or control.
Regarding AmerGen's suggestion that a stock threshold be considered
below which there would be presumptive non-control absent foreign
involvement in management or operation, it is notable that while
earlier drafts of the Atomic Energy Act contained a stock threshold
(five percent) above which foreign ownership would have been barred,
the final version of the Act, of course, does not. Thus, Congress
declined to establish any threshold. Also, other statutes such as the
Public Utilities Holding Company Act, while establishing thresholds
above which control is presumed, are silent on ``safe harbors.'' At
least until further experience is gained in this area, the flexibility
of the SRP in this regard should be maintained.
Concerning AmerGen's comment on stating permissible activities that
a foreign entity or foreign nationals could engage in regarding the
operation or management of a reactor, it should be noted at the outset
that the statutory prohibition applies to the issuance of licenses.
Thus, as long as foreign entities or nationals are not engaged in
activities requiring a license, the foreign control prohibition does
not apply specifically to them. This is not to say that the actual
licensee--the entity which does have control over licensed activities--
is unrestricted in its use of foreign entities or personnel. As
provided in the Act, no license may be issued if issuance would be
inimical to the common defense and security. Entering into this
analysis would be the licensee's use of foreign entities or personnel.
Because AmerGen's comment potentially involves considerations of the
common defense and security, it would not appear that any meaningful
purpose would be served for the SRP to attempt to simply list
activities or positions in an organization that would presumptively not
trigger the prohibition on foreign ownership or control when it would
still be necessary to conduct a full separate analysis of whether a
certain degree of foreign involvement would be inimical to the common
defense and security.
With respect to AmerGen's comment that the SRP should discuss
specific arrangements involving foreign entities that the Commission
has found acceptable, the agency's dockets presently provide access to
this information, which constitutes a substantial amount of material
(agreements, organizational charts, by-laws, etc.) specific to each
application which cannot be incorporated into the SRP, as a practical
matter, due to their volume. Commission statements and analyses
regarding applications involving the Babcock & Wilcox/McDermott and
Union Carbide/Cintichem matters, which provide essentially a historical
perspective and summary of the Commission's views on the foreign
ownership prohibition, and which are more difficult to locate due to
their age, are in a form that is more easily included as part of the
SRP. These analyses were not published in the Federal Register notice
requesting comments on the SRP, but are to be attachments to the SRP as
indicated in Section 6, ``References,'' of the SRP.
For situations involving an applicant which has, directly or
indirectly, a foreign parent but which is seeking to acquire less than
a 100% interest in a reactor, the attached version of the SRP has been
expanded in response to AmerGen's comments concerning the ``further
consideration'' that is required. The SRP includes new proposed
language providing that ``further consideration'' will be given to: (1)
The extent of the proposed partial ownership of the reactor; (2)
whether the applicant is seeking authority to operate the reactor; (3)
whether the applicant has interlocking directors or officers and
details concerning the relevant companies; (4) whether the applicant
would have any access to restricted data; and (5) details concerning
ownership of the foreign parent company. The new language should
provide applicants with a clear understanding of what facts will be
considered and what type of information may need to be submitted.
Regarding AmerGen's interest in the SRP expressly confirming that a
previously approved applicant will survive foreign ownership scrutiny
where there have been no material changes since the last application
and the same conditions are imposed, the agency intends to apply the
law uniformly and consistently and not act in an arbitrary manner.
Thus, there appears to be no necessity in essentially restating this
principle specifically in the context of the SRP.
PECO
PECO commented that, at least in the context of making a non-
inimicality finding with respect to the common defense and security,
``some degree of deference should be applied'' when the
[[Page 52357]]
relevant foreign applicant is from a country with close ties to the
United States. In addition, PECO stated its opinion that the focus of a
foreign control review as set forth in the SRP should be on ``who
exerts control over the `safety and security' aspects of the licensee's
operations.'' With specific reference to section 3.2 of the SRP, PECO
recommended that where a license condition is necessary to limit those
responsible for special nuclear material, the limitation should apply
to officers and senior management of the applicant, rather than
officers and employees, which latter term is used in the present SRP.
Response
As pointed out in SECY-98-252, ``Preliminary Staff Views Concerning
Its Review of the Foreign Ownership Aspects of AmerGen, Inc.'s Proposed
Purchase of Three Mile Island, Unit 1'' (Oct. 30, 1998), previous
Commission decisions regarding foreign ownership or control did not
appear to turn on which particular nation the applicant was associated
with. Although the broader required finding of non-inimicality to the
common defense and security may be based, in part, on the nation
involved, the SRP concerns the specific foreign ownership prohibition
and is not intended to cover all common defense and security issues, as
stated in Section 1.1 of the SRP. Thus, no changes in consideration of
PECO's first comment appear warranted.
Regarding PECO's second comment, it is true that the exertion of
control over the ``safety and security aspects'' of reactor operations
(interpreting that phrase broadly for the purpose of this discussion)
can be an important factor in the foreign ownership or control
analysis. However, it may not be the only important factor, given that
the statute does not limit the foreign control prohibition to only
those applicants who intend to be actively engaged in operation of the
plant, or intend to ``exert control'' over operations. A statement of
the ``focus'' of the analysis would appear to be somewhat premature at
this time, given the limited experience the Commission has had in this
area.
With respect to PECO's last comment concerning personnel
responsible for special nuclear material, the term ``employees'' was
used by the Commission in a previous condition of approval that
required those responsible for special nuclear material to be U.S.
citizens.3 It appears reasonable to seek to ensure that all
those employees responsible for special nuclear material have at least
U.S. citizenship, not just senior management, when there is some issue
of foreign control, and PECO has not provided a compelling reason why
there should be any departure from a prior Commission decision.
---------------------------------------------------------------------------
\3\ See letter from L. Manning Muntzing, Atomic Energy
Commission, to General Atomic Company (Dec. 14, 1973), incorporating
by reference letter from General Atomic Company to L. Manning
Muntzing, Atomic Energy Commission (Dec. 14, 1973) with attachment
(General Atomic Company Resolution of the Standing Committee of the
Partnership Committee Adopted at a Meeting Thereof Held on December
14, 1973).
---------------------------------------------------------------------------
Approval by the Commission
In approving the final SRP, the Commission approved new additional
guidance (incorporated in the last paragraph of section 3.2 of the SRP)
reflected in the foregoing response to AmerGen's comments concerning
applicants seeking to acquire less than 100% of a reactor who have
ultimate foreign parents. Also, the Commission directed that one
additional change be made from the previous interim SRP, namely, the
addition of a new footnote in Section 3.2 of the SRP.
Dated at Rockville, Maryland, this 21st day of September, 1999.
For the Nuclear Regulatory Commission.
Annette L. Vietti-Cook,
Secretary of the Commission.
Final Standard Review Plan on Foreign Ownership, Control and
Domination
1. Areas of Review
1.1 General
The NRC is issuing this Standard Review Plan (SRP) to describe the
process it uses to review the issue of whether an applicant for a
nuclear facility license under sections 103 or 104 of the Atomic Energy
Act of 1954, as amended (AEA or Act), is owned, controlled, or
dominated by an alien, a foreign corporation or a foreign government.
This SRP will be used as the basis for such reviews in connection with
license applications for new facilities, or applications for approval
of direct or indirect transfers of facility licenses.
Where there are co-applicants, each intending to own an interest in
a new facility as co-licensees, each applicant must be reviewed to
determine whether it is owned, controlled, or dominated by an alien,
foreign corporation or foreign government. If a co-licensee of an
existing facility owns a partial interest in the facility and is
transferring that interest, the acquirer must be reviewed to determine
whether it is owned, controlled, or dominated by an alien, foreign
corporation or foreign government.
The foreign control determination is to be made with an orientation
toward the common defense and security. However, this SRP does not
address all matters relating to the determination of whether issuance
of a license to a person would be inimical to the common defense and
security.
This SRP reflects current NRC regulations and policy.
1.2 Relevant Statutory And Regulatory Provisions
Sections 103d and 104d of the Act provide, in relevant part, that
no license may be issued to:
Any corporation or other entity if the Commission knows or has
reason to believe it is owned, controlled, or dominated by an alien,
a foreign corporation, or a foreign government. In any event, no
license may be issued to any person within the United States if, in
the opinion of the Commission, the issuance of a license to such
person would be inimical to the common defense and security or to
the health and safety of the public.
(Section 103d also states that no license may be issued to an
alien.)
Section 184 of the Act provides, in relevant part:
No license granted hereunder and no right to utilize or produce
special nuclear material granted hereby shall be transferred,
assigned or in any manner disposed of, either voluntarily or
involuntarily, directly or indirectly, through transfer of control
of any license to any person, unless the Commission shall, after
securing full information, find that the transfer is in accordance
with the provisions of this Act, and shall give its consent in
writing.
10 CFR 50.33(d), in relevant part, provides:
Each application shall state:
(d)(1) If applicant is an individual, state citizenship.
(2) If applicant is a partnership, state name, citizenship and address
of each partner and the principal location where the partnership does
business.
(3) If applicant is a corporation or an unincorporated association,
state:
(i) The state where it is incorporated or organized and the
principal location where it does business;
(ii) The names, addresses and citizenship of its directors and of
its principal officers;
(iii) Whether it is owned, controlled, or dominated by an alien, a
foreign corporation, or foreign government, and, if so, give details.
(4) If the applicant is acting as agent or representative of another
person in filing the application, identify the
[[Page 52358]]
principal and furnish information required under this paragraph with
respect to such principal.
10 CFR 50.38 provides:
Any person who is a citizen, national, or agent of a foreign
country, or any corporation, or other entity which the Commission
knows or has reason to believe is owned, controlled, or dominated by
an alien, a foreign corporation, or a foreign government, shall be
ineligible to apply for and obtain a license.
10 CFR 50.80 provides, in pertinent part:
(a) No license for a production or utilization facility, or any
right thereunder, shall be transferred, assigned, or in any manner
disposed of, either voluntarily or involuntarily, directly or
indirectly, through transfer of control of the license to any
person, unless the Commission shall give its consent in writing.
* * * * *
(c) * * * [T]he Commission will approve an application for the
transfer of a license, if the Commission determines:
* * * * *
(2) That the transfer of the license is otherwise consistent
with applicable provisions of the law, regulations, and orders
issued by the Commission pursuant thereto.
2. Information To Be Submitted by Applicant
2.1 Information Required By Regulation
At the time the applicant submits its application for a license or
for approval of the transfer of a license, the applicant must submit
information sufficient to comply with 10 CFR 50.33(d).
2.2 Additional Information
If the reviewer, based on the information required to be submitted
by 10 C.F.R. 50.33(d), has reason to believe that the applicant may be
owned, controlled, or dominated by foreign interests, the reviewer
should request and obtain the following additional information:
1. If the applicant's equity securities are of a class which is
registered pursuant to the Securities Exchange Act of 1934, copies of
all current Securities and Exchange Commission Schedules 13D and 13G,
which are required to be filed by owners of more than 5% of such a
class with the Securities and Exchange Commission, the security issuer
(applicant), and the exchange on which the issuer's securities are
traded.
2. Management positions held by non-U.S. citizens.
3. The ability of foreign entities to control the appointment of
management personnel.
2.3 Negation Action Plan
If applicable under Section 4.4 infra, the applicant should also
submit a Negation Action Plan, which is described in detail in Section
4.4.
3. Acceptance Criteria
3.1 Basic Statutory and Regulatory Limitations
License applications for new facilities or applications for
approval of transfers of licenses required in the case of proposed new
ownership of existing facilities may involve foreign entities proposing
to own all or part of a reactor facility. Sections 103d and 104d of the
AEA prohibit the NRC from issuing a license to an applicant if the NRC
knows or has reason to believe that the applicant is owned, controlled,
or dominated by an alien, a foreign corporation, or a foreign
government (or is an alien, in the case of section 103d).
Likewise, under 10 CFR 50.38,
Any person who is a citizen, national, or agent of a foreign
country, or any corporation, or other entity which the Commission
knows or has reason to believe is owned, controlled or dominated by
an alien, a foreign corporation, or a foreign government, shall be
ineligible to apply for and obtain a license.
3.2 Guidance On Applying Basic Limitations
The Commission has not determined a specific threshold above which
it would be conclusive that an applicant is controlled by foreign
interests through ownership of a percentage of the applicant's stock.
Percentages held of outstanding shares must be interpreted in light of
all the information that bears on who in the corporate structure
exercises control over what issues and what rights may be associated
with certain types of shares.
An applicant is considered to be foreign owned, controlled, or
dominated whenever a foreign interest has the ``power,'' direct or
indirect, whether or not exercised, to direct or decide matters
affecting the management or operations of the applicant. The Commission
has stated that the words ``owned, controlled, or dominated'' mean
relationships where the will of one party is subjugated to the will of
another. General Electric Co., 3 AEC at 101.
A foreign interest is defined as any foreign government, agency of
a foreign government, or representative of a foreign government; any
form of business enterprise or legal entity organized, chartered, or
incorporated under the laws of any country other that the U.S. or its
possessions and trust territories; any person who is not a citizen or
national of the U.S.; and any U.S. interest effectively controlled by
one of the above foreign entities.
The Commission has stated that in context with the other provisions
of Section 104d, the foreign control limitation should be given an
orientation toward safeguarding the national defense and security.
Thus, an applicant that may pose a risk to national security by reason
of even limited foreign ownership would be ineligible for a
license.4
---------------------------------------------------------------------------
\4\ In any event, a license would not be issued to any person if
the Commission found that issuance would be inimical to the common
defense and security or to the health and safety of the public. See,
e.g., sections 103d and 104d of the AEA. Pursuant to this provision,
the Commission has the authority to reject a license application
that raises a clear proliferation threat, terrorist threat, or other
threat to the common defense and security of the United States.
---------------------------------------------------------------------------
Even though a foreign entity contributes 50%, or more, of the costs
of constructing a reactor, participates in the project review, is
consulted on policy and cost issues, and is entitled to designate
personnel to design and construct the reactor, subject to the approval
and direction of the non-foreign applicant, these facts alone do not
require a finding that the applicant is under foreign control.
An applicant that is partially owned by a foreign entity, for
example, partial ownership of 50% or greater, may still be eligible for
a license if certain conditions are imposed, such as requiring that
officers and employees of the applicant responsible for special nuclear
material must be U.S. citizens.
Where an applicant that is seeking to acquire a 100% interest in
the facility is wholly owned by a U.S. company that is wholly owned by
a foreign corporation, the applicant will not be eligible for a
license, unless the Commission knows that the foreign parent's stock is
``largely'' owned by U.S. citizens. If the foreign parent's stock is
owned by U.S. citizens, and certain conditions are imposed, such as
requiring that only U.S. citizens within the applicant organization be
responsible for special nuclear material, the applicant may still be
eligible for a license, notwithstanding the foreign control limitation.
If the applicant is seeking to acquire less than a 100% interest,
further consideration is required. Further consideration will be given
to: (1) the extent of the proposed partial ownership of the reactor;
(2) whether the applicant is seeking authority to operate the reactor;
(3) whether the applicant has interlocking directors or officers and
details concerning the relevant companies; (4) whether the applicant
would have any access to restricted data; and (5) details concerning
ownership of the foreign parent company.
[[Page 52359]]
4. Review Procedures
4.1 Threshold Review and Determination
The reviewer should first analyze all of the information submitted
by the applicant sufficient to comply with 10 CFR 50.33(d), as well as
other relevant information of which the reviewer is aware, to determine
whether there is any reason to believe that the applicant is an alien
or citizen, national, or agent of a foreign country, or an entity that
is owned, controlled, or dominated by an alien, a foreign corporation,
or foreign government. If there is no such reason to believe based on
the foregoing information, no further review is required and the
reviewer should proceed to make a recommendation regarding whether
there is any foreign control obstacle to granting the application. On
the other hand, if there is any reason to believe that the applicant
may be owned, controlled, or dominated by foreign interests, the
reviewer should request and obtain the additional information specified
in Section 2.2.
4.2 Supplementary Review
If it is necessary to obtain the additional information specified
in Section 2.2, the reviewer should consider the acceptance criteria
above, and consult with the Office of the General Counsel on Commission
precedent. Information related to the items listed below may be sought
and may be taken into consideration in determining whether the
applicant is foreign owned, controlled, or dominated. The fact that
some of the below listed conditions may apply does not necessarily
render the applicant ineligible for a license.
1. Whether any foreign interests have management positions such as
directors, officers, or executive personnel in the applicant's
organization.
2. Whether any foreign interest controls, or is in a position to
control the election, appointment, or tenure of any of the applicant's
directors, officers, or executive personnel. If the reviewer knows that
a domestic corporation applicant is held in part by foreign
stockholders, the percentage of outstanding voting stock so held should
be quantified. However, recognizing that shares change hands rapidly in
the international equity markets, the staff usually does not evaluate
power reactor licensees to determine the degree to which foreign
entities or individuals own relatively small numbers of shares of the
licensees' voting stock. The Commission has not determined a specific
threshold above which it would be conclusive that an applicant is
controlled by foreign interests.
3. Whether the applicant is indebted to foreign interests or has
contractual or other agreements with foreign entities that may affect
control of the applicant.
4. Whether the applicant has interlocking directors or officers
with foreign corporations.
5. Whether the applicant has foreign involvement not otherwise
covered by items 1-4 above.
4.3 Supplementary Determination
After reviewing the additional information specified in Section
2.2, if the reviewer continues to conclude that the applicant may be an
alien or owned, controlled, or dominated by foreign interests, or has
some reason to believe that may be the case, the reviewer shall
determine:
1. The nature and extent of foreign ownership, control, or
domination, to include whether a foreign interest has a controlling or
dominant minority position.
2. The source of foreign ownership, control, or domination, to
include identification of immediate, intermediate, and ultimate parent
organizations.
3. The type of actions, if any, that would be necessary to negate
the effects of foreign ownership, control, or domination to a level
consistent with the Atomic Energy Act and NRC regulations.
On the other hand, if the reviewer determines after reviewing the
additional information specified in Section 2.2 that there is no
further reason to believe that the applicant is an alien or owned,
controlled, or dominated by a foreign person or entity, no additional
review is necessary.
4.4 Negation Action Plan
If the reviewer continues to conclude following the Supplementary
Determination that an applicant may be considered to be foreign owned,
controlled, or dominated, or that additional action would be necessary
to negate the foreign ownership, control, or domination, the applicant
shall be promptly advised and requested to submit a negation action
plan. When factors not related to ownership are present, the plan shall
provide positive measures that assure that the foreign interest can be
effectively denied control or domination. Examples of such measures
that may be sufficient to negate foreign control or domination include:
1. Modification or termination of loan agreements, contracts, and
other understandings with foreign interests.
2. Diversification or reduction of foreign source income.
3. Demonstration of financial viability independent of foreign
interests.
4. Elimination or resolution of problem debt.
5. Assignment of specific oversight duties and responsibilities to
board members.
6. Adoption of special board resolutions.
5. Evaluation Findings
The reviewer should verify that sufficient information has been
provided to satisfy the regulations and this Standard Review Plan. In
consideration of the guidance of this Standard Review Plan, the
reviewer should then draft an analysis and recommendation, based on the
applicable information specified in Sections 2 and 4 above, concerning
whether the reviewer knows, or has reason to believe that the applicant
is an alien, or is a corporation or other entity that is owned,
controlled, or dominated by an alien, a foreign corporation, or foreign
government, and whether there are conditions that should be imposed
before granting the application so as to effectively deny foreign
control of the applicant.
6. References
1. Sections 103, 104, and 184 of the Atomic Energy Act of 1954,
as amended (42 USC 2133, 2134, and 2234).
2. Part 50 ``Domestic Licensing of Production and Utilization
Facilities'' of Title 10 of the Code of Federal Regulations (10 CFR
Part 50).
3. General Electric Co. and Southwest Atomic Energy Associates,
Docket No. 50-231, 3 AEC 99 (1966).
4. Letter from W. Dircks to J. MacMillan (Dec. 17, 1982) (Re:
Babcock & Wilcox/McDermott) (attached).
5. Letter from N. Palladino to A. Simpson (Sept. 22, 1983) w/
attachment (Re: Union Carbide/Cintichem) (attached).
[FR Doc. 99-25182 Filed 9-27-99; 8:45 am]
BILLING CODE 7590-01-P
