House Committee Adopts Tough New Rules for Nuclear Trade Agreements

A proposed law would require more intensive inspections, strict export control systems, and proven nonproliferation credentials.

On April 14, 2011, the House Foreign Affairs Committee unanimously approved HR 1280, a bill that would expand congressional controls over US nuclear cooperation agreements with other states and increase the requirements for states wishing to participate. (Such agreements are known as “123 agreements,” after Section 123 of the US Atomic Energy Act, which prescribes their requirement and approval process.) The proposed requirements would be applied prospectively, as states seek to enter into new 123 agreements or to renew existing agreements.[1] The bill also provides incentive for states interested in signing 123 agreements with the United States to voluntarily forego uranium enrichment and spent fuel reprocessing—both of which can be used to produce material for nuclear weapons—by putting agreements that contain such a ban on an easier path to approval. No companion bill has yet been introduced in the US Senate.

The United States is currently negotiating new 123 agreements with Jordan and Vietnam and may shortly start negotiations with Mongolia and Saudi Arabia. Renewals of existing agreements must be concluded with Bangladesh in 2012; Colombia in 2013; and Norway, South Korea, Taiwan, Thailand, and the International Atomic Energy Agency in 2014.[2]

Key Provisions

In new and renewed 123 agreements, HR 1280 would require a new undertaking promising that third-country nationals would not be given access to US exports without prior US approval. This appears intended to prevent the emergence of another A.Q. Khan.[3] While Khan’s illicit nuclear trafficking activities underscore the importance of securing sensitive information and technology, some states may consider this provision an undue restriction on their sovereignty. The rule could complicate US participation in the commercial nuclear nuclear market where multiple supplier states often collaborate on reactor projects.

The proposed legislation would also require that states seeking new or renewed 123 agreements bring into force and implement an Additional Protocol to their International Atomic Energy Agency (IAEA) comprehensive safeguards agreements (on inspection and accounting), which would grant the IAEA significantly expanded inspection powers. Today, US nuclear trading partners need only accept more limited “classic” IAEA safeguards on all of their declared nuclear materials and facilities, an arrangement that limits the agency’s authority to gain access to locations where it suspects undeclared nuclear activities are taking place.

The bill would make mandatory the acceptance of several additional nonproliferation and nuclear security measures that would be triggered when states sought to negotiate new or renewed 123 agreements; however, these measures are not required to be incorporated into the agreements themselves. States, for example, would be required to be members of and/or implementing the Convention on the Prohibition of the Development, Stockpiling and Use of Chemical Weapons and on their Destruction (the Chemical Weapons Convention or CWC) and the Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on their Destruction (the Biological Weapons Convention or BWC). This is the first Congress has sought to link access to US nuclear trade to prohibitions on chemical and biological weapons. Among other ramifications, the new restriction could preclude US nuclear trade with Egypt, which has refused to ratify the either treaty until Israel joins the Treaty on the Non-Proliferation of Nuclear Weapons and renounces nuclear weapons.

In addition, states seeking to engage in nuclear trade with the United States would have to actively oppose proliferation by “closely cooperating” with Washington to prevent the acquisition of weapons of mass destruction by states labeled as sponsors of terrorism—Cuba, Iran, Sudan, and Syria.[4] Nuclear trading partners would also be required to show they are implementing effective export control programs by complying with the export control provisions of UN Security Council Resolution 1540, which requires all states to adopt such controls, and by acceding to and fully implementing all “international agreements to which the United States is a party regarding the export of nuclear, chemical, biological, and advanced conventional weapons, including missiles and other delivery systems,” an apparent reference to the Australia Group, the Missile Technology Control Regime, the Nuclear Suppliers Group, and the Wassenaar Arrangement.

In the same vein, further conditions for US nuclear exports would be that recipient states demonstrate a commitment to securing nuclear materials by ratifying the Convention on the Physical Protection of Nuclear Material and the International Convention for the Suppression of Acts of Nuclear Terrorism.

Congressional Control over Nuclear Cooperation

As noted, the bill also enhances congressional controls over the 123 agreement approval process. Currently, if a cooperation agreement incorporates all the undertakings required by Section 123, it then goes into effect automatically after laying before Congress for ninety days during which both Houses are in session, unless both Houses pass a joint resolution rejecting the agreement.[5] The president, however, may waive certain Section 123 requirements, in which case the agreement can come into effect only if both Houses adopt a joint resolution approving it—a much higher legislative hurdle.

HR 1280 realigns this process: it eliminates the president’s waiver authority and—with one exception—requires affirmative votes of both Houses to bring agreements into force. Having thus made the standard approval process far more burdensome than it is today, the bill then provides that states pursuing new or renewed agreements for cooperation can enjoy the traditional, automatic approval process if they accept one additional nonproliferation undertaking: agreeing not to engage in enrichment or reprocessing on their territory. Enrichment and reprocessing have applications in the civilian nuclear energy sphere but can also be used to produce fuel for nuclear weapons. As such, the United States and other states with strong nonproliferation policies have tried to limit the spread of these sensitive aspects of the nuclear fuel cycle, while development-minded states have guarded the right to pursue all facets of the peaceful uses of nuclear energy.[6] Most US agreements for peaceful nuclear cooperation prohibit the cooperating country from enriching or reprocessing US-origin nuclear material without prior approval but stop short of prohibiting all enrichment or reprocessing on that country’s territory; however, in 2009, the United States concluded an agreement with the United Arab Emirates in which that country accepted such an across-the-board prohibition.[7] HR 1280 seeks to build on this precedent—now known as the “gold standard” for US nuclear trade agreements—without making the renunciation of these technologies a mandatory requirement, since many states would find this unpalatable. Rather, the legislation uses the prospect of an expedited approval process to create a strong incentive for states to accept this restraint voluntarily.

HR 1280, however, also includes a related measure that toughens enrichment and reprocessing controls over US-origin nuclear materials. US decisions on whether to consent to these activities, known as “subsequent arrangements,” now take effect fifteen days after they are announced in the Federal Register. But under HR 1280, a joint resolution of approval by both Houses of Congress would be required to authorize them, a significant procedural change that could introduce uncertainties as to whether particular subsidiary arrangements, which sometimes embody complex political and technical understandings, would gain approval.

Status of Compliance

None of the states that are (or will be) seeking new or renewed 123 agreements with the United comply with all of the standards established by HR 1280. Jordan (new agreement), South Korea (renewal), and Norway (renewal) come closest, but all three would need to ratify the Nuclear Terrorism Convention, which all have signed. Only South Korea and Taiwan would be entitled to expedited congressional review of their agreements, although Jordan might also fall in this group if it agrees to renounce enrichment and reprocessing, as US officials anticipate.

Conclusion

With its mix of wide-ranging voluntary and mandatory measures, HR 1280 would represent a significant intensification of US nuclear trade rules. But the very sweep of the proposed legislation is likely to stir controversy. For example, the Nuclear Energy Institute, the nuclear energy industry’s policy organization, urged the full House to reject HR 1280 on the grounds that it would reduce US competitiveness in the nuclear market and drive potential partners toward other suppliers.[8] Developing states may object to some of the bill’s provisions as unacceptable limits on their nuclear energy policy choices. The executive branch may object to the loss of its waiver authority, the expansion of Congress’s review powers, and the curtailing of the administration’s ability to negotiate 123 agreements with nonproliferation requirements more closely tailored to individual countries.

The House Foreign Affairs Committee bill provides an interesting innovation, however, in encouraging other states to voluntarily forego enrichment and reprocessing. By offering states a choice—in which choosing not to pursue enrichment and reprocessing is rewarded with an expedited path through the Congress, while choosing to keep these options open would draw extra congressional scrutiny—the reform would create a formal incentive for strong nonproliferation restraints. Additionally, the adoption of no-enrichment-and-reprocessing commitments by some states as part of US 123 agreements under these rules could provide political cover for more states to do so. The other provisions of the bill primarily require new and renewing US partners to adhere to a broadened set of basic nonproliferation norms, such as UN Security Council Resolution 1540 and several UN conventions which most of these states already support in large measure, though there are potential challenges, as demonstrated by Egypt’s reluctance to ratify the CWC and the BWC. In sum, the proposed reform is a worthwhile effort to update the law regulating 123 agreements to reflect modern US nonproliferation priorities, but it is likely to provoke resistance from a number of important stakeholders in the existing system.

Cole J. Harvey is a research associate at the James Martin Center for Nonproliferation Studies (CNS) in Washington, DC. He thanks Leonard S. Spector, deputy director of CNS and head of its Washington office, for his comments and suggestions.

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Notes

[1] While the bill does not explicitly state that it does not apply to existing 123 agreements, it is the drafters’ intent that the bill’s requirements would apply only to new and renewed agreements, according to House Foreign Affairs Committee staff members. The full text of HR 1280 may be found at <www.gpo.gov/fdsys/pkg/BILLS-112hr1280ih/pdf/BILLS-112hr1280ih.pdf>.
[2] The US-Japan and US-Euratom 123 agreements are “self-renewing,” so these nuclear trading partners would not be subject to the pending legislation’s new requirements.
[3] Khan is the Pakistani engineer who stole the technology for uranium enrichment while working for a European uranium enrichment consortium in the 1970s and then brought it to Pakistan, where it was used in that country’s nuclear weapons program and later sold to North Korea, Iran, and Libya. See David Albright, Peddling Peril: How the Secret Nuclear Trade Arms America’s Enemies (New York, NY: Simon & Schuster, 2010).
[4] This would not apply to the 123 agreements with Japan and EURATOM, since those agreements are self-renewing. The reform provisions would only apply if Japan or EURATOM sought to re-negotiate and amend their 123 agreements.
[5] Paul K. Kerr and Mary Beth Nikitin, “Nuclear Cooperation with Other Countries: A Primer,” Congressional Research Service, April 22, 2011, p. 3, <www.fas.org/sgp/crs/nuke/RS22937.pdf>.
[6] See statement of the Non-Aligned Movement state parties at the 2010 Review Conference of the Treaty on the Non-Proliferation of Nuclear Weapons, May 3, 2010.
[7] Ellen Tauscher, testimony on the Agreement for Cooperation Between the Government of the United States of America and the Government of the United Arab Emirates Concerning Peaceful Uses of Nuclear Energy, July 8, 2009, <www.state.gov/t/us/125782.htm>.
[8] “House Should Reject Bill That Would Limit US Influence in Global Nuclear Technology Safety, Cost Americans Thousands of Jobs,” Nuclear Energy Institute press release, April 14, 2011, <www.nei.org/newsandevents/newsreleases/house-should-reject-bill-that-would-limit-us-influence-in-global-nuclear-technology-safety-cost-americans-thousands-of-jobs/>.