Information Notice 1989-25, Unauthorized Transfer of Ownership or Control of Licensed Activities

Unauthorized Transfer of Ownership or Control of Licensed Activities

ML031180579
Person / Time
Site:	Beaver Valley, Millstone, Hatch, Monticello, Calvert Cliffs, Dresden, Davis Besse, Peach Bottom, Browns Ferry, Salem, Oconee, Mcguire, Nine Mile Point, Palisades, Palo Verde, Perry, Indian Point, Fermi, Kewaunee, Catawba, Harris, Wolf Creek, Saint Lucie, Point Beach, Oyster Creek, Watts Bar, Hope Creek, Grand Gulf, Cooper, Sequoyah, Byron, Pilgrim, Arkansas Nuclear, Three Mile Island, Braidwood, Susquehanna, Summer, Prairie Island, Columbia, Seabrook, Brunswick, Surry, Limerick, North Anna, Turkey Point, River Bend, Vermont Yankee, Crystal River, Haddam Neck, Ginna, Diablo Canyon, Callaway, Vogtle, Waterford, Duane Arnold, Farley, Robinson, Clinton, South Texas, San Onofre, Cook, Comanche Peak, Yankee Rowe, Maine Yankee, Quad Cities, Humboldt Bay, La Crosse, Big Rock Point, Rancho Seco, Zion, Midland, Bellefonte, Fort Calhoun, FitzPatrick, McGuire, LaSalle, 05000000, Zimmer, Fort Saint Vrain, Shoreham, Satsop, Trojan, Atlantic Nuclear Power Plant
Issue date:	03/07/1989
From:	Cunningham R NRC/NMSS/IMNS
To:
References
IN-89-025, NUDOCS 8903010075
Download: ML031180579 (13)

UNITED STATES

NUCLEAR REGULATORY COMMISSION

OFFICE OF NUCLEAR MATERIAL SAFETY AND SAFEGUARDS

WASHINGTON, D.C. 20555 March 7, 1989 NRC INFORMATION NOTICE NO. 89-25: UNAUTHORIZED TRANSFER OF OWNERSHIP OR

CONTROL OF LICENSED ACTIVITIES

Addressees

All U.S. Nuclear Regulatory Commission (NRC) source, byproduct, and special

nuclear material licensees.

Purpose

This notice is to inform licensees of their responsibility to provide timely

notification to NRC before the planned transfer of ownership or control of

licensed activities, and to obtain prior written consent to such action from

NRC, as specified in 10 CFR Sections 30.34(b), 40.46, and 70.36. In addition, this notice provides guidance on the type of information that should be sub- mitted to NRC, before a change of ownership or control. It is expected that

recipients will: review this notice for applicability to their licensed acti- vities; distribute it to responsible licensee management and corporate staff, radiation protection staff, and authorized users, as appropriate; and maintain

procedures to preclude problems from occurring as the result of the transfer

of control of licensed activities. However, suggestions contained in this

notice do not constitute any new NRC requirements, and no written response

is required.

Discussion:

Sections 81 and 184 of the Atomic Energy Act of 1954, as amended, require

that a license be possessed to conduct licensed activities, and 10 CFR Section

30.34(b) states that no NRC license nor any right under a license 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 in- formation, find that the transfer is in accordance with the provisions of

the Act and shall give its consent in writing. Similar wording is found in

Sections 40.46 and 70.36 of the regulations for source and special nuclear

material.

Recently, NRC has noticed an increasing trend to transfer ownership of

businesses that control the use of licensed materials. Such changes in

ownership are usually the results of mergers, buy-outs, or majority stock

transfers. These actions appear to be occurring at a greater frequency

because of the present economic environment. Although it is not the intent

A-

8903010075 g

=) /

IN 89-25 March 7, 1989 of NRC to interfere with the business decisions of licensees, it is necessary

for licensees to provide timely notification to NRC whenever such decisions

could involve changes in the corporate structure responsible for management

oversight, control, or radiological safety of licensed materials. The purpose

of such notification is to allow NRC to assure that: radioactive materials

are possessed, used, owned, or controlled only by persons who have valid NRC

licenses; materials are properly handled and secured; persons using such mate- rials are capable, competent, and committed to implement appropriate radiological

controls; and public health and safety are not compromised by the use of such

materials.

In 1988, NRC identified several instances of businesses authorized to possess

and use licensed materials that were transferred to other owners, with a

consequent change in control, without any notification to the NRC. In such

cases, NRC has usually become aware of the change either when conducting a

routine inspection or when notified by the new controlling organization

(transferee).

Transfer of company ownership often results in the assumption of licensed

activities by a corporation not authorized to use or possess licensed

materials, and whose competence and ability to establish, implement, and

maintain radiological controls have not been previously evaluated by NRC.

In such cases, NRC usually determines that the transferee violated NRC

requirements on use and possession of radioactive materials (because of

its unauthorized use and possession), and that the predecessor entity

(transferor) failed to inform NRC of the planned transfer of ownership.

In specific cases, licensees have failed to inform NRC of changes in ownership

and changes in locations of licensed material from those specified on the

transferor's licenses. In one particular case, failure to notify NRC of

a change in ownership may have contributed to the inadvertent loss of two

nuclear weighing scales, containing several hundred millicuries of cesium-137.

This type of situation could result in the exposure or contamination of

individuals or the environment.

NRC licensees planning to transfer ownership, a change in corporate status, or control of licensed activities are required by 10 CFR to provide sufficient

prior notice and full information about the change to NRC, in order to obtain

written consent from the Commission before the transfer. Although the burden

of adhering to this requirement is on the existing licensee, it will be neces- sary for the transferee to provide supporting information or to independently

coordinate the change in ownership or control with the appropriate NRC Regional

Office. Failure to comply with this requirement may adversely affect the public

health and safety-and interfere with NRC's ability to inspect activities. There- fore, NRC may consider that a violation of this requirement warrants escalated

enforcement action, including civil penalties and orders, if indicated by the

circumstances against one or both of the parties involved. Willful failure

to obtain prior NRC approval of the transfer may result in referrals to the

Department of Justice for consideration of criminal prosecution.

IN 89-25 March 7, 1989 The following guidance is provided concerning notification of NRC of ownership

or control changes:

1. Full information on change in ownership or control of licensed

activities should be submitted to the appropriate NRC Regional

Office as early as possible, preferably at least 90 days before

the proposed action.

2. NRC approvals for change in ownership or control may be delayed or

denied if the following information, where relevant, is not included

in the submittal:

a. The name of the organization, if changed. Provide the new

name of the licensed organization and if there is no change, so state.

b. Identification of any changes in personnel named in the license, including any required information on personnel qualifications.

c. An indication of whether the seller will remain in business

without the license.

d. A complete, clear description of the transaction. The de- scription should include any transfer of stocks or assets.

e. An indication of any planned changes in organization, location, facilities, equipment, procedures, or personnel. If such

changes are to be made, they should be fully described.

f. An indication of any changes in the use, possession, or storage

of the licensed materials. If such changes are to be made, they

should be described.

g. An indication of whether all surveillance items and records, including radioactive material inventory and accountability

requirements, will be current at the time of transfer. A

description of the status of all surveillance requirements

and records, e.g., calibrations. leak tests, surveys, etc.

should be provided.

h. A description of the status of the facility. Specifically, the

presence or absence of contamination should be documented. If

contamination is present, will decontamination occur before

transfer? If not, does the successor company agree to assume

full liability for the decontamination of the facility or site?

i. A description of any decontamination plans, including financial

assurance arrangements of the transferee, should be provided,

IN 89-25 March 7, 1989 as specified in 10 CFR Sections 30.35, 40.36, and 70.25.

This should include information about how the transferee

and transferor propose to divide the transferor's assets, and responsibility for any cleanup needed at the time of

transfer.

j. An indication of whether the transferor and transferee agree

to the change in ownership or control of the licensed material

and activity. If so, documentation stating this should be

provided.

k. A commitment by the transferee to abide by all constraints, conditions, requirements, representations, and commitments

identified in the existing license. If not, the transferee

must provide a description of its program to assure compliance

with the license and regulations.

No specific action or written response is required by this information

notice.

Questions on this matter should be directed to the appropriate NRC Regional

Office or to this office.

Richard E. Cunningham, Director

Division of Industrial and

Medical Nuclear Safety

Office of Nuclear Material

Safety and Safeguards

Scott Moore, NMSS

(301) 492-0514 Attachments: 1. List of Recently Issued NMSS Information Notices

2. List of Recently Issued NRC Information Notices

Attachment 1 IN 89-25 March 7, 1989 LIST OF RECENTLY ISSUED

NMSS INFORMATION NOTICES

Information Date of

Notice No. Subject Issuance Issued to

89-13 Alternative Waste Management 02/08/89 All holders of NRC

Procedures in Case of Denial specific licenses

of Access to Low-Level Waste

Disposal Sites

89-12 Dose Calibrator Quality 02/09/89 All NRC medical

Control licensees

89-03 Potential Electrical 01/11/89 All Fuel Cycle and

Equipment Problems major nuclear materials

licensees

89-02 Criminal Prosecution of 01/09/89 All holders of NRC

Licensee's Former President specific license

for

Intent

ional Safety

Violations88-100 Memorandum of Understanding 12/23/88 All major nuclear

Between NRC and OSHA Relating materials licensees

to NRC-Licensed Facilities and utilities holding

(53 FR 43950, October 31, 1988) CPs and OLs.

88-93 Teletherapy Events 12/02/88 All NRC medical

licensees

88-90 Unauthorized Removal of 11/22/88 All NRC licensees

Industrial Nuclear Gauges authorized to

possess, use, manufacture, or

distribute industrial

nuclear gauges

88-66 Industrial Radiography 08/22/88 All NRC industrial

Inspection and Enforcement radiography licensees

OL = Operating License

CP = Construction Permit

J-' Attachment 2 IN 89-25 March 7, 1989 LIST OF RECENTLY ISSUED

NRC INFORMATION NOTICES

Information Date of

Notice No. Subject Issuance Issued to

89-24 Nuclear Criticality Safety 3/6/89 All fuel cvcle

licensees and other

licensees possessing

more than critical

mass quantities of

special nuclear

material.

89-23 Environmental Qualification 3/3/89 All holders of OLs

of Litton-Veam CIR Series or CPs for nuclear

Electrical Connectors power reactors.

89-22 Questionable Certification 3/3/89 All holders of OLs

of Fasteners or CPs for nuclear

power reactors.

89-21 Changes in Performance 2/27/89 All holders of OLs

Characteristics of Molded- or CPs for nuclear

Case Circuit Breakers power reactors.

88-73, Direction-Dependent Leak 2/27/89 Supplement 1 All holders of OLs

Characteristics of Contain- or CPs for nuclear

ment Purge Valves power reactors.

89-20 Weld Failures in a Pump 2/24/89 All holders of OLs

of Byron-Jackson Design or CPs for nuclear

power reactors.

89-19 Health Physics Network 2/23/89 All holders of OLs

or CPs for nuclear

power reactors, and

the following fuel

facilities: Nuclear

Fuel Services of Erwin, General Atomic, UNC

Montville, B&W LRC

Lynchburg, and B&W

Lynchburg.

89-18 Criminal Prosecution of 2/22/89 All holders of OLs

Wrongdoing Committed by or CPs for nuclear

Suppliers of Nuclear power reactors.

Products or Services

OL = Operating License

CP = Construction Permit

IN 89-25 March 7, 1989 as specified in 10 CFR Sections 30.35, 40.36, and 70.25.

This should include information about how the transferee

and transferor propose to divide the transferor's assets, and responsibility for any cleanup needed at the time of

transfer.

j. An indication of whether the transferor and transferee agree

to the change in ownership or control of the licensed material

and activity. If so, documentation stating this should be

provided.

k. A commitment by the transferee to abide by all constraints, conditions, requirements, representations, and commitments

identified in the existing license. If not, the transferee

must provide a description of its program to assure compliance

with the license and regulations.

No specific action or written response is required by this information notice.

Questions on this matter should be directed to the appropriate NRC Regional

Office or to this office.

Richard E. Cunningham, Director

Division of Industrial and

Medical Nuclear Safety

Office of Nuclear Material

Safety and Safeguards

Scott Moore, NMSS

(301) 492-0514 Attachments: 1. List of Recently Issued NMSS Information Notices

2. List of Recently Issued NRC Information Notices

Also input from

LChandler, OGC

RWeisman, OGC

• Editor *RI *RII *RIII *RIV *RV *OE

EKraus JJoyner WCline BMallett WFisher RThomas JLieberman

2/08/89 2/07/89 2/13/89 2/14/89 2/13/89 2/08/89 2/23/89

• See previous concurrence

OFC: *IMOB  :*IMOB  :*IMAB  :*IMSB  :*IMOB *OGC :IMNS  :*IMNS

NAME:SMoore/sm :DCool :JAustin :LRouse :JHickey :RFonner:GSjoblom :RECunningham

_____________________-_________________-____________________-________________

DATE:2/22/89 :2/23/89:2/23/89 :2/28/89 :2/28 /89 :2/28/89:2/ /89 :02/28/89 OFFICIAL RECORD COPY

IN 89- March , 1989 as specified in 10 CFR Sections 30.35, 40.36, and 70.25. This

should include information about how the transferee and

transferor propose to divide the transferor's assets, and

responsibility for any cleanup needed at the time of transfer.

j. An indication of whether the transferor and transferee agree to

the change in ownership or control of the licensed material and

activity. If so, documentation stating this should be provided.

k. A commitment by the transferee to abide by all constraints, conditions, requirements, representations, and commitments

identified in the existing license. If not, the transferee

must provide a description of its program to assure compliance

with the license and regulations.

No specific action or written response is required by this Information Notice.

Questions on this matter should be directed to the appropriate NRC Regional

Office or to this office.

Richard E. Cunningham, Director

Division of Industrial and

Medical Nuclear Safety

Office of Nuclear Material

Safety and Safeguards

Scott Moore, NMSS

(301) 492-0514 Attachments:

1. List of Recently Issued

NMSS Information Notices

2. List of Recently Issued

NRC Information Notices

Also input from

LChandler, OGC

RWeisman, OGC

• Editor *RI *RII *RIII *RIV *RV *OE

EKraus JJoyner WCline BMallett WFisher RThomas JLieberman

2/08/89 2/07/89 2/13/89 2/14/89 2/13/89 2/08/89 2/23/89

• See previous concurrence

OFC: *IMOB  :*IMOB  :*IMAB  :*IMSB :IMq :0GkS S

NAME:SMoore/sm :DCool :JAustin :LRouse :JHickey (6eIner:GS lom :R Cunningham

DATE:2/22189 :2/23/89:2/23/89 :2/28/89 :2/7 /89 :A2/ 89:2/ 9:02 2589

IN 89-

-S-e~ ,1989 as specified in 10 CFR Sections 30.35, 40.36, and 0.25. This

should include information about how the transf ee and

transferor propose to divide the transferor's ssets, and

responsibility for any cleanup needed at the ime of transfer.

j. An indication of whether the transferor d transferee agree to

the change in ownership or control of tye licensed material and

activity. If so, documentation stati this should be provided.

k. A commitment by the transferee to ide by all constraints, conditions, requirements, repres tations, and commitments

identified in the existing liceg e. If not, the transferee

must provide a description of ts program to assure compliance

with the license and regulat ns.

No specific action or written response is/required by this Information Notice.

Questions on this matter should be dire ed to the appropriate NRC Regional

Office or to this office.

Richard E. Cunningham, Director

Division of Industrial and

Medical Nuclear Safety

Office of Nuclear Material

Safety and Safeguards

Scott Moore, NMSS

(301 492-0514 Attachments:

1. List of Recently ssued

NMSS Informati Notices

2. List of Recent Issued

NRC Informat n Notices

Also input from

LChandler, OGC

RWeisman, OGC

• Editor *RI *RII *RIII *RIV *RV OE a -

EKraus JJoyner WCline BMallett WFisher RThomas JWa erman

2/08/89 / 2/07/89 2/13/89 2/14/89 2/13/g9 Z/Ub/U9 Z/W.;Vb

• See previous concurrence

==========

=============

OFC: IS Q:IMOB :1M =

A:IM===

E===================M==

~:IMOB :OGC . IMNS :IMNS

- - - - --

---

ZAL--------

NAME:SMoore/sm :pD W

JA stin :LRouse :JHickey :RFonner:G blom :RECunningham

_-----------------------_------------4 ------

_______________,,<r----

DATE:2/a2/89  :/'i/89:2ft5/89 :2/i;/89 :2/ /89 :2/ /89:2/ i :02/ /89 OH1CIAL RELURU CUPY

IN 89- February , 1989 k. Do the transferor and transferee agree to the change in ownership

or control of the licensed material and activity? If so, documentation stating this should be provided.

No specific action or written response is required by this Information Notice.

Questions on this matter should be directed to the appropriate NRC Regional

Office or to this office.

Richard E. Cunningham, Director

Division of Industrial and

Medical Nuclear Safety

Office of Nuclear Material

Safety and Safeguards

Scott Moore, NMSS

(301) 492-0514 Attachments:

1. List of Recently Issued

NMSS Information Notices

2. List of Recently Issued

NRC Information Notices

(44) Iva~

Editor RI RII$"' R II4.{ RIV 'oS RYV OE

EKraus JJoyner WCline BMallett WFisher RThomas JLieberman

2/8/89 2/17/89 2/13/89 2/i4/89 2/13/89 q2/

/89 2/ /89 OFC: IMOB :IMOB :IMAB :IMSB :IMOB :OGC :IMNS :IMNS

___--__-___-___-__________-_______-____-_-______-e _____________-_____

NAME:SMoore/sm:DCool :JAustin :LRouse :JHickey :Rp X:GSjoblom :RECunningham

DATE:2/ /89 :2/ /89:2/ /89 :2/ /89 :2/ /89 :2'/_Z/89:2/ /89 :02/ /89

IN 89- '

March , 1989 as specified in 10 CFR Sections 30.35, 40.36, and 70.25. This

should include information about how the transferee and

transferor propose to divide the transferor's assets, and

responsibility for any cleanup needed at the time of transfer.

j. An indication of whether the transferor and transferee agree to

the change in ownership or control of the licensed material and

activity. If so, documentation stating this should be provided.

k. A commitment by the transferee to abide by all constraints, conditions, requirements, representations, and commitments

identified in the existing license. If not, the transferee

must provide a description of its program to assure compliance

with the license and regulations.

No specific action or written response is required by this Information Notice.

Questions on this matter should be directed to the appropriate NRC Regional

Office or to this office.

Richard E. Cunningham, Director

Division of Industrial and

Medical Nuclear Safety

Office of Nuclear Material

Safety and Safeguards

Scott Moore, NMSS

(301) 492-0514 Attachments:

1. List of Recently Issued

NMSS Information Notices

2. List of Recently Issued

NRC Information Notices

Also input from

LChandler, OGC

RWeisman, OGC

• Editor *RI *RII *RIII *RIV *RV *OE

EKraus JJoyner WCline BMallett WFisher RThomas JLieberman

2/08/89 2/07/89 2/13/89 2/14/89 2/13/89 2/08/89 2/23/89

• See previous concurrence

OFC: *IMOB  :*IMOB  :*IMAB  :*IMSB :IMQb :0G ,7 S :1 w

---

--- ---

--- ------ --- --- --- --- --- 4 - -~ t- -- -----

NAME:SMoore/sm :DCool :JAustin :LRouse :JHickey E 4ner:GSz lomi Cunningham

DATE:2/22/89 :2/23/89:2/23/89 :2/28/89 :2/1l/89 :2/t/89:2/ 9 0216/89 OFFICIAL RECORD COPY

IN 89- tAo-cCk Seb6t*wry , 1989 as specified in 10 CFR Sections 30.35, 40.36, and 0.5. This

should include information about how the transf ee and

transferor propose to divide the transferor's ssets, and

responsibility for any cleanup needed at t -ime of transfer.

j. An indication of whether the transferor d transferee agree to

the change in ownership or control of t licensed material and

activity. If so, documentation stati this should be provided.

k. A commitment by the transferee to ide by all constraints, conditions, requirements, represe tations, and conmmitments

identified in the existing lice e. If not, the transferee

must provide a description of ts program to assure compliance

with the license and regulat ns.

No specific action or written response is required by this Information Notice.

Questions on this matter should be direted to the appropriate NRC Regional

Office or to this office.

Richard E. Cunningham, Director

Division of Industrial and

Medical Nuclear Safety

Office of Nuclear Material

Safety and Safeguards

Scott Moore, NMSS

(301/ 492-0514 Attachments:

1. List of Recently ssued

NMSS Informati Notices

2. List of Recent'y Issued

NRC Informat' n Notices

Also input from

LChandler, OGC

RWeisman, OGC

• Editor *RI *RII *RIII *RIV *RV OEj4. A 11-JIL

EKraus JJoyner WCline BMallett WFisher RThomas J~7perian

2/08/89 / 2/07/89 2/13/89 2/14/89 2/13/89 2/08/89 2J 89

• See previous concurrence

OFC: I B :IMOB :IMAB :IM i :IMOB :OGC .YMNS :IMNS

NAME:SMoore/sm :DQ ' :JAvstin :LRo se :JHickey :RFonner:G blom :RECunningham

DATE:2/aS/89  :/A!/89:2h3 /89:2/ /89 :2/ /89 :2/ /8 :2/ / 02/89 UMLIAL KLUULP

IN 89- February , 1989 k. Do the transferor and transferee agree to the change in ownership

or control of the licensed material and activity? If so, documentation stating this should be provided.

No specific action or written response is required by this Information Notice.

Questions on this matter should be directed to the appropriate NRC Regional

Office or to this office.

Richard E. Cunningham, Director

Division of Industrial and

Medical Nuclear Safety

Office of Nuclear Material

Safety and Safeguards

Scott Moore, NMSS

(301) 492-0514 Attachments:

1. List of Recently Issued

NMSS Information Notices

2. List of Recently Issued

NRC Information Notices

Editor RI RII4 " I RIV Xs9 2 RV OE

RIRIl e/ OE

EKraus JJoyner WCline BMallett WFisher RThomas JLieberman

2/8/89 2/71/89 2/13/89 2/1/ 89 2/13/89 2/ S/89 2/ /89 OFC: IMOB

-- -- --- -- :IMOB

- - -- -:IMAB

- -- - -:IMSB

-- ----------------:IMOB :OGC

--:IMNS

- - - --:IMNS

---

NAME:SMoore/sm:DCool :JAustin :LRouse :JHickey :RF aer:GSjoblom :RECunningham

DATE:2/ /89 :2/ /89:2/ /89 :2/ /89 :2/ /89 :2 /5/89:2/ /89 :02/ /89