ML17241A084
| ML17241A084 | |
| Person / Time | |
|---|---|
| Site: | Nuclear Energy Institute |
| Issue date: | 08/23/2017 |
| From: | Schluter J Nuclear Energy Institute |
| To: | Peter Habighorst, James Rubenstone Office of Nuclear Material Safety and Safeguards, NRC/OIP/ECNP |
| Savoy J | |
| References | |
| Download: ML17241A084 (5) | |
Text
JANET R. SCHLUETER Senior Director, Radiation and Materials Safety 1201 F Street, NW, Suite 1100 Washington, DC 20004 P: 202.739.8098 jrs@nei.org nei.org August 23, 2017 Mr. Peter Habighorst, Chief Mr. James Rubenstone, Chief Export Controls and Nonproliferation Branch Material Control and Accounting Branch Office of International Programs Office of Nuclear Material Safety and Safeguards U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 Washington, DC 20555-0001
Subject:
NEI Comments on the Application of the Additional Protocol Reporting Requirements set forth in 10 CFR 110.54(a)(1) and recent NRC Enforcement Actions Project: 689
Dear Messrs. Habighorst and Rubenstone:
On behalf of the Nuclear Energy Institutes (NEI) 1 fuel cycle facility (FCF) members, we recognize the importance and significance of the Protocol Additional to the Agreement Between the United States of America (U.S.) and the International Atomic Energy Agency (IAEA) for the Application of Safeguards in the United States of America (hereinafter referred to as the Additional Protocol or AP), to the global nonproliferation regime. The U.S. governments AP reporting obligations provides the IAEA with additional qualitative tools to comprehensively monitor activities, including exports of covered equipment and material, in addition to other tools (e.g., the quantitative accounting tools under the U.S. Voluntary Offer Agreement).
NEI commends the U.S. government, including the Nuclear Regulatory Commission (NRC), for its overall implementation of the AP reporting regime, since the APs entry into force in 2009.
We are concerned, however, with the NRCs recent approach to its interpretation of the AP reporting requirements set forth in 10 CFR 110.54(a)(1). We have seen an uptick in enforcement actions related to this provision that appears to be unwarranted. There is significant confusion for the industry in when and how 10 CFR 110.54(a)(1) applies, which appears to be the result of unclear guidance. The NRCs approach to resolving this confusion, rather than communicating with affected industry members or updating its guidance and websites, has been to regulate through enforcement. Given that the industry is trying to comply with these requirements, we would like to work with you and your staff to assist industry in better understanding these requirements so that they can ensure complete and accurate reporting to the IAEA.
1 NEI is responsible for establishing unified nuclear industry policy on matters affecting the nuclear energy industry, including regulatory, financial, technical and legislative issues. NEI members include all companies licensed to operate commercial nuclear power plants in the United States, nuclear plant designers, major architect/engineering firms, fuel fabrication facilities, materials licensees, and other organizations and individuals involved in the nuclear energy industry.
Messrs. Peter Habighorst and James Rubenstone August 23, 2017 Page 2 As you are aware, under the AP, the U.S. is obligated to make declarations to the IAEA on peaceful nuclear activities in the U.S. To ensure the U.S. government's compliance with the treaty, certain public and private U.S. entities are required to report on a number of activities, including the export of nuclear fuel cycle-related equipment and materials. This reporting requirement is set forth in 10 CFR 110.54(a)(1), and covers exports of nuclear facilities and equipment, nuclear grade graphite for nuclear end use, and deuterium.
These reports are due to Department of Commerce on a quarterly basis. The Department of Commerce (DOC) has guidance on the submission of these reports that is set forth in The U.S. Additional Protocol to the U.S. - International Atomic Energy Agency (IAEA) Safeguards Agreement Report Handbook for Locations and The U.S. Additional Protocol to the U.S. - International Atomic Energy Agency (IAEA)
Safeguards Agreement Report Handbook for Sites (collectively, Handbooks). The DOC website discussing the Additional Protocol obligations explains that U.S. Nuclear Regulatory Commission (NRC) licensees should use the reporting handbooks and forms found on this page as instructed in 10 CFR Part 75. 2 The NRC will also refer entities subject to the AP reporting requirements to the Handbooks. 3 Beginning in 2015, the NRC issued several Severity Level IV notices of violation (NOV) to a number of companies for alleged violations of the AP reporting requirements set forth in 10 CFR 110.54(a)(1). While some NRC licensees were unaware of the AP reporting requirements, there are several instances in which disagreements over the interpretations of the Handbooks, and the underlying Annex II of the Additional Protocol itself, which lists the covered equipment and material subject to the AP reporting requirement, have led to the issuance of NOVs to licensees. Recent NRC staff re-interpretations of these longstanding documents represent a departure from previous NRC staff practice. Additional guidance and clarification from the NRC staff is necessary regarding the applicability of the Handbooks.
On behalf of its members, NEI offers the following recommendations to clarify the existing regulatory requirements as related to AP export reporting which we would be pleased to discuss with you:
Clarifying Applicability & Reinterpretations of Joint DOC / NRC AP Handbooks The Handbooks have been referenced, in several forms, by DOC and NRC staff since 2008. The Handbooks have a provision in Table 1 4 which allows for amended reports to be submitted under three conditions:
- 1) 30 calendar days after identification of a correction to information regarding a reportable activity
- 2) 30 calendar days after change in company information
- 3) 30 calendar days after receipt of a post-complementary access letter from BIS or NRC Industry has successfully adopted this practice of submitting amended reports (particularly under condition
- 1), absent feedback from the NRC. Amidst industrys broad day-to-day operating, business, and regulatory compliance responsibilities in an environment of increased regulation, we strongly applaud them for self-2 DOC Bureau of Industry and Security (BIS), Additional Protocol webpage.
3 See, e.g., NRC webpage, Additional Protocol: Frequently Asked Questions (last updated February 8, 2017); NRC Presentation, Addressing the U.S. Additional Protocol at page 9.
4 Note, the language varies slightly between the two Handbooks.
Messrs. Peter Habighorst and James Rubenstone August 23, 2017 Page 3 identifying, and promptly correcting certain missing information from submitted export reports in an effort to provide the U.S. government with complete and accurate reporting to the IAEA.
Recently, the NRC staff has begun issuing NOVs following the submittal of corrected reports under this provision of the AP Handbooks. This sudden departure from past practice, without notice or prior guidance to industry, does not align with the NRC organizational values of openness in communications and decision making. In response, the NRC staff has conveyed the position that the AP Handbooks are simply guidance, and do not represent codified AP regulatory requirements. This sort of response represents a mixed message, considering that the NRC has also repeatedly represented to wide industry audiences that it endorses and recommends utilizing such Handbooks.
Furthermore, it is perplexing when NRC staff identifies, in a piecemeal fashion, areas of the Handbooks that are and are not valid, for example, excluding certain provisions of Table 1.
I ndustry P roposed Solution: Thus, a clear message from NRC staff on the how industry should use the Handbooks is necessary. If there has been a departure of interpretation, in any part of the Handbooks content, this needs to be clearly and broadly communicated with all AP stakeholders, and the Handbooks need to be expeditiously revised (we also note that the Handbooks are not clearly dated - which adds to confusion). This can be done through the issuance of a Regulatory Issue Summary (RIS), or through revisions to the Handbooks themselves.
We strongly suggest that until a RIS or revised guidance has been issued, however, licensees who have followed the Handbooks guidelines to date should not be issued NOVs based on retroactive NRC decisions about the applicability or validity of this guidance. Communication of new requirements or interpretations, simply through an enforcement route, as NRC has demonstrated, is a clear departure from the NRC principles of good regulation, specifically in the areas of Openness, Efficiency, Clarity, and Reliability.
Increasing Transparency of AP Annex II Interpretations AP Annex II provides a list of all applicable elements that should be reported under the AP. Since implementation of the AP in 2009, there have been several questions from industry on the applicability of certain Annex II items to their operations, which would directly impact the applicability of 10 CFR 110.54(a)(1). Unfortunately, as several key issues were identified and resolved in the early stages of U.S.
AP implementation, these records of decision were not formally documented or recorded by the NRC and shared throughout the AP reporting community. This lack of historical documentation has hurt industry, as similar questions and concerns have arisen years later. As a result, as time goes on, new interpretations of Annex II requirements have appeared, which in some cases, have not been consistent with the guidance given to industry in the early stages of AP implementation.
I ndustry P roposed Solution: W e strongly encourage that all official decisions regarding AP reporting (and technical Annex II inquiries) be docketed in public ADAM S. These main library (ML) numbers could then be referenced on one (or all) of several appropriate government agency webpages related to AP and Part 110 (as outlined below), as a useful reference tool for the AP reporting community.
Messrs. Peter Habighorst and James Rubenstone August 23, 2017 Page 4 In addition, we recommend the NRC staff provide a RIS which outlines the summary of regulatory positions taken regarding the scope of items to be reported under Annex II, particularly for items that may not obviously fall under the scope of Annex II and 10 CFR 111.54(a)(1), so industry members can better update their reporting procedures.
Increasing AP Reporting Requirement Awareness As previously mentioned, some licensees were simply not aware of the AP reporting requirements as outlined in 10 CFR 110.54(a)(1). There are several remedies available to NRC staff to increase awareness and communication of AP reporting requirements, which has the advantage of minimizing future resource expenditure towards issuing NOVs and allowing for a more complete and accurate reporting to the IAEA.
I ndustry P roposed Solution: For example, the NRC could issue a generic communication to broaden awareness of AP reporting requirements and clarify common misconceptions. The NRC could also develop new, more formal proposed guidance and seek input from the public, including the regulated community.
Among other things, such guidance could clarify how licensees can rely on the Handbooks. In addition, there are several public webpages that can be expanded upon to provide further clarification and guidance on AP reporting to include:
- 1) www.AP.gov
- 3) https://www.nrc.gov/about-nrc/ip/intl-safeguards.html#USAP Surprisingly, there is no clear reference to AP reporting requirements on the NRCs export/import control webpage, which could be a source of confusion, given AP export reporting requirements are listed under 10 CFR Part 110. In the same vein, further confusion arises by the fact that AP export reporting requirements are contained in both 10 CFR Part 110 and 10 CFR Part 75 (specifically 10 CFR 75.11).
While both the NRCs import/export control webpage, and the International Safeguards webpage have a frequently-asked-questions (FAQ) section, these questions do not delve into the level of technical detail necessary, to answer critical questions from industry regarding Annex II reporting, and in fact, just refer industry to the Handbooks, which have already proven to be a source of confusion. A helpful example would be to add a Q&A on AP export reporting of specific components (e.g., for fuel rods, whether this includes pieces of fuel rods vice the full length fuel rod).
Also, NEI supports the NRC staff practice of sending an annual reminder letter to NRC and Agreement State licensees. While we recognize that the purpose of those letters was tailored to the annual AP report, it would be helpful to additionally emphasize the quarterly reporting deadlines in those same communications, and what those reports entail, given the increased focus and pointed scrutiny those reports have received by NRC staff.
Finally, we recommend that the NRC exercise enforcement discretion regarding Part 110 reporting violations, given the absence of guidance related to such matters in the NRCs Enforcement Policy, compounded by the low safety and security significance of such findings. If, however, an enforcement route
Messrs. Peter Habighorst and James Rubenstone August 23, 2017 Page 5 is to be pursued, NRC staff should consider how such violations fit into the current Enforcement Policy framework.
We appreciate the opportunity to provide industrys perspective on this important international safeguards matter, and trust this information will be useful to ensure expectations related to AP reporting are clearly identified and communicated to industry moving forward. We are also available to discuss these matters with you in order to identify the most efficient and effective means to help ensure full compliance by NRC licensees subject to the applicable requirements.
If you have any questions about the content of this letter, please contact me or Hilary Lane (hml@nei.org; 202.739.8148).
Sincerely, Janet R. Schlueter c: Mr. Craig Erlanger, NMSS/FCSE, NRC Mr. Nader Mamish, OIP, NRC Mr. David Skeen, OIP, NRC Ms. Grace Kim, OGC, NRC Ms. Patricia Holahan, OE, NRC NRC Document Control Desk