ML18221A260

CFSI Presentation - Greater than the Sum of Its Parts

ML18221A260
Person / Time
Issue date:	08/09/2018
From:	Pasquale D NRC/OI
To:
Pasquale D
References
Download: ML18221A260 (29)

Text

THE ENERGY INFRASTRUCTURE INITIATIVE International Conference on Quality, Leadership and Management in the Nuclear Industry DAN PASQUALE SR. REACTOR SYSTEMS ENGINEER (301) 415-2498 Daniel.Pasquale@nrc.gov

To license and regulate the nations civilian use of byproduct, source and special nuclear materials to ensure adequate protection of public health and safety, promote the common defense and security, and protect the environment.

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Responsibilities outlined in Title 10 of the CFR, Part 1.36, Office of Investigations

• Conducts investigations of allegations of wrongdoing

• Maintains current awareness of inquiries and inspections by other NRC offices

• Makes appropriate referrals to the Department of Justice

• Liaise with other agencies and organizations, both domestic and international, to ensure the timely exchange of information of mutual interest 3

The Office of Investigations:

• is committed to combatting the introduction of counterfeit parts into the nuclear supply chain through strategic partnerships with internal and external stakeholders

• is collaboratively working with other government agencies and industry to proactively identify CFSI before it enters into the US critical infrastructure (i.e., nuclear supply chain)

• works closely with our inspectors and the technical staff whenever there is a report of CFSI 4

For those Systems, Structures, And Components (SSC) deemed Important to Safety, the GENERAL DESIGN CRITERA provides design, fabrication, construction, testing, and performance requirements that provide the facility can be operated without undue risk to the health and safety of the public 5

1. to the best possible extent provided given the situations circumstances, the author is reasonably sure that his conclusions are free from material misstatement

2. acknowledgment that it is not possible to assert absolutely and certainly that an event will (or will not) occur 6

Reasonable evolves consistent with the Body Of Knowledge. What was understood to be reasonable in 1818 may not be reasonable in 2018!

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• Will it fail?

• When will it fail?

• How will it fail?

• How will its failure effect other components?

• Trend data?

• No Warranties or Guarantees

• No Vendor support

• No Nuclear liability Single Failure Criterion (SFC)

Common Cause Failure (CCF)

Probabilistic Risk Assessment (PRA) 8 Core Damage Frequency (CDF)

Poor performance by a vendor resulting in a nonconformance, while undesirable, can be managed by effective customer oversight.

Intentionally misrepresenting equipment, parts or materials is illegal and must be dealt with appropriately 9

Allegation (in-part): A declaration, statement, or assertion of impropriety or inadequacy associated with NRC-regulated activity, the validity of which has not been established The NRCs Allegation Program is:

designed to review anyones concerns regarding safety significant issues associated with NRC regulated activities Contact any NRC employee (including a resident inspector), or e-mail the NRC at ALLEGATION@nrc.gov, or call the NRCs toll-free Safety Hotline, 1-800-695-7403 NUREG BR-0240 Reporting Safety Concerns to the NRC https://www.nrc.gov/docs/ML1214/ML12146A003.pdf 10

An acceptance process undertaken to provide that a commercial grade item to be used as a will perform its intended safety function and, in this respect, is deemed equivalent to an item designed and manufactured under a 10 CFR Part 50, appendix B, quality assurance program.

10 CFR 21 11

U.S. Department of Commerce, 2010 Defense Industrial Base: Counterfeit Electronics

• Historic increase in counterfeit electronic incidents

• 140% increase in DoD counterfeit electronic reports: 2006-2009

• 82% of companies DO NOT report CFSI

• Increased use of commercial-grade dedications

• Supply chain globalization

• Industry-wide transition to digital technology -Advanced microcircuit technology (including programmable logic controllers)

• Cyber Security for Critical Infrastructure (embedded/tainted code)

• Advanced Counterfeiting Technologies 12

REACTIVE PROACTIVE 13

NATIONAL INTELLECTUAL PROPERTY RIGHTS CENTER 23 partner agencies, consisting of 19 key federal agencies, Interpol, Europol and the governments 14 of Canada and Mexico in a task-force setting.

. 15 Effectively leverage the resources, skills, and authorities of each partner and provide a comprehensive response to IP theft.

Investigation - Identifying, analyzing, deconflicting, prosecuting and dismantling criminal organizations involved in the manufacture and distribution of counterfeit products.

Interdiction - Using collective intelligence & detective resources to perform raids, surges, focused targeting and inspections to keep counterfeit and pirated goods out of U.S.

industrial supply chains.

Outreach and Training - Providing training for domestic and international law enforcement to build stronger enforcement capabilities worldwide.

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A comprehensive initiative targeting counterfeit items entering the supply chains* of the Department of Defense and other U.S. government agencies.

• supply chains includes those of public and private critical infrastructure entities regulated by OCR agencies (e.g., NRC) 17

• Proactive Information re: CFSI

• Harder for the dishonest to re-invent themselves

• Access to more Operating/Construction experience

• Expedited CFSI Alerts/Advisories (contain the spill)

• Avenue for reporting non-power block CFSI 18

The only effective way to combat the problem is

• Regulator

• Licensee

• Supply Chain

• Trade Associations

• Law Enforcement

• Federal Agencies 19

• Academia

The NRCs Safety Culture policy statement, applies to all licensees, certificate holders, permit holders, authorization holders, holders of quality assurance program approvals, vendors and suppliers of safety-related components, and applicants for a license, certificate, permit, authorization, or quality assurance program approval subject to NRC authority.

- NUREG/BR-0500, Rev. 3 NUREG/BR-0500

- ML15062A478 20

• Assist with high risk procurements (incl. CDAs)

• Data Analytics (DataNet)

• Supplier Vetting o Access to U.S. Government data o Credible & trustworthiness o Transnational records

• Financial stresses o Bankruptcy/delinquency litigations

• Supplier relationship intelligence o Time in business o Cage Hoppers/Jackers o System for Award Management (SAM, f.k.a. Excluded Parties List-EPLS) o Subsidiary relationships o Foreign ownership/global parents 21

• OSHA safety gear (hard hats, goggles, gloves)

• Emergency response equipment (Fire/medical)

• Security forces (ammunition/body armor/sights)

• Hand & power tools

• Rigging equipment, hose fittings

• Refrigerants 22

Favorable criminal environment: Favorable profit margins:

• lack of reporting

• high profit potential

• little fear of prosecution

• low capital and labor costs

• low fines and sentences upon conviction

• access to sub-suppliers

• unprecedented anonymity

• easily distributed via the internet

• may involve alternate illicit activities

• no research & development costs

• no advertising costs

• minimal legal expenses Favorable market conditions:

• obsolescence (aging operating units)

• advancing technology (digital I&C)

• global supply chain (58 nuclear plants under construction worldwide)

• diminishing 10 CFR 50, Appendix B suppliers (more CGDs)

• new norms (high in-service failures) 23

Modernized, sophisticated sub-industry used to fund other crimes including:

Cyber Hackers Money laundering Terrorist activities Transnational organizations Organized crime syndicates Political activists Culture jammers 24 Nation-states

25 Kobe Steel Scandal Goes Nuclear: Company Faked Data For Decades, Had A "Fraud Manual _www.zerohedge.com Kobe Steel Scandal Could Rattle US Nuclear Industry

_wolfstreet.com Inspectors find safety irregularities at Creusot nuclear forge in France

_www.theguardian.com France's nuclear giant Areva admits to 400 irregularities' in power plant parts_ www.telegraph.co.uk IN-16-01: Recent Issues Related to the Commercial Grade Dedication of Allen Bradley 700-RTC Relays _NRC Relay manufacturer quietly changes internal parts, creates potential safety hazard_www.nuclearelectricalengineer.com 26

Critical Infrastructure Security and Resilience (2013) advances the Community of Interest Concept

• Regulator (USNRC)

• Commercial Nuclear Licensees

• Key IP Rights Owners

• National IPR Center (DHS/ICE/HIS)

• Trade associations

• Academia PPD-21: https://obamawhitehouse.archives.gov/the-press-office/2013/02/12/presidential-policy-directive-critical-infrastructure-security-and-resil 27

In all aspects of IPR crime enforcement, there is an identified and ongoing need for enhanced cooperation and education amongst all stakeholders and intermediaries to ensure that the fight against such criminality and its effects becomes more cohesive and well informed

- EUROPOLs 2017 Situation Report on Counterfeiting and Piracy in the European Union The NRCs Office of Investigations supports those recommendations for a more and approach to CFSI 28

DAN PASQUALE U.S. NRC, Office of Investigations (301) 415-2498 Daniel.Pasquale@nrc.gov 29