Information Notice 2012-22, Rev. 1 - Counterfeit, Fraudulent, Suspect Item Training Offerings
| ML19017A118 | |
| Person / Time | |
|---|---|
| Issue date: | 11/20/2019 |
| From: | Chris Miller, Shuttleworth E NRC/NRR/DRO, NRC/OI |
| To: | |
| Benney B | |
| References | |
| IN-12-022, Rev. 1 | |
| Download: ML19017A118 (6) | |
UNITED STATES
NUCLEAR REGULATORY COMMISSION
OFFICE OF NEW REACTORS
OFFICE OF NUCLEAR REACTOR REGULATION
OFFICE OF FEDERAL AND STATE MATERIALS AND
ENVIRONMENTAL MANAGEMENT PROGRAMS
OFFICE OF NUCLEAR MATERIAL SAFETY
AND SAFEGUARDS
WASHINGTON, DC 20555-0001 November 20, 2019 NRC INFORMATION NOTICE 2012-22, REV. 1: COUNTERFEIT, FRAUDULENT,
SUSPECT ITEM TRAINING OFFERINGS
ADDRESSEES
All holders of and applicants for a specific source material license under Title 10 of the Code of
Federal Regulations (10 CFR) Part 40, Domestic Licensing of Source Material.
All holders of an operating license, research and test reactor operating license, or construction
permit for a nuclear power reactor under 10 CFR Part 50, Domestic Licensing of Production
and Utilization Facilities, including those that have permanently ceased operations and have
certified that fuel has been permanently removed from the reactor vessel.
All holders of and applicants for a power reactor early site permit, combined license, standard
design certification, standard design approval, or manufacturing license under 10 CFR Part 52, Licenses, Certifications, and Approvals for Nuclear Power Plants.
All holders of and applicants for a fuel cycle facility license or a special nuclear material license
authorizing the possession, use, or transport of formula quantities of strategic special nuclear
material under 10 CFR Part 70, Domestic Licensing of Special Nuclear Material.
All holders of and applicants for a transportation package certificate of compliance or for a
specific approval for the transport of radioactive material shipping containers under
10 CFR Part 71, Packaging and Transportation of Radioactive Material.
All holders of and applicants for an independent spent fuel storage installation license or a
certificate of compliance under 10 CFR Part 72, Licensing Requirements for the Independent
Storage of Spent Nuclear Fuel, High-Level Radioactive Waste, and Reactor-Related Greater
Than Class C Waste.
All contractors and vendors that supply basic components to U.S. Nuclear Regulatory
Commission (NRC) licensees.
All NRC licensees and certificate holders, Agreement State Radiation Control Program
Directors, and State Liaison Officers.
IN 2012-22, Rev. 1 All contractors and vendors that supply basic components to NRC licensees. All vendors and
suppliers of safety-related components and digital assets associated with Section 73.54, Protection of digital computer and communication systems and networks, of Title 10, Energy, of the Code of Federal Regulations (10 CFR).
PURPOSE
The NRC is issuing this information notice (IN) to inform addressees of examples of the many
training opportunities available on detecting potential counterfeit, fraudulent, and suspect items
(CFSIs) that may enter the supply chain. The NRC believes it is both prudent and warranted at
this time to continue to make deliberate efforts toward understanding how the regulator and
industry could address new CFSI challenges. The issuance of this IN will also serve to heighten
each addressees awareness of CFSI issues. The training resources listed in Table 1 of this IN
may be useful for educating personnel involved in NRC-regulated activities on current trends in
CFSI and on techniques to prevent the use of CFSI parts. The suggestions contained within
this IN are not NRC requirements; therefore, no specific action or written response is required.
Addressees
can review this information and consider actions, as appropriate.
This IN calls attention to new advances in anti-CFSI techniques and provides a list of training
that focuses on a broad spectrum of potential recipients. Each training provider should be
contacted directly for current course descriptions, schedules, and fees.
BACKGROUND
The NRC has issued several generic communications to inform licensees of counterfeit or
misrepresented vendor products, including Generic Letter (GL) 89-02, Actions to Improve the
Detection of Counterfeit and Fraudulently Marketed Products, dated March 21, 1989 (ADAMS
Accession No. ML031140060). The GL emphasized the three characteristics of effective
procurement and dedication programs identified during NRC inspections. These characteristics
are (1) the involvement of engineering staff in the procurement and product acceptance
process, (2) effective source inspection, receipt inspection, and testing programs, and
(3) thorough, engineering-based programs for the review, testing, and dedication of
commercial-grade products for suitability of use in safety-related applications. The NRC found
that programs that embodied the above three characteristics generally were effective in
providing an enhanced capability to detect counterfeit or fraudulently marketed products and in
assuring the quality of procured products, both in safety-related and other plant systems. These
three characteristics are as relevant today as they were more than two decades ago.
In addition to GL 89-02, the NRC staff issued IN 89-70, Possible Indications of Misrepresented
Vendor Products, on October 11, 1989 (ADAMS Accession No. ML031190077), and
Supplement 1 with the same title on April 26, 1990 (ADAMS Accession No. ML031180470), to
inform licensees of misrepresented products and to provide information on how to detect them.
The NRC staff also issued IN 2008-04, Counterfeit Parts Supplied to Nuclear Power Plants, dated April 7, 2008 (ADAMS Accession No. ML093620098), to inform addressees of the
potential for counterfeit parts to enter their supply chains. IN 2012-22, Counterfeit, Fraudulent, Suspect Item (CFSI) Training Offerings was issued on January 25, 2013 (ADAMS Accession
No. ML12137A248) to inform addressees of a sampling of various CFSI training offerings
dealing with detecting potential CFSI that may enter the commercial nuclear supply chain.
Regulatory Issue Summary 2015-08, Oversight of Counterfeit, Fraudulent, and Suspect Items
in the Nuclear Industry, dated June 24, 2015 (ADAMS Accession No. ML15008A191),
IN 2012-22, Rev. 1 summarized existing NRC regulations and described their application to CFSI within the scope
of the NRCs regulatory jurisdiction.
DISCUSSION
The threat of industrial counterfeiting continues to increase globally despite concerted efforts by
the various stakeholders and law enforcement agenciesproving once again that reactive
efforts alone are only marginally successful in this arena. Recent examples that underscore this
trend include the following:
- 2017 - The Japanese steel manufacturer Kobe Steel Group (Kobe Steel) released a
report from an independent investigation committee, stating that Kobe Steel had
engaged in inappropriate conducts in the handling of test data associated with
delivered materials. The results of an independent internal investigation commissioned
by Kobe Steel into the issue confirmed four instances of altering inspection dataall
outside the commercial nuclear industry. Subsequently, the NRC issued IN 18-11, Kobe Steel Quality Assurance Record Falsification, on September 24, 2018 (ADAMS
Accession No. ML18190A466), to alert NRC licensees, license applicants, certificate
holders, and component contractors and vendors of Kobe Steels widespread
falsification of quality assurance records over a period of 5 years.
- 2017 - The French Nuclear Safety Authority (ASN) presented Irregularities and
Falsification - Background and suggested improvements during the European Nuclear
Safety Regulators Groups European Nuclear Safety Conference in Brussels. The public
presentation explained the regulators decision to increase inspections related to the
Creusot Forge events. The number of inspections related to past manufacturing
products was increased to 10,000 components, along with a corresponding increase to
150 people dedicated to performing those examinations. The ASN stated that the
increases were based on observations noted during examinations performed between
2015 and 2016, including attempts by key suppliers to transmit falsified certificates of
materials intended for the AP1000. In their summary, they proposed several
improvements in three key areas: (1) information and notification, (2) controls and tests, and (3) oversight and inspections, noting that these recommendations are Applicable to
all actors (suppliers, customers, licensees, and safety authorities).
- 2017 - The Construction Industry Institute published Research Report RR307, Mitigating Threats of Counterfeit Materials in the Capital Projects Industry, issued
April 2016. This new study built upon their 2010 report, RT264. Although the new study
which was performed several years later published similar conclusions (e.g. both reports
indicated that CFSIs continue to be a threat to the construction industry; within the
construction industry, valves, fasteners, bolts, and pipe were found to be some of the
most widely reported instances of CFSIs; approximately 53 percent of CFSIs are
detected after installation and completion of construction activities and, the need still
exists for comprehensive training of personnel to prevent the introduction of CFSI into
the supply chain).
- 2016 - April 21, 2016, the French Nuclear Safety Authority (ASN) published a notice in
response to a report they received on January 21, 2016, from a metallurgical analysis
laboratory on, indicating that inspection reports produced for Le Creusot Forge had been
falsified. The notice stated that the subject company produces parts incorporated into
IN 2012-22, Rev. 1 industrial equipment including nuclear power plants. This information would lead to a
multiyear, multinational investigation into how the facility interpreted and communicated
technical data associated with the adequacy of those components. On January 10,
2017, the NRCs Office of Public Affairs, via the agencys public-blog, expressed the
U.S. regulators confidence that based on the results of joint efforts between the NRC
and the ASN), there are no safety concerns for U.S. nuclear power plants raised by the
Creusot Forge investigations in France.
- 2013 - The NRC issued IN 2013-15, Willful Misconduct/Record Falsification and
Nuclear Safety Culture, dated August 23, 2013 (ADAMS Accession No. ML13142A437),
to inform addressees of recent instances of willful misconduct identified at U.S. nuclear
sites.
- 2010 - The Construction Industry Institute issued the final report for study RT264, Product Integrity Concerns in Low-Cost Sourcing Countries, which summarizes
interviews of 187 industry representatives and government leaders from eight countries.
The consensus was that the magnitude of the problem has grown from big to very
big.
As many published best practices recommend, proactive anti-CFSI policies should stress the
need to share CFSI information and to train the workforce in current identification, avoidance, management, and response techniques. Many industries have already begun to modify their
purchasing policies and procedures in response to CFSI threats. Each organizations
commitment to CFSI training will vary based on many factors, including reliance on procurement
strategies that carry higher CFSI risks (e.g., unfamiliar supply sources, or suppliers known to
exhibit questionable business practices). The constant among better implemented programs is
that every individual involved in specifying, procuring, and installing components is held
responsible for combating CFSI. Training, including hands-on instruction, should be considered
for all employees supporting the procurement process, including personnel involved in product
purchasing (materials and services), quality assurance, receiving, maintenance, and
investigation. Refresher training also may be regularly emphasized to update employees on
new threats, identification techniques, and communication strategies.
Providing training and awareness programs to these individuals helps prevent the inadvertent
introduction of nonconforming parts into the supply chain. This message is particularly
important in keeping pace with the growing trends in business-to-business commerce. While
many organizations today have implemented some form of electronic commerce (e-commerce),
each organization must weigh the level of risk along with the legitimacy of a suppliers offer
when purchasing critical items. It is vitally important that all final procurement decisions, including those steps programmed into automated systems, consider the best possible
anticounterfeiting purchasing practices before the final purchase.
Table 1 of this IN (ADAMS Accession No. ML19017A117) lists CFSI training courses offered
from a variety of sources. The list is not intended to be complete, nor is it the staffs intent to
maintain this list current. It is intended to inform the industry of existing CFSI training and to
encourage industry representatives to expand the body of knowledge. This list focuses on
those responsible for traditional supply chain procurement from product development through
product receipt. It also includes some often-overlooked support functions, including offerings
focused on establishing and protecting intellectual property rights.
IN 2012-22, Rev. 1 Additionally, the list provides offerings for fraud investigators and prosecutors. Most of this
training was developed from a nonnuclear industry perspective but can be adapted for the
commercial nuclear industry. Many of the organizations contacted are willing to tailor their
sessions to a specific topic or audience. The NRC staff has made no attempt to evaluate, rate, or endorse these courses but rather provides this list to those organizations and individuals
seeking this unique knowledge or skill set. The NRC encourages users of this list to contact
resource representatives directly and to perform due diligence to determine if the offering
adequately satisfies their specific needs.
CONTACT
This IN requires no specific action or written response. Please direct any questions about this
matter to the technical contact listed below.
Note: NRC generic communications may be found on the NRC public Web site, http://www.nrc.gov, under NRC Library.
/RA/ /RA/
Christopher G. Miller, Director E. Andy Shuttleworth, Director
Division of Reactor Oversight Office of Investigations
Office of Nuclear Reactor Regulation
Contacts:
Daniel J. Pasquale
Senior Operations Engineer
Office of Investigations
301-415-2498 Daniel.Pasquale@nrc.gov
Tracy Higgs
Deputy Office Director
Office of Investigations
301-415-1371 Tracy.Higgs@nrc.gov
Francis (Paul) Peduzzi
Deputy Office Director
Office of Enforcement
301-287-9527 Francis.Peduzzi@nrc.gov
ML19017A118 *concurrence via E-mail
OFFICE OI* QTE* OIP/ICA/BC* NRR/MPS/RISB*
NAME DPasquale JDougherty EStahl LHill
DATE 6/10/2019 5/1/2019 6/10/2019 6/6/2019 OFFICE OCIO* NRR/DIRS/IRGB/LA NRR/DIRS/IRGB/PM NRR/DIRS/IRGB/BC
NAME DCullison IBetts BBenney PMcKenna
DATE 7/16/2019 6/13/2019 7/17/2019 8/12/2019 OFFICE NRR/DIRS/IQVB/BC(A)* NMSS/FCSE/D* NMSS/DSFM/D* NMSS/MSST/DD
NAME JJacobson SSotoLugo MLayton KWilliams
DATE 8/8/2019 5/2/2019 4/29/2019 5/1/2019 OFFICE NRO/DLSE/DD* OI/DD* OE/DD NMSS/MSST/DD
NAME ABradford SJefferson FPeduzzi KWilliams
DATE 8/27/2019 6/10/2019 8/28/2019 9/9/2019 OFFICE NRR/DRO/D OI/D
NAME CMiller AShuttleworth
DATE 11/20/19 11/20/19