ML19210D754

Reports to Commission on Study of Proliferation Implication of origin-swapping Transactions Among Countries Engaged in U Commerce.Commission Should Confirm That Countries Are Not Swapping Unlike Matl.Supporting Documentation Encl

ML19210D754
Person / Time
Issue date:	08/01/1979
From:	Dircks W NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS)
To:
References
SECY-79-058A, SECY-79-58A, NUDOCS 7911280003
Download: ML19210D754 (20)

Text

..

Aug6st 1,1979 SECY-79-58A s

COMMISSIONER ACTION For.

The Cocnissioners Fro =:

William J. Dirchs, Director Office of Nuclear Material Safety and Safeguards Thru:

Executive Director for Operations

Subject:

DECIARID CB.I?,IN OF NUCLEAR MATERIALS

Purpose:

To report to the. Coc: mission on a study of the proliferation i=plications of " origin-svappin6" transactions Discussion:

1.

A memorandum from S. J. Chilk to L. V. Gossick dated Februar/ 13, 1979, on the subject, "SECY-79 Declared Origin of Nu: lear Materials," directed the staff to collect and conduct a study of data on transactions made during 1973 and proposed in 1979 that effected a change in the declared

" country of origin" of quantities of uranium. The staff was also directei to assess (a) the proliferation implications of these " origin-svapping" transactions, (b) the need for inter-nationally agreed supplier controls regarding such transactions, and (c) the likelihood of achieving internationally agreed supplier controls.

2.

3e considerations of concern are somewhat broader than i= plied by the term " origin swapping." Exchanges on paper of quantities cf uranium from different countries, without actual movenent of the uranium, are more properly called " flag svap-ping" or " nationality svapping," and the "svapping" could relate to the countries (a) where the uranium was mined, (b) where it was enriched, (c) where it was irradiated, (d) whe e it was repr: essed, or (e) where special safeguards conditions were attached independently of any of the preceding activities.

In previous cocmunications with the Cat: mission (cf. SECY-79-53),

refe ence vas =ade only to " origin svapping," and that term vill be used throughout this paper for ease of discussion.

Proliferatica i=plications vould be the.same for any of the other " nationality svappi'ag" transactions.

3 Co=neree is uranium (buying, selling, trading of ovnership, assignment of contract rights, etc. ) is. at least to sc=e extent, 1

Contact:

Justi2 Long, IOGS/SG 1403 001 7 004 J

$h 7911280003 j

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e stimulated and co= plicated by the necessity to (a) achieve

. assurance of supp y over a long time period, (b) comply with l

gcTern=ent regulations and -- in some cases -- intergovern-mental agreements, (c) maintain economic stability, and (d) ad,just to changes in these fac. tors (see Appendix A).

4.

Changes in ovnership of or contract rights to uranium are cocmon.

Scores of transactions involving natural uraniu= took place in 1978, seme of which vere exchanges of ovnership, or "svaps."

Section k0.21 of 10 CFR Part 40 pro-vides a general license to receive title to source material without regard to quantity. A similar general license to i

ovn, (but not to receive, possess, use, transfer, import, or b

export) special nuclear material is contained in 10 CFR 70.20.

5 Although ownership "svaps" are fairly co=non, few involve uranius of foreign origin (see data in Appendix B). Most trans-actions involving " origin swapping" appear to be occasioned by the need to co= ply with a DOE requirement originally estab-lished by the AEC in 1974 (see Appendix C). This requirement, which was established to help assure the development of an adequate domestic nuclear fuel supply, places limite on the arount of feed material of foreign origin that may be fur-nished by any customer to the U.S. government's enrichment fa:ilities in any one year where the enriched product is intended to be used in a domestic reactor.

o.

On all uraniu= of U.S. or foreign origin exported from the United States, tracking requirements are imposed, and retransfers, reprocessing, and other subsequent arrangements mest be approved by the United States government.

In order to avoid"multiplecontrols,"theproposedU.S./AustraliaAgree-mest for Cooperation (SE'"I-79-302) includes a provision for vcluntarily defer-ing to the country of origin to exercise such controls. This policy =ay be extended to other supplier nations on a case-by-case basis, as appropriate, in the process of negotiating future Agreements for Cooperation with other ecuntries.

7 Three basic types of "svaps" are of possible concern.

These are (1) "svaps" of material located entirely in the United States (i.e., domestic "svaps"), (2) "svaps" of material in the United States with material located abroad (i.e.,

dcmestic-foreign "svaps"), and (3) "svaps" of material located entirely abroad, or foreign-foreign "svaps."

The proliferation significance of each of these types of "svaps" is analyzed below.

B.

with respect to domestic "svaps," the amount of uranium unier U.S. control is not reduced, and there is no possibility 1403 002

,of avoiding U.S. export conditions. Statutory export condi-

'tions vould be applied to the uranium at the time of issuance of the required export license, regardless of country of origin, and the existence of any previous "svapping" arrangements vould not affect U.S. proliferation controls.

9 In the case of domestic-foreign "svaps" between a quantity of uranium in this country and an equal quantity in a foreign country, the uranium in this country would be subject to domestic controls as long as it re=ained in the U.S. and would become subject to U.S. export controls at the time of export -- if ever it were to be exported. The quantity of uranium in the j

foreign country would likewise continue to be subject to U.S.

{,

export controls if it were subject to such controls prior to the "svap. " The change in designated country of origin vould not affect the necessity for co=pliance with U.S. requirements and. accordingly, there are no proliferation concerns with these types of "svaps."

10.

In the case of foreign-foreign "svaps" involving quantities of uranius entirely in foreign countries, the United States vould likely be unaware of the "svap."

Nevertheless, any U.S.

proliferation controls vould not be avoided in such instances because any country that originally received material from the United States has for= ally agreed to subject the material to U.S. controls pursuant to the applicable Agreement for Coopera-tion and could not avoid U.S. controls by "svapping" material with another nation without at the same time violating their co==itments to the U.S. under the Agreement. All combinations of domestic-foreign and foreign-foreign "svaps" are su==arized in Appendix D.

11.

The above analyses indicate that none of the possible types of "svaps" result in proliferation concerns in themselves. Hov-ever, in one situation involving uranium exported from the United States a "svap" could occur even though it vould not necessarily contribute to the proliferation concern.

Such a situation vould arise when material is exported to Country X, and Country X then exports an identical quantity of that =aterial (but without U.S. export controls) to a third country, or uses an identical quantity itself.

This transaction would not violate any commitments to the United States because a quantity of mate-rial re=aining in Country X would be set aside and subjected to U.S. controls.

(Note that it is i==aterial to the discussion whether the material remaining in Country X is that which was exported from the U.S. or material originally in Country X that was "svapped" for the U.S. material and became subject to U.S.

controls.)

In effect, Ine transaction described would amount to U.S. exports for legitimate nuclear uses freeing up stocks of 1403 003

material in a foreign country for possible nuclear explosive uses ih that country or elsewhere. As a concrete example, it has been allegei that U.S. exports of high-enriched uranium to certain countries have freed up stocks of high-enriched uranium for dcmestic use or export to countries to which the United States

=ay not wish to export nuclear =aterials. Under such circum-stances, one recourse for the United States vould be to cease all exports to the country involved.

12.

Uttil nov the discussion has been predicated on the "svap-ping" of physically and chemically identical quantities of material. A potential for a "svapping" problem unrelated to l-country of origin could exist in the "svapping" of quantities of uraniu= and/or plutonium that are not identical but are consider-d, on some other basis, to be equivalent. One example vould be a "svap" of natural uranium for enriched uraniu=;

another vould be a "svap" of spent fuel for plutonium.

Such "svaps" could be of potential proliferation concern because of the pessibility of leapfrogging U.S. control require =ents.

This issue has not been subject to fo=al international dis-cussicas and agreement.

Consideration of conditions for agreeing to such "svaps" and the criteria for dete=ining equivalency may be an appropriate agenda item for the next meeting of the Nuclear Suppliers' Group or other appropriate international forun.

==

Conclusion:==

The staff is in agree =ent that " origin swapping" transactions of quantities of identical material involve no proliferation concerns. Accordingly, the staff believes no rule changes or internationally agreed supplier controls are needed with respect to " origin svapping" of like materials.

Because of possible concerns involving the "svapping" abroad of unlike materials, the staff believes this natter should be dis-cussed fu-ther with the Executive Branch.

F.eco=endation :

Toat the Com=ission:

Note the staff's conclusions regarding the " origin svapping" a.

of like =aterial.

b.

Authorize the staff to contact the Executive Branch to obtain confirmaticn that countries are not engaging in "svaps" of unlike material and to explore the possibility of es-dolishing agreed international =eans"of dealing with this matter. *

• SECY NOTE:

There are no, resource requirements associated with this action.

h-1403 004

Coordination:

The Office of International Programs concurs.

The Office

'gf the Executive Legal Director has no legal objections.

v J

William J. Dircks, Director Office of Nuclear Material Safety and Safeguards

Enclosures:

A.

Some Considerations Relating To f

Declared Origin of Nuclear Materials 3.

Data on the Frequency of " Origin Swapping" C.

Federal Register Notice of Occaber 25, 1974 D.

Combiaations In Which Transnational Uranium "Suaps" Can Take Place Commissioners' comments should be provided directly to the Office of the Secretary by c.o.b. Tuesday, August 14, 1979.

Comm.ission Staff Office comments, if any, should be submitted to the Commissioners NLT August 8,1979, with an information copy to the Office of the Secretary.

If the paper is of such a nature that it requires additional time for analytical review and comment, the Commissioners and the Secretariat should be apprised of when comments may be expected.

DISTRIBUTION Commissioners Commission Staff Offices i

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Accendix A SOME CONSIDERATIONS RELATING TO DECLA RD ORIGIN OF NUCLEAR MATERIALS To be comprehensible, any discussion of " origin-swapping" transactions must be done within a fr:mework of background considerations pertaining to the movement of uranium in international commerce.

These considerations include the nature of uranium processing for use as nuclear fuel, the concept of fungibility, some factors that affect international commerce in uranium, and examples of f

transactions in which " origin swapping" has occurred.

f Uranium 'rocessino -- How It Flews And Where It Goes In the co rse of its extraction from nature and use to produce electricity, uranium,ndergoes a number of industrial processes (Fig.1).

We shall not consider reprocessing or re anrichment, as those processes are not now being engaged in commercially in this country.

Each cf the listed processes can be carried out at different places and in different plants.

Each step except mining can take place in a country other than the country of origin.

Indeed, each step could conceivably take place in a country different from waere all the other steps are carried out.

NRC's import / export licensing experience indicates that conversion to UF in one g

country, enrichment in another country, and conversion and fabricat' ion in yet an6ther is becoming more com on.

Essentially all uranium milled in the United States comes from mines in t.e United States because it is too costly tc transport are (with its low concentration of uranium) over long distances.

In some cases, plants for the c:nversion of enriched UF6 to oxide and fabrication of reactor fuel are collocatsd, in which only one storage step is involved between processes 5 and 6 in Figure 1.

The amount so stored may be relativ.ely small.

On the other hand, huge quantities of yellowcake may be stored as feed to step 3, awaiting conversi n to UFs.

This feed normally includes many lots from a number of different c:stomers, both domestic and foreign.

A typical inventory so stored could corsist of thousands of drums, each containing on the order of 700 lb (300 kg) of uranium in about 800 lb of yellowcake.

Con-version plants and enrichmen: plants also maintain a sizeable inventory of uranium as UFs in cylinders. Uranium is also stored in connection with trans-portation.

For example, yellowcake from Australia might be stored in a warehause at the port of entry for a censiderable time before it is sent to the conversion plant.

Particular attention is called to the conversion and enrichment processa because it is in cennection with these processes that practically all " swapping'-

transactions occur.

Definitions:

Funaibility anc " Origin swapping" Fungiole goods are those that can be interchanged in commerce with other goods, as in meeting an oblication.

The common (dictionary) definition suggests that fungibility relates to goods that can be counted, weighed, or A-1

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MINING (Storage) 2.

MILLING (Storage)

(Storage) 3.

C,0NVERSION (to UF )

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(Storage) 4.

ENRICHMENT (in the isotope U-235)

(Storage)

(Storage) 5.

CONVERSION (usually to oxide)

(Storage)

(Storage) 6.

FABRICATION of reactor fuel elements (Storage)

(Storage 7.

IRRADIATION (in the reactor)

(Storage of spent fuel)

Fig. 1.

- Processes undergone by uranium in its use in the commercial production of electricity

'403 008 A-2

measured and that can b'e exchanged for an equivalent amount of material at another location having the same physical prop?rties..

Uranium meets these requirements.

It can be weighed, and a quantity J yellowcake or UF6 at one location is physically no different from a like cuantity stored elsewhere.

In other words, uranium a:cas cannot be " tagged."

Although the conceot of fungibility applies to many operations in the nuclear industry (and specifically to all transactions involving conversion to UF6 ar.d enrichment), the ter n is not ordinarily applied to strictly domestic operations.

It is, rather, encountered when dealing with uranium that is moving in inter-national comerce.

This coces about because international transactions involve t

compliance wfth intergovern= ental agreements and are therefore concerned with identifying " country of origin" in addition to the chemical and physical form of the materirl.

Thus we define fungibility, as applied to uranium, as the interchange r / all attributes, including country of origin, of two fully equivalent cuantities of uranium.

"Orioin swaoping" is the term applied to the exchange of otherwise fungible quantities of uranium tnat have different countries of origin.

To cur knowledge, the term "crigin swapping" has come into use only because of soecial concern with that one attribute.

Uranium On The 'a'orld Scene Uranium is a comcdity that is bought and sold in international trade.

It is a strategic material -- inocrtant to the energy needs of many nations and to the military reeds cf some.

Furthermore, it is a precious metal, worth rough:y one dollar a gram at the low enrichments used in light-water reactors.

Fcr these reasons, correrce in uranium is subject to complicating factors that may not aoply to other international comodities such as wheat or wool.

Among these factors are the necessity fer an assured future supply, regulatory, nonproliferation, and economic constraints, and the impact of unforeseen chan;es in these facters.

Assured r ture Sucaly.

Within the United States, some State utility ccmissi:ns u

require many years of centracted assurance of fuel availability.

Even where not so required, prudence warrants long-term contracts for supply and delivery.

Large quan:ities c' uranium still in the ground are therefore subject to comitments many years hence.

Regulatory Constraints.

Trade in uranium is subject to conditions imposed by intergovermental agreements, federal statute, and by some r'ederal agencies.

1403 009 A-3

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One condition' imposed'by the Departcent of Energy is of special importance because of the extent to which it centributes to the incentive for " origin swapping." This condition sets limits on the enrichment of uranium of foreign origin at the government-cwned enrichment plants.

The purpose for establishing the condition was to assure the development of an adequate domestic nuclear fuel supply on a timely schedule.

Originally, all uranium to be enriched'for domestic us had to be of domestic origin.

However, this requirement is now being phaseu out under criteria published on October 25, 1974.

For ex mple, in 1979 the foreign fraction is limited to 20%.

This fraction increases each year, until in 1984 all the feed material may be of foreign origin.

I Economic Constraints.

The ultimate user (utility) may purchase uranium ore and contract with one or more companies in different countries for the various fuel processing activities and for the transporting of materials from place to place.

Alternatively, the utility cay buy fabricated fuel from a fuel supplier who takes care of the various manufacturing stys.

In any case, the fuel processing decisicas are made by the utility, the supplier, the manufacturer (s),

and the transporters on the bases of such factors as economic costs, anticipatec energy demands, the inflatica rate, the world money market, available production capacity, and trace agreemer,:s.

The constraints enumerated in thi: and the preceding paragripns woulc be difficult enough to deal with in a static world of predictability; the real world is far different.

The " Fast Flux" Ccmolication.

Problems in international commerce in uranium are greatly aggravated because all the factors that affect the transactions are subject to relatively raoid flux compared with the long time that uranium is in the process chain.

Thus, changing patterns of energy demand occur --

changes both in quantity, in location where needed, and in the form desired.

The economics of alternate energy sources can be expected to enange with changing technologies and in:ruding governcent policies.

The inflation rate varies.

Governments change, and successor regimes may espouse policies sharp ~.y at variance from those of their prececessors.

Within stable governments, changes in intergovernmental agreements and government regulations occur that are particularly troublesome to the extent that they are not only unforeseen but are arbitrary and capricious.

For these reascns, companies are faced with uranium fuel market conditier.s today that were completely unexpected ten or more years ago when contracts were entered into.

The "Who's On First" Problem If there were only two people in the whole world -- a buyer and a seller --

things still wouldn't be too bad.

But there are owners, agents, brokers, dealers, importers, exporters, processors, transporters, and regulators.

Consider an instructive example:

Operator A of an enrichment plant operated under contract for Country B may uncertake to enrich some uranium for Importer C. who is an agent for Company D in Country E.

Company D is actually an 1403 010 A-4

a'cer.cy of Sc rernment E, which bought the cranium from Company F in Country G.

The uraniun was mined in Country H and may or may not have been processed in that country or in Country J by Company K before it was transported by Companies L, P., and N to Country B.

Act al transactions may' be even more ccmplex than this, because the lot of material at the enrichment plant may be the result of combining material from two or three purchases (having different origins) via more than one route.

And it may be des-tined to power reactors in three or four different countries via fabrication opera-tior.s in more than ene country.

Only workers from Companies A, K, L, fi, and M have To t5e other parties' actually handled the material after it left the mine.

1 (Countries S, E, G, H, and J and Companies C, D, and F) the uranium exists only as entries en their books; they have neither seen nor handled it.

Furthermore, Operator A has no way of knowing the origin of the material except to take the worc of Importer C -- who must take the word of Company D.

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How Things Work -- More or Less Now that a setting has been established for the manufacturing processes involved and the constraints imposed on the movement of uranium in the international market, a picture can be given of how " origin swapping" comes about.

Some reasons for uranium "saapping" transactions, not all of which involve " origin swapping," are listed in ' Table 1.

However, the following two examples do inscive " origin swapping."

Case i.

In early 1978, Allied Chemical had 75,000 pounds of U 0s of foreign 3

origin.

United Nuclear Corporat. ion had 75,000 pounds of U 0 3 3 of U. S. origin, whicn it was preparing to export for conversion and enrichment outside the U.S.

The United Nuclear material was shipped to Metropolis, where an " origin swap". was effected so that the material reshipped outside the U.S. was deemed to be of non-U.S. origin and the material remaining at Allied Chemical was deemed to be of U.S. origin.

This " swap" provided Allied Chemical with feed material tha: could be enriched at the 00E enrichment plants within the criterion in tne Federal Recister notice of Octocer 25, 1974.

Case 2.

Babcock & Wilcox Company, Kerr-McGee, and the DOE enrichment plants have an agreement whereby feed material is shipped to the enrichment plar..s according to an agreed-upon schedule.

Kerr-McGee found itself (for reasons not revealed to us) unable to meet its shipment schedule with U.S.-origin material required to comply with the Federal Register notice of October 25, 197'..

It tnerefore arranged a " swap" with Allied Chemical of foreign-origin U0 possessed by Kerr-McGee for U.S.-origin material of the same composition 2 3 and form.

In C1 cases, the meterial ending up designated as of foreign origin carries wit it all condit:cns attached to the material originally of foreign origin:

the conditior.s imposed by intergovernmental agreement attach to the designated origin and not to the atoms of uranium.

There are therefore no implications rela.ing to proliferation or nonproliferation not already addressed in the inte governmental agreements that are in force.

1403 011 A-5

Table 1.

Scme Advantages of Uranium Swapping

• Vest production commitment with material at Plant B when Fiant A hreaks dean Adjust to changes in demand -- e.g., " swap" material on hand but no needed now because of licensing delays for c;her catarial to be delivered in the future Avoid unr.ecessary transportation costs i

I Acility to comply with criterion imposed at U.S. enrich-cent plants by the Federal Reoister notice published on October 25,1974 (39 FR 38016)

C:tain "c.7eap" U.S. uranium in exchange for more expensive foreign.caterial (cf. declining value of the dollar in the foreign msney.aar:s)

A:hieve better assurance of supply -- some countries have repor:edly reneged on their supply commitments

" Note Int *, tne first three would not necessarily involve " origin swapping,"

but tne last three woul: be predicated on such " swapping."

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-'M,',e 4

__e-

., 4

yW

.a,

. :-. g.

e 4.

s**

.5

)'

b5>= b

• met,~

g,.

T. ! W. -

e-

. hp. 'e v1'

'##f u ',

e

~

• *f)$8,4

• f e#

r.

y *

-l/e.

e

- ). -v. s

- i-

,4+ts 5.

' 8E '...

,h

<, v.- '

3.,-

"kd-

." T f * "

' ' ~ ~.

eu',

=~,g=..

• g

.,)

n

,p'

~,d4 e-a..

j q *..

.y.'

,iv,

'/f w

7 *it.s,

=

s

.e

..s._

m-,

,,a,,

+d.

%.

• s

• 5 c.k, p Q =,[

','k }* '. '

'*'y,

(

jig, -.:. yy*hn,

['t

,,s, M'

. W*

.As.

g.%7,

< -s F -

,.., r - '-

4.--

r" f 3 a4 mL'*,

[~%. N y r f }..*

{.. r -

• _.. f,4/} q,f,.. f, *., -,3".*

r

-'4 +, *

..*N*.

.p

-.. -,....,,Q

- ra

+-

,?

. d. ' ! ?, * #

.A

-j,

,g.

4.'~*

. -._-w.

.a \\g).. ? ** -

s 1

2 4; - '

rg

= -

• n

....aA.

ar

- A.... :.. -

C-

Appendix B s

EATA CN Th2 73E;UENCY OF "0RIGIN-S'a'APPING" Dat.a :n " origin swaps" effected in 1978 and planned in 1979 vere solicited f - eigh licensees and frcs the Department of Energy.

Information fro 7 the Department of Energy is especially meaningful because (1) that agency 8

l Ovns the isotepe en:-1:h=ent plants where large quantities of material that would be candidate for "svaps" are. stored, (2) a DOE requirement on feed

=ste-ials for dc=es ti: reactors p:ovided the only identifiable incentive f:r ":rigin svapping" in the transactions that were uncovered. and (3) D E =at=: sins the records c= origins for compliance with their require-men.. The sample cf '_icensees surveyed included:

The two W6 c:nversion plants that are the locations of ost of

~

the saterial subject to " origin swaps";

Tvc 1:v-e riched fuel fabrication plants with large throughptits of =a erial; T:ree power reactor utilities; 0.e internati:ne1 agent highly active in import and expor' a::i'." ties.

7:is sa=ple was chosen because it should elicit data on nearly all trans-a:: ions that have taken place, and all types of licenseer were represented.

1403

,114 3-1

N

\\

Tne data oi.;.ained are shown in the following tab,le:

FPIC.UENCY OF '*0RIGIN-SWAPPD3" TRANSACTIO:IS No. of " origin swaps" Licensee or Agency 197o. 1979 (plannecT Notes Kerr-McGee 1

1 One in 1977 Allied Chemical 1

G.E./Wilmington 0-1 Westinghouse 2

O Edlov International 2

J..'. A.

O O

One in 1977 Carolina P&L 0

0 Conmonwealth Edison (no response}

D.O.E.

1 Five or six since 1974

• Not yet deternined 1403 J15 E-2 O

~w es-

. s.' '.-,.,~V,,,.._.,..,3,,,7,,.

-)2

. ' ?,.

,.ssq g _._.,;,,. {3-

.Q

+

-, y4 ;..g in 4, <& ^'

, ', ~.l'

• a.

...s.~..

• ,E r.

s me .J 33

,'Y 'l ? W. *~

5

'N. &. *, ?

'.'*1-!r.

.u.

's,$ t \\ '-' '

s ga

~r et b.

t,

.,. - 6

, 4

'-+*es*

p**

h bi., ' g "g

/ j s; t >

t 4

s s 3-r-

.E't.

g t'*

QMQ 4 3

8

• • P.., -

g

• 14 b.

e

-; g g.

a g

MP*

s a

ag 9

we*

&*L

• p 4e"*'.

9, ' e,.g,.o

+

E 4

e.

h e*,

P g

^

j.

.'2

_.m A'.

.pr-s,

.g-

-e

)*

g_,

q' e

e y.}'r'.

sp

.. ~.,

h, fa 8

1 i

,s

'\\.

A

< 'j.

c.("Y,

.,L;,

_c., J T.e - s-r#

. p;. $ --

c,-

w, n.m

., - -- S,

.(,,,,

. s ** '

.M.

.- Y _,w e,

v w

--+4

- u e. -

. J'

p...

e -

9.-,.

a

'.4

~

h d

e-E w p%.

"J-.

,. Ta s 4

- 1,

.f c

, g./N e

e

%T-f_

4

'\\.

a

-p,.

A q

Ep

• F

g-g.

o 4

/

e ENCLOSURE C 1403 116 1

e P

e h

.x b&

6 %.

sf s;

],g.

{_ d +

4 M

1.,-

.r* -

i ~

.,2 -

,.'t 4 -

7

• • 'Y; A 'r J gh...g 4

y 'p',

g' "w,

~m

?_

'm',;.

.,'1,e~,s.

.- 4D',n g

.; a =

1:

q.

- s -

1

,ge,.

r,#. ". a..

-'pr a,$ss,

ae,**8.'.--

L q

,4. w,

.--e

'. 'ar -

cg,

f 3

e.,

~,

,,.s.

• - t f.-

..s v 9.-

f. -..,

.s.,

e:>

r

,x<.,,,.

2m'

.1

- e

- i-6 e*

• • .s.,vs

..w.,

• 4 f*

,q',pp

..li;,;,,

.h>,,

. y.

g

.n,

_ l, *-

s

• 3 f

~w-

.y 3.r -

q.s y m

~

(h.

8,. '

f /W '.- -

M y

e.

• _, i'

$ me 4,o g

% !g.

6-

~

pp' '.

- s

,. g - +

- 3,

.gi

.,.4.-k..-

m.d. *~g; 4-

q;,

s, g ;-

~ t _ Y,t > ^

w f. * ~ t..gs v

.. c r

.. -.. +,+*

f~t.,

,s a

s_

[ *%..

=;,,

.g y

. a g.(

,.5 L,.-.

.m

. 1 s..

.,.N.~,

w

.cg-

,,y.

. r

,m, r

e e.--

c

.r c.,

a n.

g -j { * '.- r,p-..

,- Q-J q;.

. er* ~'3' J'hs~.

...s.

.y~.

.'r-

,,i e ), o,-

CV

-g-h.~[s.,N4 w

_~--

.m

- '.n

=,:' %e e > x. ',

k#

'][.*.C.

te[,.

• 1. ' W ' *

- Y., )

• 3

, f-'

--. 4.,

~. y ng -

_, ~

s.,

" y

-.,a

~

WL-....,x, p. r

- * - ~

- 2:

.ns*-L

, M,c

'. ; -e.e e :.

s

,s.

1 r.r

• y

,e. ? % ' '

(&g,.*1 a $,

,' n -.*

, q d,g"j g 9..h gL,

-8

<.. (- s g s a f

,-,v (,

is,: pe.

3=

v_.

.a,..-., m. y ' '..,.

re

,,.,...,g.

. sd# - 9 4 *

.,. apQ.( J s

> d : sp 9.- *

. ; y v *

-d*f, --. vm

. r.+3

,,

• J. a,' 4 '.,f a

n, %

.Qg.i% p > g...

y en..

g c.

.u _s 4 4..,I w

3. r.-

.=.

g

,. s

- 9

(,

-v s

s w

s

c. - - s m%.;,J

w. ~,1,.'

w.,,,,.a

- - c w

- w3-a -, k o..s-a,dr

OS016 NoilCES

w17 a

icre!r: orgi. when ce e:rt:hed product S-j.s :::. ended for use := a utui:raic

!s- "

AEC thst b feed =.w:4 1 o* fore!/.s c Uty (as ded ed i

• he Act) witti:

orif sbs11:2A, exceed; c under the jurisd;: tics of de U lted (a) 10 per ect : a 7 time d: 4 S tates.

1s;;;

A prop; sed tscdi.*:1*.ica of the Crl-(1.3 15 perces t at 3:y ti=e du'..t terta was ;.;tlished 's the F2:zza.:. Etc.

19 3:

srza on N:vember :7 1973 (23

.9.

(c) 20 pereect at any t'=e du.n; 3:595) w:ta.equest !st puhuc cor.=ents ig;,t by Peb:.1:7 25. 1974. A!:er censiders-(de 23 per:ent at ::/ := e duri.:

tson of the c===ents received and other Ig;c relev::.=t *2ctors, the Cc-~'W-m hea de-(e3 10 pertest st a:,7 ti=e dun =2 cided *.o sdept the s:hedule wh!:h was 1931; published Nove=ber 27.1D73 :r s grad-(!) 60 perce:t at n:y time duh:2 us: 1 re:.se in the ;r:por. ion of urs -

193;;

i = of f: eign ort:f.: that ::37 be s D*

(::) 20 per est at c:7 t+=e du..n I

pueC by s.r. enrich =ent serhees cus*

1033.

b There<ter, them sh:.'1 h no res*.rgon, t

c:t a ticipated that any ^"ge on ca fum:g of feed

.e.1 d

fo ci-.2 ohs: *cr the prora;on o,A. o.

1.2 be rect:1 red is the schedule now

.en-heing estabitshed. H: wever, the AF.'C s.D

=en: tor he extent c i=?crtati:n cf for.

Itc.W.*

• se ~.1cee.**

Ws nouce sh3 b.eco=e eCecWe on eign u:::ium for d:=estic use a:d its October 25.1974.

e::ect on the viabi.:7 of the decestic t::. ium ; reducing *. dust 7 r..c on the DM st Ge=sstow= :.!ar7b=d. Oc-

? esidents objective ci sch!evin; a n2-Icter a i. 1974.

tiona' ct;atuity !ct ene:Ty self-sul'i:1-

• - *, y.c a - v.- co

.:3:.,- -

e,.. u ency. Fer this ;u.,.:se the C==istien,

--~ - '_ C. E:-:- e2 t: Odd:*!: tc c00"-'";; its present pro-Pr I'.= : :".cLitCring ; niu= e.;IC 3tiCn Se re W a, cf *he Cc

.r'.i.-v

e. ;r.17, res.., cree deve :;=ent_ produ:.

gg 7.x 3pgg 4 tion ca;2Cty and the ;ener?.! uranin =

=stket s'.natics v.t'.1 s. iso== 1 ct pur.

ch1st or other nr r.:;e=e. ts inicising i=::crt c! any rnste.-tal cestined f:: en.

chment in physte e :ir':.is; it:il: ties.

".! the ex.e t of do=es.ic use of i re!;.1 OO 3k-

2nium sh:uld !=; :: cr threaten to D

D 0

D f

impstt the c0==on de!ense and security, h

D the Cc--'"'c win 1.stitute sa:h =ess.

ee R

7 utes s.s r. e dee=ed recessa.7 Tne C:- 'tsice ;!so piar.s to pur:::e an exparded and ag;re:. sire s.%.

di-rected t::.vd cb*'*-"*; a es=;rehensive asses =e:t cf the estent c! pctentia! do.

=esti: u 2.ium retsurets, t.:1 *.e. ward i=;rcr.:3 explorate:. -'-' ; and C.

ing *.e t:o;:gy in :.-der to help e.=u.

tre deve;;;=ent of s :.de:ns.e d =es-tie cus.1 !nel su;;;y :: a t.'=e17 s:ted-use.

.. -...s. -~.na s c..

.C_.,

... ~..

• ens hr.: been rer. sed to 1 di 3 e =:re clear:7 ::st the a:::::.111=1:stiens w.11 apply to all of the fe-d fur =::hed by a cus.c=er under all c' his en..chment

~

contr:c:.:. rather '"'

• o each cc:::::

separ te',7.

Pa.ar:::b 4. of the Criteha e.s :- b-

!ir.hed in 0.e FI::ar. F.:::s:I2 c f.is7 9.

1973 (33 FP.121:0) is cr. sed to read as

!c;io rs:

"4. r-"^~ent of Ur.nium of Foreis:

Ort:in.--.There is to restnct!cr' on the FORE!GN URANIUM FOR.cMESTIC IJSE prors!c: of ennch=cnt sert:es to,er-Mocic:t;on of Restrictions on Enrichment sons fu-er a: feed ~_2 tert:.! urncin=

._o.d..,..

o. dn w.' e: e the enric.hed..........=.,

1

....,g

,.o e used a

of fore:;. on herety.sencunces the :ev.s c=. is, sic n US. Atomic ner:7 C s

r l

.c c.

Its

~. tis e.a C <' *

• e.Aw-

....m E. nc.._..e. e.. me

...s C..ena 1,.m,.- -c t,.nder t.,.e '..,d..'.o.,o f,,,.e

.,. m.

e w

. u sthe Cnterts), a.s they sp;17 to t.i.e re-g,a.d hies.W' 5 *Ned ihIs~d'obesb-

• • e e--

ed

-a f,d *2

1. ~5 *-!.*61, c. the Atc, 1.,g r.,,, A.. c.,

• es*.

edpws

• o sussee-t,.,.i,33,_t; =,3 g,.

e

,scili s..ow e s.e.,,,,_,,m.,.,

.s.

set forth the te: ns and co=d.;tions under c; ge,e =3;,7g3g gg. 12.ed by any custo-wh.;h e:r'-*

ent sertces : H oe o:*e ed

=t. dun:g a year under til of the custo-

!ct sourta or spe:lal muelear =atensi c!

=er's c:r' '~ent agreements W.th the TCitAt RfC15712. Vol. 39, NO. 20s.-TIJoAY. 00:0512 25. 1974 f

, +

.. -.~

7**.gn.c ' '"'- se l.

.[-

-('*? /..

t,.

• i q'_^U ;.' _.

. 7 * * + ' #'p * -i.l d

.w c # f. i

• g

< y

-4 w. ",

,, + f e.

.4 4.

- ~

m.

. r.:.p; -j-. w -,, t p._,...yn r-

~.

-- ;:n

.w+ a

, n

. s..

g

.J->.

'Y, "Q;

• ,e eA

?,'*v' l

...4j

Y !'

'??C

• y wa

.,,g

,'6-'

.,A,

,,4*-

gp r

e

,-g e

yp--

..w.

e p,.

f

._.'.s.,

s\\e

,,.1 e.

,m E

'4.'

s I

y..

)

a,,

=>

y*

~. '

e.

~.

,+.

. h&

.a-

~

+.

n c

k h*

(

(

i

.~ e

=

e ENCLOSURE D 0009 fi)R J [ 4 '_

1403 118 g+'

e

• 4 jhe.

y u-S g

4 i4, 9

.a-

~.

s E

k.%

1 ~'

.9~

,i".

4f(.,

x.

..r-i-,

af-2 r

.w'..s

. m-

,,.,5 4"W

's..'

) T' iy w) *,

4 's J

,s

%^

M-3

.y e

.x e

' we

~ '

=

'*['

d'

.. g g;

s y -- -

.,se

,..,s..*

'].'

s 4 4 '. #

o r,,

" ' -41; e

" -o h *.

• w g

j I,

",n

q.x, T. 'r -

,,ik y.,.

..qq t

~.

. N,,.

,l1,.)..

<y; yh,.g i

. > p v.

m_ V 6 i

a.-

4,,.--

g

.t

.f...

s, g -.- $

.m.

..L,

.y,s 3

.r-

,=,

e, w g.

g.

. t,(.

..s. f

< w.c -

s -

1 a :,

.'p_g

.. t.

6 ')

. ~

.~.a--

t

• n

^

4-

,,'f;..

s

_.p %

+ ' ' ' ' - '

,. iq

. ~. "

- ~: *

. i. = '

t2...

- u-c

-.'4

% h**

g#

, p.../

.ss

3

.y M...

~

s y.-

s r

.5.-+

,'. # 6 *

,,,3,,

NW 4. b, ' *- sJ *'

>0 e

.,f*g 4 $[

8r 3,.

G'-

I J,,q

_p 74

• b*E===**. -p.ia g,

.s'e,,.,,,_s . d s s.

W%Y.'

y.

1

t').D. 4'.

I

,/ '...

.'Y, eO e

'4.-

4

.[;i

.,. + -.*.a..

?

8 y

~

a 1m-

.w;e.

%. g..

'4p # -,Q,

,p.

.'c, ci.

t,

_g f.f* f a w, gn.E,

".%.i

--14 s=~,*-

e, t

-6 s

$,c.

a4

< r... r e

-2

=. ig,, iF. w _

g*~

m ',.

k

. k'g

(,,

,(

gp gjg

.b, D

.O%

8' w M

• _s y, -m ~, gs g~r *,

• >.e.7 %s

-kpa I

f fnt"W =, y _

s 's.. h,....

A '; p ?$,'.

.t" ;.

p

'P g

d*jh3

%y**

,.y,

>. y a

...e

-sy.

+r,~,

Y.hp.y'-a.,+ ~[v,'s t.

.'D,,

~. N' ep,, */

1 *s

( ~' 51:,

%~R.4^.,n..~z,ad[,6 %u

.a--

5 a.,,

' f %*In-([

~.. 4 L L -', 1 *:.,. T.qw v

' M a-pu,

.{y v-

.2.. :.h u

n w

. a_.: __

- :.v_.w w nw -

_m.,_.m

_.,. n. e. m

. a.n._,. _ _

w t

1, 9 m

_a u

Appendix D

~

. CCM3? NATIONS I'i WEIC3 RANSNATIONAL URANIUM " SWAPS" CAN TAKE PIACE 1

"Svaps" cf declared origin between uranium in the U.S. of U.S. origin and uraniun of foreign origin in a foreign country do not require U.S. approva' (because no =aterial is exported) and do not increase the amount of uranic avai'.able for proliferation purposes (case 1).

"Svaps" of declared crigin between U.S.-origin uranium in a foreign country anc traniun t,regarnless Of origin) in any other country do not affect the need to apply U.S. safeguards conditions to the =aterial in the foreign c: ntr;.

of U.S. crigin -- even though the designated country of origin has been changed on paper. That country is stil'. required, by terms of its Agree-ment fcr Cooperation with the U.S. govern =ent, to =aintain controls on the cuantity of uranic received from the U.S. (cases 2 3, 5, and 6).

"Svaps" of declared origin between uranium in the U.S. of foreign origin and traniu: Of foreign origin in a foreign country require (U.S. and/or Canadian / Australian) approval if the foreign-origin uranium in the U.S. has had supplier centrols applied W, for exa=ple, Canada or Australia.

If no suppl.ier centr:ls have been applied, no approval is required (case k).

" Swaps' of decla: ed crigin between foreign-origin uranium in a foreign cort-y and :ther foreign-crigin uranius in a different foreign country are free Of U.S. :entrols (case 7).

D** lD

" l0 N Y $

} 405

)l7 m o M e M L JL A lr h D-1 g

Table D-1 5

COMBINATIONS I3 *EICH TPANSNATIONAL URANIUM "SWADS" CAN TAKE PLACE Case 1 Case 5 U.S

• 1 gin

" Identical"*

U.S.-origin

" Identical"*

ma..... in foreign-origis caterial in f oreign-origin the U.S.

caterial in Country X naterial in Country P Country Y t

Case 2 u-o Foreign-origin

" Identical"*

U.S.-origin "Iden-ical"*

material in U.S.-o '. gin

=aterial in U. S. -origin the U.S.

=aterial in Country X

=aterial in Cotstry P Count.y Y Case 3 Case 7 U.S.-origin "Idennical"*

Foreign-crigin

" Identical"*

= ate' rial in U.S.-origin

=aterial in foreign-origin the U.S.

naterial in Country X

=aterial in Cotetry P Cou,t y Y Case k

+

Foreign-origin "Idennical" material in foreig.-origin the U.S.

naterial in Country ?

• The ter: " identical" is used to designate two quantities of uranium havin.;

the sane physical and chemical characteristics, but differing in the designated country of origin.

1403 070 D-2

-9

..