ML20147F875

Forwards Executive Branch Eval of Appl by Edlow Intl Corp to Export U-235 to Japan

ML20147F875
Person / Time
Issue date:	12/12/1978
From:	James Shea NRC OFFICE OF INTERNATIONAL PROGRAMS (OIP)
To:
References
SECY-78-648, NUDOCS 7812260038
Download: ML20147F875 (16)

Text

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.a UNITED STATES December 12, 1978 NUCLEAR REGULATORY COMMtsslON SECY-78-648 INFORMATION REPORT Ud% pan For:

The Comissioners From:

James R. Shea, Director Office of International Programs Thru:

Executive Director for Operationp p

Suoiect:

EXECUTIVE BRANCH RESPONSE ON PENDING EXPORT' LICENSE

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APPLICATION (LEU TO JAPAN - XSNM01303) l Purcose:

To inform the Comission of the above suoject.

Discussion:

Enclosed for the information of the Comission are copies of the Executive Branch response.on a pending export license application.

Copies of the Executive Branch coments have been placed in the Public Document Room. A Comission Action Paper will be forwarded soon.

Comissioners are requested to advise the staff of any particular issues or information which they can identify at this stage and which they wish incluced in the staff's analysis.

l James R. Shea, Director l

Office of International Programs i

Enclosure:

Letter dtd 12/8/78

. (XSNM01303, Export of LEU to Japan for Genkai-1 reload) i

Contact:

DISTP.ISUTION

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G.2. 0; linger, 492-7866 Commission s g,0, Lee, 492 7984 Comission Staff Offices Exec. Cir. for Opers.

Secretaria:

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.w JAPAN O E AA R T M E N T, O F STATE XSNM-1291, XSMN-1300, weiniac.a. m.c. 2cs2o XSNM-1302, XSNM-1303, XSNM-1304, XSNM-1315, DEC 8 1978 and XSNM-1365 BUREAU OF OCEANS'AND INTERNATIONAL yggggj3og ENVIRONMENTAL AND' SCIENTIFIC AFFAIRS 70- ots7 MEMORANDUM FOR JAMES-R. SHEA NUCLEAR REGULATORY COMMISSION Enclosed is an Executive Branch analysis covering seven license applications for the export of low-enriched uranium to Japan.

.In accordance with P.L.95-242, the analysis explicitly addresses how the recuirements of Section 126 a.(1) of the Atomic Energy Act are met, in-ciuding the specific criteria of Sections 127 and '128, as well as certain additional factors, envisaged by Section 126 a.

(1).

The Executive Branch,.on the basis of its review of these cases, has concluded that the requirements of the Atomic Energy Act and P.L.95-242 have been met and that the proposed exports would not be inimical to the common defense and security of the United States.

Moreover, Japan has adhered to the provisions of its Agreement for Cooperation with the United States.

Therefore the Execu-tive Branch recommends issuance of the requested export licenses.

W,h Louis V.

Nosen:t Deputy Assistant Secret _r;

Enclosure:

As stated.

at:E:vto u.s. sac 578 CEC @ M.i 2 41 EXPORT /!MPORT AHO WTERNAi*L SF1Pn'

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XSNM-1301 Transaction:

The export to Japan of 324 kilo-grams of U-235 contained-in 10,270 kilograms of uranium in the form of uranium hexafluoride enriched to a maximum of 3.15 percent U-235 Applicant:

Edlow International Corporation Applicant's

Reference:

HSA JA/18 Date of Application:

April 11, 1978 Purpose of the Export This low-enriched uranium will be shipped to Sumitomo Metal Mining Co.,

Ltd. in Japan for the conversion-to uranium dioxide.and then transferred to Nuclear Fuel In-dustries Ltd., OSAKA, for fabrication into fuel assemblies for reload of Kyushu Electric Powar Company, Inc.'s Genkai

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Nuclear Power Plant, Unit No.

1, Regions 7 and 8.

Genkai No. 1 is a 529 megawatt electric pressurized water reactor which began commercial operation in 1975.

The material is scheduled to be shipped to Japan in January 1979.

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JAPAN --' EXPORT LICENSE APPLICATION ANALYSES i

Ultimate Consignee State:

Japan Type.of Material:

Low-Enriched Uranium Application Numbers:

A.

XSNM-1291 B.

-XSNM-1300 1

C.

XSNM-1302 D.

XSNM-1303 E.

.XSNM-1304 F.

XSNM-1315 t

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XSNM-1365

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i JAPAN' - EXP3RT LICENSE APPLICATION ANALYSIS 1.

Applicable Acreement'for Cooperation The proposed exports are subject to all of the ' terms and conditions of the Agreement.for Cooperation between the i

Government of the United States of America and the Govern-ment:of Japan concerning Civil Uses of Atomic Energy, which entered into force on' July 10, 1968.

In each case, this-has beenLconfirmed by letters from the Embassy of the Govern-ment of Japan', copies of which follow the description of each license application.'

Japan _ has adhered to-the provisions of its Agreement for Cooperation with the United States.

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2.

Extent to Which Export Criteria Are Met j

A.

Section 127 Criteria As provided in Section 127 of the. Atomic Energy Act, the following criteria govern exports for peaceful nuclear uses from the United States of source material, special nuclear material, production or utilization facilities, and any sensitive nuclear technology:

Criterion (1)

"IAEA safeguards as required by Article III(2) of the Treaty will be applied with respect to any such material or facilities proposed to be exported, to any such material or facilities previously exported and subject to the ap-plicable Agreement for Cooperation, and to any special nu-clear material used in or produced through the use thereof."

Japan is a Party to the Treaty on the Non-Proliferation of Nuclear Weapcns and deposited its instrument of rati-fication on June 8, 1976.

This Japan /IAEA Safeguards Agree-ment pursuant to the NPT entered into force on December 2, 1977.

Therefore, it is the Executive Branch view that criterion (1) is met.

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Criterion (2)

"No such material, facilities, or sensitive nuclear technology proposed to be exported or previously ex-ported and subject to the applicable Agreement for Co-operation, and no special nuclear material produced through the use of such materials, facil-ities, or sensi-tive nuclear technology, will be used for any nuclear explosive device or for research on or development of any nuclear explosive device."

pursuant to Article X A (2) of the Agreement,, Japan has guaranteed that no material or equipment transferred thereunder and no special nuclear material produced therefrom, will be used for atomic weapons, or for re-search or development of atomic weapons, -or for any other military purpose.

Japan, as a party to the NPT, has pledged not to manufacture or otherwise accuire any i

nuclear weapon or other nuclear explosive devices.

Further, in accordance with the Safeguards Agreement, Japan is precluded from engaging in any research and de-velopment on any nuclear explosive device involving any US-supplied material or facilities or any special nuclear material derived therefrom.

Since thece commitments will apply to the proposed export and to any special nuclear material produced through its use, it is the view of the Executive Branch that criterion (2) is met.

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Criterion (3)

" Adequate physical security measures will be maintained with respect to such material for facilities proposed to be r

exported: and to any special nuclear material used in or pro-duced through the use thereof.

Following the effective date of any regulation promulgated by the Commission pursuant to-Section 304(d) of' the Nuclear Non-Prolif eration Act of 1978, physical security measures shall be deemed adequate if such measures provide;a level of protection equivalent to that required by the applicable regulations."

iA USG physical security review team visited Japan in j

July 1977 to follow-up surveys made by security teams in June 1975 and February 1976.

During the 1977 survey, the Team met with concerned of ficials of the Government of Japan and visited a number of typical nuclear facilities including the Kansai Electric Power Company's Tsuruga Facility where three Westinghouse PWR reactors are located.

The Team de-termined that Japanese physical security measures met as a minimum. the levels envisaged by INFCIRC/225.

On September 22, 1978, the Ministry cf Foreien Affairs f

of Japan provided the following assurance to the Embassy of the United States in Tokyo:

"The Government of Japan confirms that the maintenance i

of physical protection measures providing as a minimum a level of protection comparable to that set forth in IAEA document NFCIRC/225/Rev. I with respect to nuclear materials I

and facilities exported from the United States to Japan and with respect to nuclear material used in or produced throuch the use of such materials and f acilities, conforms to the policy of the Government of Japan, and that adequate physical protection measures as necessary are, and will be, imple-mented in accordance'with the relevant laws and regulations i

I and also through the administrative actions by the govern-mental authorities concerned with respect to the aforesaid f

materials and facilities.

It is the understanding of the j

Government of Japan that as f cm the cate of this note verbale, the United States Government does not intend to request the Government of Japan on a case-by-case basis to l

make written confirmation concerning physical protection in j

connection with each case of license-application for the exports of nuclear materials."

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On the basis of the physical Security Feview Team visits and the assurance from the Government of Japan, the. Executive Branch has determined that the physical security measures maintained in Japan with-respect to nuclear material and

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facilities are as a minimum compatible with the level of protection envisaged by IAEA INFCIRC/225/Rev. I and are therefore adequate for the material covered by these license applications.

Therefore, it is the view of the Executive Branch that criterion (3) is met.

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Criterion (4) j "No such materials, f acil i ti es., or sensitive nuclear technology proposed to be exported, and no special nuclear i

i material produced through the use of such material, will be retransferred to the jurisdiction of any other nation or group of nations unless the prior approval of the United i

States is obtained for such retransfer.

In additic, to ether requir'ements of law, the United States may appcove.

f such retransfer only if the nation or group of nations des-ignated to receive such retransfer agrees that it shall i

subject to the conditions required by this section."

Article X(A)(3) of the 1968 U.S.-Japan Agreement for No material, including equip-Cooperation stipulates that: - "

ment and devices, transferred to the' Government of Japan or to authorized persons under its jurisdiction pursuant to this Agreement or the superseded Agreement will be trans-ferred to unauthorized persons or beyond the jurisdiction

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of the Government of Japan, except as the United. States Commission may agree to such a transfer to another nation er.

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international organization, and then only if, in the opinion i

of the United States Commission, the transfer of the material

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is within the scope of an Agreement for Cooperation between i

the Government of the United States...and the other nation or international organization."

. t Article VIII E.

provides that:

"Special nuclea-material produced through the use of-material transferred to the Government of Japan or to authorized persons under its jurisdict, ion pursuant to this Agreement or the superseded

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Agreement may be transferreduto any other nation or inter-i national organization provided that such natien or inter-l national organization has an appropriate agreement for cooperation with the Government of the United States r

of America or guarantees the.use of such special nuclear material for peaceful purposes under safeguards acceptable to the Parties."

While it is the U.S. position that Article VIII E.

I accords the United States the equivalent of a consent right, the p:ovision does not explicitly stipulate whether the U.S. or the other party'is responsible for making.the determination' whether an " appropriate" Agreement for Co-operation exists.

(This is more than a pro forma finding that an agreement exists, since the word "apprcpriate" conveys the intent that-the contemplated transfer is fully within the scope of the agreement. )

However, it should be r.oted that the only way in which special nuclear material covered by article VIII E could w

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beceme available fer transfer thrcugh Japanese reprocessing of U.S.-supplied source or special nuclear cateria2.

Sc long as the prcduced material remains in the spent fuel it is net separable frem the U.S.-supplied material, which is subject to the provisions of Article XA. (3).

Therefore, it is the Executive Branch view that, as the U.S. has the right of pric: appreval ever retransfer of U.S.-supplied material and the ecuivalent for.aterial pre-duced through the use of U.S. material, criterien (4) is net.

Criterion (5)

"No such material proposed to beLexported and no special nuclear material produced through the use of such material will be reprocessed, and no irradiated fuel elements containing.such material removed from a reactor shall be altered in form or content, unless the l

prior approval of the United States is obtained for such reprocessing or alteration."

j Article:VIII C.-of the U.S. -_ Japan' Agreement for Cooperation provides'that:

"When any special nuclear mate.ial received from the United States of America re-r quires-reprocessing, or any irradiated fuel' elements containing fuel material: received from the United States of America are.to be removed from a reactor.and are to

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be altered in form or content, such reprocessing or-

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alteration may be-performed in Japanese. f acilities upon-a joint determination of the Parties that the provisions of Article XI may be effectively. applied, or in such other facilities as may be mutually agreed."

As no joint determination under Article VIII C. can-be made without the agreement of the United States, and since the facilities to be used must be acceptable to the U.S. as one of the Parties,-'it is-the-Executive Branch view that criterion (5) is met.

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B.

Section 128 Criterion

'Section 128'a.(1) of the Atomic Energy Act estab-lishes the following additional criterion:

"As a con-dition of continued United States export of source material,

. special nuclear material, production or utilization facil-ities,.and any sensitive nuclear technology to non-nuclear-1 weapon states, no such export shall be made unless IAEA safeguards:are maintained with respect to all peaceful

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nuclear activities in, under the jurisdiction of, or carried out under the'contro1~of such state at the time of the export."

"As a Party to the NPT, Japan has accepted IAEA safe-guards on all. its nuclear activities thereby satisfying this criterion.

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Criterion (6)

"No such sensitive nuclear technology shall be ex-ported unless the-foregoing conditions shall be applied tolany nuclear material or equipment which is produced or constructedsunder the jurisdiction of.the recipient nation or group of.. nations by'or through'the use of any such exported sensitive. nuclear technology."

The. proposed exports do not involve the transfer of sensitive nuclear technology.

Criterion (6) is, therefore, not applicable.

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Additional Factors A.

Safeguards Implementation The IAEA Secretariat has noted in its Special Safe-guards Implementation Report that with regard to nuclear material subject to IAEA safeguards, while some deficiencies exist in the system, no diversion of a significant quantity of nuclear material was detected in any of the 45 states in which inspections were carried out.

Although recognizing the need to correct existing deficiencies in safoquard im-plementation, the Executive Branch has no reason to believe i

that the IAEA Secretariat's report is not valid.

In the light of this and other factors associated with the pro-i posed export, the Executive Branch believes the framework of commitments, assurances, and safeguards is adequat for the purpose of this export.

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Special Non-Proliferation and Other Foreign Policy Considerations None.

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Inimicality Judament Based on,. review.of the proposed exports, i t is the Judgment of the Executive Branch that the proposed exports will not be inimical to.the common defense and security,

.and that'the. licenses should be issued..

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