ML20216C237

Requests Commission Review of Proposed Issuance of License XSNM-2999 to Siemens Power Corp for Export of low-enriched U Fuel to Brazil

ML20216C237
Person / Time
Issue date:	02/04/1998
From:	Stoiber C NRC OFFICE OF INTERNATIONAL PROGRAMS (OIP)
To:
References
SECY-98-018, SECY-98-018-01, SECY-98-018-R, SECY-98-18, SECY-98-18-1, SECY-98-18-R, NUDOCS 9803130338
Download: ML20216C237 (24)

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POLICY ISSUE February 4, 1998 SECY-98-018 EDE:

The Commissioners FROM Carlton R. Stoiber, Director Office of international Programs

SUBJECT:

PROPOSED UCENSE TO EXPORT SPECIAL NUCLEAR MATERIAL (XSNM02909) TO BRAZll PURPOSE:

To request Commission review of the proposed issuance of a license to Siemens Power Corporation for the export of low-enriched uranium fuel to Brazil. The application is being referred to the Commission in accordance with 10 CFR S110.40(b)(5). If approved, the proposed export would be the initial export to Brazil of special nuclear material for nuclear end use under the terms of the Nuclear Non-Proliferation Act of 1978.

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DISCUSSION:

On June 24,1997, Siemens Power Corporation applied for a license (Attachment 1) to export to Brazil ? 300 kilograms of uranium-235 contained it 40,000 kilograms of uranium, enriched to a maximum of 5.0 percent, as uranium dioxide pellets for use as reload fuel in the Angra Unit 1 nuclear power reactor. The application was amended on August 22, September 8, and September 12,1997 to increase the quantity of uranium for export to 5,000 kilograms of uranium-235 contained in 100,000 kilograms uranium and to change the end use to include an initial core loading for Angra Unit 2.

In response to NRC's request for viewe on the proposed export, the Executive Branch, in a letter dated December 2,1997 (Attachi. 3nt 2), recommends that the license be issued to Siemens Power Corporation.

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[9y CONTACT:

NOTE:

TO BE MADE PUBLICLY AVAILABLE 5

B.L. Wright, OlP/NEMR WHEN THE FINAL SRM IS MADE AVAILABLE 415-2342 9803130338 980204 ff VOR SECY (ls 4I' [

?'I,I,98-018 R PDR v

. The Executive Branch notes Brazil has waived the Treaty of Tlatelolco into force and has entered into an agreement with the Intemational Atomic Energy Agency (IAEA) to maintain safeguards on all ofits peaceful nuclear activities. The Chairman of the Brazilian Nuclear Energy Commission has provided written assurances, dated October 30,1997, that the supplied nuclear material will: 1) not be retransferred without the consent of the U.S.

Govemment; 2) not be used to produce nuclear explosive devices; and 3) be subject to the 1972 U.S.-Brazil Agreement for Cooperation'. The assurance statement was forwarded to U.S. Embassy, Brasilia, by a note from the Brazilian Ministry of Foreign Affairs, dated November 25,1997. Assurances regarding maintenance of physical protection of nuclear materials in Brazil were provided by the Brazilian Em%ssy in Washington by letter dated September 27,1978.

It is the judgment of the Executive Branch that the proposed export will not be inimical to the common defense and security of the United Shtes, and is consistent with the provisions of the Atomb, Energy Act of 1954, as amended by the Nuclear Non-Proliferation Act of 1978.

The most recent physical protection evaluation by the U.S. was performed during a visit to Brazil in July 1996. That review found that Brazil's physical protection program is consistent with the recommendations of IAEA INFCIRC/225/Rev. 3 (the accepted intemational standard) for Category lli nuclear material.

The Executive Branch, in a memorandum dated December 15,1997 (Attachment 3), provided a complete country analysis for Brazil. The analysis addresses how the requirements of Section 126 a.(1) of the Atomic Energy Act are met, including the specific criteria of Sections 127 and 128, as well as certain additional factors envisaged by Section 126 a.(1).

CONCLUSION:

The staff concurs with the Executive Branch judgment that the proposed export would not be inimical to the common defense and security of the United States and concludes that all criteria required for the issuance of license XSNM02999 are met. The Office of the Executive Director for Operations concurs. The Office of General Counsel has no legal objections.

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1 A new U.S.-Brazil Agreement for Cooperation was signed by the U.S and Brazil in I

early October 1997 and was sent to the U.S. Congress on October 20,1997 for review. In the meantime, as presented in this paper, the proposed export can be exported under the still-active 1972 U.S.-Brazil Agreement because Brazil has placed its nuclear program under full-scope IAEA safeguards and has provided other NNPA guarantees to the U.S.

RECOMMENDATION That the Commission authorize the issuance of export license XSNM02999 to Siemens Power Corporation.

OI k jpQ__ Carlton R. Stoiber, Director n

Office ofIntemational Programs Attachments: 1. 06/24/97 Siemens License Application (XSNM02999) 08/22/97 Siemens License Application Amendment 09/08/97 Siemens License Application Amendment 09/12'97 Siemens License Application Amendment 2.12/02/97 Executive Branch views RJKStratford to CRStoiber 3.12/13/97 Executive Branch country analysis

. Commissioners' completed vote sheets / comments should be provided directly to the Office of the Secretary by COB Thursday, February 19, 1998.

Commission Staff Office comments, if any, should Fe submitted to the Commissioners NLT Thursday, February 12, 1998,~. ith an information copy to the Office of the Secretary.

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

DISTRIBUTION:

Commissioners OGC OIG l

OPA OIP i

OCA CIO CFO i

REGIONS EDO SECY l

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NRC FORM 7 U.S. NUCLf.AR REGULATORY COMMIS$40N AP. A04DIY OMB N0.31tS4DU (s.o4) npurgs 331.g; 10 Cra 110 (ITa4& TID BURDDs PER RESPoh5E 70 CDMPLY RffM Ties h50RMATim COLLICTION atoutIT 1.7 APPLICATlON FOR LlCENSE TO EXPORT

"'"' ". "20 POUCY Cm51DERATim$ AAE $ATISFED. 50RRA

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1. f0ULAfotY NUCLEAR MATERIAL AND EQUIPMENT sunoDi rimATE To m woaMafia mo ntans MMAmMcRT iamCu n a rm a: avCtw REGULATORY CCMMIS$13. NASMh6 TON DC 20501E1. 20 TO THE PAMRRORK REDUCTuss (See instructions on Beverse)

PRQJECT D1564027L OFmCI Of MAN AGDADtT MD SUDGET.RASHeeGTh.DC 21203 1.

A PPUCANT*S

"' DATE OF APPLiCATtON 0 APPLICANT $ REFERENCE

a. DOCULE'T #fURWER S. LACENSE PPMR 7g 6/24/97 ust t'st ll 0M4'n X5NM OA999

3. APPLICANT'S NAME AND ADORESS lM gg

4. SUPPLIER'S NAW AND ADOMESS Siemens Power Corporation

<C <n,*e s e=uear,. aor.,,w er,,=ren.n D. STREET ADDRgs3 fe,cgfry sep

.. NAME 2101 Horn Rapids Road

c. CITY

d. STATE

e. ZIP CODE t.

STREET ADDRESS Richland WA 99337

f. *ILEPHONE NUMSER (Aree Cees. Number. lstenssonJ

- CITY d STATE

.. ZIP CODE 509-375-8380

6. FIRST SHIPMENT S FINAL SHIPMENT

7. APPLICANT'S CONTRACTUAL S. #ROPOSED LICENSE

0. U.S. DEPARTMENT OF ENEROY SCHEDULED SCHEDULED DELfVERY DATE EXPlRATION DATE CONTRACT No. #f Anotwn1 Y

00 0 5 f

Sept. 1997 Dec. R000 4998 Dec.

S ec. A os 0

10. ULTIMATE FOREIGN CONS 40 NEE l418.

11. ULTIMATE END USE juSEODOE ancme omnt er recary non,er

• - " ^ " ' Furnas Centrais Electricas S.A.

Almiranto Alvarn Alhortn Statinn (Annra)

n. STREET ADoms <reca,rv s,re,

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Rua Real,randeza 219-CEP 22250-000 Relpad(f r Angra Uni M^ -

c. CITY d.

COUNTRY J

Chv ei k Rio de Janeiro Brazil M..

DATE REQUmED

12. sNTERMEDIATE FOREIGN CONSIONEE 3

13. INTERMEDIATE END USE juSE CODE l

3. NAME Industrias Nucleares do Brasil S.A.

.. s atET AcoREss Rua Mena Barreto 161 FJ 0

Botafoao-CEP 22271-100

c. CITY d.

COUNTRY Rio de Janeiro Brazil 13.. DATE REaumED

14. INTERMEDIATE FOREIGN CON 640 NEE lgSE,

16. INTERMEDIATE ENO USE juSE CODE :

3.

N A ME b.

STREET ADDREES /scasty Seres j

c. CITY d.

COUNTRY 1Es. DATE REQUIRED

18. COM

17. DESCRIPTION

18. A4AK. ELEMENT 19. MAR. 20. MAX. SOTOPE 21.

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CODE WEIGHT WT.%

WEIGHT UMT nuetee eavement and comoonenest Y

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22. COUNTRY OF OR8 GIN -

l 123 COUNTRY OF ORIGsN - &NM l24. COUNTRIES WHICH ATT ACH l

SOURCE MATERIAL WHERE ENRICHED OR PRODUCED '

SAFEOUARDS #f Anew 9#

Unknown Unknown

26. ADDITION AL INFORMATION 086 CONssONtES. END U$ES. AND PRODUC DE SCRIP 1 TON use separere sheer er necesservi 0.

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SIEMENS 4

R7CE!VED O!?

E97 5115 f.19: 38 July 9,1997 DLN:97:047 U.S. Nuclear Regulatory Commission Attn: Mr. Fonald D. Hauber, Assistant Director Exports, Security, and Safety Cooperation Office of international Programs Mail Stop 3H-5 Washington, DC 20555 l

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Dear Mr. Hauber:

l Ref.: Export Application to Brazil, Dated June 26,1997 As I discussed with Betty Wright, enclosed is a check for $4,800.00 to cover Executive Branch review for SPC's export application to Industrias Nucleares do Brazil S.A. in Rio de Janeiro, Brazil. This check is in addition to the original amount of $3,000.00 enclosed in the June i

request.

i A copy of my June 26* letter is attached.

If you have any questions, please contact me at (509) 375 8380.

Very truly yours, h ((

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p. ]9 D. L. Noss Genior Scientist, Safeguards

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Siemens Power Corporation f

Nuclear Division 2101 Horn Rapids Road Tel:

100 Engineenno & Manufacturing P.o. Box 130 Fax:

402 Richland. WA 99352-0130

SIEMENS

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i August 22,1997 DLN:97:062 4

U.S. Nuclear Regulatory Commission Attn: Mr. Ronald D. Hauber Exports, Security & Safety Cooperation

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Office of International Programs Mail Stop 3G-5 Washington, D.C. 20555

Subject:

Export License Application XSNM - 02999, dated June 24,1997

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Concerning the referenced export license application made by Siemens to export SNM to Brazil, 4

please make the following changes to the request.

f Did Read Should Read Final Shioment Scheduled:

Final Shioment Scheduled Box 6 December 1998 December 2000 Acolicants Contractual Deliverv Date:

Acolicants Contractual Deliverv Date:

1 Box 7 December 1998 December 2000 Procosed License Exoiration Date:

Proposed License Exoiration Dated Box 8 December 2000 Ultimate End Use:

Ultimate End Use:

Box 11 Reload for Angra Unit 2 Reloads for Angra Units 1 and 2 Maximum Element Weiaht:

Maximum Element Weiaht:

Box 18 40,000 100,000 Maximum isotcoe Weiaht:

Maximum isotooe Weicht:

Box 20 2,000 5,000 I

Siemens Power Corporation l

Nuclear Dwision 2101 Horn Rapids Road Tel:

(509)375 8100 Engineenng & Manufacturing P.O. Box 130 Fax:

(509)375 8402 Richland, WA 99352 0130 e'

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August 22,1997

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Should you have any questions, please feel free to give me a cail.

Very truly yours, t

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SIEMENS O

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Fax To Betty Wright

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Date 09/08/97 Time in 9:21 AM~

Pages to follow 1

Company U.S. NRC From D.L. Nocs Telephone 509-375-P380 MB Scoiving fax 301-415-2395

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D Originst to be melled E Via fax only Sending fax Telephone 4

Fax verification Extra distribution to

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Messene Betty.

l As you requested, here is some more information regarding export application X export of SNM to Brazil. The application is for permission to export to Angra U or the Additions!information on plan for each unit is as follows:

3.45% U235. This material will constitute the seventh reload g s enriched to Angra Unit 2 - Export of 50.000 kgs of UO2 pe!!sts containing opproximately 4 1.90% U235. This material will constitute the entire first core for Angra Unit 2 s enriched to k e ;1 lx il -l b-( 7 t/ a & f) W%I bC rrD I9 RfD 6 Al o

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(. I AT Cn) y 5o, coo

@,000

%b Let me know if you have any questlions.

Regards, Dan Noss TNs feesunDe trF=misaron a intenced only for the indnsdust(s} named above. It may conta confidemW, or otWwrse protected from dischsvre by law. Any use of thrs transmstion by indnnd s egafty prrweged, c

above is etnctty proNbrted. If you receM tNs transmission in error, please c.aB the faz verr 6 c e

ose named mailthe ongrset ransmesionio us at the address set forth belo t

' hank you.

i e y, and Siemens Power Corporation Nuclear Division Engineering & Manufacturing 2101 Horn Rapids Road, PO Box 130 Operator Richtend. WA 99352-0130 Tel: (509)375-8100 Log No

_ Time Sent TOTR. P W

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SIEMENS g

Siam:ns P;w OrporatJon Fax To Betty Wright Date 09/t2/97 Time in 8:01 AM Pages to follow 0

Cornpany U.S. NRC From D.L. Noss Telephone 509 375-8380 MB D Original to be mailed E via fax only Receiving fax 301 415 2395 Sending fax Tolophone Fax verification Extra distribution to Message

Setty, As you requested, here is some more information regarding export application XSNM-02999 for the export of SNM to Brazil. The application is for permission to export to Angra Unit 1 and Angra Unit 2.

Additionalinformation on plan for each unit is as follows:

Angra Unit 1 - Export of 60,000 kgs of UO2 pellets containing approximately 50,000 kgU's enriched to 6.00% U235. This material will constitute the seventh reload for Angra Unit 1.

Angra Unit 2 - Export of 60,000 kgs of UO2 pellets containing approximately 50,000 kgu's enriched to 5.00% U235. This material will constitute the entire first core for Angra Unit 2.

LA p.) b Let me know if you have any questiions.

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Regards, gg-} g,A

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ic :1 Dan Noss ths facsirnine trenstnssion is amended onty for the inded.#s) named above it may contain information which 's legafy trivileged, confidentet, or otherwise protected from d s::losure by law. Any use of this transmhon by individupla cther than those r.:ened above is svictfy proNbeted. If you receive this transmss.on in enor, please ca3 the faa verification number above 6 ment te. and melt the originat transmisse to us at the address set forth below. Thank you.

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Siemens Power Corporation Nuclear Division Engineering & Manufacturing 2101 Horn Rapids Road, PO Box 130 Operator Richtand, WA 99352-0130 Log No Time Se '

l Tel: (509) 375-3100 TAL P.01

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United Sta._, Pepartment of State Washington, D.C.

20520 v

December 2,1997 y $ fi/A1 d Mr. Carlton R. Stolber Director, International Programs

/[g & E @y g United States Nuclear Regulatory Commission Rockville, Maryland fyVi^ $

Dear Mr. Stolber:

I refer to the letter from your office dated July 16, 1997, requesting the views of the Executive Branch as to whether issuance of an export license in accordance with the application hereinafter described meets the applicable criteria of the Atomic Energy Act of 1954, as amended by the Nuclear Non-Proliferation Act of 1978:

NRC No. XSNM02999-Siemens Power Corporation has applied for authorization to export to Brazil 5,000 kilogra.ns of U 235 contained in 100,000 kilograms of uranium enriched to a maximum of 5 ps. cent in the form of UO2 fuel pellets for the Angra Nuclear Power Station. The LEU will be shipped to Industrias Nucleares do Brasil S.A. for fabrication into fuel assemblies-50,000 kilograms for the seventh reload of Angra Unit 1 and 50,000 kilograms for the initial core of Angra Unit 2.

It is the judgment of the Executive Branch that the proposed export will not be inimical to the common defense and security of the United States, and is consistent with the provisions of the /,tomic Energy Act of 1954, as amended by the Nuclear Non-Proliferation Act of 1978.

Brazil has waived the Treaty of Tlatelolco into force and has entered into an agreement with the International Atomic Energy Agency to maintain safeguards on all of its peaceful nuclear activities. The Chairman of the Brazilian Nuclear Energy Commission hgs provided written assurances, dated October 30,1997, that the supplied nuclear material will: 1) not be retransferred without the consent of the U.S. Govenrnment; 2) not be used to produce nuclear explosive devices and 3) be subject to the 1972 U.S. -Brazil Agreement for Cooperation. This assurance statement was forwarded to U.S. Embc.ssy, Brasilia, by a note from the Brazilian Ministry of Foreign Affairs, dated November 25,1997. Assurances regarding maintenance of physical protection of nuclear materials in Brazil were provided by the Brazilian Embassy in Washington by letter dated September 27,1P78, forwarded to you by Department of Energy letter dated December 20,1978.

On the basis of the foregoing, the Executive Branch recommends that the license be issued.

S ncorely, 3

A Richard J.K. S tratford Director Office of Nuclear Energy Affairs

Enclosures:

1. Certificate from Brazilian Nuclear Energy Commission

2. Transmittal note from Brazilian Foreign Ministry 9I @ 1.'d 8-L g d'5 Lb nb ;;a 1

ATTACHMENT 2

FROM D:G-f11N. NEl.. EXT.

CA PHOE Ntt.

foe. 251997 e5:37Pn P2 naNIs7&aro ens acLa90eo autantoass Tips Peg.-

Anexce-Destinataric NOTA VERRAL 1

02 Embaixada dos Estados Unidos da America

<aratei-Prioridade RESERVADO URCENT!SSINO Distribuig56 DDS/DCS

!ndice

<1assificagse Brasil-EUA. Energia Nucasar.

ENER ARAS EUA Liesnga de exportagno NEC/15 NN02999. Carentias do Governo itCaero Data-brasileiro.

O Ministerio das

-Relag6es Exteriores cumprimenta a Embaixada dos Estados Unidos da America e referencia a pretendida exportagao de natorial de #ueo, com nuclear para o

trasil, coberta pela referencia NRC/K5NMD2999, t a a honra de transmitir, em acaxo, as i

seguintes garant2as do Governo brasileiro:

a) certificado assinado pelo Doutor Jose Mauro Esteves dos i

santos, Presidente, da Comise&o Nacional de Energia Nuclear (C3 TEN), em 30/10/97, scostpanhado dos certificadoe assinados pelo Doutor Ronald Araujo de silva, Diretor 2ndustrial da empresa 2ndastrias Nucleares do Brasil (INB), em 29/$/96 e 15/10/97; b) declaragao assinada pelo Embaixador Ronaldo Nota

[

sardenberg, Secretario de Assuntos Retrategicos de Presideocle da Repchlica, em 30/10/97.

Brasilia, de novembro de 1997.

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i STATEMENT-The starlian Nuclear Ener;y Commiselon (Cornlemso Neoenal de:

Energia Nuclear) CNEN, Federr A0sncy, under the responsbilkies of ths; Braastian Secretary of Strategic Affairs (Secretarts de Assuntos Estrategicos da, Presidencia da Rep 0blica) SAE/PR, steles that the Bratiflan Nuclear Industriest S/A (Ind6strias Nucleares do Brasil S/A) - INB will compy the terms of the!

attached oortificates, dated 29 May,1996 and 10 Odober,1997, referring to the',

supply from Siemens Power Corporation of 5,000 Mingrams of U 235.containssiit);

100,000 kilogroms of uronium enriched to a maximum of 5 percent in the form of UO2 (urenium dioxide) for febrication of nuclear power plant fuel assemblies to be used in Angra Nuclear Power Plant Units 1 and 2.

CNEN is the main shareholder of INS and on tne behalf of tho' Gratihan Govemment soeures that the motoriel described above and in the mentoned attached certfficate will not be re-transferred or re exported without the consent of the Gowemment of the Untted States of Americe and it wiu not be used to produce nuaiear explosNo devices. This material wlN be subject to thej i

A0reement for Cooperation between the Govemment of the United Sistos of Amence and the Govemment of the Federal Republic of Brarii conoomme CivB Uses of Atomio Energy which entered into force on September 20,1972.:

AdditionoHy, this material and the nuclear power plant fuel assembles produced will be under safeguards of the Braritian-Argentine Agency for Accounting and Control of Nucieer Materle! (ABACC) and the Intemetonal Atomic Energy Agency (IAEA).

Rio de Janeh, October je th, t997 b a [,id is.

a Jp f.au vesidos Santos Chairman g

Braziljan Nuclear Energy Commisalon i

CNEN i

PO.3Dvd VI IIsyys,t3ceSW

1. ESPPEE TE:SI 455I/LE/IT

United States Department of State

%shington. D.C.

20.520 y5 fy!(M 62 $ ' S December 15, 1997 gtff7[

BUREAU OF POLITICAL-MILITARY AFFAIRS

/

A pitip4 MEMORANDUM FOR CARLTON R. STOlBER NUCLEAR REGULATORY COMMISSION Enclosed is an Executive Branch analysis covering the proposed export to Brazil of 100,000 kilograms of uranium enriched to a maximum of 5 percent in U-235 for reload of Unit 1 and the initial core of Unit 2 of the Angra Nuclear Power Station.

In accordance with P.L.95-242, the analysis explicitly addresses how the requirements of Section 126 a.(1)of the Atomic Energy Act are met, including the specific criteria of Sections 127 and 128, as well as certain additional factors, envisaged by 3ection 126 a (1).

As stated in my letter of December 2,1997 the Executive Branch, on the basis of its review of this case, has concluded that the requirements of the Atomic Energy Act, as amended, have been met and that the proposed export would not be inimical to the common defense and security of the United States.

Brazil has adhered to the provisions of the 1972 U.S.-Brazil Agreement for Cooperation.

Therefore, the Executive Branch recommends issuance of the requested export

license, h

Richard J. K. Stra'tford Director Office of Nuclear Energy Affairs

Enclosure:

analysis.

Ud iI L LL; O ' Cl<,l..

ATTACHMENT 3

EXPORT LICENSE APPLICATION ANALYSIS XSNM02999 Destination:

Brazil Transaction:

Siemens Power Corporation has applied for authorization to export to Brazil 5,000 kilograms of U-235 contained in 100,000 kilograms of uranium enriched to a maximum of 5 percent in the form of UO2 fuel pellets for the Angra Nuclear Power Station. The LEU will be shipped to industrias Nucleares do Brasil S.A. for fabrication into fuel assemblies-50,000 kilograms for the seventh reload of Angra Unit 1 and 50,000 kilograms for the initial core of Angra Unit 2.

Date of Ap?! 2ation:

June 24,1997 1

1

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4 9

1, Applicable Agreement for Cooperation The proposed export will be subject to the terms and conditions of the Agreement for Cooperation Between the Government of the United States of America and the Government of the Federative Republic of Brazil Concerning Civil Uses of Atomic Energy which entered into force on September 20,1972. This was confirmed by statement signed by the Chairman of the Brazilian Nuclear Energy Commission dated October 30,1997, a copy of which has already been furnished the NRC.

Brazil has adhered to all provisions of that Agreement for Cooperation.

9 2.

Extent to Which Export Criteria Are Met A.

Section 127 Criteria As provided in Section 127 of the Atomic Energy Act, as amended, 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)

"lAEA safeguards as required by Article 111(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 U.S.-Brazil Agreement for Cooperation ar.d to any special nuclear material used in or produced through the use thereof."

Brazil has waived the Treaty of Tlatelolco into force and has entered into an agreement with the International Atomic Energy Agency to maintain safeguards on all its peacefc.l nuclear activities.

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

4 Criterion (2)

"No such material, facilities, or sensitive nuclear technology proposed to be exported or previously exported and subject to the applicable agreement for cooperation, and no special nuclear material produced through the use of such materials, facilities, or sensitive nuclear technology, will be used for any nuclear explosive device or for research on or development of any nuclear explosive device."

The October 30,1997 statement rJgned by the Chairman of the Brazilian Nuclear Energy Commission included a confirmation that the nuclear material to be exported will not be used to produce nuclear explosive devices.

With regard to no nuclear explosive use of produced special nuclear material, Article Vill F. of the 1972 U.S.-Brazil Agreement for Cooperation requires a joint determination of the part'is to the Agreement prior to the reprocessing, or alteration in form or content of any irradiated fuel elements containing fuel material received from the United States of America pursuant to the Agreement.

As no joint determination under Article Vill F. 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, no produced special nuclear material can be separated from irradiated U.S.-supplied fuel material without the prior consent of the United States.

It is therefore the Executive Branch view that criterion (2) is met.

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Criterion (3)

" Adequate physical security measures will be maintained with respect to such material or facilities proposed to be exported and to any special nuclear material used in or produced through the use thereof.

Foilowing the effective date of any regulations promulgated by the Commission pursuant to Section 304(d) of the Nuclear Non-Proliferation 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."

The Executive Branch has assessed the physical security measures maintained by the Government of Brazil with respect to nuclear material and determined that they are adequate for the material covered by this license application.

Assurances regarding maintenance of physical protection of nuclear materials in Brazil were provided by the Brazilian Embassy in Washington by letter dated September 27,1978, forwarded to you by Department of Energy letter dated December 20,1978.

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

2

Criterion (4)

"No such materials, facilities or sensitive nuclear technology proposed to be exported, and no special nuclear 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 States is obtained for such retransfer. In addition to other requirements of law, the United States may approve such retransfer only if the nation or group of nations designated to receive such retransfer agrees that it shall be subject to the conditions required by this section."

Article X A. (3) of the 1972 U.S.-Brazil Agreement for Cooperation provides that no material, including equipment or devices, transferred to the Government of the Federative Republic of Brazil or to authorized persons under its jurisdiction pursuant to the Agreement will be transferred to unauthorized persons or beyond the jurisdiction of Government of the Fedentive Republic of Brazil except as the

" Commission" (i.e. the U.S. Government) may agree to such a transfer to the jurisdiction of any other nation or group of nations, and then only if, in the opinion of the U.S., the transfer of the material is within the scope of an Agreement for Cooperation between the Government of the United States of America and the other nation or group of nations.

Article Vill H. of the 1972 U.S.-Brazil Agreement for Cooperation provides that no special nuclear material produced through the use of material transferred to the Government of the Federative Republic of Brazil or to authorized persons under its jurisdiction pursuant to the Agreement will be transferred to the jurisdiction of any other nation or group of nations except as the U.S.may agree to such a transfer.

In addition, the Chairman of the Brazilian Nuclear Energy Commission in his October 30,1997 assurance statement included confirmation that the supplied nuclear material will not be retransferred without the consent of the U.S. Government.

These articles and assurances give the U.S. an unqualified approval right over the retransfer from Brazil of U.S.-supplied material, equipment and devices (i.e.

utilization facilities) or special nuclear material produced through the use of such material or facilities.

Therefore it is the Executive Branch view that criterion (4) is met.

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Criterion (5)

"No such material proposed to be exported 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 prior approval of the United States is obtained for such reprocessing or alteration."

Article Vill F. of the 1972 U.S.-Brazil Agreement for Cooperation requires a joint determination of the parties to the Agreement prior to the reprocessing, or alteration in

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form or content of any irradiated fuel elements containing fuel material received from the United States of America pursuant to the Agreement.

As no joint determination under Article Vill F. can be made without the agreement of the United States, and since the facilities to be.aed must be acceptable to the U.S. as one of the Parties, it is the view of the Exect;;ive Branch that criterion (5) is met.

4 Criterion (6)

"No such sensitive nuclear technology shall be exported unless the foregoing conditions shall be applied to any nuclear material or equipment which is produced or constructed under the jurisdiction of the recipient nation or group of nations by or i

through the use of any such exported sensitive nuclear technology."

The proposed export does not involve the transfer of sensitive nuclear technology. Criterion (6) is, therefore, not applicable.

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e B.

Section 128 Criterion Section 128 A. (1) of tree Atomic Energy Act, as amended, establishes the following additional criterion: "As a condition of continued United States export of source material, special nuclear material, production or utilization facilities, and any sensitive nuclear technology to non-nuclear-weapon states, no such export shall be made unless IAEA safeguards are maintained with respect to all peaceful nuclear activities in, under the jurisdiction of, or carried out under the control of such state at the time of the export."

Since Bozil has waived the Treaty of Tlatelolco into force and has entered into an agreement with the IAEA to maintain safeguards on all of its peaceful nuclear activities, it is the vieve of the Executive Branch that this criterion is met.

3. Additional Factors The Executive Branch believes the framework of commitments, assurances, and safeguards is adequate for the purposes of this export.

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P 4.

Inimicality Judgment Based on review of the proposed export, it is the judgment of the Executive Branch that the proposed export will not be inimical to the common defense and security and that the requested license should be issued.

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