Information Notice 1989-25, Unauthorized Transfer of Ownership or Control of Licensed Activities

Unauthorized Transfer of Ownership or Control of Licensed Activities

ML031180579
Person / Time
Site:	Beaver Valley, Millstone, Hatch, Monticello, Calvert Cliffs, Dresden, Davis Besse, Peach Bottom, Browns Ferry, Salem, Oconee, Mcguire, Nine Mile Point, Palisades, Palo Verde, Perry, Indian Point, Fermi, Kewaunee, Catawba, Harris, Wolf Creek, Saint Lucie, Point Beach, Oyster Creek, Watts Bar, Hope Creek, Grand Gulf, Cooper, Sequoyah, Byron, Pilgrim, Arkansas Nuclear, Three Mile Island, Braidwood, Susquehanna, Summer, Prairie Island, Columbia, Seabrook, Brunswick, Surry, Limerick, North Anna, Turkey Point, River Bend, Vermont Yankee, Crystal River, Haddam Neck, Ginna, Diablo Canyon, Callaway, Vogtle, Waterford, Duane Arnold, Farley, Robinson, Clinton, South Texas, San Onofre, Cook, Comanche Peak, Yankee Rowe, Maine Yankee, Quad Cities, Humboldt Bay, La Crosse, Big Rock Point, Rancho Seco, Zion, Midland, Bellefonte, Fort Calhoun, FitzPatrick, McGuire, LaSalle, 05000000, Zimmer, Fort Saint Vrain, Shoreham, Satsop, Trojan, Atlantic Nuclear Power Plant
Issue date:	03/07/1989
From:	Cunningham R NRC/NMSS/IMNS
To:
References
IN-89-025, NUDOCS 8903010075
Download: ML031180579 (13)

UNITED STATES NUCLEAR REGULATORY

COMMISSION

OFFICE OF NUCLEAR MATERIAL SAFETY AND SAFEGUARDS

WASHINGTON, D.C. 20555 March 7, 1989 NRC INFORMATION

NOTICE NO. 89-25: UNAUTHORIZED

TRANSFER OF OWNERSHIP

Addressees

All U.S. Nuclear Regulatory

Commission (NRC) source, byproduct, and special nuclear material licensees.

Purpose

This notice is to inform licensees

of their responsibility

to provide timely notification

to NRC before the planned transfer of ownership

or control of licensed activities, and to obtain prior written consent to such action from NRC, as specified

in 10 CFR Sections 30.34(b), 40.46, and 70.36. In addition, this notice provides guidance on the type of information

that should be sub-mitted to NRC, before a change of ownership

or control. It is expected that recipients

will: review this notice for applicability

to their licensed acti-vities; distribute

it to responsible

licensee management

and corporate

staff, radiation

protection

staff, and authorized

users, as appropriate;

and maintain procedures

to preclude problems from occurring

as the result of the transfer of control of licensed activities.

However, suggestions

contained

in this notice do not constitute

any new NRC requirements, and no written response is required.Discussion:

Sections 81 and 184 of the Atomic Energy Act of 1954, as amended, require that a license be possessed

to conduct licensed activities, and 10 CFR Section 30.34(b) states that no NRC license nor any right under a license shall be transferred, assigned or in any manner disposed of, either voluntarily

or involuntarily, directly or indirectly, through transfer of control of any license to any person, unless the Commission

shall, after securing full in-formation, find that the transfer is in accordance

with the provisions

of the Act and shall give its consent in writing. Similar wording is found in Sections 40.46 and 70.36 of the regulations

for source and special nuclear material.Recently, NRC has noticed an increasing

trend to transfer ownership

of businesses

that control the use of licensed materials.

Such changes in ownership

are usually the results of mergers, buy-outs, or majority stock transfers.

These actions appear to be occurring

at a greater frequency because of the present economic environment.

Although it is not the intent 8903010075 g A-=) /

IN 89-25 March 7, 1989 of NRC to interfere

with the business decisions

of licensees, it is necessary for licensees

to provide timely notification

to NRC whenever such decisions could involve changes in the corporate

structure

responsible

for management

oversight, control, or radiological

safety of licensed materials.

The purpose of such notification

is to allow NRC to assure that: radioactive

materials are possessed, used, owned, or controlled

only by persons who have valid NRC licenses;

materials

are properly handled and secured; persons using such mate-rials are capable, competent, and committed

to implement

appropriate

radiological

controls;

and public health and safety are not compromised

by the use of such materials.

In 1988, NRC identified

several instances

of businesses

authorized

to possess and use licensed materials

that were transferred

to other owners, with a consequent

change in control, without any notification

to the NRC. In such cases, NRC has usually become aware of the change either when conducting

a routine inspection

or when notified by the new controlling

organization (transferee).

Transfer of company ownership

often results in the assumption

of licensed activities

by a corporation

not authorized

to use or possess licensed materials, and whose competence

and ability to establish, implement, and maintain radiological

controls have not been previously

evaluated

by NRC.In such cases, NRC usually determines

that the transferee

violated NRC requirements

on use and possession

of radioactive

materials (because of its unauthorized

use and possession), and that the predecessor

entity (transferor)

failed to inform NRC of the planned transfer of ownership.

In specific cases, licensees

have failed to inform NRC of changes in ownership and changes in locations

of licensed material from those specified

on the transferor's

licenses.

In one particular

case, failure to notify NRC of a change in ownership

may have contributed

to the inadvertent

loss of two nuclear weighing scales, containing

several hundred millicuries

of cesium-137.

This type of situation

could result in the exposure or contamination

of individuals

or the environment.

NRC licensees

planning to transfer ownership, a change in corporate

status, or control of licensed activities

are required by 10 CFR to provide sufficient

prior notice and full information

about the change to NRC, in order to obtain written consent from the Commission

before the transfer.

Although the burden of adhering to this requirement

is on the existing licensee, it will be neces-sary for the transferee

to provide supporting

information

or to independently

coordinate

the change in ownership

or control with the appropriate

NRC Regional Office. Failure to comply with this requirement

may adversely

affect the public health and safety-and

interfere

with NRC's ability to inspect activities.

There-fore, NRC may consider that a violation

of this requirement

warrants escalated enforcement

action, including

civil penalties

and orders, if indicated

by the circumstances

against one or both of the parties involved.

Willful failure to obtain prior NRC approval of the transfer may result in referrals

to the Department

of Justice for consideration

of criminal prosecution.

IN 89-25 March 7, 1989 The following

guidance is provided concerning

notification

of NRC of ownership or control changes: 1. Full information

on change in ownership

or control of licensed activities

should be submitted

to the appropriate

NRC Regional Office as early as possible, preferably

at least 90 days before the proposed action.2. NRC approvals

for change in ownership

or control may be delayed or denied if the following

information, where relevant, is not included in the submittal:

a. The name of the organization, if changed. Provide the new name of the licensed organization

and if there is no change, so state.b. Identification

of any changes in personnel

named in the license, including

any required information

on personnel

qualifications.

c. An indication

of whether the seller will remain in business without the license.d. A complete, clear description

of the transaction.

The de-scription

should include any transfer of stocks or assets.e. An indication

of any planned changes in organization, location, facilities, equipment, procedures, or personnel.

If such changes are to be made, they should be fully described.

f. An indication

of any changes in the use, possession, or storage of the licensed materials.

If such changes are to be made, they should be described.

g. An indication

of whether all surveillance

items and records, including

radioactive

material inventory

and accountability

requirements, will be current at the time of transfer.

A description

of the status of all surveillance

requirements

and records, e.g., calibrations.

leak tests, surveys, etc.should be provided.h. A description

of the status of the facility.

Specifically, the presence or absence of contamination

should be documented.

If contamination

is present, will decontamination

occur before transfer?

If not, does the successor

company agree to assume full liability

for the decontamination

of the facility or site?i. A description

of any decontamination

plans, including

financial assurance

arrangements

of the transferee, should be provided, IN 89-25 March 7, 1989 as specified

in 10 CFR Sections 30.35, 40.36, and 70.25.This should include information

about how the transferee

and transferor

propose to divide the transferor's

assets, and responsibility

for any cleanup needed at the time of transfer.j. An indication

of whether the transferor

and transferee

agree to the change in ownership

or control of the licensed material and activity.

If so, documentation

stating this should be provided.k. A commitment

by the transferee

to abide by all constraints, conditions, requirements, representations, and commitments

identified

in the existing license. If not, the transferee

must provide a description

of its program to assure compliance

with the license and regulations.

No specific action or written response is required by this information

notice.Questions

on this matter should be directed to the appropriate

NRC Regional Office or to this office.Richard E. Cunningham, Director Division of Industrial

and Medical Nuclear Safety Office of Nuclear Material Safety and Safeguards

Technical

Contact: Scott Moore, NMSS (301) 492-0514 Attachments:

1. List of Recently Issued NMSS Information

Notices 2. List of Recently Issued NRC Information

Notices

Attachment

1 IN 89-25 March 7, 1989 LIST OF RECENTLY ISSUED NMSS INFORMATION

NOTICES Information

Date of Notice No. Subject Issuance Issued to 89-13 89-12 89-03 89-02 88-100 88-93 Alternative

Waste Management

Procedures

in Case of Denial of Access to Low-Level

Waste Disposal Sites Dose Calibrator

Quality Control Potential

Electrical

Equipment

Problems Criminal Prosecution

of Licensee's

Former President for

Intent

ional

Safety Violations

Memorandum

of Understanding

Between NRC and OSHA Relating to NRC-Licensed

Facilities

(53 FR 43950, October 31, 1988)Teletherapy

Events Unauthorized

Removal of Industrial

Nuclear Gauges Industrial

Radiography

Inspection

and Enforcement

02/08/89 02/09/89 01/11/89 01/09/89 12/23/88 12/02/88 11/22/88 08/22/88 All holders of NRC specific licenses All NRC medical licensees All Fuel Cycle and major nuclear materials licensees All holders of NRC specific license All major nuclear materials

licensees and utilities

holding CPs and OLs.All NRC medical licensees All NRC licensees authorized

to possess, use, manufacture, or distribute

industrial

nuclear gauges All NRC industrial

radiography

licensees 88-90 88-66 OL = Operating

License CP = Construction

Permit

J-' Attachment

2 IN 89-25 March 7, 1989 LIST OF RECENTLY ISSUED NRC INFORMATION

NOTICES Information

Date of Notice No. Subject Issuance Issued to 89-24 Nuclear Criticality

Safety 3/6/89 All fuel cvcle 89-23 89-22 89-21 88-73, Supplement

1 Environmental

Qualification

of Litton-Veam

CIR Series Electrical

Connectors

Questionable

Certification

of Fasteners Changes in Performance

Characteristics

of Molded-Case Circuit Breakers Direction-Dependent

Leak Characteristics

of Contain-ment Purge Valves 3/3/89 3/3/89 2/27/89 2/27/89 licensees

and other licensees

possessing

more than critical mass quantities

of special nuclear material.All holders of OLs or CPs for nuclear power reactors.All holders of OLs or CPs for nuclear power reactors.All holders of OLs or CPs for nuclear power reactors.All holders of OLs or CPs for nuclear power reactors.89-20 Weld Failures in a Pump of Byron-Jackson

Design Health Physics Network 2/24/89 2/23/89 89-19 All holders of OLs or CPs for nuclear power reactors.All holders of OLs or CPs for nuclear power reactors, and the following

fuel facilities:

Nuclear Fuel Services of Erwin, General Atomic, UNC Montville, B&W LRC Lynchburg, and B&W Lynchburg.

All holders of OLs or CPs for nuclear power reactors.89-18 Criminal Prosecution

Wrongdoing

Committed Suppliers

of Nuclear Products or Services of by 2/22/89 OL = Operating

License CP = Construction

Permit

IN 89-25 March 7, 1989 as specified

in 10 CFR Sections 30.35, 40.36, and 70.25.This should include information

about how the transferee

and transferor

propose to divide the transferor's

assets, and responsibility

for any cleanup needed at the time of transfer.j. An indication

of whether the transferor

and transferee

agree to the change in ownership

or control of the licensed material and activity.

If so, documentation

stating this should be provided.k. A commitment

by the transferee

to abide by all constraints, conditions, requirements, representations, and commitments

identified

in the existing license. If not, the transferee

must provide a description

of its program to assure compliance

with the license and regulations.

No specific action or written response is required by this information

notice.Questions

on this matter should be directed to the appropriate

NRC Regional Office or to this office.Richard E. Cunningham, Director Division of Industrial

and Medical Nuclear Safety Office of Nuclear Material Safety and Safeguards

Technical

Contact: Scott Moore, NMSS (301) 492-0514 Attachments:

1. List of Recently Issued NMSS Information

Notices 2. List of Recently Issued NRC Information

Notices Also input from LChandler, OGC RWeisman, OGC*Editor *RI *RII *RIII *RIV *RV *OE EKraus JJoyner WCline BMallett WFisher RThomas JLieberman

2/08/89 2/07/89 2/13/89 2/14/89 2/13/89 2/08/89 2/23/89*See previous concurrence

OFC: *IMOB :*IMOB :*IMAB :*IMSB :*IMOB *OGC :IMNS :*IMNS NAME:SMoore/sm

DCool :JAustin :LRouse :JHickey :RFonner:GSjoblom

RECunningham

_____________________-_________________-____________________-________________

DATE:2/22/89

2/23/89:2/23/89

2/28/89 :2/28 /89 :2/28/89:2/

/89 :02/28/89 OFFICIAL RECORD COPY

IN 89-March , 1989 as specified

in 10 CFR Sections 30.35, 40.36, and 70.25. This should include information

about how the transferee

and transferor

propose to divide the transferor's

assets, and responsibility

for any cleanup needed at the time of transfer.j. An indication

of whether the transferor

and transferee

agree to the change in ownership

or control of the licensed material and activity.

If so, documentation

stating this should be provided.k. A commitment

by the transferee

to abide by all constraints, conditions, requirements, representations, and commitments

identified

in the existing license. If not, the transferee

must provide a description

of its program to assure compliance

with the license and regulations.

No specific action or written response is required by this Information

Notice.Questions

on this matter should be directed to the appropriate

NRC Regional Office or to this office.Richard E. Cunningham, Director Division of Industrial

and Medical Nuclear Safety Office of Nuclear Material Safety and Safeguards

Technical

Contact: Scott Moore, NMSS (301) 492-0514 Attachments:

1. List of Recently Issued NMSS Information

Notices 2. List of Recently Issued NRC Information

Notices Also input from LChandler, OGC RWeisman, OGC*Editor *RI *RII *RIII *RIV *RV *OE EKraus JJoyner WCline BMallett WFisher RThomas JLieberman

2/08/89 2/07/89 2/13/89 2/14/89 2/13/89 2/08/89 2/23/89*See previous concurrence

OFC: *IMOB :*IMOB :*IMAB :*IMSB :IMq S :0GkS S NAME:SMoore/sm

DCool :JAustin :LRouse :JHickey (6eIner:GS

lom :R Cunningham

DATE:2/22189

2/23/89:2/23/89

2/28/89 :2/7 /89 :A2/ 89:2/ 9:02 2589 IN 89--S-e~ ,1989 as specified

in 10 CFR Sections 30.35, 40.36, and 0.25. This should include information

about how the transf ee and transferor

propose to divide the transferor's

ssets, and responsibility

for any cleanup needed at the ime of transfer.j. An indication

of whether the transferor

d transferee

agree to the change in ownership

or control of tye licensed material and activity.

If so, documentation

stati this should be provided.k. A commitment

by the transferee

to ide by all constraints, conditions, requirements, repres tations, and commitments

identified

in the existing liceg e. If not, the transferee

must provide a description

of ts program to assure compliance

with the license and regulat ns.No specific action or written response is/required

by this Information

Notice.Questions

on this matter should be dire ed to the appropriate

NRC Regional Office or to this office.Richard E. Cunningham, Director Division of Industrial

and Medical Nuclear Safety Office of Nuclear Material Safety and Safeguards

Technical

Contact: Scott Moore, NMSS (301 492-0514 Attachments:

1. List of Recently ssued NMSS Informati

Notices 2. List of Recent Issued NRC Informat n Notices Also input from LChandler, OGC RWeisman, OGC*Editor *RI *RII *RIII *RIV *RV OE a -EKraus JJoyner WCline BMallett WFisher RThomas J a W erman 2/08/89/ 2/07/89 2/13/89 2/14/89 2/13/g9 Z/Ub/U9 Z/W.;Vb*See previous concurrence

==========

OFC: IS Q :IMOB :1M A :IM E ~ :IMOB :OGC .IMNS :IMNS------ZAL--------

---

NAME:SMoore/sm

pD W :JA stin :LRouse :JHickey :RFonner:G

blom :RECunningham

_______________,,<r----

_-----------------------_------------4

---

DATE:2/a2/89

/'i/89:2ft5/89

2/i;/89 :2/ /89 :2/ /89:2/ i :02/ /89 OH1CIAL RELURU CUPY

IN 89-February , 1989 k. Do the transferor

and transferee

agree to the change in ownership or control of the licensed material and activity?

If so, documentation

stating this should be provided.No specific action or written response is required by this Information

Notice.Questions

on this matter should be directed to the appropriate

NRC Regional Office or to this office.Richard E. Cunningham, Director Division of Industrial

and Medical Nuclear Safety Office of Nuclear Material Safety and Safeguards

Technical

Contact: Scott Moore, NMSS (301) 492-0514 Attachments:

1. List of Recently Issued NMSS Information

Notices 2. List of Recently Issued NRC Information

Notices (44) Iva~Editor RI RII$"' R II 4.{ RIV 'oS RYV OE EKraus JJoyner WCline BMallett WFisher RThomas JLieberman

2/8/89 2/17/89 2/13/89 2/i4/89 2/13/89 q2/ /89 2/ /89 OFC: IMOB :IMOB :IMAB :IMSB :IMOB :OGC :IMNS :IMNS___--__-___-___-__________-_______-____-_-______-e

_____________-_____

NAME:SMoore/sm:DCool

JAustin :LRouse :JHickey :Rp X:GSjoblom

RECunningham

DATE:2/ /89 :2/ /89:2/ /89 :2/ /89 :2/ /89 :2'/_Z/89:2/

/89 :02/ /89 IN 89- 'March , 1989 as specified

in 10 CFR Sections 30.35, 40.36, and 70.25. This should include information

about how the transferee

and transferor

propose to divide the transferor's

assets, and responsibility

for any cleanup needed at the time of transfer.j. An indication

of whether the transferor

and transferee

agree to the change in ownership

or control of the licensed material and activity.

If so, documentation

stating this should be provided.k. A commitment

by the transferee

to abide by all constraints, conditions, requirements, representations, and commitments

identified

in the existing license. If not, the transferee

must provide a description

of its program to assure compliance

with the license and regulations.

No specific action or written response is required by this Information

Notice.Questions

on this matter should be directed to the appropriate

NRC Regional Office or to this office.Richard E. Cunningham, Director Division of Industrial

and Medical Nuclear Safety Office of Nuclear Material Safety and Safeguards

Technical

Contact: Scott Moore, NMSS (301) 492-0514 Attachments:

1. List of Recently Issued NMSS Information

Notices 2. List of Recently Issued NRC Information

Notices Also input from LChandler, OGC RWeisman, OGC*Editor *RI *RII *RIII *RIV *RV *OE EKraus JJoyner WCline BMallett WFisher RThomas JLieberman

2/08/89 2/07/89 2/13/89 2/14/89 2/13/89 2/08/89 2/23/89*See previous concurrence

OFC: *IMOB :*IMOB :*IMAB :*IMSB :IMQb :0G ,7 S :1 w---- --- --- --- --- --- --- --- --- --- ---4 --~ t- -- -----NAME:SMoore/sm

DCool :JAustin :LRouse :JHickey E 4ner:GSz lomi Cunningham

DATE:2/22/89

2/23/89:2/23/89

2/28/89 :2/1l/89 :2/t/89:2/

9 0216/89 OFFICIAL RECORD COPY

IN 89-tAo-cCk Seb6t*wry , 1989 as specified

in 10 CFR Sections 30.35, 40.36, and 0 .5. This should include information

about how the transf ee and transferor

propose to divide the transferor's

ssets, and responsibility

for any cleanup needed at t -ime of transfer.j. An indication

of whether the transferor

d transferee

agree to the change in ownership

or control of t licensed material and activity.

If so, documentation

stati this should be provided.k. A commitment

by the transferee

to ide by all constraints, conditions, requirements, represe tations, and conmmitments

identified

in the existing lice e. If not, the transferee

must provide a description

of ts program to assure compliance

with the license and regulat ns.No specific action or written response is required by this Information

Notice.Questions

on this matter should be direted to the appropriate

NRC Regional Office or to this office.Richard E. Cunningham, Director Division of Industrial

and Medical Nuclear Safety Office of Nuclear Material Safety and Safeguards

Technical

Contact: Scott Moore, NMSS (301/ 492-0514 Attachments:

1. List of Recently ssued NMSS Informati

Notices 2. List of Recent'y Issued NRC Informat'

n Notices Also input from LChandler, OGC RWeisman, OGC*Editor *RI *RII *RIII *RIV *RV OEj4. A EKraus JJoyner WCline BMallett WFisher RThomas J~7perian 2/08/89 / 2/07/89 2/13/89 2/14/89 2/13/89 2/08/89 2 J 89 11-JIL*See previous concurrence

OFC: I B :IMOB :IMAB :IM i :IMOB :OGC .YMNS :IMNS NAME:SMoore/sm

DQ ' :JAvstin :LRo se :JHickey :RFonner:G

blom :RECunningham

DATE:2/aS/89

/A!/89:2h3

/89 :2/ /89 :2/ /89 :2/ /8 :2/ / 02/89 UMLIAL KLUULP

IN 89-February , 1989 k. Do the transferor

and transferee

agree to the change in ownership or control of the licensed material and activity?

If so, documentation

stating this should be provided.No specific action or written response is required by this Information

Notice.Questions

on this matter should be directed to the appropriate

NRC Regional Office or to this office.Richard E. Cunningham, Director Division of Industrial

and Medical Nuclear Safety Office of Nuclear Material Safety and Safeguards

Technical

Contact: Scott Moore, NMSS (301) 492-0514 Attachments:

1. List of Recently Issued NMSS Information

Notices 2. List of Recently Issued NRC Information

Notices Editor RI RII 4 I " RIV Xs 9 2 RV OE RIRIl e/ OE EKraus JJoyner WCline BMallett WFisher RThomas JLieberman

2/8/89 2/71/89 2/13/89 2/1/ 89 2/13/89 2/ S/89 2/ /89 OFC: IMOB :IMOB :IMAB :IMSB :IMOB :OGC :IMNS :IMNS-- --- ---- ---- ---- ---- ----------------

-- ----- ----NAME:SMoore/sm:DCool

JAustin :LRouse :JHickey :RF aer:GSjoblom

RECunningham

DATE:2/ /89 :2/ /89:2/ /89 :2/ /89 :2/ /89 :2 /5/89:2/ /89 :02/ /89