IA-87-138, Informs That Chairman Zech & Commissioners Roberts & Asselstine Approved Proposed Rev to 10CFR110 Re Import of U from South Africa W/Mods Which Would Require Commission to Review All Imports on case-by-case Basis

Informs That Chairman Zech & Commissioners Roberts & Asselstine Approved Proposed Rev to 10CFR110 Re Import of U from South Africa W/Mods Which Would Require Commission to Review All Imports on case-by-case Basis

ML20209E222
Person / Time
Issue date:	12/18/1986
From:	Chilk S NRC OFFICE OF THE SECRETARY (SECY)
To:	NRC OFFICE OF THE SECRETARY (SECY)
Shared Package
ML20209E197	List: ML20209E190 ML20209E208 ML20209E215 ML20209E222
References
FOIA-87-138 NUDOCS 8704290456
Download: ML20209E222 (2)

Text

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N December 18, 1986 FOR AFFIRMATION THURSDAY, DECEMBER 18, 1986

SUBJECT:

SECY-86-336A - PROPOSED REVISION TO PART 110 CONCERNING IMPORT OF URADIUM FROM SOUTH AFRICA The Commission is being asked to approve a final rule which amends NRC's export regulations in 10 CFR Part 110 concerning import of uranium from South Africa. The proposed rule change would require any South African uranium ore or oxide import license applications to be considered on a case-by-case basis.

Chairman "ech and Commissioners Roberts and Asselstine have approved the rule with modifications which would require the Commission to review all imports of uranium, in any form, from South Africa on a case-by-case basis.

Commissioner Carr has approved the staff proposed rule.

Commissioner Bernthal has not Jet voted on the paper.

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( - Samuel J. Chilk Secretary of the Commission cc: Chairman Zech Commissioner Roberts Commissioner Asselstine Commissioner Bernthal Commissioner Carr OGC - H Street EDO 8704290456 870427 kkOSTEg-138 PDR b

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i The Honorable George P. Shultz Secretary of State Washington D.C. 20520

Dear Mr. Secretary:

As the Department draf ts the regulations to implement the Comprr hensive Anti-Apartheid Act of 1986, I wanted to be sure it was aware of my views on Section 309, which bans imports of uranium and uranium ore.

During debate on this section Senators McConnell, Ford and I discussed the scope of this ban. It was our mutual understanding that it did not reach uranium imported only for reprocessing and subsequent export. Any other interpretation of this provision would clearly be at odds with our discussion.

I am also advised that some question has been raised as to whether clearly doesthe ban extends to uranium hexafluoride. It not. Had Congress wished to include this item in the list of banned items, it would have done so expressly.

Thank you for attention to this letter.

Sincerely,

, Richard G. Lugar Chairman RGL: rmk  :

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\*****/ November 26, 1986 MEMORANDUM FOR: Commissioner Asselstine FROM: William C. Parler General Counsel -

SUBJECT:

LEGAL ANALYSIS OF SECTION 309(a) OF THE COMPREHENSIVE ANTI-APARTHEID ACT OF 1986 (P.L.99-440)

Section 309fa) of the Comprehensive Anti-Apartheid Act of 1986 (P.L.99-440) prohibits the import of uranium ore and uranium oxide from South Africa into the United States after December 31, 1986. In a memorandum to me dated November 19, 1986, you asked the Office of the General Counsel to analyze section 309(a) focusing specifically un whether~the import of uranium hexafluoride or other non-oxide forms of uranium ore from South Africa is permitted under the Act. For reasons set forth in the enclosed legal analysis, OGC concludes that imports of uranium hexafluoride or other non-oxide forms of uranium ore are not barred under Section 309 (a) of this Act.

In our analysis we also address two other significant questions regarding the interpretation of Section 309 (a) . The first is whether the bar extends to South African uranium ore or uranium oxide that is imported into the United States for further processing, such as transformation into uranium hexafluoride or enriched uranium, and then exported to another country. We

believe the better reading of the law is that such imports are barred.

Finally, we address the question whether the bar covers South African uranium ore or uranium oxide that is exported to a country other than the United States where it is converted to uranium hexafluorida or enriched, and then sent by the processing  !

i country to the United States. We state that under our present understanding of Customs Service law, if a product originating in one country has been "substantially transformed" in another i country the transformed product is not considered to have come from the originating country. The question to be resolved I

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therefore is whether uranium hexafluoride or enriched uranium is l a substantially different product than uranium ore or uranium oxide. It is our understanding that these products may be viewed as being substantially different.

I In any event, before promulgating our regulations implementing i the Anti-Apartheid Act, it is our understanding that we wil; have I the benefit of the Executive Branch's views on these matters.

Enclosure:

Legal Analysis cc: Chairman Zech Commissioner Roberts Commissioner Bernthal Commissioner Carr EDO IP SECY l

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I LEGAL ANALYSIS

Section 309(a) of the Comprehensive Anti-Apartheid Act of 1986 (P.L.99-440) provides that "...no- (1) uranium ore, (2) uranium oxide (3) coal, or (4) textiles, that is produced or manufactured 2

in South Africa may be imported into the United States." There are several questions raised regardina the scope of this prohibition. The first question we will address is whether the

, import of uranium hexafluoride or other non-oxide forms of uranium ore from South Africa is permitted under the Act. For reasons set forth in this memorandum, OGC concludes that imports of hexafluoride or other non-oxide forms of uranium ore are permitted.

The text of Section 309 (a) is clear. Read literally it only bars the importation of uranium ore and uranium oxide. Even though the statute is clear on its face, in construing the section an examination of the leaislative history is warranted. The Supreme Court has repeatedly asserted that "[w] hen aid to construction of i

the meanina of words, as used in the statute, is available, there certainly can be no ' rule of law' which forbids its use, however c1 car the words may appear on ' superficial examination'."

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Train v. Colorado Public Interest Research Group, 426 U.S. 1, 10 t (1976), quoting United States v. American Truckina Associations, 310 U.S. 534, 543-544 (1940). In evaluating a clearly worded i statutory provision in light of its legislative history, the plain meaning of the statutory provision is to prevail unless there is " clear evidence" of a " clearly expressed leaislative intention" to the contrary. Bread Political Action Committee v.

Federal Election Commission, 455 U.S. 577, 581 (1982). Here, there is no pre-enactment lecislative history indicating that Concress intended the bar to include uranium hexafluoride or other non-oxide forms of uranium.

The House Bill, H.R. 4868, as introduced, contained no reference to uranium hexafluoride in its section banning the import of uranium ore and uranium oxide.y No hearings were held on the bill in the House Foreign Affairs Committee or in the House Ways and Means Committee. Hearings were held in the House Committee

- on Banking, Finance and Urban Affairs and in the House Rules Committee. The House Committee on Foreign Affairs in its report on H.R. 4648 (H.R. REP.99-638, Part 1) did not discuss the i prohibition in detail. That discussion did not indicate that the ,

bar extended to uranium hexafluoride or other non-oxide forms of uranium. Thereafter, H.R. 4868 was debated in the House on June 18, 1986. No references to the import ban, except for i

I The NRC staff has advised OGC that from a technical perspective, uranium hexafluoride is not uranium oxide.

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! restatement of the statutory provi'sion, were made. The House  !

l passed the bill that day.

The Senate Bill, S.2701, as introduced by Senator Lucar (132 CONG. REC. S9889-9898, daily ed. July 30, 1986), contained i

no provision equivalent to Section 309 (a) , although it did contain a provision, Section 303, prohibiting the import of an article grown, produced or manufactured by a "parastatal organization" of South Africa.' Senator Lucar noted in his introductory remarks that the prohibition would cover uranium, i

among other things. After hearings, S.2701 was reported out by the Senate Foreign Relations Committee. As reported, it contained in Section 311 a ban on the import of uranium ore and uranium oxide. The Report (S. REP. No.99-370) contained no indication that uranium hexafluoride fell within the scope of the import bar. The Senate Bill was debated in the Senate on Auaust 13, 14, and 15, 1986. No reference to a ban on the import of uranium hexafluoride or other non-oxide forms of uranium can be found in the debates.

After the President vetoed the legislation, the House and Senate debates on whether the veto should be overridden did not address the uranium hexafluoride issue. (132 CONG. REC. H.8649-8672, j daily ed. September 29, 1986; 132 CONG. REC. S.14629-14660, daily ed. October 2, 1986.)

There is some post-enactment " legislative history". After Congress had overridden the President's veto and the leaislation became law, Senator Lugar sent a letter on October 14, 1986 to i Secretary of State Shultz in which he stated that Conoress had not intended to include uranium hexafluoride in the list of banned items. Senators Bingaman and Kennedy and Congressmen Richardson, Wolpe, Dellums, Leland and Markey took a contrary position in a letter they jointly sent to President Reagan on l October 31, 1986. They expressed concern about reports that the i Treasury Department intended to bar only uranium in the form of f

raw ore or in a specific oxide compound. The authors argued that

! such an interpretation would be contrary to Congressional intent and that to apply the ban only to ore or to oxide allows easy

, circumvention of the sanctions, since concentrates can be readily

, converted to uranium hexafluoride elsewhere and then imported into the United States. The Concressmen asserted that both the House and the Senate intended to bar the importation of all South  :

African uranium. I Not only are these letters conflicting and thus not conclusive, they are entitled to little or no weight in interpreting Section 2"Parastatal organization" was defined as a corporation or partnership owned or controlled by the South African Government.

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309(a). Statements made by Congressmen after the passage of legislation, however explicit, cannot serve to change the legislative intent of Congress expressed before an act's passage.

Rather, such statements represent only the personal views of the legislators since the statements were made after passage of the statute. Bread Political Action Committee v. Federal Election Commission, 455 U.S. 577, 582.n3 (1982); Regional Rail Reorganization Cases, 419 U.S. 102, 132 (1974).

Because the text of the statute clearly indicates that the import bar is applicable only to uranium ore and uranium oxide and we found no pre-enactment legislative history to the contrary, OGC concludes that the Section 309(a) bardoesnotapp}ytouranium hexafluoride and other non-oxide forms of tranium.

Perhaps the most significant question concerning the scope of Section 309(a) is whether the import bar extends to uranium ore or uranium oxide that is imported for enrichment or other processing and subsequent re-export. Again a natural reading of the text of Section 309(a) would lead one to conclude that there are no exceptions to the impor However, there is some pertinent legislative history.g bar.

Che Senate Foreign Relations Committee in describing the import ban stated:

1 Imports of South African uranium ore, uranium oxide and coal are banned. The ban takes effect 90 days after enactment to permit goods already purchased and in transit to be imported. After this date, however, no South African uranium ore, uranium oxide, or coal can be imported into the United States."

S. REP. No.99-370 at 14.

3 We note though that import of such substances would be barred by Section 303 if the material came from a "parastatal organization" of South Africa. That section, which is broader than section 309, bars the import of any article (with a few specified exceptions not applicable here) which is grown, produced, manufactured by, marketed, or otherwise exported by a parastatal organization. A list of parastatal organizations has been published by the State Department in the Federal Register

, (51 Fed. Reg. 41912, November 19, 1986).

4 The Senate legislative history is more authoritative than that of the House in interpreting t.his legislation. After the Senate passed S. 2701, the House adopted the Senate version, rather than the version it had previously passed. This obviated the need for a conference committee.

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This language can be construed to Indicate that there are to be no imports of uranium ore or uranium oxide into the United States s after December 31, 1986, reoardless of the intended end-use of i

the material. However, a contrary view can be found in Senate debates.

Senator McConnell offered an amendment on the Senate floor'that l vculd have eliminated the bar on the import of uranium ore and uranium oxide. 132 CONG. REC. S. 11851 (daily ed. Aucust 15, l 1986). During the course of the debate on the smendment, a eclloquy purportedly occurred between Senate Foreion Relat CommitteeChairmanLucar,andSenatorsMcConnellandFord.jonsIn

the colloquy Senator Lucar in discussing the proposed import ban stated

The bill is not designed to have any punitive impact except on products which are imported into the United States for consumption in the United States. I think economists have defined a distinction between temporary imports and imports l for consumption. It is the latter that we are targeting when we refer to imports in this bill.

Senator Ford, a Democrat, responded:

I appreciate the chairman's reassurance. I have had discussions with the leadership on my side of the aisle and we share your interpretation of the bill's intention.

1 Senator McConnell concluded the dialogue by asserting:

I thank the Senator from Indiana [Lugar] for his indulgence i and his thoughts.

1

After that colloquy and before the Senate vote on the McConnell l amendment, Senator Sarbanes asserted that the amendment should be i defeated because it would undo the import bar, which had been

everwhelmingly adopted by the Senate Foreign Relations Committee.

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5 This colloquy did not appear in the Congressional Record of Aucust 15, 1986. Sometime thereafter, the Senators discovered i

, its absence and asked that the colloquy be included in the

! permanent bound edition of the Congressional Record. It is our understanding that the colloquy will be published in the bound 4 /ersion. Senator Kennedy argues that the colloquy never took place, that it is not valid legislative history, and that the views expressed there do not represent the will of Congress. i 13; CONG. REC. S17319 (daily ed. October 18, 1986). For purposes

]

of thiu memorandum, we presume the colloquy took place.

5 The McConnell amendment was then defeated 56-40.6 The question is how much weight should be given to the ,

Lugar-Ford-McConnell colloquy. Traditionally, floor statements l made by the chairman of the committee managing the bill on the floor, here Senator Lugar, are regarded as being like supplemental committee reports and are accorded similar weight.

Sutherland Stat Const S48.14 (4th Ed. 1984). Because there is conflicting legislative history, one could conclude that the plain meaning of the statute along with the consistent explanation in the Foreign Relation Committee's Report, should be given effect because there is no " clear evidence" of a " clearly expressed legislative intention" to the contrary. Bread Political Action Committee v. Federal Election Commission, 455 U.S. 577 (1982).

' This same conclusion can be reached by analyzing whether the natural reading of the text as reflected in the Senate Committee Report or the view reflected in the Lugar-Ford-McConnell colloquy, best effectuates the purposes of the legislation.

In our view the purposes of the legislation are cogently articulated by the House Ways and Means Committee in its Report on the legislation. The committee in explaining the rationale for i

the import sanctions asserted:

The import prohibitions are considered to be an important element of the overall package of economic sanctions included in H.R. 4868 to exert pressure on the Government of South Africa to eliminate the apartheid system and its illegal occupation of Namibia. The particular products subject to the import ban were selected because they are important to the economies of South Africa and Namibia and are major components of their overall foreign exchange 4

6 Here again there is some post-enactment legislative history

that should be given little, if any, weight. Senator Lugar in l his October 14, 1986 letter to Secretary Shultz, mentioned i earlier, stated that it was the mutual understanding of Senators

, McConnell, Ford and Lugar that the ban did not reach uranium imported only for reprocessing and subsequent export and that any i other interpretation would " clearly be at odds with our discussion".

I I In the Senate debate on a Resolution (H.J. Res. 756) making technical corrections to the legislation, after the President's veto had been overridden, Senator Kennedy stated that he I interpreted the Act differently. He stated that Section 309 i banned all imports, regardless of whether they were intended for l l consumption in the United States or re-export to other countries. l l 132 CONG. REC. S17319 (daily ed. October 18, 1986).  ;

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6 8 **e earnings, and are not materials which may be needed for U.S. I national security. A prohibition of imports from South  !

Africa and Namibia of the particular products covered will  !

' not have an adverse impact on the United States economy or  !

on supplies of strategic materials, given the existence of l

adequate domestic production or other more important foreign sources of supply.

l H. REP. No.99-638, Part 2 at 7.

After discussions with the NRC staff, OGC has concluded that if the Lugar interpretation of the provision is adopted, the uranium import ban contained in section 309(a) would for practical purposes'have no effect. It is our understanding that virtually all, if not all, uranium ore and uranium oxide that is imported into the United States from South Africa is re-exported. If uranium may be imported as long as it is not for domestic consumption, the statutory provision would be meaningless. It is a cardinal rule that in construing a statute, effect is to be given to every clause and word of a statute and that interpretations should be avoided which emasculate an entire i portion thereof. United States v. Menasche, 348 U.S. 528, 538-39 (1955). Moreover, in the absence of clear legislative history to the contrary, which we do not have here, we believe the statute should be construed to best carry out the overall congressional objective which was to bar imports from South Africa.

Accordingly, we believe the better view of the law is that the ban includes all uranium ore and u9anium oxide, not just that intended for domestic consumption Another question relating to the scope of Section 309(a) is whether the import bar covers South African uranium ore or uranium oxide that is exported to a country other than the United 4

States where it is converted to hexafluoride or enriched, and then sent by the processing country to the United States. Such transformation of South African uranium could, and does, take place in other countries, such as those in the European Economic community. This issue was not directly addressed by either House of Congress. We understand that there is a substantial body of Custom Service case law that provides that if a product originating in one country has been "substantially transformed" in another country, the transformed product is not considered to be from the originating country. A contrary result would have far reaching implications beyond the Anti-Apartheid Act. For We note that the law firm of Shaw, Pittman, Potts &

Trowbridge, has submitted a memorandum to the NRC staff dated {

November 5, 1986 which reaches the contrary conclusion. That memorandum was prepared by the firm on behalf of the Taiwan Power j Company. 3 l

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- 7 example, the Anti-Apartheid Act ba'rs the import of South African steel. If South Africa exported steel to a European Economic Community country for use in manufacturing a car, under such a 4 theory the automobile could not be imported into the United I States. We found no indication that Congress intended to reach  !

so far in the Anti-Apartheid Act. The question in the uranium '

context is therefore whether, for example, uranium hexafluoride  ;

or enriched uranium is a substantially different product than uranium ore or uranium oxide. It is our present understanding that these products may be viewed as being substantially different. Under such an interpretation, substantially .

transformed South African uranium ore or uranium oxide would not

. fall within the prohibitions of Section 309 (a) .

We note that the NRC needs to promulcate reculations implementing the Anti-Apartheid Act which will clearly need to delineate the scope of Section 309(a). However, we are not the only agency with responsibilities for making that determination. Executive Order 12571 of October 27, 1986 (51 Fed. Rec. 39505) delegated to the Secretary of Treasury the authority to implement the Act's

. prohibition on imports of products subject to section 309, among others. With the assistance of other Executive Branch agencies, the Treasury Department is now analyzing the issues discussed in this memorandum so that it can give guidance to the Customs Service, which is part of that Department, on what South African products can be imported. The Executive Branch intends to provide its views to the NRC on the scope of Section 309(a) in the near future so that we can take their views in account in developing our implementino regulation.

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WASHINGTO=, DC20510-4178 March 5, 1987

'lhe Honorable Lando W. Zech, Jr.

Chairman U.S. Nuclear Regulatory Cmmission ~

Washington, D.C. 20555

Dear Lando:

On October 2,1986, Congress enacted the Comgehensive Anti-Apartheid Act of 1986 (Public Law 99-440) . Under section 309 of that Act, the imprtation into the United States of uranium ore and uranium oxide that is produced or '

manufactured in South Africa is now gobibited, effective December 31, 1986.

' It is my understanding that the Cmmission has now revised its regulations to carry out the requirements of section 309. In that regard, I should like to ask you to respond to the following questions about the Comnission's impimentation of this govision:

1. Please describe the regulations adopted by the Cmmission. What types of South African uranium are gohibited under the Cmmission's regulations and what gocedures have been established to ensure that all such uranium is goperly identified and treated accordingly?

2. Under the regulations adopted by the Cmmisison, is the importation into the United States of uranium ore or uranium oxide that is brought into the United States for gocessing and then subsequently reexported for use in ~

some other country gohibited? Has the Cmmission undertaken a legal analysis of this issue? If so, please govide copies of all such analyses.

3. Do your current regulations require an importer to identify the speific l country of origin of any shipnent of uranium, regardless of the form, into )

the United States?  !

1

4. Do you have any requests pnding to import South African uranium? If so, please identify the applicant, the amount and type of uranium to be imported, and whether the uranium is to be used in the United States or elsewhere. What is the status of the Camission's consideration of these requests?

5. Please identify all existing licenses authorizing the importation of South l African uranim. Under what ciremstances, if any, may such licensees l imprt South African uranium into the United States? Please identify any I such shipnents prsuant to existing licenses, including the licensee and the amount and type of uranium, that arrived in the United States on or after Deomber 31, 1986.

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6. Please Irovide a month-by-month breakdown for 1985 and 1986 of all South African uraniurn imported into the United States, the amount and type (i.e., uranium ore, uranium oxide, uranitan hexafluoride, or enriched uranitzn) of each individual shipnent, and whether the uranium was for use in the United States or was subsequently reexported. With respect to uranitzn that originated in South Africa, but was shipped to the United States through sane other country, please identify all such shipnents and the country through which such uranitan was shipped, as well.

j I apgreciate your assistance in responding to these questions and look forward to hearing from you.

With warm regards, Most sincerel ,

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Alan . on Ranking Mino 'ty Menber Subcomnittee Nuclear Regulation

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FDO PRINCIPAL CORRESPONDENCE CONTROL FROM: DtlE: 03/19/87 1 EDO CONTROL: 002602 l SEN. ALAN K. SIMPSON DOC'DT: 07/05/97 FINAL REPLY: i I

TO:

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1 FOR SIGNATURE OF: ** PRIORITY ** SFCY NO: 87-237 1 1

CHAIRMAN I l

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QUESTIONS RE COMMISSION'S IMPLEMENTATION OF STELLO REGULATIONS RELATING TO THE COMPREHENSIVE ANTI- ROE APARTHEID ACT OF 1986 REHM ZERBE C,'DATE:'03/09/87 THOMPSON

' ASSIGNED TO: _IP CONTACT: SHFA MilRRAY

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,, i CFFICE CF THE SECRETARY CORRESPONDENCE CONTROL TICKET PAPER NUMBER: CRC-87-0237 LOGGING DATE: Mar 9 87 ACTION OFFICE: EDO .

AUTHOR: A.K. Simpson AFFILIATION: .U.S. SENATE LETTER DATE: Mar 5 87 FILE CODE:

SUBJECT:

Questions on the Comms implementation of regs relating to the comprehensive Anti-Apartheid Act of 1986 '

ACTION: Signature of Chairman DISTRIEUTION: RF, OCA to Ack SPECIAL HANDLING: None NOTE 3:

i DATE bOZ: Mar 23 87 SIGNATURE: .

DATE SIGNED:

AFFILIATION:

Rec'd Off. EDO Date - 3 ') - ?)

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