Text

Recommends Approval of Draft Final Rule to Amend Regulations in 10CFR110 Re Imports of U from South Africa & Draft Ltr to Dept of State.Comments from Ofcs of General Counsel & Admin Encl
	ML20207D753
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Issue date:	12/11/1986
From:	Stello V; NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
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ML20207B343	List: ML20207D753; ML20207D923; ML20207R205; ML20207R207; ML20207R211;
References
	FRN-51FR47207, RULE-PR-110, TASK-RIA, TASK-SE AC43-2-05, AC43-2-5, SECY-86-336A, NUDOCS 8612310187
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l RULEMAKING ISSUE (Affirmation) , December 11, 1986 SECY-86-336A For: The Commission From: Victor Stello, Jr. Executive Director for Operations f

Subject:

PROPOSED REVISION TO PART 110 CONCERNING IMPORT OF URANIUM FROM SOUTH AFRICA

Purpose:

To obtain Commission approval of (1) a draft final rule which amends NRC's export regulations in 10 CFR Part 110 concerning imports of uranium from South Africa and (2) a draft letter to the Department of State.

Background:

Section 309 of the Comprehensive Anti-Apartheid Act of 1986 ("the Act"), enacted October 2, 1986, prohibits the import into the United States of " uranium ore" and " uranium oxide" that is " produced or manufactured" in South Africa (Appendix A, pp. 38-39). As the Comission was informed in SECY-86-336, November 13, 1986, a revision to Part 110 is necessary to carry out the requirements of Section 309 because the existing general license for imports in 1110.27 permits the unrestricted import of uranium into the United States from any foreign country. The Act stipulates that the provisions of Section 309 shall take effect 90 days after the date of enactment of the Act, which is December 31, 1986. As a related matter, the Treasury Department is also revising its own regulations concerning the uranium import ban. (The Secretary of the Treasury, by Executive Order 12571, was delegated authority in the Executive B.anch to implement the majority of the Act's provisions affecting imports.) Accordingly, the NRC must ensure that its CONTACT: $ E. O. Hemby, IP 49-27984 h l N O D @d s g i _

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The Commission. 2 implementing provisions in Part.110 do not conflict with the provisions of the Treasury Department's regulations affecting uranium imports.j Discussion: On October 23, 1986, the staff requested Executive Branch

                                          .coments on a preliminary draft of the Part 110 amendments, noting the 90-day deadline for implementation of the Act.

Normally, the staff would not proceed to publish an amendment to Part 110 without receiving formal Executive Branch concurrence. However, the Executive Branch has, to date, not completed its assessment of the scope of the uranium import ban provisions of the Act and has not been able to provide its views to NRC regarding the draft' amendment to Part 110. In view of the December 31 deadline, the staff has concluded that the Commission should nevertheless oroceed to revise Part 110, in advance of receiving Executive Branch comments, but in a manner which does not prejudice any subsequent Executive Branch policy

 '                                          determinations on the scope of the uranium import ban. The s'taff's proposal would be simply to revise Part 110 to remove the general license authorization to import " uranium ore or oxide produced or manufactured in South Africa".

This approach would require any South African uranium ore and oxide import license applications to be considered on a case-by-case basis and would allow the Commission to defer its final decision on certain aspects of the scope of the Act's provisions until after receiving the Executive Branch's formal views. With regard to the scope of Section 309, 0GC has prepared a legal analysis which is enclosed at Appendix B. The major conclusions of this analysis are that:

1. Imports of non-ore or non-oxide forms of uranium from South Africa are not banned under the Act (e.g., UF6).

3 I Section 303 of the Act (Appendix A, p. 31) also prohibits the import of any products (including uranium) from a "parastatal organization" of South Africa (i.e., a corporation or partnership owned, controlled or subsidized by the Government of South Africa). The Treasury Department has published regulations

implementing the requirements of this Section and there is no need to amend Part 110 in this regard. The Department of State published a list of South African parastatal organizations on November 19, 1986, F.R. 41912.

_ . - _ . _ _ _ . ~ _ . . _ . . . . . . _ _ _ ___ __

The Commission 3 r Discussion: 2. - The Act does not prthibit the import of South (Continued) African-origin uranium which has been "substantially transformed " in a third r.ountry after initial export from South Africa. 3.- The Act does prohibit the import of South African uranium ore or oxide which is imported solely for purposes offurtherprocessing(e.g.,conversionorenrichment)and subsequent reexport to a third country. With regard to OGC's conclusions on " substantial transformation", the staff, after discussions with Executive Branch officials and taking particular note of standard U.S. Customs practices, has concluded that the chemical or physical conversion of uranium (e.g., from U308 or yellowcake to UF6, UO2 or metal), or its isotope enrichment, does constitute a " substantial transformation". According to U.S._ Customs regulations, if a product originating in one country has been "substantially transformed" in another country, the transformed product is not considered to have come from the originating country, but rather from the country where the product was substantially' transformed (see Appendix C). Implications of Section 309(a) The economic impact of the uranium import ban will be severe on the two private U.S. companies, Kerr-McGee and Allied, which convert South African-origin uranium oxide U308 to UF6 for enrichment purposcs for use by both domestic and foreign utilities. Although the staff is unable to determine the exact economic impact, it is known that these companies represent a $100 million industry employing 1,000 people and,-with respect to just their foreign customers, over 20 percent of the industry's throughput of UF6 is South African-origin material. Currently the U308 material is imported into the United States under NRC's general license provisions for imports; however, Section 309 will orohibit these kinds of imports after December 31. U.S. DOE uranium enrichment activities will be less affected - by the uranium import ban because imports of South , African-origin UF6 will still be permitted. However, foreign governments may be reluctant to enrich South African-origin material in the United States if they cannot also have it converted in the United States. For example, d w r -e-- - -'r-- y - et W ~p-- , p- w - w-

I ' , - The Commission 4 ' Discussion: if South African-origin uraniu'm must be converted in JContinued) EURATOM, foreign utilities may also decide to enrich their material in EURATOM. In addition, foreign users are concerned that the'U.S. Congress may pass new legislation l which will further restrict the use of-South African uranium

- in the U.S. and this concern may-lead to further long-term reductions in DOE's enrichment services. This is of particular concern in. Japan, Taiwan, and Spain. These considerations could potentially result in a substantial impact on Department of Energy enrichment services performed for foreign customers should the foreign users divert their enrichment contracts to other suppliers.- Currently, DOE's -

- enrichment contracts involving South African-origin uranium total approximately $200,000,000 per year.

Conclusion:

     - Although final Executive Branch consents, as noted, have not yet been received. the staff has met with-Exacutive Branch                                                i officials on several occasions and -believes that the draft final rule will not conflict with and will not j                                         -

prejudice the Executive Branch's views when. received. Accordingly, and in consideration of the statutory deadline i of December 31, the staff believes that the Commission i-

'                                           must take the necessary minimal steps to implement the Act r                                          without waiting for formal Executive Branch views.

1 Should NRC's rulemaking action turn out to~be more restrictive than subsequently interpreted by the Executive l s Branch, the amendment would not preclude a person from 4' applying for a specific import license. Such import applications.would be forwarded to the Executive Branch for review pursuant to. interagency procedures. If, on the other F hand, the Executive Branch.should decide to go beyond the i literal requirements of the Act and, for policy reasons,~ decide to ban all uranium imports from South Africa (including UF6), the Commission can then review this

position and, if deemed appropriate, further amend Part 110 accordingly.

At the time this paper was prepared, the Executive Branch 4-advised the staff that its final views on NRC's rulemaking may be dispatched during the week of December 8. Tne staff 1 will forward these views to the Commission immediately upon 4 receipt. 1 e t t 4

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The Commission- 5 Recomendation: That the Commitsion:

1. Approve publication in the Federal Register of the craft final rule (Appendix D);

2. Approve dispatch of the draft 'etter to the Department of State (Appendix E); and

3. Not_e_:

a. The final rule will be effective December 31, 1986.

b. A brief regulatory analysis of the final rule has been prepared (Appendix F).

c. Letters will_be sent to the appropriate Congressional Committees (Appendix G).

d. The final rule does not contain new or amended information collection requirements subject to the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). Existing requirements were approved by the Office of Management and Budget under approval number 3150-0036.

Scheduli 11: Section 309 of the Act requires tha't the rule must be made effective December 31, 1986.

                                                                                       -?                 ,

hctorStelle, . Executive Director for Operations Appendices: A - Relevant extracts of the Comprehensive Anti-Apartheid Act of 1986 B - OGC legal analysis C - Description of U.S. Customs practices D - Final Rule E - Draft ltr to Dept of State o F - Regulatory Analysis - G - Letters to Congress

A

        .      ,                                6 In order to meet the December 31, 1986 date, Commissioners' comments should be provided directly to the Office of the Secretary by c.o.b. Nednesday, December.17, 1986.

This paper is tentatively scheduled for affirmation at an Open Meeting on Thursday, December 18, 1986. Please refer to the for appropriate a specific Weekly Commission schedule, when published, time.

              - DISTRIBUTION:

Commissioners e OGC -(H' Street) OI OCA OIA OPA EDO 3 OGC (MNBB) SZCY h

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1 APPENDIX A I s 7-- w-m - - -w- -- y, w a w- y - - iw- y c ,g - e e-w=- y- w--w - -- - ww- ,--w-w w-wv

4. In the Senate of the United States, T August 15 (legislative day, August 11), 1986. Resolved, That the bill from the House of Representa-tives (H.R. 4868) entitled "An Act to prohibit loans to, other investments in, and ~ certain other activities with respect to, South Africa, and for other purposes", do pass with the follow-ing AMENDMENT: Strike out all after the enacting clause and insert: SHORT TITLE ' Section 1. This Act may be cited as the "Comprehen-sive Anti Apartheid Act of1986". TABLE OF CONTENTS Sec. 2. The table of contents of this Act is as follotos: See. 1. 3Aare riae. See. 2. Table of munu. Sec. s. Defmitwu. See. 4. Purpme. TITLE l-POLICT OF THE UNITED STA TES WITH* RESPECT TO ENDING APARTHEID See.10L Patiey comord the Georrnment of South Afrka. See. 20s. PWicy temord tAe Afrusa Nanonal Compreen, etc

See.108. Felicy temord the omenme of operskend.

See.10d. Policy toneerd otAer amnerim in Southern Africe. See fas. P way mee,w "f = di= ~ m me. \

             '                     Sec.106. Poimey temord a nopenated settlement.

\ i . See. 20;*. Policy tomord internanonal ,. :M on meeouron to ed apartheut.

Sec.100. Palacy toneerd necklacing. See.109. United Stenen Ambenendor to meet mitA Nele.m Mandale. *

                                '  See.110. Policy temaerd the recruitewnt and training of bleek South Afrkann by United Staten employers.

TITLE !!-MEASURES TO ASSIST VICTIMS OF APARTHEID See. 201. Beholorekipe for the victiu of apertAesd. 6 I'

               .                                .                -(

q 2 Sec. 202. 'Ruman rights fund.

                                                                                   ' See. 203. Erpending participatwn in the South African economy.

Sec. 204. Esport.impet Bank of tAe United States. ( Sec. 20& Laborpractione of the Uniud Staue Georenment in South Afnea.

                                                                   .                Sec. 206. Wolfers and protection of the metime of apartheid employed b Staten.
                                                              }v                    Sec. 207. Employment practiene of United States nationals in South Africa.

1 l Sec. 20t Code of Conduct. I Sec ,,foi. Mihition on aseistenes.

                                                    .!                             Sec. 210. Use of the Jfriese Emeryoney Renase.

1 See. /11 Prohibition ing". on seeistsace to any person or proup anpaping in "

                                                             '                     Sde. 212. Passicipetwo
                                                                                                      ,'5Fr*=8-of South Africe in spriculturel esport c 1

A TITLE !!I-MEASURES BT THE UNITED STATES TO UNDERM APARTHEID 1

                                               .I        ,

Sec. 301. Prohibition on tar importation o S. 308. P,.miti.m ~ in, ort.ti.n o,f Aruperrende. must.r, .rtiel.

                                                    ,                            S.c. 301 . w u .n u i n ./ , rod.et. iro.i ,.                                             .t.! .r,ariu.t m .

Sec. Sod. Prohibitwn on r,m seporte se SoutA Afries. Sec. 305. Prohibition on loans to the Gooernment of,SoutA Africa. M Sec. 306. Prohibition on air tv- ;- '

                                                                                                                                        - with South Airice.
                                                    ~    .~                      See. 307. Prohibitiene on nuclear trade soitA SoutA Afries.
                                                   .t

Sec. SQL Goonennient of South Africe bank accounts.

Sec. 309. Prohibitwn on imprtation of uranium and coalfrom South Africa. See. 310. Prohihision on new isoestment in SoutA Africa. Sec. 311 Terminstwn of cerveio prooisione. , Sec. 312. Po; icy toward malener or temmon, k Sec. 313. Termination of tas trosty and proteool 4 See. 314. Pronihitici on United Staten Gooernment procurement from SoutA 3 Africa. 4 Sec. 311 Prohibitwn on the ymniotwo of Uniud Staus tourism in South Africa. See. 316. Prohibitwn on United Staten Gooernmar.t aseistance to, inoestment in. or su&eidy for trade witA. SoutA Africa. Sec. 317. Prohibition on sale or eeport of itene a t Munition List. l Sec. 318. Munitions list sales, notificatwn. See. 31L Prohibition on importation of South African agneultural products and f**d-See. 320. Prohibition on V,- . d ofiron and steel. See. SEL Prohibitwo on ecperts of crude oilandpetroleum products. 8se. 322. Pre 4!aition on

                                                                                                                   ,- h witA the armou forces of Sou A Africa.                                                            '

Jee. 323. Prohibitun on super imports. k TITLE IV-MULTILATERAL MEASURES TO UNDERMINE APARTHEID See. 401 Nepensting autAerity Sec. 40t. Limitation on importe from otAer countries. Sec. 465. Prsoeta right of actwn. i TITLE V-FUTURE POLICT TOWARD SOUTH AFRICA ( Sec. 30L Additmaal measuns. Sec. Sat. Lifting ofprohibitions. e i

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3 Sec. 503. Study of AealtA conditi.ms in tAe "Aometer.ds" orvas of SoutA Africa See. 304. Repris on South Afrieen impres. Soc. 305. Study and report on the economy of southern Africa. See. 306. Reprt on rstatsons betacern other induser,atized 4.u, cies and South Africa. Sec. 507. Study and twport on depoest accounts of South African natsonals in United States banks. See. 300. Study and report on the malatwo of tAe internatumal embargo on sale and esport of milstery articles to South Africa. See. 509. Report on Communist activities in South Africa. See. 510. Prohibstson on the importatson of Societ Gold Coins. . See. JII. Keenomic support for da-Ja==sp SoutA Africons. See. 512. Report on tAe African National Compress. s TITLE VI-ENFORCEMENT AND ADMINISTRATIVE PROVISIONS Ser. 401. Regulatory authorsty See. 602. Cenpressionalpriorssy procedures. See. dai Enforcement and penalties. See. 604. Applicability to reassons of AeL See. 605. Construction of Act. See. 606. State or laeol anti.apartAeid lawn, enforce. DEFINITIONS SEc. 3. As used in this Act-(1) the tenn " Code of Conduct" nfers to the prin-ciples set forth in section 208(a); (2) the tenn "contmiled South African entity"

means-(A) a corpomtion, partnership, or other busi-ness association or entity organized in South Africa and owned or contmiled, dinctly or indi-netly, by a national of the United States; or '

(B) a bmnch, office, agency, or solo propri-1, etorship in South Africa of a national of the ; Uniud States; (3) the tenn " loan"- em as tas .

4 (A) means any innsfer or extension of funds or credit on the basis of an obligation to repay, o-any assumption or guamntee of the obligation of another to repay an extension of funds or cndit,

including-

6) overdmfts, Gi) curnney swaps, (iii) the purchase of debt or equity secu-t rities issued by the Government of South Africa or a South African entity or. or after the date of enactment of this Act, '

(iv) the punhase of a loan made by another person, (v) the sale af financial assels subject to an agnement to repunhase, and (vi) a waewal or nfinancing whenby funds or cndits an tmnsferred or extended to the Government of South Africa or a South African entity, and ( (B) does n'et include-(i) normal short-term inde financing, l as by letters of cndit or similar tmde cndits; (ii) sales on open account in cases l when such sales an normal business pmc-l tice; or

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5 (iii) nscheduling of existing loans, if no new funds or endits an thenby extended to a South African entity or the Government of South Africa; (4) the term "new investment"- (A) means-(i) a commitment or contribution of funds or other assets, and (ii) a loan or other extension of cndit, and (B) does not include-(i) the ninvestment of pmfits genented by a contmiled South African entity into that same controlled South African entity cr the investment of such pmfits in a South African entity; (ii) centributions of money or ofher assets when such contributions are necessary to enable a contmlled South African entity to opemte in an economically sound manner, without expanding its opemtions; or (iii) the ownership or contml of a shan or intenst in a South African entity or a contmiled South African entity or a debt or equity security issued by the Government of I

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t I 9 6 South Africa or a South African entity befon the date of enactment of this Act, or the emnsfer or. acquisition of such a share, intenst, or debt or equity security, if any such innsfer or acquisition does not nault in a payment, contribution of funds or assets, or credit to a South African entity, a contmiled South African entity, or the Gov. ernment of South Africa; (5) the term " national of the United States"

                       ,          means-(A) a natumi person who is a citizen of the United States or who owes permanent allegiance to the United States or is an alien lawfully ad-mitted for permanent residence in the United States, as defined by section 101(a)(20) of the Immigmtion and Nationality Act (8 U. S. C.

1101(a)(20)); or (B) a cai;mation, partnership, or other busi-ness association which is organized under the de laws of the United States, any State o- territory thereof, or the Distdct of Columbia; ji' (6) the term " South Africa" includes- l\ (A) the Republic of South Africa; en an us i

I 3 (B) any territory under the Administmtion, legal or illegal, of South Africa; and (C)- the "bantustans" or " homelands", to schich South Afdcan blacks an assigned on the bacia of ethnic origin, including the Tmnskei, Bophuthatswana Ciskei, and Venda; and (7) the term " South African entity" means-i (A) a corpomtica, partnership, or other busi-ness association or entity organized in South Africa, or (B) a bmnch, office, agency, cr sole propri-etorship in South Africa of a person that nsides or is osyanized outside South Africa: and 4 (8) the term " United States"ir.cludes the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States. PURPOSE . Szc. 4. The purpose of this Act is to set forth a com-prwhensive and complete fmmework to guide the efforts of the United States in helping to bring an end to apartheid in South Africa and lead to the establishment of a nonmcial, democmtic form of government. This Act sets out United States policy towant the Government of South Africa, the victims of apartheid, andthe other states in southern Africa. i It also pmoides the President toith additional authority to em m MB

    . . . . . . .      -. -. - - . - - , . - . . . - - _ - - . - . - - . . .                                                                  - . . , - . . ~ -

8 work with the other industrial democmcies to help end apartheid and establish democmcy in South Africa. TITLB I-POLICY OF THE UNITED STATES WITH RESPECT TO ENDING APARTHE1D

POLICY TOWARD THE GOVERNMENT OF SOUTH AFRICA SEc.101. (a) United States policy toward the Gov-ernment of' South Africa shall be designed to bring about nforms in that system of government that will lead to the establishment of a nonmcial democmcy. (b) The United States will work towant this goal by encoumging the Government of South frica to-(1) nyeal the present state of emergency and re-spect the principle of equaljustice under law for citi-

zens of all mees; (2) nicase Nelson Mandela, Govan Mbeki, Walter Sisulu. black tmde union leaders, and all politicalprisoners;

, (3) permit the fne exercise by South Africans of all mces of the right to form political parties, express political opinions, and otherwise participate in the politicalpmcess; (4) establish a timetable for the elimination of apartheid laws;

A f 31 PROHIBITION ON THE IMPORTATION OF PRODUCTS FROM PARASTATAL ORGANIZATION 3

       .                                             SEc. 303. (a) Notwithstanding any other pmvision of law, no article which is gmwn, pmduced, manufactund by, marketed, or othenoise exported by a pamstatal organization
                                          ,f South Africa may be imported into the United States, (1) except for agricultumipmducts during the 12 month period fmm the date of enactment; and (2) except for those stmtegic minemis for which the Pnsident has cer*ified         t  to the Con-gnss that the quantities essential for the economy or defense a

of the United States are unavailable fmm nliable and secure suppliers and except for any article to be imported ,

                                      ' pursuant to a contract entered into before August 15, 1986:

Pmoided, That no shipments may be riceived by a national of 'the United States under such contmet after April 1, 1987. (b) For purposes of this section, the term "parastatal organization" means a corpomtion~ or partnership owned or contmiled or subsidized by the Government of South Africa, but does not mean a corpomtion or partnership which previ-ously isceived start up assistance fmm the South African ' 2ndustrial Development Corpomtion but which is now privately owned. PROHIBITION ON COMPUTER EXPORTS TO SOUTH AFRICA \

SEc. 304. (a) No computers, computer software, or

goods or technology intended to manufacture or sersce com-

t. 38 . States nonymlifemtion objectives or would othernoise jeop-antize the common defense and security of the United States ami, if at least 60 days befon the initial export, n-tmnsfer, or activity is carded out, the Pnsident submits to the Speaker of the House of Repnsentatives and the chair-man of the Committee on Fonign Relations of the Senate a report setting forth that determination, together toith his i nasons thenfor. GOVERNMENT,0F SOUTH AFRICA BANK ACCOUNTS SEC. 308. (a) A United States depositon) institution

may not accept, nceive, or hold a deposit account fmm the Government of South Africa or fmm any agency or entity oumed or contmiled by the Government of South Africa except for such accounts tchich may be authorized by the Pnsident for diplomatic or consular purposes. For purposes of the pnceding sentence, the term " depository institution": l has the same meaning as in section 19(b)(1) of the Fedeml Reserve Act.

! (b) The ymhibition contained in subsection (a) shall take effect 45 days after the date cf enactment of this Act. PROBIBITION ON IMPORTATION OF URANEUM AND COAL FROM SOUTH AFRICA SEC. 309. (a) Notwithstanding any other pmvision of lato, no-(1) unnium on,

      -4 (2) umnium oxide, emm                                             ,

          ,            t' 39 (3) coal, or                                            '

(4) textiles, that is pmduced or manufactund in South Africa may be imported into the United States. _ (b) This section shall take effect 90 days after the date of enactment of this Act. PROBIBITION ON NEW INVESTMENT IN SOUTH AFRICA SEc. 310. (a) No national of the United States may, dinctly or ihmugh another person, make any new invest-

ment in South Africa.

(b) The prohibition contained in subsection (a) shall take effect 4' 5 days after the date of enactment of this Act. (c) The ymhibition contained in this section shall not apply to a firm oumed by black South Africans. TERMINATION OF CERTAIN PROVISIONS SEc. 311. (a) This title and sections 501(c) and 504(b) shall terminate if the Government of South Africa-(1) nicases all persons persecuted for their politi. \ cal beliefs or detained unduly without trial and Nelson Mandela fmm prison; (2) repeals the state of emergency in effect on the 4 date of enactment of this Act and releases all detainees

                                               . held under such state of emergency;
   .                                                      (3) unhans democmtic political parties and per-mits the fne ezemise by South Africans of all races of the right to form political parties, express political en an em e+e-ee--,---y---       ,  g--o-      c--w-.  ,,w,--- - - - -                     - -             -

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o kg UNITED STATES NUCLEAR REGULATORY COMMISSION g j WASHINGTON, D.. C. 20555

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          %              JY Ncvember 26, 1986 MEMORANDUM FOR:                   Commissioner Asselstine                                         i 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 on 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, CGC concludes that imports of uranium hexafluoride or other non-oxide forms of uranium ore are not barred under Section 309(a) of this Act. i 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 hexafluoride or enriched, and then sent by the processing 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 country the transformed product is not considered to have come from the originating country. The question to be resolved

Contact:

Joanna Becker x2-7630 '

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2 ~ . therefore is whether uranium hexadluoride or enriched uranium is a substantially different product than uranium ore or uranium oxide. as beingItsubstantially is our understanding different'. that these products may be viewed ' In any the event, beforeAct, Anti-Apartheid promulgatihg our regulations implementing it is'our understanding that we will have the benefit of the Executive Branch's views on these matters.

Enclosure:

h Legal Arialysis , cc: Chairman Zech ' Commissioner Roberts c Commissioner Bernthal . -- Commissioner Carr '

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4 LEGAL ANAIYSIS Section 309 (a) of the Comprehensive Anti-Apartheid Act of 1986

 '                            (P.L. 99-440) provides that             "...no-                         (1) uranium ore, (2) uranium sy                  . oxide (3) coal, or (4) textiles, that is produced or manufactured dn South Africa may be inported into the United States." There t

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 i 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 stature is clear on its face, in construing the section an

                .;       "examihation of the leaislative history is warranted. The Supreme Court has repeatedly asserted that "[w] hen aid to construction of

l the meanina of words, as used in the statute, is available, there certainly can be no ' rule of law' which forbids its use, however 2

4 clear the words may appear on ' superficial examination'."

Train v. Colorado Public Interest Research Group, 426 U.S. 1, 10 (1976), quoting United States v. American Truckina Associations, 310 U.S. 534, 543-544 (1940). In evaluating a clearly worded statutory provision in light of'its leglslative history, the 4 plain meaning of the statutory provision is to prevail unless there is " clear evidence" of a " clearly expressed legislative t , intention" to the contrary. Bread Political Action Committee v. Federal Election commission, 455 U.S. 577, 581 (1982). Here, there is no pre-enactment leaislative history indicatina that Congress intended t.he;bar'to include uranium hexafluoride or

other non-oxide forms ^of uranium.

i

                          .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.1 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

! prohibition in detail. That discussion did not indicate that the ! bar extended to uranium hexafluoride or other non-oxide forms of l uranium. Thereafter, H.R. 4868 was debated in the House on

                          -Junn IS, 1986.          No references to the import ban, except for l
                                  ' The NRC staff has advised OGC that from a technical perspective, uranium hexafluoride is not uranium oxide.

g

                                                      , a _6     _ ..._.__...._,__,...___,,,.__-._.,,_,__,.._.,.,_m___.             . -. _ __.,___ ,

2 i restatement of the' statutory proviNion, were made. -The House " passed the bill that day. The Senate Bill, S.2701, as introducediby Senator Lucar.

   ."~,,

(132 CONG. REC. S9889-9898,- daily ed. July 30, 1986), contained po provision equivalent to Section 309 (a) , although it did jcontain a provision, Section 303, prohibiting the import of an c article grown, produced or manufactured by a "parastatal

                    '  '.orcanization" of South Africa.' Senator Luaar noted in'his 7

" . introductory remarks that the prohibition would cover ~ uranium, among other things. After hearings,;S.2701 was reported out by x the Senate Foreign Relat4ons Committee. As reported, it a contained in Section 311 a banion the import of uranium ore and uranium o):ide. 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 Aucust 13, 14, and 15, 1986. No referenceito a ban on the import of uranium hexafluoride or other non-oxide forms of uranium can

    ,                   'be found in the debates.                                                           i-l            After the President vetoed the lecislation, 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, daily ed." September 29, 1986; 132 CONG. REC.<S.14629-14660, daily ed. October.2, 1986.)

There i.y some post-enactment " legislative history". After Congress had overridden the President's veto and the lecislation

became law, Senator Lugar sent a letter on October 14, 1986 to Secretary of State Shultz in which he stated that Congress had I not intended to include uranium hexafluoride in the list of 4 banned items. Senators Bingaman and Kennedy and Congressmen Richardson, Wolpe, Dellums; Leland and Markey took a contrary position in avletter they jointly sent to President Reagan on-October 31, 1986. They expressed concern about reports that the Treasury Department intended to bar only uranium in the form of raw ore or in a specific oxide compound. The authors argued that such an interpretation would be contrary to Congressional intent i 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. Not only are these letters conflicting and thus not conclusive, they are entitled to little or no weight in interpreting Section o y + + 2"Parastatal organization" was definedias a corporation or partnership owned or controlled by the South African Government.

                                                                          -      ----w   ' -eq-r-e--su---

3 -
, ~
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. Commission, Bread Political Action Committee v. Federal Election 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 concludes no pre-enactment that the Section legislative history to the contrary, OGC 309(a) bar does not app hexafluorideandothernon-oxideformsofuranium.}ytouranium ' 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.
The ban stated:Senate Foreign Relationc committee in describing the import 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. 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 Ped. Reg. 41912, November 19, 1986). 4 The Senate legislative history is more authoritative than that of the House in interpreting this legislation. After the Senate passed S. 2701, the House adopted the Senate version, l rather than the version it had previously passed. This obviated the need for a conference committee. er -- . ~,, , . - , , - - - , - , - - , - , , - - - - . - , - - - ,,-,--- ,e - - . , , , , - , - - -,,--------n--- , - - - - .
4 This language can be construed to indicate that there are to be no imports of uranium ore or uranium oxide into the United States after December 31, 1906, reaardless of the intended end-use cf the material. However, a contrary view can be found in Senate debates. Senator McConnell offered an amendment on the Senate floor that would have eliminated the bar on the import of uranium ore and uranium oxide. 132 CONG. REC. S. 11851 (daily ed. August 15, 1986). During the course of the debate on the amendment, a colloquy purportedly occurred between Senate Foreion Relat CommitteeChairmanLucar,andSenatorsMcConnellandFord.gonsIn the stated: colloquy Senator Lugar in discussing the proposed import ban The bill is not desianed to have any punitive impact except e on products which are imported into the United States for consumption in the United States. I think economists have
' defined a distinction between temporary for consumption. It is the latter that we are targeting imports and imports 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. Senator McConnell concluded the dialogue by assertino: I thank the Senator from Indiana [Lucar] for his indulgence and his thoughts. After that colloquy and before the Senate vote on the McConnell amendment, Senator Sarbanes asserted that the amendment should be defeated because it would undo the import bar, which had been overwhelmingly adopted by the Senate Foreign Relations Committee. 5 This colloquy did not appear in the Congressional Record of.1 August 15, 1986. Sometime thereafter, the Senators discovered i+.s 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 version. 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. 132 CONG. REC. S17319 (daily ed. October 18, 1986). For purposes of this 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 made by the chairman of the committee managing the bill on the floor, here-Senator Lugar, are regarded as-being like Sutherland Stat Const S48.14 supplemental committee reports and are accorded (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 U
'Political .S. 577Action (1982).Committee v. Federal Election Commission, 455 i This same conclusion can be reached by analyzing whether the v 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 the legislation. import sanctions The Committee in explaining the rationale for asserted: The import prohibitions are considered to be an importante element of the overall package of economic sanctions included in H.R. 4868 to exert pressure on the Government of South Africa-to eliminate illegal occupation the apartheid system and its of Namibia. The particular products 2important to the economies of South Africa and Nsubject to the im amibia and are major components of their overall foreign exchange 6 that should be given little, if any, weight.Here again there is some post-en his October 14, 1986 letter to Secretary Shultz,Senator Lugar in mentioned 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 other interpretation would " clearly be at odds with our discussion". 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 interpreted the Act differently. He stated that section 309 banned all imports, regardless of whether they were intended for consumption 132 CONG. REC.inS17319 the United States or re-export to other countries. (daily ed. October 18, 1986).
- 6 -~
earnings, and'are not materials which may be needed for U.S. cational security. A prohibition'of imports from South Africa'and Namibia of the particular products covered will not haveHan adverse impact on the United States economy or on supplies of strategic materials, given the existence of adequate domestic production or other more important foreign sources of supply.
, 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. , <a car'dinal rule that in construing a statute, effect is to beIt is given to every clause and word of a statute and that interpretations should be avoided which emasculate an entire 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 che better view of the law is that th,e 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 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 substant'ial body of Custom Service case law that provides that if a product originating in one country has been "substantially transformed" l in another country, the transformed product is not considered to 1 . be from the' originating country. A contrary result would have far reaching implications beyond the Anti-Apartheid Act. For i We note that the law firm of Shat', Pittman, Potts & Trowbridge, has submitted a memorandum to the NRC staff dated November 5, 1986 which reaches the contrary conclusion. That i memorandum was prepared by the firm on behalf of the Taiwan Power Company. x . - . _ _ _ - - _ - - . _ _ _ .- . - - -
o 7 example, steel. the Anri-Apartheid Act ba'rs the import of South African If South Africa exported steel to a European Economic Community country for use in manufacturing a car, under such a theory the automobile could not be imported into the United 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 transfcrmed South African uranium ore or uranium oxide would not f all 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 3 our implementing regulation. .
f 4 ~
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p t APPENDIX C
THE IMPACT o F RULES OF ORIGIN - ON U.S. IMPORTS AND EXPORTS
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l 8 . RULES OF ORIGIN AND THEIR OPERATION Rules of Orixin of the United States An identification of the country of origin of goods is required for all
, cosamecial shipments into the United States. The appropriate customs focu aust be used, containing the importer's declaration as to the origin of the goods, and, where required, a certificate of origin.
Products wholly obtained in'one country have that country as their origin. The term " wholly obtained" is not, however, defined in United States statutes. When more than one country is involved in the manufacture of a product, the country of origin of the goods is generally the last country in which the goods underwent a substantial transformation. " substantial trans-formation" is defined in U.S. Customs Service Regulations for purposes of some origin determinations, but not for all. 1/ 3cnpreferential origin Determinations The need to d'etermine the nonproferential origin of imported goods arises primarily because of the U.S. marking statute (19 U.S.C. 1304(a)). This l.aw provides that every article of foreign origin imported into the United States imast be " marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such manner as to indicate to an ultimate purchaser in the United states the English name of the coisntry of origin of the article." U.S. Customs Service Regulat' ions define
" country of origin" to mean "the country of manufacture, production, or growth 1/ country of origin is defined in one U.s. statute, is U.s.c. 251s, for purposes of the Agreement on Govermeent Procurement. See pages 35-36 of this report. ~
l
.. . - _ . - - - _ - -. . - . - . . .- - .- . - . . . - . .D
cf any ceticlo cf foreign crigin entcring the United Statca. Further work cr
' material added to an article in another country mast effect a substantial transformation in order to render such other country the ' country of origin' within the asaning of this part" (19 CFR 134.1(b)).
A number of judicial opinions have interpreted " substantial transforma-tion" for purposes of the marking statute. In Uniroyal. Inc. v. United States (542 F. Supp. (1982), aff'd., 702 F. 2d 1022 (1983)), the Court of Appeals for the Federal Circuit affirmed the finding of the Court of International Trade j that a annufacturing process in which outsoles were attached to imported footwear uppers did not effect a " substantial transformation" of the , , j , merchandise. The cartons in which the uppers were packed, but not the uppers i
! . themselves, had been marked "made in Indonesia". However, the footwear uppers had to be excluded from entry since they carried no indication of the country of origin to the ultimate purchaser of the merchandise in the United States.
The court looked to the following customs regulation for a definition of
" ultimate purchaser": .
The " ultimate purchaser" is generally de last person in the United Etates who will receive the article in the form in which it was imported . . . . (1) If an imported article will be used in manufacture, the manufacturer may be the
" ultimate purchaser" if he subjects the imported article to i a process which results in a substantial transformation of the article, even though the process may not result in a new or different article. (19 CFR 134.1(d))
In effect, this regulation defines what is necessary to change the country of origin of an article from foreign to United States origin, thereby eliminating ! any fut*.her need for marking in accordance with 19 U.S.C. 1304. - i i 1 m' L k
. _,---,.--.--_,_ ,, ,-,.,,,.__._.,__.__._,____,__.,____,,_-_-...,_,.__..-.._.,-,.._m,,_.__,,_r.,___-
10 { The court also made reference to 19 CFR 134.35, which provides as follows: Article's substantially chanmed by manufacture.
'~ An article used in the United States in manufacture'which results in an article having a name, character, or use differing from that_of the imported article, will be within the principle of the decision in the case of United States v.
Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98). Under
-this principle, the manufacturer or processor in the United States who converts or combines the imported article into the different article will be considered the " ultimate purchaser" of the imported article within the contemplation of section ,
, 304(a). Tariff Act of 1930, as amended (19 U.S.C. 1304(a)), and the article shall be excepted from marking. The outer- , most containers of the imported articles shall be marked in accord with this part. In reaching its conclusion that a substantial transformation of the uppers did
~~
not ' occur during the manufacturing process, the court pointed out that the process of attaching the uppers to the outsoles was significantly less tima consuming and less costly than the process of annufacturing the upper, and that the manufacture of the upper required a great deal more in the way of 4 technical skill. Since the attachment of the outsoles was a minor meaufac-l turing process leaving the identity of the upper intact, the process did not j result in an article having a naas, character, or use' differing from that of the imported article. Therefore, since the manufacturer was not the ultimate purchaser, the fact that the country of origin was indicated to him was not ! sufficlent. i Section 1304 was amended by the Trade and Tariff Act of 1984 to add new i subsections governing the marking of certain imported pipes, pipe fittings, 1 compressed gas cylinders, and aanhole rings or frames, covers, and assemblies.
~
The new subsections require that pipes and pipe fittings and manhole rings or 4 i
-,---------n,_-_,,, ,,--,,-,,,,---,-r,-,-..., , _ - , - , , , , , - , , . , , . . - . . - _ , , , - _ _ _ . . _ , . -
Ns frames, cavers, and ccceablico be marked with the Englich name cf the country ! 1 of origin by means of die stamping, cast-in-mold lettering, etching, or engesv-ing. Compressed gas cylinders are to be aseked by means of die stamping. l aciding, etching, raised lettering, or an equally pecuanent method of. marking. No U.S. statute or regulat' ion defines country of origin for statistical purposes. Therefore, the marking statute's definition of substantial transfor-nation is applied. The country of origin of a product imported into the United States is the last country in which a substantial transformation of any materials or components imported into that country occurred. Of course, if no imported materials were used in the manufacture of the product in the country
. from which the goods were exportied to the United States, the merchandise is considered " wholly obtained" in that country and clearly has that country as its country of origin.
Preferential Rules of Origin Most-favored-nation (MFE) treatment The United States, consistent with its GATT'cbligations, sets MFN duty y l rates that apply to iimportations from most countries. These rates appear in column 1 of the Tariff schedules of the United states (TSUS) in accordance i . with gene $ral headnote 3(h), and are applicable to products of all countries not given special treatment in accordance with some other preferential program set out in general headnote 3. In the absence of a special preference, these MFW rates apply to all products except those imported directly or indirectly from one of the Consamist countries listed in general headnote 3(f). Products , from Cosaunist countries receive the column 2 duty rate.
7 ?- e W 5 4 1
+
i. APPENDIX D J t 4 1 4 h i r
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17590-01]
', NUCLEAR REGULATORY COMMISSION 10 CFR Part 110 Imports of Uranium from South Africa AGENCY: Nuclear Regulatory. Commission.
ACTION: Final rule.
SUMMARY
The Nuclear Regulatory Commission (NRC) is amending its regulations concerning the import of uranium from South Africa under the general ' license.
This action is ,necessary to implement the provision of the Comprehensive Anti-Apartheid Act of 1986, enacted October 2, 1986, which prohibits the import
-into the United States of uranium are and uranium oxide produced or manufactured in South Africa. The final rule deletes the general import license with respect to the import of uranium ore and uranium oxide produced or manufactured in Scuth Africa, thereby prohibiting the import of this material unless a specific license is' requested and obtained.
EFFECTIVE DATE: December 31, 1986. FOR FURTHER INFORMATION CONTACT: Elaine 0. Hemby, Office of International Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555,(301) 492-7984 or Joanna M. Becker, Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555, (301) 492-7630. AP SUPPLEMENTARY INFORMATION: On October 2,1986, Public Law 99-440, the Comprehensive Anti-Acartheid Act of 1986 ("the Act"), was enacted to establish a framework to guide the efforts of the United States to help e,nd the apartheid system in South Africa and to i
- ~ . - _ . _ -- _ - . . , _ , ..m.._ ..., ._ .-c - -, .- -__~--e . . - ,
[7590-01] 2 assist in the establishment of a nonracial, democratic form of government in that country. The Act imposes a wide range of measures against South Africa to undermine apartheid including a ban on the importation of uranium ore and oxide
" produced or manufactured" in South Africa. The Treasury DepartmenW in Executive Order 12571 of October 27, was delegated authority in the Executive Branch to implement the Act's provisions on the importation of uranium (Section 309(a)). The NRC, which has independent regulatory authority under the Atomic Energy Act over the import of uranium, must also implement provisions in its regulations to conform with the requirements of the Act and ensure that these provisions are parallel to the provisions of the Treasury Department's regulations.
South Africa, as used in the Act, includes the Republic of South Africa; any territory under the administration, legal or illegal, of South Africa (including Namibia); and the "bantustans" or " homelands", to which South African blacks are assigned on the basis of ethnic origin, including the Transkei. Bophuthatswana, Ciskei, and Venda. Section 309(a) of the Act prohibits the imoortation into the United States of uranium ore and uranium oxide that is produced or manufactured in South Africa. The NRC's import regulations in 10 CFR 110.27 currently permit a oerson to import byproduct material or unirradiated source or special nuclear material, including uranium ore and uranium oxide, from any country under general license if the consignee in the United States is authorized to possess the material. To imolement section 309(a), the NRC is amending its regulations in
[7590-01] 3 1110.27 to delete the general license with respect to the import of uranium ore and uranium oxide produced or manufactured in South Africa. The NRC has interpreted Section 309(a), as it pertains to uranium, to mean only that uranium mined in South Africa and that uranium oxide manufactured in South Africa. Further, NRC has concluded Section 309(a) does not prohibit the import into the United States of other forms of uranium oroduced in South Africa, including uranium hexafluoride (UF6), or any other uranium of South African origin which has been "substantially transformed" in a third country. For example, the importation of South African origin uranium which has been isotopically enriched or converted to 002 or metal in a third country would not be prohibited from import under the general license. Accordingly, a person may continue to import these categories of uranium under the general license in 1110.27. The NRC's revised general license regulations do not relieve a person from complying with any other applicable laws or regulations. A person wishing to import South African origin uranium which is no longer pennitted for import under the general license in 9110.27 may submit a specific license request to import this material to the NRC for consideration. Unless the scope of the Act is reinterpreted, such import license applications will be denied after December 31, 198.6, under existing law, including anolications to import material intended for further processing in the U.S. (e.g., enrichment)
,and subsequent reexport to a third country.
Because this rulemaking action involves a foreign affairs function of the United States, notice of proposed rulemaking, public procedure, and delay.in effective date thereon are not required by the Administrative Procedure Act (5 U.S.C. 5553(a)(1)). The Act requires tha' the rule must be made effective December 31, 1986.
~ 'f7590-01]
4. Environmental Impact: Categorical Exclusion The NRC has determined that the final rule in Part 110 is the type of action described in 10 CFR 51.22(c)(1). Therefore, neither an environmental impact statement nor an environmental assessment has been prepared. Paperwork Reduction Act Statement This final rule does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). Existing requirements were approved by the Office of Management and Budget under approval number ~3150-0036. ' Regulatory Analysis The Commission has prepared a regulatory analysis of this final regulation. The analysis examines the costs and benefits of the regulation. The analysis is available for inspection in the NRC Public Document Room,1717 H Street, NW,
. Washington, DC. Single copies of the analysis may be obtained from Elaine Hemby, Office of International Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555, telephone (301) 492-7984. . _ _ _.- _ .._. ~ .-__ . _ . . __ . _ _ . . - - . _ _ _ _ _ . _ . _ _ . - . . . _ . - _ _ _
' ~
S' [7590-01]
w :. : ,
c 5 t Backfit Analysis s The NRC has . determined that the backfit analysis provisions in 10 CFR
#~
L50.109 cks not aphly to amendments to 10 CFR Part 110 because Part 110 applies . only to the export and . import of nuclear facilities, material, and components and does not deal with domestic facilities. Therefore, a backfit analysis has e not been prepared for this amendment. L List of Subjects in 10 CFR PART 110 Administrative practice and procedure, Classified information, Export, Import, Incorporation _ by reference. Intergovernmental relations, Nuclear materials, Nuclear. power plants and reactors, Penalty, Reporting and recordkeeping requirements, Scientific equipment. Pursuant to Section 309(a) of Public Law 99-440, the Atomic Energy Act of 1954 -as amended, the Energy Reorganization Act of 1974, as amended, and 5 U.S.C. 552 and 553 the following amendment to 10 CFR Part 110 is published as.a document subject to codification.
'd
17590-01]-
. ;; ;,. 6 s
1PART 110 - Export and Import of Nuclear Equipment and Material
1. ~The ' authority citation for Part 110 is revised to read as 'follows:
+
4
-AUTHORITY: Secs. 51, 53, 54, 57, 63, 64, 55, 31, 82, 103, 104, 109,-111, 126, 127, 128, 129, 161, 181, 182, 183, 187, 189, 68 Stat. 929, 930, 931, 932, 933, 936, 937, 948, 953, 954, 955, 956, as amended (42 U.S.C. 2071, '
2073, 2074, 2077, 2092-2095, 2111, 2112, 2133, 2134, 2139, 2139a,2141,2154-2158,2201,2231-2233,2237,2239); sec. 201,uB8 Stat. 1242, as amended (42 U.S.C. 5841). t 4 Section 110.1(b)(2) also issued under Pub. L. 96-533,
? 94 Stat. 3138 (42 U.S.C. 2403). Section 110.11 also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152) and secs. 54c. and 57d., 88 Stat. 473, 475 (42 U.S.C. 2074).
1 1 Section 110.27 also issued under sec. 309(a), Pub. L. i Law 99-440. Section 110.50(b)(3) also issued under sec. 123, 92 Stat. 142 (42 U.S.C. 2153). Section 110.51 also issued under sec. 184, 68 Stat. 954, as amended (42 U.S.C. 2234). Section 110.52 also issued under sec. 186, 68 Stat. 955 (42 U.S.C. 2236). Sections 110.80-110.113 also issued under 5 U.S.C. 552, 554. Sections 110.130-110.135 also issued L under 5 U.S.C. 553. m
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. 17590-01]
7 For'the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C.2273);110.20-110.29,110.50,and110.120-110.129 also issued under secs. '161b and i, 68 Stat. 948, 949, as amended (42 U.S.C. 2201(b)and(i));and110.53alsoissuedudnersec. 1610, 68 Stat. 950, as amended (42 U.S.C. 2201(o)). Section 110.27 is revised to read as follows: 9110.27 Imports. (a) Except as noted in paragraph (b) of this section, a general license is issued to any person to import byproduct, source, or special nuclear material if the consignee is authorized to possess the material under: (1) A contract with the Department of Energy; (2) An exemption from licensing requirements issued by the Commission; or (3) A general or specific license issued by the Commission or a State with which the Commission has entered into an agreement under Section 274b. of the Atomic Energy Act. (b) The general license in paragraph (a) of this section does not authorize: (1) The import of source or special nuclear material in thd form of irradiated fuel that exceeds 100 kilograms per shipment; or 9 9
. . 17590-01]
8 (2) The import of uranium ore or uranium oxide produced or manufactured in South Africa. As used in this paragraph,
" South Africa" includes the Republic of South Africa; any . territory under the administration, legal or illegal, of South Africa (including Namibia); and the "bantustans" or " homelands", to which South African blacks are assigned on the basis of ethnic origin, including the Transkei, Bophuthatswana.
Ciskei, and Venda. _(c) Any person importing special nuclear material under this general license shall provide advance notification of imoorts to the Conmission as specified in 573.27 of this chapter. Dated at Washington, DC, this day of , 1986, For the Nuclear Regulatory Commission, Samuel J. Chilk, Secretary for the Commission. 3 = ,
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k -i * . o t t i j l 1 1 f I APPENDIX E l i /. 4 Y, d .l L 4 i
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Mr. Frederick F. McGoldrick, Director Office of Non-Proliferation and Export Policy Bureau of Oceans and International Environmental and Scientific Af fairs
- U.S. Depa rtment of State Washington, D.C. 20520
Dear Mr. McGoldrick:
This is to inform you that the Comission has directed that the enclosed amendments to Part 110 be published in the Federal Register to implement the requirements of Section 309 of the Comprehensive Anti-Apartheid Act of 1986. f
. The Conmission believes that this final mle will not prejudice the Executive Branch's formal views on these amendments to Part 110, which we look forward to receiving shortly. Publication of the amendment is necessary at this time, however, in view of the Congressional deadline of December 31. If necessary, the Consission will further refine its amendments to Part 110 after receipt of.
the Executive Grar.ch's formal coments. Sincerely, James R. Shea, Director Office of International Programs i a e e
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APPENDIX F i
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REGULATORY ANALYSIS AMENDMENT TO 10 CFR PART 110 1
1. ST/.TEMENT OF PROBLEM The Comprehensive Anti-Apartheid Act of 1936 ("the Act"), enacted i October 2, 1986, pronibits the import into the United States of uranium ore and uranium oxide produced or manufactured in South Africa. .The NRC has independent regulatory authority under the Atomic Energy Act over the import of uranium. Currently the NRC's import regulations in 10 CFR 110.27 permit a person to import byproduct material or unirradiated source or special nuclear material, including urar.ium ore and uranium oxide, from any country under general license if the consignee in the United States is authorized to possess the material. In order to implement the requirements of the Act, it is necessary for the NRC to amend its regulations in 9110.27 for the import of uranium from South Africa under general license.

2. OBJECTIVE NRC's sole objective in developing the amendment is to change NRC's regulations to conform to the requirements of the Act. The revision e to NRC's regulations will delete the general license to import uranium ore and uranium oxide produced or manufactured in South Africa, thereby precluding the import into the United States of any uranium are and uranium oxide from South Africa under general license.

3. ALTERNATIVES There are no alternatives for achieving the stated objective.
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4. CONSEQUENCES The consequences of the specific NRC rulemaking action should be considered separately from the larger, more significant issue concerning the impact of the statute banning imports of South African-origin uranium.
NRC's rulemaking action to delete the general license to import South African ore and oxide in and of itself will have only a minor impact on the public. It will mean that those persons previously using the general .. license provision in al10.27 as their licensing authority would now be required to submit specific license applications to import South African uranium ore and uranium oxide for NRC consideration. However, unless the scope of the Act is reinterpreted, such applications will be denied after December 31, 1986, under existing law. In this respect, NRC believes that fewer than 10 persons will be affected by this rule. The amendment will not have an adverse effect on the Commission's responsibility for protecting the public health and safety and the common defense and security. The impact of the Act's uranium import ban, however, will have a substantial economic effect on those private U.S. industries that convert South African-origin uranium oxide U308 to UF6 for enrichment purposes for use by both domestic and foreign utilities. Although the staff is unable to determine the exact economic impact, it is known these companies ' represent a $100 million industry employing over 1,000 persons, and, with respect to just their foreign customers, over 20% of the industry's throughput of UF6 is South African-origin material. There also could be a substantial impact on Department of Energy enrichment services performed
v... 3 1 i for foreign customers, currently valued at approximately $200,000,000, should the foreign users divert their conversion and enrichment contract.s to other suppliers because of the ban. The foreign users most likely to divert their services to other suppliers would be in Japan, Taiwan and Spain. The ban will have minimal impact on the domestic power industry which imports almost no South African uranium for domestic use.
5. DECISION RATIONALE This rulemaking action relates solely to that provision of the Act (section 309(a)) which prohibits the importation of uranium ore and u'rapium oxide produced or manufactured in'louth Africa. In order for NRC's ,
regulations to conform to the provisions of the Act, it is necesstjry for - flRC to amend its license regulations to preclude the import of South ' ' African uranium ore and uranium oxide pursuant to an NRC general import
~
license. South African-origin urar.ien not included in the import ban may continae to be imported under general license. I
6. IMPLEMENTATION In accordance with the Act, Sectio' n 303(a), banning the imoorstation of '
Sc;th African uranium ore and uranium oxide, will become effective on December 31,.1986. A f
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, UNITED STATES - 2 NUCLEAR REGULATORY COMMISSION ' * ,i WASHWG TON. O. C. 20655 -s s I
The Honorable Alan Simpson, Chairman
-Subcommittee on Nuclear Regulation JComsttee .on Environment and Public Works United States Senate ~ Washington, D.C. 20510 -
Dear Mr. Chairman:
, ~I am pleased to forward, for the information of the Subcommittee on Nuclear Regulation of the Comittee on Environment and Public Works, copies of a final rule ahnding the Comission's regulations in 10 CFR Part 110 pertaining to the importation of uranium from South Africa under a general license. This final rule is:being transmitted to the Office of the Federal Register for publication. t , Th'e' revision is' necessary to implement Section 309 of the Comprehensive , 2 Anti-Apartheid Act of 1986,;Pubite Law 99-440, enacted October 2, 1986. Section 309 of the Act prohibits the import into the United States' of " uranium ore" and
" uranium oxide" produced or manufactured in South Africa. The existing general . license for imports permits the unrestricted import of uranium into the United States from any foreign country. . The. amendment revises the_ general license regulations to delete the general import license with respect' to such material.
The ~ amendment .is not inimical to the comon defense and security of the United 3 -States and does not constitute an unreasonable risk ta the public health and safety. The amendment also is-consistent with the provisions of the Atomic ' Energy Act of 1954, as amended by the Nuclear Non-Proliferation Act of-1978. .O ' Further, the amendment is not inconsistent with the obligations of the United-States under any treaty or international arrangement, including the Treaty on , the Non-Proliferation of Nuclear Weapons. 1 Sincerely, c James R. Shea, Director j o Office of International Programs
Enclosure:
' Notice _of Rulemaking y cc: Sen. Gary Hart s , /
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The Honorable Alan Simpson, Chairman Subconmittee on Nuclear Regulation
// 4 Committee on Environment and Public llorks a" United States Senate Washington, D.C. 20510 cc: Sen. Gary Hart The Honorable Morris K. Udall, Chairman Subcommittee on Energy and the Environment Committee on Interior and Insular Affairs United ~ States House of Representatives Washington, D. C. 20515 cc: Rep. Manuel Lujan The Honorable Edward J. Markey, Chairman Subcommittee on Energy Conservation and Power Committee on Energy and Commerce United States House of Representatives -
Washington, D.C. 20515
.cc: Rep. Carlos Moorhead The Honorable Dante B. Fascell, Chairman Committee on Foreign Affairs United States House of Representatives Washington, D.C. 20515 cc: Rep. William S. Broomfield The Honorable Richard G. Lugar, Chairman Connittee on. Foreign Relations United States Senate Washington, D.C. 20510 cc: Sen. Claiborne Pell The Honorable Thad Cochran, Chairman i Subcommittee on Energy, Nuclear Proliferation #
and Government Processes Committee on Governmental Affairs United States Senate Washington, D.C. 20510 cc: Sen. John Glenn
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"AC43-2" PDR
[77SO~O/} COMMENTS ON NUCLEAR REGULATORY COMMISSICN ADMINISTRATION 10 CFR Part 110 Imports of Uranium from South Africa AGENCY: Nuclear Regulatory Comission. ACTION: Fi nal rule .
SUMMARY
The Nuclear Regulatory Comission (NRC) is amending its regulations concerning the import of uranium from South Africa under al license. This action is necessary to implement the provision of the Comprehensive Anti-Apartteid Act of 1986, enacted October 2,1986, which prohibits the import into the United States of uranium ore and uranium oxide produced or manufactured Dmil nuk thi d$r$[aHicer.se-vegtshtMwte-
- in South Africa. The rWmant e- ::: ^
delete /the general imp)rt license with respect to j ::::. -- Q-- .
- f4a impropf of weniom O/t airc/ # ###' ""A A'# dd O' #"""4'+d'd EFFECTIVE DATE: December 31, 19860 in %fh 46ica th em, pos Asyjs, /A~ /mpod o f fjjg- psfe,gia/ esks a y,,caig h /irepic is />e yyesfed os/ p)/oja,/.
FOR FURTHER INFORMATION CONTACT: Elaine 0. Hemby, Office o'f International Programs, U.S. Nuclear Regulatory Comission, Washington, DC 20555, (301) 492-7984 or Joanna M. Becker, Office of the General Counsel, U.S. Nuclear Regulatory Comist. ion, Washington, DC 20555,(301)492-7630. SUPPLEMENTARY INFORMATION: dCKGROUND On October 2,1986, Public Law 99-440, the Comprehensive Anti-Apartheid Act of 1986 ("the Act"), was enacted to establish a framework to guide the efforts of the United States to help,kend the apartheid system in South Africa and to
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2 assist in the establishment of a nonracial, democratic fom of government in that country. The Act imposes a wide range of measures against South Africa to undermine apartheid including a ban on the importation of uranium ore and oxide
" produced or manufactured" in South Africa. The Treasury Department, in Executive Order 12571 of October 27, was delegated authori.ty in the Executive Branch to implement the Act's provisions on the importation of uranium (Section The NRC, which has independent regulatory authority under the Atomic 309(a)).
Energy Act over the import of uranium, must also implement provisions in its regulations to conform with the requirements of the Act and ensure these provisions are parallel to the provisions of the Treasury Department's regulations. South Africa, as used in the Act, includes the Republic of South Africa; any
. territory under the administration, legal or illegal, of South Africa (including Namibia); and the "bantustans" or " homelands", to which South African blacks are assigned on the basis of ethnic origin, including the Transkei, Bophuthatswana, Ciskei, and Venda.
P/0HIBITION/NI)(PORTSw o Section 309(a) of the Act prohibits the importation into the United States of uranium ore and uranium oxide that is produced or manufactured in South Africa. The NRC's import regulations in 10 CFR 110.27 currently permit a person to
-s 3
F Y import byproduct material or unirradiated source or special nuclear material, ' ch.kiincluding uranium ore and uraniun oxide, from a [ general license if the consignee in the United States is authorized to p N the material. To implement section 309(a), the NRC is amending its regulations to delete the general 1.icense with respect to the import of umnium in 9110.27 f E l ore and uranium oxide produced or nanufactured in South l
\ interpreted Section 309(a), as it pertains to uranium, to mean only that u i g[ mined in South Africa and that uranium oxide manufactured in Sou Further, NRC has concluded Section 309(a) does not prohibit the import into th United States of other fonns of uranium produced in South Africa, including
] - k 0 f uranium hexafluoride (UF6), or any other uranium of South For example, the
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'j @ has been "substantially transformed" in a third country. k importation of South African origin uranium which has been is or converted to UO2 or metal in a third country would not be prohibited from Accordingly, c. person may continue to import
' import under the general license.
9y g The NRC's these categories of uranium under the general license in l110.27. y N revised general license regulations do not relieve a person from complying - }I gky , any other applicable laws or regulations. A person wishing to import South African origin uranium which is no longer { permitted for import under the general license in h10.27 may submit a license request toimprt sdm/J/3aterial to the NRC for consideration. Because this rulemaking action involves a foreign affairs function of the U States, notice of proposed rulemaking, public procedure, and delay in effec date ' thereon are not required by the Administrative Procedure Act (5 U.S.C.
. s 4 ,,,;3 0-53(a)(1)). I:==;a:r.;m:efpcc.,meu ,ol .;;iin; i: 7:;;i;ed ' , S "J1 et ::;. , dees a;t :;;'[The n?;, '.h; " .ekte;, "';;ibt'ity ^.ct, 5 L'.S .C.
31, 1986, Act requires that the rule must be made effective December hlRONMENTALI/ PACT: CJdEGORICAL / E/CLUSION,
" /
The NRC has determined that the final rule in Part 110 is the type of action described in 10 CFR 51.22(c)(1). Therefore, neither an environmental impact statement nor an environmental assessment has been prepared. ( P/PERWORK REI)UCTION A/T S/ATEMENT , f l
@ 4 / / /
n , C has detemined that the amendments to Part 110 in this re erefore, neither an are the type of actiorr18es.qribed in 10 CFR 51.22(c) 1) onmentalJLssessment has been prepared environmental impact statement nor
,~
for this re s e w dGULATORYA/ALYSIS
- i y The Connission has prepared a regulatory analysis of this final regulation.
The analysis is The analysis examines the costs an'd benefits of the regulation. available for inspection in the NRC Public Document Room,1717 H Street, NW, Washington, DC. Single copies of the analysis may be obtained from Elaine Hemby, Office of International Programs, U.S. Nuclear Regulatory Comission, Washington,DC20555, telephone (301)492-7984.
g . hlY ' V ' 6lf: t This--final rule.does'not contain a new or amended information collection
'+: requirementsubject.to.bie.PaperworkReductionAct'of 1980 (44 U.S.C. 3501 - , et seq.).' Existing requirements were approved by the Office of Management. .and Budget under approval number 3150-0036.
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5 B/CKFITm A e-The NRC has determined that the backfit analysis provisions in 10 CFR 50.109' do not apply to amendments to 10 CFR Part 110 because Part 110 applies only to the export and import of nuclear facilities, material, and components Therefore, a backfit analysis has and does not deal with domestic facilities. not been prepared for this amendment. t g d_SIELSUBJEC_TS IN 10_CFR PART 110 Administrative practice and procedure, Classified infonnation, Export, l Import, Incorporation by reference,' Intergovernmental relrtions, Nuclear materials, Nuclear power plants and reactors, Penalty, Reporting and recordkeeping requirements, Scientific equipment. Pursuant-to Section 309(a) of Public Law 99-440, the Atomic Energy Act of 1954, as amended, the Energy Reorganization Act of 1974, as amended, and U.S.C. 552 and 553 the following amendment to 10 CFR Part 110 is published document subject to codification. I s
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6 PART 110 - EXPORT AND IMPORT OF NUCLEAR EQUIPMENT AND M
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The authority citation for Part 110 e to read as follows: 1. AUTHORITY: Secs. 51, 53, 54, 57, 63, 64, 65, 81, 82, 103, 104, 109, 111, 126, 127, 128, 129,-161, 181, 182, 183,187,189, 68 Stat. 929, 930, 931, 932, 933, 936
- 937, 948, 953, 954, 955, 955, as amended (42 U.S.C. 2071, 2073, 2074, 2077, 2092-2095, 2111, 2112, 2133, 2134, 2139, 2139a, 2141, 2i54-2158, 2201, 2231-2233, 2237, 2239);
sec. 201, 88 Stat.1242, as amended (42 U.S.C. 5841). Section 110.1(b)(2) also issued under Pub. L. 96-533, 94 Stat.3138(42U.S.C.2403). Section 110.11 also issued under sec.122, 68 Stat. 939 (42 U.S.C. 2152) and secs.54c.and57d.,88 Stat.473,475(42U.S.C.2074). Publi: Section 110.27 also issued under sec. 309(a)
, 92 99-440. Section 110.50(b)(3) also issued under sec.1 Stat.142 (42 U.S.C. 2153). Section 110.51 also issued under sec.
Section 184, 63 Stat. 954, as amended (42 U.S.C. 2234). 110.52 also issued under sec.186, 68 Stat. 955 (42 U.S.C. 2236). Sections 110.80-110.113 also issued under 5 U.S.C. 552, 554. Sections 110.130-110.135 also issued under 5 U.S.C. 553. kS &
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7 Section 110.27 is revised to read as follows: I110.27 Imports.
.(a) Except as noted in paragraph (b) of this section, a general license.
is issued to any person to import byproduct, source, or special nuclear material if the consignee is authorized to possess the material under: (1) A contract with the Department of Energy; (2) An exemption from licensing requirements issued by the Commission; or (3) A general or specific license issued by the Commission or a e State with which the Commission has entered i:to an agreement .
' under Section 274b. of the Atomic Energy Act.
(b) The general license in paragraph (a) of this section does not authorize: (1) The import of source or special nuclear material in the form of irradiated fuel that exceeds 100 kilograms per shipment; or . p d pf ' o (2) The import of uranium ore and uranium oxide produced or p/ I manufactured in South Africa. As used in this , " South Africa" includes the Republic of South Africa; any territory under the' administration, legal or illegal, of South Africa (including Namibia); and the "bantustans" or " homelands", to which South African blacks are assigned on the basis of i ethnic origin, including the Transkei, Bophuthatswana Ciskei, and Venda. e T
, - ~ . , - . _ _ - _ . - - , , , . . .,.-.~m..-e.._. ... .. _ _ , _ , _ . . , - . , , . , , , _ , _ _ . _ _ ,-.-,---,e < - . . ~ _ _ _ .
t . .' .. f J ' . 8 (c) Any person importing special nuclear material under this general license shall provide advance notification of imports to the Comission as specified in 3.27'of this chapter. F
'. n 1986, ~
Dated at Washington, D C, this day of , For the Nuclear Regulatory Comission, Samuel J. Chilk p Secretary for the Commission g 1
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- .' " "AC43-2" PDR ., -s COMMENTS ON FINAL 2 RULEMAKING FRCM OGC assis t in the establishment of a nonracial, democratic form of government in that country. The Act imposes a wide range of measures against South Africa to undermine apartheid including a ban on the importation of uranium ore and oxide " produced or manufactured" in South Africa. The Treasury Department, in Executive Order 12571 of October 27, was delegated authority in the Executive Branch to implement the Act's provisione on the importation of uranium (Section 309(a)). The NRC, which has independent regulatory authority under the Atomic Energy Act over the import of uranium, must also implement provisions in its -c c e regulations to conform with the requirements of the Act and ensure these /
provisions are parallel to the provisions of the Treasury Department's
~
regulations. South Africa, as used in the Act, includes the Republic of South Africa; any territory under the administration, legal or illegal, of South Africa (including Namibia); and the "bantustans" or " homelands", to which South African blacks are assigned on the basis of ethnic origin, including the Transkei, Bophuthatswana, Ciskei, and Venda. PROHIBITION ON IMPORTS Section 309(a) of the Act prohibits the importation into the United States of uranium ore and uranium oxide that is produced or manufactured in South Africa. The NRC's import regulations in 10 CFR 110.27 currently pennit a person to
5 0 . 3 import byproduct material or unirradiated source or special nuclear material, including uranium ore and uraniun oxide, from any country under general license if the consignee in the United States is authorized to possess the material. To implement section 309(a), the NRC is anending its regulations in 5110.27 to delete the general license with respect to the import of uranium ore and uranium oxide produced or nanufactured in South Africa. The NRC has interpreted Section 309(a), as it pertains to uranium, to mean only that uranium mined in South Africa and that uranium oxide manufactured in South Africa. Further, NRC has concluded Section 309(a) does not prohibit the import into the United States of other forms of uranium produced in South Africa, including uranium hexafluoride (UF6), or any other uranium of South African origin which has oeen "substantially transformed" in a third country. For example, the importation of South African origin uranium which has been isotopically enriched or converted to UO2 or metal in a third country would not be prohibited from import under the general license. Accordingly, a person may continue to import these categories of uranium under the general license in $110.27. The NRC's revised general license regulations do not relieve a person from complying with any other applicable laws or regulations. A person wishing to import South African origin uranium which is no longer j jf%
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permitted for import under the general license in 110.27 may submit a specific license r t toimport such material to the NRC or consideration. $ . . /, & /( b chs
t ,cid ,1i.etJ t h :l4 *l 0/i'? bw , .LY ? /, l 'l * > h ., t pl & ss.a w.
Because"this rulemaking action involves a foreign affairs function of the United States, notice of proposed rulemaking, public procedure, and delay in effective date ' thereon are not required by the Administrative Procedure Act (5 U.S.C.
3 diated source or special nuclear material, import byproduct material or.uni rra including uranium ore and uraniun oxide, from any country under 9eneral license if the consignee in the United States isi authorized the material. To implement section 309(a), the NRC is anending its reg to delete the general license with respect to the import of uranium in 5110.27 has ore and uranium oxide produced or nanufactured in South Africa. The N h t uranium
-interpreted Section 309(a), as it pertains to uranium, to mean only t a mined in South Africa and that uranium oxide manufacture Further, NR'C has concluded Section 309(a) does not prohibit the im United States of other forms of uranium produced in South Africa, inc hich ,
uranium hexafluoride' (UF6), or any other uranium of South African orig For example, the has been "substantially transformed" in a third country. importation of South African origin uranium which d from has been is or converted to U02 or metal in a third country would not be prohibite Accordingly, a person may continue to import ' import under the general license. The NRC's these categories of uranium under the general license in $110.27. with , li revised general license regulations do not relieve a person from comp y
any other applicable laws or regulations.
A person wishing to import South African origin uranium which v is li10.27 may submit a specific i permitted for import under the general license in license request toimport-sve4 material r<to< the
%t J bede NRC MN for opb bNN consideration. <a o
' ( i-p. ' a 1 e n L r e y .a ef L Ac?is lahlenh o, Q exite [qw , dll d e deded ,CW decedes- 11, itN, s ..f u ew d Because this rulemaking action involves a foreign affairs functio f , States, notice of proposed rulemaking, public procedure, and d date ' thereon are not required by the Administrative procedure A 4
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4 f 53(a)(1)). Because no notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act 5 U.S.C. 601 et seq., does not apply. The Act requires that the rule must be made effective ....... .. .. 986. O 3 . / f f7 I (-
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ENVIRONMENTAL IMPACT: CATEGORICAL EXCLUSION The NRC has determined that the final rule in Part 110 is the type of G. action described in 10 CFR 51.22(c)(1). Therefore, neither an environmental impact statement nor an environmental assessment has been prepared. PAPERWORK REDUCTION ACT STATEMENT T The NRC has determined that the amendments to Part 110 in this regulation ; are the type of action described in 10 CFR 51.22(c)(1). Therefore, neither an environmental impact statement nor an environmental assessment has been prepare for this regulation. REGULATORY ANALYSIS The Comission has prepared a regulatory analysis of this final regulation. The analysis examines the costs and benefits of the regulation. The analysis is available for inspection in the NRC Public Document Room,1717 H Street, NW, Washington, DC. Single copies of the analysis may be obtained from Elaine Hemby, Office of International Programs, U.S. Nuclear Regulatory Comission, Washington,DC20555, telephone (301)492-7984.
5 BACKFIT The NRC has determined that the backfit analysis' provisions in 10 CFR
- 50.109 do not apply to amendments to 10 CFR Part 110 because Part 110 applies only to the export and import of nuclear facilities, material, and components and does not deal with domestic facilities. Therefore, a backfit analysis has not been prepared for this amendment.
2. LIST OF SUBJECTS IN 10 CFR PART 110 Administrative practice and procedure, Classified information, Export, Import, Incorporation by reference, Intergovernmental relations, Nuclear ,. materials, Nuclear power plants and reactors, Pensity, Reporting and recordkceping -requirements, Scientific equipment. Pursuant to Section 309(a) of Public Lcw 99-440, the Atomic Energy Act of 1954, as amended, the Energy Reorganization Act of 1974, as amended, and 5 U.S.C. 552 and 553 the following amendment to 10 CF,R Part 110 is published as a document subject to codification. e'5m em e
6 PART 110'- EXPORT AND IMPORT.0F NUCLEAR EQUIPMENT AND MATERIAL
1. The' authority citation for Part 110 continues tn read as follows: ,
AUTHORITY: Secs. 51, 53, 54, 57, 63, 64, 65, 81, 82, 103,.104, 109, 111, 126, 127, 128, 129, 161, 181, 182, 183, 187, 189, 68 St6t. 929, 930, 931, 932, 933, 936, ,
. ;. 937, 948, 953, 954, 955, 956, asamended(42U.S.C.2071, 2073, 2074, 2077, 2092-2095, 2111, 2112, 2133, 2134, 2139, 2139a,2141,2154-2158,2201,2231-2233,2237,2239);
sec. 201, 88 Stat.1242, as amended (42 U.S.C. 5841). Section110.1(b)(2)alsoissuedunderPub.L.96-533, 94 Stat.3138(42U.S.C.-2403). Section 110.11 also issuedundersec.122,68 Stat.939(42U.S.C.2152)and
-secs. 54c. and 57d., 88 Stat. 473, 475 (42 U.S.C. 2074).
Section 110.27 also issued under sec. 309(a) of Public Law 99-440. Section 110.5C(b)(3) also issued under sec.123, 92 Stat. 142 (42 U.S.C. 2153). Section 110.51 also issued under sec. 184,68 Stat.954,asamended(42U.S.C.2234). Section 110.52 also issued under sec.186, 68 Stat. 955 (42 U.S.C.2236). Sections 110.80-110.113 also issued under 5 U.S.C. 552, 554. Sections 110.130-110.135 also issued {. under 5 U.S.C. 553. 4
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7
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Section 110.27 is revised to read as follows: 1110.27 Imports. (a) Except as- noted in paragraph (b) of this section, a general license is' issued to any person to import byproduct, source, or special nuclear material if the consignee is authorized to possess the material under: - (1)AcontractwiththeDepartmentofEnergy; (2) An exemption from licensing requirements issued by the Comission; or
~
(3) A general or specific license issued by the Comission or a-State with which the Commission has entered into an agreement under Section 274b. of the Atomic Energy Act. I (b) The general license in paragraph (a) of this section does not authorize: (1) The import of source or special nuclear material in the form of - irradiated fuel that exceeds 100 kilograms per shipment; or erv (2) The import of uranium ore p # uranium oxide produced or manufactured in South Africa. As used in this section, " South Africa" includes the Republic of South Africa; any territory under the administration, legal or illegal, of South Africa (including Namibia); and the "bantustans" or " homelands", to which South African blacks are assigned on the basis of ethnic origin, including the Transkei, Bophuthatswana Ciskei, [ and Venda. d
~
8 (c) Any person importing special nuclear material under thit. general license shull provide advance notification of imports to the Commission as specified in 73.27 of this chapter. a Dated at Washington, D.C this day of ,1986, For the Nuclear Regulatory Comnission, Samuel J. Chilk Secretary for the Comission G
REGULATORY ANALYSIS AMENDMENT TO 10 CFR PART 110
1. STATEMENT OF PROBLEM The Comprehensive Anti-Apartheid Act of 1986 ("the Act"), enacted
, October 2,1986, prohibits the import into the United States of uranium ore and uranium oxide produced or manufactured in South Africa. The NRC has independent regulatory authoH ty under the Atomic Energy Act over the import of uranium. Currently the NRC's import regulations in 10 CFR ' 110.27 permit e person to import hyproduct material or unirndf ated source or special nuclear material, inclutiing uranium ore and uranium oxide, from
- any country under general license if the consignee in the United States is authorized to possess the material. In order.to implement the requirement!,
of the Act, it is necessary for the NRC to amend its regulations in 3110.27 for the import of uranium from South Africa under general license.
2. OBJECTIVE NRC's sole objective in developing the amendment ,is to L..,J,..~4 cry'mu 2 dIhbc. -
prev 4e4eas34n NRC's regulations to err: re # r_..;o alth the requirements of the Act. The revision to NRC's regulations will delete the general license to import uranium ore and uranium oxide produced or manufactured in South Africa, thereby precluding the import into the United States of any uranium ore and uranium ore and uranium oxide from South Africa under general license. i
3. ALTERNATIVES N
There are no re ' onable alternatives for achieving the stated objective. 1 1
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4. CONSEQUENCES _
The consequences of'the specific NRC rulemaking action should be considered separately from the larger, more significant issue concerning . the impact of the statute banning imports of South African-origin uranium. NRC's rulemaking action to delete the general license to import South African ore and oxide in and of itself will have only a minor impact on the public. It will mean that those persons, previously using the general license provision in 5110.27 as their, licensing authority would now be y % ,-o. J required to submit specific license prequests to import South African uraniomoreanduraniumoxideforNRCconsideration.'hInthisrespect,NRC The believes that fewer than 10 persons will be affected by this rule. amendment will not have an adverse effect on the Comission's responsibility for protecting the public health and safety and the comon defense and security. The impact of the Act's uranium imoort ban, however, will have a substantial economic effect on those private U.S. industries that convert South African-origin uranium oxide U308 to UF6 for enrichment purposes for use by both domestic and foreign utilities. Although the staff is unable to determine the exact economic impact, it is known these companies represent a $100 million industry employing over 1,000 persons, and, with respect to just their foreign customers, over 20% of the industry's throughpt.t of UF6 is South African-origin material. There also could be a substantial impact on Department of Energy enrichment# services performed for foreign customers, currently valued at approximately M90,000,000, should the foreign users divert their conversion and enrichment contracts l 1
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4. CONSEQUENCES The' consequences of the specific NRC rulemaking action should be considered separately from _the larger, more significant issue concerning the impact of the statute banning imports of South African-origin uranium.
NRC's rulemaking action to delete the general license to import South African ore and oxide in and of itself will have only a minor impact on the public. It will mean that those persons previously using the general ! y+-c. t . o. license provision in 5110.27 as their licensing authority would now be . 7
,/ 1 o"*'{,
required to submit specific license requests to import South African /, c' 1 uranium ore and uranium oxide for NRC consideration. In this respect, NRC believes that fewer than 10 persons will be affected by this rule. The - amendment will not have an adverse effect on the Commission's responsibility for protecting the public health and safety and the conmon defense and security. , The impact of the Act's uranium import ban, however, will have a substantial economic effect on those private U.S. industries that convert South African-origin uranium oxide U308 to UF6 for enrichment purposes for use by both domestic and foreign utilities. Although the staff is unable t to determine the exact economic impact, it is known these companies
- represent a $100 million industry employing over 1,000 persons, and, with respect to just their foreign customers, over 20% of the industry's throughput of UF6 is South African-origin material. There also could be a substantial impact on Department of Energy enrichment services performed for foreign customers, currently valued at approximately $190,000,000, should the foreign users divert their conversion and enrichment contracts - - * - y-r ymerww-p -w ege-me i. w r w w-e3gev9 wy9-yr,-my-mv--y vywe e merw-,,p ny, m- y-.,g-,. , , - w..g. ,- --..---- .s,.-- w-,o+7 -- a.-,-
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3 d to other suppliers because of the ban. The foreign users most likely to divert their services to other suppliers would be in Japan, Taiwan and
~
Spain. The ban will have minimal impact on the domestic power industry which imports almost no South African uranium for domesi.ic use.
5. DECISION RATIONALE This rulemaking action relates solely to that provision of the Act (section 309(a)) which prohibits the importation of uranium ore and uranium oxide produced or manufactured in South Africa. In order for NRC's regulations to conform the provisions of the Act, it is necessary for NRC to amend its license regulations to preclude the import of South African uranium ore and uranium oxide pursuant to an NRC general import license. South African-origin uranium not included in the import ban yRf Ow continue to be " " '-- impor der general license.

6. IMPLEMENTATION
. In accordance with the Act, Section 309(a), banning the importation of South African uranium ore and uranium oxide, will become effective on December 31, 1986. h.._, e,j_j12j .
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ML20207D753

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ML20207D753

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