New U.S. Policy Regarding Nuclear Exports to China
December 17, 2018
New U.S. Policy Regarding Nuclear Exports to China
Introduction
program. China is building AP1000 reactors under a 2007
On October 11, 2018, the U.S. Department of Energy
technology transfer agreement.
(DOE) announced “measures to prevent China’s illegal
diversion of U.S. civil nuclear technology for military or
Nuclear Export Approvals
other unauthorized purposes.” These measures, which took
The Nuclear Regulatory Commission (NRC) authorizes
effect immediately, include additional restrictions on U.S.-
export licenses for nuclear equipment and materials. In
origin nuclear-related exports to China; such exports
addition, the Secretary of Energy may, pursuant to Section
require a specific export license or other authorization.
57.b. (2) of the Atomic Energy Act, authorize some forms
Nuclear industry groups have raised concerns about the new
of nuclear cooperation related to the “development or
policy’s limits on future access to the Chinese market,
production of any special nuclear material outside of the
though the effect of the new policy on nuclear cooperation
United States.” Known as “Part 810 authorizations,” after
is unclear.
10 Code of Federal Regulations (C.F.R.) Part 810, these
activities generally involve transfers of unclassified nuclear
The United States has extensive nuclear cooperation with
technology and services, such as nuclear reactor designs,
China, which is governed by a civil nuclear cooperation
nuclear facility operational information and training, and
agreement renewed in 2015. These agreements are
nuclear fuel fabrication. Such authorizations are not
commonly known as “123 agreements” after the relevant
required for NRC-licensed exports.
section of the Atomic Energy Act of 1954. (For more
information, see CRS Report RL33192, U.S.-China Nuclear
A number of regulations on U.S. nuclear exports to China,
Cooperation Agreement.) The Trump Administration
as well as other countries, are designed to prevent the
devised the new policy after a National Security Council-
diversion or misuse of U.S. nuclear technology. In the case
led review of the previous U.S. policy regarding civil
of specific technology transfers to China, Beijing confirms
nuclear cooperation with China, according to a U.S.
to the U.S. government that it will apply the 123
government official speaking during an October 11
agreement’s “legally-binding nonproliferation obligations”
background briefing. The review, which began in 2017,
to particular technology transfers, according to a November
“was prompted by China’s accelerated efforts to acquire
30 DOE email to CRS. Moreover, Part 810 authorizations
U.S. intellectual property and advanced technology,
require the Energy Secretary’s determination that the
including through illicit means to benefit its military
activity “will not be inimical to the interest of the United
programs as well as to gain a competitive advantage to the
States”; such a determination requires the State
detriment of U.S. businesses and U.S. national security,”
Department’s concurrence and the Energy Department’s
the official said.
consultation with the NRC, the Department of Commerce,
the Department of Defense, and the Office of the Director
In explaining the new policy, U.S. officials have argued that
of National Intelligence (ODNI).
Beijing may use U.S. nuclear technology to improve
China’s military capabilities and, therefore, a higher level
New Policy Details
of scrutiny for certain transfers is justified. Specifically,
The new policy “establishes a clear framework for the
these officials have claimed that Beijing may use small
disposition” of current requests for Part 810 authorizations
modular reactors (SMRs) or other unspecified reactor
concerning transfers to China that are “on hold because of
designs to improve nuclear reactors for placement on
military diversion and proliferation concerns,” according to
disputed islands in the South China Sea, floating nuclear
an October 11 DOE statement. The new policy will affect
power reactors for possible deployment to that region, and
“[n]early 30” such requests, according to the November 30
propulsion for Chinese nuclear-powered submarine and
DOE email. The policy also implicates export licenses,
other naval vessels. A U.S. government Nuclear
according to an undated DOE document that also describes
Proliferation Assessment Statement submitted to Congress
the transfers that are subject to presumptions of approval or
in 2015 expressed concern about potential Chinese misuse
denial. According to the NRC, such presumptions are
of U.S. nuclear power technology. “China’s strategy for
recommendations “from the Executive Branch process …
strengthening its military involves the acquisition of foreign
to provide judgment as to whether a proposed export would
technology as well as greater civil-military integration, and
be inimical to the common defense and security” of the
both elements have the potential to decrease development
United States. An independent agency, the NRC “evaluates
costs and to accelerate military modernization,” according
the Executive Branch’s inimicality decision as part of the
to the assessment, which specifically raised concerns that
licensing process.” According to the DOE email:
China could use the unique sealed pumps used by the
Westinghouse AP1000 reactor for the Chinese naval reactor
in order to override a presumption of denial, the
United States must be able to develop and enforce
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New U.S. Policy Regarding Nuclear Exports to China
measures sufficient to mitigate the inherent
China General Nuclear Power Corporation
proliferation risk(s). Conversely, for those cases in
The new policy targets transfers involving the state-owned
which there is a presumption of approval, the
China General Nuclear Power Corporation (CGN).
United States will analyze the proposed transfer to
Specifically, with respect to CGN and its “subsidiaries or
determine whether the risk of proliferation
related entities,” the policy mandates a presumption of
pertaining to a specific export request is too great to
denial for Part 810 authorizations and export licenses for
allow for the transfer to take place.
nuclear material and nuclear-related equipment and
components. In 2016, the U.S. government indicted CGN
During the October 11 briefing, U.S. officials said that
and a Taiwan-born naturalized U.S. citizen, as well as his
NRC-issued licenses will remain in effect under the new
corporation, for “conspiring to unlawfully engage and
policy. Although the policy applies to existing Part 810
participate … in the development and production of special
authorizations, the “vast majority” will likely remain
nuclear material” in China without proper legal
unaffected.
authorization. (“Special nuclear material,” defined in 42
U.S.C. §2014, refers primarily to plutonium and enriched
Part 810 Authorizations
uranium.) The citizen pleaded guilty to this charge in
With respect to Part 810 authorizations, the new policy
January 2017. The purpose of this conspiracy, according to
mandates a presumption of approval for
the indictment, was to improve CGN’s ability to “design
and manufacture certain components for nuclear reactors
“amendments or extensions for existing authorizations
more quickly by reducing the time and financial costs of
for technology transferred prior to January 1, 2018”;
research and development.”
“new technology transfers for operational safety
During the October 11 briefing, a U.S. official credited the
contingent on satisfactory technical analysis on
ODNI’s consultative role, mandated by Section 3136 of the
applicability to and benefit of operational safety and
National Defense Authorization Act for Fiscal Year 2016
assessment of the end user”; and
(P.L. 114-92, hereafter “FY 2016 NDAA”), with providing
additional relevant information to DOE. The Energy
“mew technology transfers required to support sale of an Department typically includes intelligence reviews when
item that is commercially available.”
reviewing such authorizations, but “as a result of” the
FY2016 NDAA, “there were more resources devoted
There is a presumption of denial for
toward that end,” resulting in “additional information” that
increased DOE’s concerns about nuclear-related transfers to
“exports related to light water SMRs [light water
China, the official explained. This new information, “in
reactors use ordinary water for cooling and to sustain the
concert with” the CGN-related activities described above,
nuclear chain reaction]”;
“raised the risk level for these transactions beyond what
was evident in 2015,” the November 30 DOE email said.
“non-light water advanced reactors”; and
China-Specific Reporting Requirements
“new technology transfers after January 1, 2018.”
Section 3136 of the FY2016 NDAA contains several
reporting requirements concerning Part 810 authorizations
Export Licenses
with respect to China. For example, this law requires the
With respect to NRC export licenses for equipment and
Energy Secretary to notify a number of congressional
components, the new policy mandates a presumption of
committees at least 14 days before issuing such an
approval for
authorization. The Secretary must also provide a “statement
of whether any agency required to be consulted … objected
support to “continued projects such as construction of
to or sought conditions on the transfer.” The committees are
AP-1000, CAP-1000,” reactors and “major identical
the Senate and House Armed Service Committees, the
components supporting CAP-1400 reactors”; and
Senate Select Committee on Intelligence, the Senate
Committees on Foreign Relations and Energy and Natural
“pressurized light water SMR or non-light water
Resources, the House Permanent Select Committee on
advanced reactors with no technology transfer above
Intelligence, and the House Committees on Foreign Affairs
and beyond installation and operation.”
and Energy and Commerce. The Secretary must also submit
a description of such authorizations at least every 90 days to
There is a presumption of denial for exports related to
the same committees, as well as a report at least annually
“direct economic competition with the United States,” such
that includes “an assessment of whether” China is “in
as the Hualong One nuclear reactor and “unique U.S.
compliance with its obligations” under any Part 810
components supporting CAP-1400 reactors.”
authorization and a description of U.S. efforts to remedy
any noncompliance. These requirements also apply to Part
Nuclear Material
810 authorizations with respect to Russia.
With respect to NRC export licenses for nuclear material,
the new policy mandates a presumption of approval “for
Paul K. Kerr, Specialist in Nonproliferation
new license applications and amendments or extensions to
existing authorizations.”
Mary Beth D. Nikitin, Specialist in Nonproliferation
IF11050
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New U.S. Policy Regarding Nuclear Exports to China
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