“[My time at ACA] prepared me very well for the position that I took following that with the State Department, where I then implemented and helped to implement many of the policies that we tried to promote.”
– Peter Crail
Business Executive for National Security
June 2, 2022
Nuclear Suppliers Make Progress on New Rules

Miles A. Pomper

Efforts by nuclear suppliers to develop tougher rules restricting transfers of sensitive nuclear technologies appear to have made progress during Nov. 19-20 meetings in Vienna, according to diplomats involved in the process, with the possibility that the Nuclear Suppliers Group (NSG) could adopt new rules this month. Meanwhile, the Department of State has told Congress that it does not believe that NSG rules permit Pakistan to receive additional reactors from China as Islamabad has claimed they do.

For several years, the 45 members of the NSG have been discussing the possibility of developing rules that would bar transfer of uranium-enrichment and spent fuel reprocessing technologies to countries that did not hew to a tight set of conditions. These technologies can provide either fuel for nuclear reactors or fissile material for nuclear weapons.

Existing NSG policy calls on participating governments to exercise "restraint." NSG members have voluntarily agreed to coordinate their export controls governing transfers of civilian nuclear material and nuclear-related equipment and technology to non-nuclear-weapon states.

The Bush administration had previously opposed the idea of imposing criteria-based rules on transfers of sensitive fuel-cycle technologies. Instead, it had backed a blanket ban on these transfers to countries that did not already operate such facilities. The U.S. proposal garnered little support in the NSG, and Washington abandoned it and backed a revised version of the criteria-based approach earlier this year. (See ACT, May 2008.)

The administration stepped up its efforts in the wake of its campaign to win congressional support for a controversial nuclear cooperation agreement with India. As part of her lobbying effort, Secretary of State Condoleezza Rice promised Rep. Howard Berman (D-Calif.), chair of the House Foreign Affairs Committee, that the United States would make its "highest priority" achieving a decision at the next NSG plenary meeting prohibiting the export of enrichment and reprocessing equipment and technology to states such as India that are not members of the nuclear Nonproliferation Treaty (NPT). (See ACT, October 2008.)

In addition to that restriction, an earlier draft NSG proposal would have added criteria that would bar sales of enrichment and reprocessing technologies to states that have not agreed to an additional protocol to their International Atomic Energy Agency (IAEA) safeguards agreement and are not in compliance with their NPT or safeguards obligations. It would also have discouraged states from exporting sensitive nuclear technologies to regions in which such transfers might promote proliferation or undermine security. Under mandatory safeguards agreements, IAEA inspectors can verify that peaceful nuclear material and technologies are not being diverted to military uses; an additional protocol, based on the voluntary 1997 Model Additional Protocol, provides inspectors' greater authority and access to make such determinations.

Until now, achieving the required consensus in the NSG has been held up by two disputes over aspects of the provisions.

First, the United States has demanded that if enrichment or reprocessing transfers do occur, they should be executed only via "black box" technologies, wherein only the supplier can access and own the technology. Canada, which is the world's largest uranium miner but has no enrichment facilities, opposed this provision, thereby blocking consensus on the package. Second, Brazil, which has rejected signing an additional protocol, has opposed making the protocol a condition for such transfers. (See ACT, June 2008.)

Diplomats said that enough progress had been made in overcoming disputes during the November consultative meetings in Vienna that they believe new rules may well be endorsed at a future NSG plenary meeting, perhaps as early as December. The draft text, however, must first be approved by NSG member governments.

Diplomats said the rules would require the use of "black box" techniques for transfers of current enrichment technologies by current technology holders. They said that, under the proposed new rules, the NSG would consider proposals from other members, such as Canada, to export any enrichment technologies they developed on their own if they adhered to at least "black box" techniques for transfers of that technology.

In a concession to Brazil, the rules would also allow the additional protocol standard to be waived if regional arrangements could offer similar levels of nonproliferation confidence.

Diplomats said that the compromise also would make comprehensive, or full-scope, IAEA safeguards a condition of supply to non-nuclear-weapon states in addition to NPT adherence. This would rule out transfers to those NPT members that have only small quantities protocols (SQPs) with the IAEA.

Saudi Arabia, for example, has an SQP in force but has not signed a comprehensive safeguards agreement. SQP protocols allow a state to forgo certain inspection and reporting requirements due to the absence of nuclear activities under a certain low threshold. Such a protocol must be rescinded once a country obtains a sufficient amount of nuclear material, as defined in its safeguards agreement, or once it introduces nuclear material into a nuclear facility. The IAEA has been pushing to strengthen these protocols, adopting an amended model small quantities protocol several years ago. (See ACT, November 2005.)

Diplomats said the only potential opposition to the new rules appeared to come from South Africa, which has been a strident critic of any further restrictions on nuclear trade to non-nuclear-weapon states. South Africa's representative Ambassador Abdul Minty did not attend the November session. Minty is a leading candidate to serve as the next IAEA director-general. (See ACT, October 2008.)

They also said that the November meeting did not discuss Pakistani claims of an agreement with China for Beijing to supply it with two additional reactors at its site at Chasma beyond one that has already been constructed and one that is being built. (See ACT, November 2008.) The NSG prohibits such trade with Pakistan, but China had already agreed to construct the first two reactors before it was invited to join the organization in 2004.

Amid U.S. opposition, Pakistan has sought and failed to win an exemption from NSG rules similar to the one recently granted to India.

Responding to concerns expressed by Rep. Edward Markey (D-Mass), Matthew Reynolds, assistant secretary of state for legislative affairs, wrote Markey on Nov. 18 that the United States believed China's potential construction of two new reactors, Chasma III and Chasma IV, would be "inconsistent with the commitments China made at the time of its adherence to [NSG] guidelines in 2004."

Reynolds said that China's representatives at that time detailed what "ongoing nuclear cooperation with Pakistan would be 'grandfathered' upon China's adherence; nothing in that statement permitted construction of reactors beyond" the existing Chasma I and Chasma II reactors. Other countries have expressed similar views.

Reynolds said any new cooperation would therefore require consensus approval by the NSG and that "Pakistan's proliferation record would make NSG consensus difficult were China to request an exemption." Pakistani scientist Abdul Qadeer Khan provided uranium-enrichment technology to Iran, Libya, and allegedly North Korea, which could have aided nuclear weapons programs.

Nonetheless, Pakistan has claimed that it is moving forward with a deal with China, saying that the additional reactors should also be considered as having been agreed on prior to China joining the NSG. Chinese officials have only offered vague statements on the reported deal. (See ACT, November 2008.)