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The U.S. Atomic Energy Act Section 123 At a Glance
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Contacts: Daryl Kimball, Executive Director, (202) 463-8270 x107; Kingston ReifDirector for Disarmament and Threat Reduction Policy, (202) 463-8270 x104

Updated: July 2018

Section 123 of the U.S. Atomic Energy Act (AEA) of 1954 establishes the conditions and outlines the process for major nuclear cooperation between the United States and other countries. In order for a country to enter into such an agreement with the United States, that country must commit to a set of nine nonproliferation criteria. As of January 20, 2017, the United States has entered into 23 nuclear cooperation agreements that govern nuclear cooperation with 48 countries, the International Atomic Energy Agency (IAEA) and Taiwan. The United States negotiated new agreements in 2015 with China and South Korea to replace existing ones and renewed Japan's agreement in July 2018.

The nine nonproliferation criteria for section 123 agreements are as follows:

  • Nuclear material and equipment transferred to the country must remain under safeguards in perpetuity.
  • Non-nuclear-weapon states partners must have full-scope IAEA safeguards, essentially covering all major nuclear facilities.
  • A guarantee that transferred nuclear material, equipment, and technology will not have any role in nuclear weapons development or any other military purpose, except in the case of cooperation with nuclear-weapon states.
  • In the event that a non-nuclear-weapon state partner detonates a nuclear device using nuclear material produced or violates an IAEA safeguards agreement, the United States has the right to demand the return of any transfers.
  • U.S. consent is required for any re-transfer of material or classified data.
  • Nuclear material transferred or produced as a result of the agreement is subject to adequate physical security.
  • U.S. prior consent rights to the enrichment or reprocessing of nuclear material obtained or produced as a result of the agreement.
  • Prior U.S. approval is required for highly-enriched uranium (HEU) and plutonium obtained or produced as a result of the agreement.  An agreement permitting enrichment and reprocessing (ENR) using U.S. provided material requires separate negotiation.
  • The above nonproliferation criteria apply to all nuclear material or nuclear facilities produced or constructed as a result of the agreement.

Section 123 requires that the Department of State submit a Nuclear Proliferation Assessment Statement (NPAS) explaining how the nuclear cooperation agreement meets these nonproliferation conditions. Congress has a total of 90 days in continuous session to consider the agreement, after which it automatically becomes law unless Congress adopts a joint resolution opposing it.

The President may exempt a proposed agreement from any of the above criteria upon determination maintaining such a criteria would be “seriously prejudicial to the achievement of U.S. non-proliferation objectives or otherwise jeopardize the common defense of the United States.” Exempted 123 agreements would then go through a different process than non-exempt agreements, requiring a congressional joint resolution approving the agreement for it to become law. There are no 123 agreements in force that were adopted with such exemptions.

In 2006, Congress passed the Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act which amended the AEA permit nuclear cooperation with India, a country which is not a member of the nuclear Nonproliferation Treaty (NPT) and does not maintain full-scope safeguards.  The Hyde amendment has been criticized for undermining U.S. international counterproliferation efforts.

A 123 agreement alone does not permit countries to enrich or reprocess nuclear material acquired from the United States and permission to do so requires a further negotiated agreement.  A debate is currently raging in the nonproliferation community over the “Gold Standard,” named after the U.S.-UAE 123 agreement signed in 2009 whereby the UAE voluntarily renounced pursuing enrichment and reprocessing (ENR) technologies and capabilities.  The UAE agreement stands in stark contrast to the “blanket consent” granted to India, Japan, and EURATOM, who have ENR approval from the U.S. 

ENR capabilities are controversial because the process transforms raw uranium or spent nuclear fuel into highly-enriched uranium.  While these capabilities are generally used for energy purposes, because the same technology can be used for weaponization processes there are concerns of serious proliferation risks when a country obtains the technology.  A Gold Standard for 123 agreements would require any country party to a 123 agreement with the United States to renounce ENR activities. The Department of Energy and the U.S. nuclear industry advocate a continuance of the case-by-case approach followed thus far in renewal agreements. A case-by-case approach allows countries to apply for ENR permission, and has been successfully pursued by India and Japan.  South Korea is pushing for an agreement to permit reprocessing to develop its own nuclear industry, a major target in its economic development plans.

Thus far Congress has attempted several times to pass measures ensuring that future 123 agreements adhere to the Gold Standard.  The most prominent of these bills was H.R. 1280, which among other amendments to the Atomic Energy Act declared that future 123 agreements must include “a requirement as part of the agreement for cooperation or other legally binding document that is considered part of the agreement that no reprocessing activities, or acquisition or construction of facilities for such activities, will occur within” the country.  The bill also required states considering 123 agreements to be members of many international treaties and conventions promoting non-proliferation.  Though reported out of the House Foreign Affairs Committee in April 2011, it was blocked from floor consideration and died with the 112th Congress.

The executive branch has been less clear in its position.  The George W. Bush administration coined the term Gold Standard when the U.S.-UAE deal was signed in 2009 and declared it the new standard for nuclear cooperation agreements.  The Obama administration did not explicitly come out in favor of a Gold Standard, though there were several interagency reviews soliciting opinions, including during the summer of 2012.  A 2011 letter from the Obama administration to Capitol Hill renounced the idea of a uniform approach to 123 agreements and advocated for a case-by-case approach in future negotiations.  (See ACT, March 2012).

The Trump administration began formal negotiations on a 123 agreement with Saudi Arabia in February 2018. The administration has not yet decided if it will insist that a Saudi 123 agreement adhere to the Gold Standard.

Posted: July 25, 2018