NSG Revises Rules on Sensitive Exports

The following is an early version of a story that appears in the July/August issue of Arms Control Today.

Originally posted June 27, 2011

Updated  July 5, 2011

Seven years after they started discussions on the issue and two and a half years after they formulated a “clean text,” the members of the Nuclear Suppliers Group (NSG) agreed in June on revised guidelines for exports relating to uranium enrichment and spent fuel reprocessing.

At issue were paragraphs 6 and 7 of the NSG guidelines. The old version of paragraph 6 said that suppliers should “exercise restraint” in exports of sensitive technology. The new paragraph 6 essentially retains that language, but specifies a list of criteria to be considered. The new paragraph 7, which deals with “[s]pecial arrangements for export of enrichment facilities, equipment and technology,” adds details on restrictions on sharing such technology.

A June 24 NSG press release issued at the end of the group’s annual plenary meeting in Noordwijk, the Netherlands, said only that the group had “agreed to strengthen its guidelines on the transfer of sensitive enrichment and reprocessing technologies.” The NSG did not release the text of the new guidelines, but a copy was obtained by Arms Control Today.

The NSG is not a formal organization, and its guidelines are not legally binding.

The main change from the previous guidelines is the addition of the list, known as “objective criteria.” Among other requirements, potential recipients of sensitive technology must be parties to and “in full compliance” with the nuclear Nonproliferation Treaty (NPT), and they must be adhering to International Atomic Energy Agency (IAEA) safeguards requirements.

Focus on Additional Protocol

In a separate section, the text says that suppliers should authorize enrichment and reprocessing exports only if the recipient has brought into force a comprehensive safeguards agreement and an additional protocol or, “pending this, [the recipient] is implementing appropriate safeguards agreements in cooperation with the IAEA, including a regional accounting and control arrangement for nuclear materials, as approved by the IAEA Board of Governors.” In a June 27 interview, a U.S. official said one significant aspect of the new guidelines is the reference to an additional protocol as a condition of supply.

The language on “a regional accounting and control arrangement” is a clear reference to the Brazilian-Argentine Agency for Accounting and Control of Nuclear Materials (ABACC). Argentina and Brazil have not signed an additional protocol, which would give IAEA inspectors greater latitude to carry out their inspections in those countries, including the right to inspect any undeclared facilities. The NSG language would make Argentina and Brazil eligible to receive sensitive exports without having an additional protocol in force.

Since the appearance of the November 2008 “clean” draft text, critics have said the group’s concession on this point is a major flaw in the NSG’s approach because the ABACC arrangements do not provide the level of assurance about the countries’ nuclear programs that an additional protocol would.

In a June 30 interview, a Brazilian official said the Quadripartite Agreement among Argentina, Brazil, ABACC, and the IAEA furnishes a “more than sufficient guarantee” of the peaceful nature of the two countries’ nuclear programs. It “add[s] value” to INFCIRC/153, the standard safeguards agreement that the IAEA signs with NPT non-nuclear-weapon states, in part because it provides for the application of safeguards by ABACC as well as the IAEA, he said.

Compared to comprehensive safeguards agreements, it furnishes “an amount of information and mutual confidence that is superior,” he said. Additional protocols are not a legal requirement under the NPT or the IAEA, and that point has been recognized in all relevant forums, including the NSG, he said.

Brazil’s 2008 National Defense Strategy was “very clear” that the country would not adhere to new safeguards commitments until the nuclear-weapon states made significant progress toward fulfilling their disarmament obligations under Article VI of the NPT, he said.

Asked if the “pending this” language in the new guidelines suggested that the Quadripartite Agreement eventually would be supplemented by an additional protocol, the official said, “We do not see an obligation deriving from this [language].” Citing the NPT and IAEA resolutions, he said it is the “sovereign decision of any country” to conclude an additional protocol.

The U.S. official said the language “was a way of saying that the NSG would continue to review the situation with respect to the status of adherence to the additional protocol.”

‘General’ Subjective Criteria

The proposed November 2008 version of the NSG guidelines also included so-called subjective criteria: “[w]hether the recipient has a credible and coherent rationale for pursuing enrichment and reprocessing capability in support of civil nuclear power generation programmes,” “[w]hether the transfer would have a negative impact on the stability and security of the recipient state,” and “[g]eneral conditions of stability and security.”

The new text dispenses with that list. Instead, it invokes other sections of the guidelines that give suppliers broad authority to ensure that their exports do not contribute to proliferation. It also adds language saying that suppliers should “tak[e] into account at their national discretion, any relevant factors as may be applicable.”

The U.S. official said the section retains the concept of subjective criteria, but “has been written in a much more general manner.”

The guidelines also contain new language at the beginning of paragraph 7, saying in part, “All States that meet the criteria in paragraph 6 above are eligible for transfers of enrichment facilities, equipment and technology.”

According to the U.S. official, being “eligible” to receive enrichment and reprocessing exports does not equate to a “right” to receive them. A key point of the new guidelines is that “the suppliers as a group were concerned with more than a specific list,” he said.

However, in additional new language at the beginning of paragraph 7, the guidelines say that “[s]uppliers recognize that the application of the Special Arrangements [on enrichment-related exports] below must be consistent with NPT principles, in particular Article IV. Any application by the suppliers of the following Special Arrangements may not abrogate the rights of States meeting the criteria in paragraph 6.”

Article IV of the NPT establishes an “inalienable right” of treaty parties to pursue peaceful nuclear programs.

The section on enrichment-related transfers requires that they be under so-called black box conditions that seek to prevent the technology from being replicated. There is a limited exception to allow cooperation on development of potential new enrichment technologies, but the restrictions would apply once the technology was commercialized.

As the U.S. official noted, black-box requirements are now a global industry standard and are being applied to two enrichment plants in the United States. He said “enshrin[ing]” industry practice in the NSG guidelines is “a very useful thing to do.”

Effect on India

In September 2008, the NSG made an exception for India from the group’s general requirement for so-called full-scope safeguards, the requirement that recipients of exports open all their nuclear facilities to IAEA inspection. In the run-up to the announcement on the revised guidelines on enrichment and reprocessing, a key question was whether India would be exempted from the new restrictions as well.

Even before the NSG or the United States announced the agreement on the new guidelines, the U.S. Department of State’s press office issued a statement saying that the Obama administration “fully supports” the “clean” NSG exception for India and “speedy implementation” of the U.S.-Indian civil nuclear cooperation agreement, which Congress approved in 2008. “Nothing about the new Enrichment and Reprocessing (ENR) transfer restrictions agreed to by NSG members should be construed as detracting from the unique impact and importance of the U.S.-India agreement or our commitment to full civil nuclear cooperation,” the statement said.

Indian officials and observers often use the term “clean waiver” to suggest that the 2008 NSG decision lifted all the restrictions that previously had been in place on nuclear exports to India. However, the June 23 State Department press release said, “Efforts in the NSG to strengthen controls on the transfers of ENR are consistent with long-standing U.S. policy that pre-dates the Civil Nuclear Agreement and have been reaffirmed on an annual basis by the [Group of Eight industrialized countries] for years.”

The U.S. official said that NSG members had begun discussing a list of criteria for enrichment- and reprocessing-related exports in 2004 and, by the end of the year, had agreed that NPT membership should be a criterion. The plans for U.S.-Indian nuclear cooperation were announced in July 2005. (See ACT, September 2005.)

The official also noted that the text of the 2008 NSG decision exempts India only from the section of the NSG guidelines dealing with the requirement for full-scope safeguards and specifically says that “transfers of sensitive exports remain subject to paragraphs 6 and 7.”

In a June 30 interview, a European diplomat agreed that, under the guidelines, India could not receive enrichment and reprocessing technology. India’s Ministry of External Affairs and its embassy in Washington did not respond to requests for comment.

Indian Membership

According to the NSG press statement, the members also “continued to consider all aspects of the implementation of the 2008 Statement on Civil Nuclear Cooperation with India and discussed the NSG relationship with India.” Last November, President Barack Obama announced his support for Indian membership in the NSG and three other export control regimes. (See ACT, December 2010.)

India would be the first member of the NSG that is not a party to the NPT. A key criterion for membership in the group is that the country is a party to and complying with the NPT or a nuclear-weapon-free-zone treaty.

A confidential May 23 U.S.-drafted “Food for Thought” paper circulated to NSG members offers two options for bringing India into the group. One would be to revise the admission criteria “in a manner that would accurately describe India’s situation.” The other would be to “recognize” that the criteria, known as “Factors to Be Considered,” are not “mandatory criteria” and that a candidate for membership does not necessarily have to meet all of them.

At the Noordwijk meeting, the United States “did not ask anybody to take a decision,” the U.S. official said. There was “a good, solid discussion” with expressions of “views on both sides,” he said. According to the official, some delegates were “very concerned about the NPT issue.”

The United States invited additional comments, with a deadline of Sept. 1, he said. That would allow time to prepare for follow-up discussions on the sidelines of the IAEA general conference later that month and at the meeting of the NSG’s consultative group in October or November, he said. —DANIEL HORNER