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November 21, 1996

Discussion Draft


Paul L. Leventhal and Eldon V.C. Greenberg1

Secretary of State Christopher, during his recent trip to Beijing, indicated that the United States may be considering allowing limited technology transfers, related for example to nuclear safety and reactor development, in advance of any decision to lift sanctions generally against U.S. nuclear trade with China. See Giacomo, "U.S. May Relax Curbs on Nuclear Sales to China", Reuters Dispatch, November 20, 1996. Earlier press reports indicated that the Administration may move early in 1997 to lift in entirety current prohibitions against U.S. nuclear trade with China. See Hibbs, "U.S. Vendors Now Scrambling For Chinese Reactor Orders", Nucleonics Week, October 24, 1996, at 1. The purpose of this memorandum is to (a) describe the standards and procedures applicable to any U.S. action to permit nuclear trade with China, and (b) suggest several, additional commitments which should be sought to protect U.S. national security interests.

(a) Current Law -- Standards and Procedures for Lifting Sanctions Against Nuclear Trade with China.

Current prohibitions on nuclear trade with China are found in two Federal laws: (1) the Joint Resolution approving the 1985 U.S.-China Agreement for Nuclear Cooperation, Pub. L. No. 99-183 (Dec. 16, 1985) (the "Joint Resolution of Approval"); and (2) Section 902 of the FY 1990 and 1991 Foreign Relations Authorization Act, Pub. L. No. 101-246 (Feb. 16, 1990) (the "Tiananmen Square Legislation"). The prohibitions established by the Joint Resolution of Approval must be lifted to allow the transfer or retransfer of facilities, components and fuel to China under the Agreement, while the prohibitions of the Tiananmen Square Legislation must be lifted to allow not only the transfer and retransfer of facilities, components and fuel subject to the Agreement, but also the export of dual use commodities and nuclear technology.2

(1) Requirements of the Joint Resolution of Approval.

Under the Joint Resolution of Approval, the President must make three certifications to Congress as a precondition to the transfer or retransfer of facilities, components and fuel to China under the U.S.-China Agreement for Cooperation:

(A) the reciprocal arrangements made pursuant to Article 8 of the Agreement have been designed to be effective in ensuring that any nuclear material, facilities, or components provided under the Agreement shall be utilized solely for intended peaceful purposes as set forth in the Agreement;3

(B) the Government of the People's Republic of China has provided additional information concerning its nuclear non-proliferation policies and that, based on this and all other information available to the United States Government, the People's Republic of China is not in violation of paragraph (2) of section 129 of the Atomic Energy Act of 1954;4 and

(C) the obligation to consider favorably a request to carry out activities described in Article 5(2) of the Agreement shall not prejudice the decision of the United States to approve or disapprove such a request.5

Pub. L. No. 99-183, (b)(1). In addition, the President must submit to the Speaker of the House and the Chairman of the Senate Foreign Relations Committee "a report detailing the history and current developments in the nonproliferation policies and practices" of China. Id., (b)(2). Both the certification and report must lie before Congress for "a period of thirty days of continuous session" before any actual exports can be approved under the Agreement.

(2) Requirements of the Tiananmen Square Legislation.

Under the Tiananmen Square Legislation, there are three preconditions which must be met for nuclear trade in general with China (including, inter alia, retransfers of facilities, components and fuel subject to the Agreement) to commence:

(i) the President certifies to the Congress that the People's Republic of China has provided clear and unequivocal assurances to the United States that it is not assisting and will not assist any nonnuclear weapon state, either directly or indirectly, in acquiring nuclear explosive devices or the materials and components for such devices;6

(ii) the President makes the certifications and submits the report required by Public Law 99-183; and

(iii) the President makes a report under subsection (b)(1) or (2) of this section.

Pub. L. No. 101-246, 902(a)(6)(B).7 The report referred to in subsection 902(a)(6)(B)(iii) may either be (a) in accordance with Section 902(b)(1), that China has "made progress on a program of political reform throughout the country, including Tibet," including six specific elements of reform (e.g., lifting of martial law, release of political prisoners, etc.), or (b) in accordance with Section 902(b)(2), that "it is in the national interest of the United States to terminate ... a suspension or disapproval" of nuclear trade.

The Tiananmen Square Legislation does not specify the amount of time the certifications and reports must lie before Congress. However, because the Tiananmen Square Legislation incorporates the requirements of Pub. L. No. 99- 183, as a practical matter thirty days of continuous session of Congress must pass as well before the prohibitions on trade are actually lifted.

(b) Enhanced Non-Proliferation Controls.

While the certifications and reports just described are important, China's recent non-proliferation record suggests that they may not be enough. Indeed, just within the past several months, there have been troubling reports that China has been continuing to supply Pakistan with equipment having weapons applications. See, e.g., Rosenthal, "The Nuclear Gamble", New York Times, October 11, 1996. Moreover, now may be the one and only time, as the terms of renewed U.S. trade are being worked out, actually to obtain commitments from China which will assure that the Chinese will join the community of responsible suppliers and users of nuclear equipment and materials. Five new commitments would represent real and tangible progress toward this end:

(1) A Commitment to Join the Nuclear Suppliers Group.

All the world's leading supplier nations, except China, are members of the Nuclear Suppliers Group (the "NSG"). These include the other four weapon states (the United States, Great Britain, France and Russia), Argentina, Australia, Canada, Japan and every major civil nuclear power in Europe. Collectively, they have committed to a set of Guidelines incorporating such important non- proliferation standards as full-scope IAEA safeguards as a condition of supply, physical protection against unauthorized use of transferred equipment and materials and restraint in the transfer of sensitive facilities, technology and weapons-usable materials. It is U.S. policy to seek universal adherence to the NSG Guidelines, and, to the Administration's credit, Secretary Christopher in Beijing apparently pressed the Chinese on this point. See Giacomo, "U.S. May Relax Curbs on Nuclear Sales to China", Reuters Dispatch, November 20, 1996. In order to ensure that China's past, deviant export practices are truly ended, it is essential that China in fact be brought into the NSG and that it subscribe to these generally accepted international standards. Consequently, U.S. nuclear trade with China should be made expressly contingent upon the Chinese joining the NSG and pledging adherence to its Guidelines.

(2) A Commitment to Implementing Effective Export Controls.

It is not enough simply to pledge in the abstract to comply with the NSG Guidelines. China in addition must actually put in place an effective, enforceable export control system that ensures that its non-proliferation pledges are meaningful. Again, the Administration appears to continue to make this part of its negotiating position with the Chinese, and it was reported during Secretary Christopher's visit that Beijing had promised to put a nationwide export control system in place. See Dobbs and Mufson, "Christopher Cites 'Progress' in China Talks, but Areas of Trouble Remain", Washington Post, November 21, 1996, at A28. However, no details or timetable have yet been announced for implementation. Until the development and implementation of such a system are complete, thereby providing a reasonable degree of confidence that exports from China inconsistent with the NSG Guidelines will not be approved, U.S. export prohibitions should remain in effect. At a minimum, specific provisions of domestic law need to be enacted, requiring any significant nuclear exports to be duly noticed to and specifically approved by the central government prior to transfer by any person or entity from China. In this way, the Chinese government would place itself in a position of no longer being able to plead ignorance of dangerous nuclear transfers, as it has in the past, for example, regarding transfers to Pakistan.

(3) A Commitment to Safeguards.

As noted earlier, the U.S.-China Agreement for Cooperation does not require bilateral (or, for that matter, IAEA) safeguards on U.S.-supplied nuclear equipment and materials. While Congress accepted this deficiency in 1985, there is no question that it is anomalous. Section 123a.(1) of the Atomic Energy Act specifically calls for "a guaranty by the cooperating party that safeguards as set forth in the agreement for cooperation will be maintained with respect to all nuclear materials and equipment transferred pursuant thereto, and with respect to all special nuclear material used in or produced through the use of such nuclear materials and equipment ...." U.S. agreements with other weapon states expressly provide for the application of safeguards, and China itself has consented to the application of safeguards under agreements with Brazil, Argentina and Japan. Indeed, it was recently reported that China had agreed to safeguards to be enforced by the IAEA in connection with its purchase of two heavy water reactors from Canada. See "Canada to Ink C$4.5 Billion Atomic Deal with China", Reuters Dispatch, November 14, 1996. There is nothing in the U.S.-China Agreement which would preclude a Chinese commitment to application of safeguards, and safeguards could readily be deemed to fall within the "mutually acceptable arrangements" contemplated by Article 8(2) of the Agreement. In such circumstances, to ensure proper use of U.S.-supplied equipment and materials and consistency with U.S. arrangements with other weapon states, China should be required to apply "safeguards", as that term is generally understood,8 to equipment and materials subject to the Agreement.

(4) A Commitment to a Once-Through Fuel Cycle.

The U.S.-China Agreement for Cooperation, in contrast to certain other recent agreements, does not contain any long-term consents to the reprocessing and recycle of U.S.-origin special nuclear material. It is formal U.S. policy not to "encourage" reprocessing, and the United States has undertaken major efforts to ensure that certain Asian countries, such as North Korea, not build reprocessing plants or otherwise acquire the capability to gain access to separated plutonium. Because China has thus far made no formal commitment to reprocess spent fuel and/or utilize recycled plutonium in its civil reactor program, obtaining a Chinese pledge not to reprocess and recycle could be an important example of U.S. policy. An express commitment by China to a once- through fuel cycle would not only put it in the forefront of nations opposed to the widespread civil reliance on weapons-usable materials but would also establish it as a role model for nations that might otherwise be disposed to embark upon reprocessing and recycle programs.

(5) A Commitment to Constructive Engagement on Non- Proliferation Issues.

The bottom line of the certifications under the Joint Resolution of Approval and the Tiananmen Square Legislation is a determination that China is ceasing to assist, directly or indirectly, other nations to acquire a nuclear explosive capability. But China could do more. Just as it could be an example to others that the civil plutonium path need not be followed, it could also become a positive force for reducing proliferation threats in Asia. If there are risks of the breakout of nuclear capable states today into full-fledged nuclear powers, they are prominently found among a number of Asian countries, especially Pakistan and North Korea. China has demonstrated an ability to exercise significant influence over the policies of these countries. A commitment by China not just to abandonment of its past practices but to constructive engagement, in collaboration with the United States, in the process of reducing the threat of proliferation would make a real difference in enhancing global security.

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End Notes

1. Paul L. Leventhal is the president of the Nuclear Control Institute. Eldon V.C. Greenberg, a partner with the Washington, D.C. law firm of Garvey, Schubert & Barer, is counsel to the Institute. Back to document

2. It should be noted that the technology transfer prohibitions of the Tiananmen Square Legislation apply where there is a need for a "specific authorization" from the Department of Energy under Section 57b. of the Atomic Energy Act, 42 U.S.C. 2077b. Under the Department's regulations implementing Section 57b., certain activities are "generally authorized", including, among other matters, "[f]urnishing information or assistance ... to enhance the operational safety of an existing civilian nuclear power plant ...; provided the Department of Energy is notified in advance ... and approves the use of the authorization in writing." 10 C.F.R. 810.7(c). Conceivably it was this kind of authorization, which would not require the formal findings and certifications specified in the Tiananmen Square Legislation, to which Secretary Christopher was referring in his statements from Beijing. Back to document

3. The "reciprocal arrangements" referred to are in lieu of "bilateral safeguards", which are expressly stated to be "not required" under the Agreement. These arrangements are intended to cover such matters as "exchanges of information and visits to material, facilities and components" covered by the Agreement, with the goal of assuring that peaceful use guarantees are maintained. Back to document

4. Section 129(2) of the Atomic Energy Act, 42 U.S.C. 2158(2), bars the export of nuclear equipment, materials and sensitive nuclear technology to any nation found by the President to have

(A) materially violated an agreement for cooperation or other terms of supply;

(B) assisted, encouraged, or induced any non- nuclear weapon state to engage in activities involving source or special nuclear material and having direct significance for the manufacture or acquisition of nuclear explosive devices, and has failed to take steps which, in the President's judgment, represent sufficient progress toward terminating such assistance, encouragement, or inducement; or

(C) entered into an agreement to supply reprocessing equipment, materials or technology to a non-nuclear weapon state. Back to document

5. The request referred to is a request to engage in activities involving enrichment of uranium to greater than twenty percent in the isotope U-235, reprocessing and alteration in form or content of materials subject to the Agreement, as well as a request for any change in location for the storage of plutonium, uranium 233 or highly enriched uranium subject to the Agreement. Back to document

6. The formulation of this non-proliferation certification, it should be noted, is different than that for the non-proliferation certification under the Joint Resolution of Approval. Both must be made for facility and fuel exports to take place. Back to document

7. It should be underscored that, notwithstanding any statements made by Secretary Christopher in Beijing this week, these preconditions would have be satisfied before there could be any transfer to China of U.S. nuclear technology for which a specific authorization is required from the Department of Energy under Section 57b. and the Part 810 regulations. Back to document

8. "Safeguards" is a term of art which is ordinarily understood to mean the application of materials accounting procedures and techniques, together with appropriate containment, and surveillance devices, and the conduct of periodic inspections, to ensure that equipment and materials are not diverted to non- peaceful purposes. Every reference to "safeguards" in the history of the Nuclear Non-Proliferation Act of 1978 is in this sense of the term.Back to document