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Nuclear Export Controls Need Improvements to Reduce Delays, Tighten Enforcement

Thursday, November 20, 2014
Sandler, Travis & Rosenberg Trade Report

The Department of Energy should take a number of steps to improve its controls on exports of civilian nuclear products, services and technology, the Government Accountability Office said in a report issued this week. Delays in processing, uncertainty in regulatory requirements and limited enforcement are all problems that need to be addressed, the report states.

According to GAO, exports of U.S. civilian nuclear technology, assistance and services are regulated by DOE through 10 CFR Part 810. Depending on the importing country and technology, exports can be generally authorized, with no application required, or specifically authorized, in which case the exporter must submit an application to DOE. The departments of Commerce, Defense and State and the Nuclear Regulatory Commission also review these applications, which are subject to final approval by DOE.

Authorization Delays. The report finds that DOE has consistently fallen short of its goal of completing each of the initial and interagency stages of the Part 810 review process within 30 days. From 2008 through 2013, DOE missed this target for 80 of 89 applications processed in the initial review stage and 85 of 89 in the interagency review stage. Median review times were 71 days and 105 days, respectively. The department has not established a target for the final review stage, which had a median review time of 125 days, or the overall process. The report states that this performance calls into question whether the existing targets are realistic and achievable, which is necessary for DOE to provide nuclear exporters with a timely and predictable regulatory process and thus enhance their competitiveness.

Unclear Regulations. The report also indicates that the scope of Part 810 is unclear but that DOE has not provided written guidance to clarify it. The department instead intends to maintain its case-by-case inquiry process, but there is no consistent documentation of such inquiries or their responses, leaving DOE unable to ensure consistent responses or determine parts of the regulation that may need clarification. While some steps to clarify Part 810 by defining or refining some key terms are being taken, these revisions do not address all terms that exporters have identified as unclear and the time frame of this effort is unknown.

Enforcement. Moreover, the GAO states, DOE may be missing opportunities to enforce its nuclear export controls and thus achieve effective threat reduction by mitigating the risk of proliferation. DOE has not determined whether it has the legal authority to impose civil penalties for Part 810 violations and has never taken a formal action for such a violation such as revoking an authorization or referring a potential violation to the Justice Department. In addition, the department only conducts in-depth analysis on less than 10 percent of exporter reports on authorized activities and does not have a risk-based procedure for prioritizing which reports to analyze, meaning it may be missing important information that could lead to the identification of violations and allow it to take enforcement actions when warranted. Finally, unlike other agencies that administer nuclear-related export controls, DOE does not have policies or guidance for exporters about self-identifying, self-reporting and correcting possible violations and is thus missing an opportunity to encourage exporters to recognize and address violations.

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