A foreign entity is (1) a non-U.S. organization based external to the United States; and/or (2) is not principally under the laws and regulations of the United States (even though a subsidiary may be); and/or (3) means any partnership, corporation, association, or institution where 75 percent or more of the voting interest is owned by non-U.S. citizens. A foreign entity falls into one or more of these categories:
Legal Authority
The Department of Energy (DOE) sponsors a research and technical assistance program for foreign entities. Within DOE, this research and technical assistance is called the Work for Others (WFO) program. For foreign entities, DOE is authorized to provide technical assistance and to make arrangements (including contracts and agreements) for conducting research and development activities with foreign entities. This work activity includes participating in joint or cooperative research, developmental, or experimental projects. The authority for such activity comes from statutes such as the Atomic Energy Act of 1954 (as amended), the Energy Reorganization Act of 1974 (Section 107a of Public Law 93-438) and the DOE Organization Act (Public Law 95-91).
Types of Research or Technical Assistance Provided by DOE
DOE can provide help in three domains of expertise. These are:
Legal Parameters
For those activities involving nuclear-related activities, a review will be done for compliance with the Price Anderson Act, as amended and Nuclear Non-Proliferation concerns. This requirement is based on the liability considerations of the Price Anderson Act and Amendments (PAAA) (42 U.S.C. 2282a). Section 17 of the PAAA makes most DOE contractors covered by the DOE Price-Anderson indemnification system, and their subcontractors and suppliers, subject to civil penalties for violation of applicable DOE nuclear safety rules, regulations, and Orders. Furthermore, Section 18 of the PAAA makes all employees of DOE contractors, and their subcontractors and suppliers, subject to criminal penalties, including monetary penalties and imprisonment, for knowing and willful violation of applicable DOE nuclear safety rules, regulations, and Orders (42 U.S.C. 2273[c]).
All DOE activities involving foreign entities must also comply with U.S. Export Compliance laws and regulations. Employees and subcontractors who send or personally carry outside the United States any equipment, commodities, information, or computer hardware and software must follow requirements in accordance with U.S. export control laws 3and regulations. See Appendix D for details.
3Export Control at Oak Ridge National Laboratory (ORNL) is governed by internal procedure ORNL-CR-008. Contact the Export Compliance Manager, Mr. Rolf Migun, at (865) 576-7230 to determine if any export/import licenses are required. Export Control at the Y-12 National Security Complex is governed by internal procedure Y30-205INS. Contact the Export Compliance Manager at (865) 574-1746 to determine if any export/import licenses are required. If you need an export license, complete form BXA-748P and BXA-748P-A (if needed). These forms are available from W.D. Chappell (865) 574-1746, email: w78@y12.doe.gov). Recognize early any need to export and plan ahead. A license from the Department of State or Commerce can take several months to process.
Contacts with foreign entities are also covered under the Foreign Corrupt Practices Act (FCPA) (see Appendix E). Both DOE and the DOE managing and operating (M&O) contractors mandate that all professional or business contacts will scrupulously adhere to the letter and spirit of the FCPA. The FCPA prohibits giving any thing of value to a foreign official for the purpose of influencing a foreign government. All transactions involving foreign officials must be coordinated with the appropriate M&O company and DOE legal departments.
Why should a Foreign Entity come to DOE for research and development or technical assistance?
The U.S. government's interest in furthering scientific advances encourages innovative approaches and solutions to technical problems facing the U.S. government and U.S. industry. This U.S. governmental concern provides various options in solving issues early in a product or systems developmental life cycle that are available to be shared with non-U.S. activities under certain policies. Based on the U.S. government's considerable investments in basic technology research and development, there is a substantive scientific foundation of knowledge in the National Laboratory and Technology Center system which is available for technology transfer under specified criteria. A normal commercial contract may not be suitable for initial research efforts and prototype tests where product or scientific feasibility is being established.
The use of a U.S. government-funded National Laboratory or a Technology Center (e.g., an Applied Development Manufacturing Facility) can establish the scientific parameters of achievement during this early research phase where subjective evaluations are the rule rather than the objective evaluation of criteria against business strategies. At this research stage in the project life cycle, general performance specifications only cover the minimum essential requirements. A sponsor's performance specifications express the sponsor's technical requirements as output, function, or operation of items or equipment. This allows an unbiased technical approach in the details of design, fabrication, formulation, and internal production to the DOE research team.
To reach the stage where design specifications are available for maximum commercial development, a model is developed. To assure adequacy of the performance specifications, the prototype is tested and deficiencies are corrected at minimal cost. Since performance specifications are not restrictive to any particular method or process, this approach permits an objective approach when the sponsor prototypes are finished, conserves project funds, and expedites the system or product when it is ready for final development, manufacturing, and/or marketing.
DOE Administrative Processing
DOE accepts taskings from a foreign entity to meet a research or technological requirement. DOE performs work that is consistent with its overall mission, is relevant to the DOE unique capabilities or special competencies, is consistent with U.S. foreign policy objectives, and is in consonance with U.S. laws. Prior to work beginning, the particular DOE management and operating (M&O) contractor will prepare for DOE approval a Proposal Information Form and a research proposal describing the work to be performed. Upon approval, DOE will formally notify the DOE M&O contractor to begin contractual negotiations with the sponsor (i.e., the foreign entity) so that work can begin.
Some tasks require DOE-Headquarters in Washington, D.C., approval for foreign entity transactions. Examples of these transactions are:
Contractual Agreements
Research or technical assistance efforts are performed under one of two contractual mechanisms, either a Material Services Order Form (MSOF) or a DOE WFO Standard Contract.
The MSOF uses a one page abbreviated contract between the DOE M&O contractor and the requesting foreign entity if there are no intellectual property concerns involved. If the foreign entity has special requirements for proprietary information protection, the DOE M&O contractor will attach a Proprietary Information Agreement to the MSOF. The sponsor's proprietary information associated with the research or technical development will be protected and safeguarded from disclosure at all times.
Where there are intellectual information or patent rights issues involved or that need to be addressed, a DOE WFO standard contract (short form) will be initiated as the preferred form of agreement. If the foreign entity can not accept the DOE contractual language as is, a negotiated contract is the next step and will be conducted among the foreign entity, the supporting local DOE Operations Office, and the DOE M&O contractor. If the foreign entity's concerns cannot be satisfied within the authorized discretionary approval areas of the local DOE Operations Offices, all future negotiations will then be conducted by DOE Headquarters in Washington, D.C., and assisted where appropriate, by the U.S. Department of State.
Periodically, there may be minor language sensitivities in abbreviations, form titles, or acronyms used within either a MSOF or contract. Where there will be no substantive difference in the meaning of the proposed contractual agreement, DOE may agree to modify language to meet the concerns of the foreign entity. However, the English language version of the contractual agreement will always take precedence.
Administrative Recovery of DOE Program Costs
Based on Section 3137 of the Strom Thurmond National Defense Authorization Act of 1999 (Public Law 105-261), DOE is authorized to charge a flat 3 percent surcharge to cover DOE administrative processing and overhead costs. This surcharge is called the Federal Administrative Charge (FAC) and the FAC is charged on all non-DOE funded work effective October 1, 1998.
Foreign entity sponsors will provide an advance payment in U.S. dollars equal to three months of estimated effort prior to work commencing. This advance funding provision is mandated by U.S. Federal Law and is included in the basic DOE and M&O WFO contract. During the conduct of the project, the DOE M&O contractor will invoice monthly for accumulated expenses (that is, funds spent) plus FAC against the project. It is the responsibility of the foreign entity sponsor to pay the invoices or work may be stopped.
As an exception to the 90-day advance payment option, DOE may agree to a 30-day advance payment option given the following written assurances or guarantees:
4The initial partial cash advance requirement for a project is the sum of the following: (1) estimated total cost for the current business month; (2) estimated in-house cost for the next business month; and (3) estimated outstanding commitments at the end of the current business month.
5Second and subsequent partial advances will represent the sum of the next's business month's estimated in-house costs plus the change in outstanding commitments for the current business month.
DOE Relationships with its Contractors
DOE competitively awards management and operating (M&O) contracts to manage and operate DOE facilities. These M&O contractors are typically financially integrated with DOE and operate under strict DOE controls and guidelines. DOE M&O contractors at Oak Ridge, Tennessee, are distinct "arms-length" subsidiaries of their parent corporations and are established exclusively to perform work assigned by DOE, including work which DOE accepts from private companies. A DOE M&O contractor performs a completely different role as a financially-integrated contractor of DOE versus a contractor who fulfills a Government-Owned-Contractor-Operated function within other federal agencies. This distinction is vital to understanding the role that DOE plays in technology research and applied development for the U.S. government.
DOE establishes the programmatic controls, oversight functions, customary reporting information, and general categories and procedures for the overhead cost structure for the M&O contractors. DOE approves all overhead rate categories.
6Means altruistic, non-profitable, or chairitable.
Sec. 810.1 Purpose.
These regulations implement section 57b of the Atomic Energy Act which empowers the Secretary of Energy to authorize U.S. persons to engage directly or indirectly in the production of special nuclear material outside the United States. Their purpose is to:
(a) Indicate activities which have been generally authorized by the Secretary of Energy and thus require no further authorization;
(b) Indicate activities which require specific authorization by the Secretary and explain how to request authorization; and
(c) Explain reporting requirements for various activities.
Sec. 810.2 Scope.
10 CFR part 810:
(a) Applies to all persons subject to the jurisdiction of the United States who engage directly or indirectly in the production of special nuclear material outside the United States.
(b) Applies to activities conducted either in the United States or abroad by such persons or by licensees, contractors or subsidiaries under their direction, supervision, responsibility or control.
(c) Applies, but is not limited to, activities involving nuclear reactors and other nuclear fuel cycle facilities for the following: fluoride or nitrate conversion; isotope separation (enrichment); the chemical, physical or metallurgical processing, fabricating, or alloying of special nuclear material; production of heavy water, zirconium (hafnium-free or low-hafnium), nuclear-grade graphite, or reactor-grade beryllium; production of reactor-grade uranium dioxide from yellowcake; and certain uranium milling activities.
(d) Does not apply to exports licensed by the Nuclear Regulatory Commission.
Sec. 810.3 Definitions.
As used in part 810:
Agreement for cooperation means an agreement with another nation or group of nations concluded under sections 123 or 124 of the Atomic Energy Act.
Atomic Energy Act means the Atomic Energy Act of 1954, as amended.
Classified information means National Security Information classified under Executive Order 12356 or any superseding order, or Restricted Data classified under the Atomic Energy Act.
General authorization means an authorization granted by the Secretary of Energy under section 57b(2) of the Atomic Energy Act to provide certain assistance to foreign atomic energy activities and which is effective without a specific request to the Secretary or the issuance of an authorization to a particular person.
IAEA means the International Atomic Energy Agency.
NNPA means the Nuclear Non-Proliferation Act of 1978.
NPT means the Treaty on the Non-Proliferation of Nuclear Weapons.
Nuclear reactor means an apparatus, other than a nuclear explosive device, designed or used to sustain nuclear fission in a self-supporting chain reaction.
Open meeting means a conference, seminar, trade show or other gathering that all technically qualified members of the public may attend and at which they may make written or other personal record of the proceedings, notwithstanding that (1) a reasonable registration fee may be charged, or (2) a reasonable numerical limit exists on actual attendance.
Operational safety means the capability of a reactor to be operated in a manner that prevents uncontrolled or inadvertent criticality, prevents or mitigates uncontrolled release of radioactivity to the environment, monitors and limits staff exposure to radiation and radioactivity, and protects off-site population from exposure to radiation or radioactivity. Operational safety may be enhanced by providing expert advice, equipment, instrumentation, technology, software, services, analyses, procedures, training, or other assistance that improves the capability of the reactor to be operated in such a manner.
Person means (1) any individual, corporation, partnership, firm, association, trust, estate, public or private institution, group, Government agency other than the Department of Energy, any State or political entity within a State; and (2) any legal successor, representative, agent or agency of the foregoing. Persons under U.S. jurisdiction are responsible for their foreign licensees, contractors or subsidiaries to the extent that the former have control over the activities of the latter.
Production reactor means a nuclear reactor specially designed or used primarily for the production of plutonium or uranium-233.
Public information means: (1) Information available in periodicals, books or other print or electronic media for distribution to any member of the public, or to a community of persons such as those in a scientific, engineering, or educational discipline or in a particular commercial activity who are interested in a subject matter; (2) Information available in public libraries, public reading rooms, public document rooms, public archives, or public data banks, or in university courses; (3) Information that has been presented at an open meeting (see definition of ``open meeting''); (4) Information that has been made available internationally without restriction on its further dissemination; or (5) Information contained in an application which has been filed with the U.S. Patent Office and eligible for foreign filing under 35 U.S.C. 184 or which has been made available under 5 U.S.C. 552, the Freedom of Information Act. Public information must be available to the public prior to or at the same time as it is transmitted to a foreign recipient. It does not include any technical embellishment, enhancement, explanation or interpretation which in itself is not public information, or information subject to sections 147 and 148 of the Atomic Energy Act.
Restricted Data means all data concerning (1) design, manufacture or utilization of atomic weapons; (2) the production of special nuclear material; or (3) the use of special nuclear material in the production of energy, but shall not include data declassified or removed from the Restricted Data category pursuant to section 142 of the Atomic Energy Act.
Sensitive nuclear technology means any information (including information incorporated in a production or utilization facility or important component part thereof) which is not available to the public [see definition of ``public information''] which is important to the design, construction, fabrication, operation, or maintenance of a uranium enrichment or nuclear fuel reprocessing facility or a facility for the production of heavy water, but shall not include Restricted Data controlled pursuant to Chapter 12 of the Atomic Energy Act. The information may take a tangible form such as a model, prototype, blueprint, or operation manual or an intangible form such as technical services.
Source Material means: (1) Uranium or thorium, other than special nuclear material or (2) ores which contain by weight 0.05 percent or more of uranium or thorium, or any combination of these.
Special nuclear material means (1) plutonium, (2) uranium-233, or (3) uranium enriched above 0.711 percent by weight in the isotope uranium-235.
Specific authorization means an authorization granted by the Secretary of Energy under section 57b(2) of the Atomic Energy Act to a person to provide specified assistance to a foreign atomic energy activity in response to an application filed under 10 CFR part 810.
United States, when used in a geographical sense, includes all territories and possessions of the United States.
Sec. 810.4 Communications.
(a) All communications concerning these regulations should be addressed to: U.S. Department of Energy, Washington, DC 20585. Attention: Director, Export Control Operations Division, IS-40, Office of Export Control and International Safeguards. Telephone (202) 586-2112.
(b) Communications also may be delivered to the Department's headquarters at 1000 Independence Avenue, SW., Washington, DC. All clearly marked proprietary information will be given the maximum protection allowed by law.
Sec. 810.5 Interpretations.
A person may request the advice of the Director, Export Control Operations Division (AN-30) on whether a proposed activity falls outside the scope of part 810, is generally authorized under Sec. 810.7, or requires specific authorization under Sec. 810.8; however, unless authorized by the Secretary of Energy in writing, no interpretation of these regulations other than a written interpretation by the General Counsel is binding upon the Department. When advice is requested from the Director, Export Control Operations Division, or a binding, written determination is requested from the General Counsel, a response normally will be made within 30 days and, if this is not feasible, an interim response will explain the delay.
Sec. 810.6 Authorization requirement.
Section 57b of the Atomic Energy Act in pertinent part provides that:
It shall be unlawful for any person to directly or indirectly engage in the production of any special nuclear material outside of the United States except (1) as specifically authorized under an agreement for cooperation made pursuant to section 123, including a specific authorization in a subsequent arrangement under section 131 of this Act, or (2) upon authorization by the Secretary of Energy after a determination that such activity will not be inimical to the interest of the United States: Provided, That any such determination by the Secretary of Energy shall be made only with the concurrence of the Department of State and after consultation with the Arms Control and Disarmament Agency, the Nuclear Regulatory Commission, the Department of Commerce, and the Department of Defense.
Sec. 810.7 Generally authorized activities.
In accordance with section 57b(2) of the Atomic Energy Act, the Secretary of Energy has determined that the following activities are generally authorized, provided no sensitive nuclear technology is transferred:
(a) Furnishing public information as defined in Sec. 810.3;
(b) Furnishing information or assistance to prevent or correct a current or imminent radiological emergency posing a significant danger to the health and safety of the off-site population, provided the Department of Energy is notified in advance and does not object;
(c) Furnishing information or assistance, including through continuing programs, to enhance the operational safety of an existing civilian nuclear power plant in a country listed in Sec. 810.8(a) or to prevent, reduce, or correct a danger to the health and safety of the off-site population posed by a civilian nuclear power plant in such a country; provided the Department of Energy is notified in advance by certified mail, return receipt requested, and approves the use of the authorization in writing; the Department will notify the applicant of the status of the request within 30 days from the date of receipt of the notification.
(d) Implementing the Agreement between the United States of America and the International Atomic Energy Agency for the Application of Safeguards in the United States;
(e) Participation in exchange programs approved by the Department of State in consultation with the Department of Energy;
(f) Participation approved by a U.S. Government agency in IAEA programs, and activities of IAEA employees whose employment was approved by the U.S. Government;
(g) Participation in open meetings as defined in Sec. 810.3 that are sponsored by educational, scientific, or technical organizations or institutions;
(h) Otherwise engaging directly or indirectly in the production of special nuclear material outside the United States in ways that (1) do not involve any of the countries listed in Sec. 810.8(a) and (2) do not involve production reactors, enrichment, reprocessing, fabrication of nuclear fuel containing plutonium, or production of heavy water, as described in Sec. 810.8(c) (1) through (5).
Sec. 810.8 Activities requiring specific authorization.
Unless generally authorized by Sec. 810.7, a person requires specific authorization by the Secretary of Energy before:
(a) Engaging directly or indirectly in the production of special nuclear material in any of the countries listed below:
Afghanistan
Albania
Algeria
Andorra
Angola
Armenia
Azerbaijan
Bahrain
Belarus
Burma (Myanmar)
Cambodia
China, People's Republic of
Comoros
Cuba
Djibouti
Georgia
Guyana
India
Iran
Iraq
Israel
Kazakhstan
Korea, People's Democratic Republic of
Kuwait
Kyrgyzstan
Laos
Libya
Mauritania
Moldova
Monaco
Mongolian People's Democratic Republic
Mozambique
Niger
Oman
Pakistan
Qatar
Russia
Saudi Arabia
Syria
Tajikistan
Turkmenistan
Ukraine
United Arab Emirates
Uzbekistan
Vanuatu
Vietnam
Zambia
Zimbabwe
Countries may be removed from or added to this list by amendments published in the Federal Register.
(b) Providing sensitive nuclear technology for an activity in any foreign country;
(c) Engaging in or providing assistance in any of the following activities with respect to any foreign country:
(1) Designing production reactors or facilities for the separation of isotopes of source or special nuclear material (enrichment), chemical processing of irradiated special nuclear material (reprocessing), fabrication of nuclear fuel containing plutonium, or the production of heavy water;
(2) Constructing, fabricating, operating, or maintaining such reactors or facilities;
(3) Designing, constructing, fabricating, operating or maintaining components specially designed, modified or adapted for use in such reactors or facilities;
(4) Designing, constructing, fabricating, operating or maintaining major critical components for use in such reactors or production-scale facilities; or
(5) Designing, constructing, fabricating, operating, or maintaining research or test reactors capable of continuous operation above 5 Megawatts Thermal.
(6) Training in the activities of paragraphs (c) (1) through (5) of this section.
Sec. 810.9 Restrictions on general and specific authorization.
A general or specific authorization granted by the Secretary of Energy under these regulations:
(a) Is limited to activities involving only unclassified information and does not permit furnishing Restricted Data or other classified information.
(b) Does not relieve a person from complying with relevant laws or the regulations of other Government agencies applicable to exports;
(c) Does not authorize a person to engage in any activity when the person knows or has reason to know that the activity is intended to provide assistance in designing, developing, fabricating or testing a nuclear explosive device.
Sec. 810.10 Grant of specific authorization.
(a) Any person proposing to provide assistance for which Sec. 810.8 indicates specific authorization is required may apply for the authorization to the U.S. Department of Energy, Washington, DC 20585, Attention: Director, Export Control Operations Division, IS-40, Office of Export Control and International Safeguards.
(b) The Secretary of Energy will approve an application for specific authorization if he determines, with the concurrence of the Department of State and after consultation with the Arms Control and Disarmament Agency, the Nuclear Regulatory Commission, the Department of Commerce, and the Department of Defense, that the activity will not be inimical to the interest of the United States. In making this determination, the Secretary will take into account:
(1) Whether the United States has an agreement for nuclear cooperation with the nation or group of nations involved;
(2) Whether the country involved is a party to the NPT, or a country for which the Treaty for the Prohibition of Nuclear Weapons in Latin America (Treaty of Tlatelolco) is in force;
(3) Whether the country involved has entered into an agreement with the IAEA for the application of safeguards on all its peaceful nuclear activities;
(4) Whether the country involved, if it has not entered into such an agreement, has agreed to accept IAEA safeguards when applicable to the proposed activity;
(5) Other nonproliferation controls or conditions applicable to the proposed activity;
(6) The relative significance of the proposed activity;
(7) The availability of comparable assistance from other sources;
(8) Any other factors that may bear upon the political, economic, or security interests of the United States, including U.S. obligations under international agreements or treaties.
(c) If the proposed assistance involves the export of ``sensitive nuclear technology'' as defined in Sec. 810.3, the requirements of sections 127 and 128 of the Atomic Energy Act and of any applicable U.S. international commitments must also be met.
(d) Approximately 30 days after the Secretary's grant of a specific authorization, a copy of the Secretary's determination may be provided to any person requesting it at the Department's Public Reading Room, unless the applicant submits information showing that public disclosure will cause substantial harm to its competitive position. This provision does not affect any other authority provided by law for the Department not to disclose information.
Sec. 810.11 Revocation, suspension, or modification of authorization.
The Secretary may revoke, suspend, or modify a general or specific authorization:
(a) For any material false statement in an application for specific authorization or in any additional information submitted in its support;
(b) For failing to provide a report or for any material false statement in a report submitted pursuant to Sec. 810.13;
(c) If any authorized assistance is subsequently determined to be inimical to the interest of the United States or otherwise no longer meets the legal criteria for approval; or
(d) Pursuant to section 129 of the Atomic Energy Act.
Sec. 810.12 Information required in an application for specific authorization.
Each application shall contain:
(a) The name, address, and citizenship of the applicant, and complete disclosure of all real parties in interest; if the applicant is a corporation or other legal entity, where it is incorporated or organized, the location of its principal office, and the degree of any control or ownership by any foreign person or entity;
(b) A complete description of the proposed activity, including its approximate monetary value, the name and location of any facility or project involved, the name and address of the person or legal entity for which the activity is to be performed, and a detailed description of any specific project to which the activity relates;
(c) Any information the applicant may wish to provide concerning the factors listed in Sec. 810.10(b); and
(d) Designation of any information considered proprietary whose public disclosure would cause substantial harm to the competitive position of the applicant.
Sec. 810.13 Reports.
(a) Any person who has received a specific authorization shall within 30 days after beginning the authorized activity provide to the Department of Energy a report containing the following information:
(1) The name, address, and citizenship of the person submitting the report;
(2) The name, address, and citizenship of the person or entity for which the activity is being performed;
(3) A description of the activity, the date it began, its location, status, and anticipated date of completion; and
(4) A copy of the Department of Energy's letter authorizing the activity.
(b) Any person carrying out a specifically authorized activity shall inform DOE when the activity is completed or if it is terminated before completion.
(c) Any person granted a specific authorization shall inform DOE when it is known that the proposed activity will not be undertaken and the granted authorization will not be used.
(d) Any person, within 30 days after beginning any generally authorized activity under Sec. 810.7(b), (c), or (h), shall provide to the Department of Energy:
(1) The name, address, and citizenship of the person submitting the report;
(2) The name, address, and citizenship of the person or entity for which the activity is being performed;
(3) A description of the activity, the date it began, its location, status, and anticipated date of completion; and
(4) An assurance that the U.S. vendor has an agreement with the recipient ensuring that any subsequent transfer of materials, equipment, or technology transferred under general authorization to a country listed in Sec. 810.8(a) will only take place if the vendor obtains DOE approval.
(e) Persons engaging in generally authorized activities as employees of persons required to report are not themselves required to report.
(f) Persons engaging in activities generally authorized under Sec. 810.7(a), (d), (e), (f), and (g) are not subject to reporting requirements under this section.
(g) All reports should be sent to: U.S. Department of Energy, Washington, DC 20585. Attention: Director, Export Control Operations Division, IS-40, Office of Export Control and International Safeguards.
Sec. 810.14 Additional information.
The Department of Energy may at any time require a person engaging in any generally or specifically authorized activity to submit additional information.
Sec. 810.15 Violations.
(a) The Atomic Energy Act provides that:
(1) Permanent or temporary injunctions or restraining orders may be granted to prevent any person from violating any provision of the Atomic Energy Act or its implementing regulations.
(2) Any person convicted of violating or conspiring or attempting to violate any provision of section 57 of the Atomic Energy Act may be fined up to $10,000 or imprisoned up to 10 years, or both. If the offense is committed with intent to injure the United States or to aid any foreign nation, the penalty could be up to life imprisonment and a $20,000 fine.
(b) Title 18 of the United States Code, section 1001, provides that persons convicted of willfully falsifying, concealing, or covering up a material fact or making false, fictitious or fraudulent statements or representations may be fined up to $10,000 or imprisoned up to five years, or both.
Sec. 810.16 Effective date and savings clause.
These regulations are effective on July 26, 1993. Except for actions that may be taken by DOE pursuant to Sec. 810.11, this revision does not affect the validity or terms of any specific authorizations granted under the previous regulations or generally authorized activities under the previous regulations for which the contracts, purchase orders, or licensing arrangements are already in effect on July 26, 1993. Persons engaging in activities that were generally authorized under the previous regulations but that require specific authorization under the revised regulations must request specific authorization within 90 days but may continue their activities until DOE acts on the request. Specific authorizations previously granted for assistance to the Soviet Union remain valid for the newly independent former republics of the Soviet Union.
Authority:
1. Secs. 57, 127, 128, 129, 161, and 223, Atomic Energy Act of 1954, as amended by the Nuclear Non-Proliferation Act of 1978, Pub. L. 95-242, 68 Stat. 932, 948, 950, 958, 92 Stat. 126, 136, 137, 138 (42 U.S.C. 2077, 2156, 2157, 2158, 2201, 2273);
2. Sec. 104 of the Energy Reorganization Act of 1974, Pub. L. 93-438;
3. Sec. 301, Department of Energy Organization Act, Pub. L. 95-91.
1.1 Disclosure of technical data to foreign persons while they are visiting the Department of Energy (DOE) Oak Ridge Reservation in the course of an assignment or visit to facilities is considered an export disclosure under various government regulations. Such disclosure is prohibited unless approval has been granted by the United States which has jurisdiction over the technology.
1.2 Specific authorization must be obtained from DOE before foreign persons at DOE facilities may gain access to unclassified scientific and technical information about certain kinds of nuclear technology that could adversely affect U.S. national security or nuclear non-proliferation objectives.
1.3 A specific license or an exemption must be obtained from the U.S. Department of State before any technical data relating to defense products is disclosed to a foreign person. Technical data that does not relate to defense products may require a Department of Commerce license.
2.1 A foreign person is any person who is not a native or national of the United States unless lawfully admitted for permanent residence in the United States. This includes foreign corporations not incorporated in the United States, international organizations, foreign governments such as diplomatic missions, and representatives of foreign interests.
2.2 Technical data means information of any kind that can be used, or adapted for use, in the design, production, manufacture, utilization, or reconstruction of articles or materials. The data may take a tangible form, such as a model, prototype, blueprint, or an operating manual; or they may take an intangible form, such as technical service. All software is technical data. This does not include information concerning general scientific, mathematical, or engineering principles.
1.1 The export from the United States of all technical data and hardware is prohibited unless and until the appropriate general or specific license, authorizing such export, is established or a validated license is granted. Multiple federal agencies are responsible for export licensing and control. Each agency has jurisdiction for particular types of technology or restricted trade. The most relevant are as follows:
1.1.1 Department of Commerce - Controls the export of all commodities and technical data not regulated by another government agency, under the Export Administration Regulations. These commodities and technical data are referred to as "dual-use" items since they can be used for civilian and military purposes.
1.1.2 Department of State - Controls the export of "defense articles and defense services" under the International Traffic in Arms Regulations.
1.1.3 Nuclear Regulatory Commission - Controls the export of certain nuclear equipment and material under the Atomic Energy Act and the Non-Proliferation Act.
1.1.4 Department of Energy - Controls the export of Special Nuclear Material production technologies and specific nuclear reactor and nuclear weapons technologies under the Atomic Energy Act of 1954.
1.2 These regulations require that a specific license or an exemption be obtained from the appropriate agency having jurisdiction over the commodity or technical data. For any Work for Others project, the principal investigator and/or the program manager is responsible for ensuring that appropriate authority exists to cover all foreign entity activities.
2.1 An export is the sending or taking of hardware or technical data out of the United States in any manner, disclosing or transferring technical data to any foreign person or entity, and/or performing a service on behalf of, or for the benefit of, a foreign person, whether in the United States or abroad. Under this definition, the application abroad of personal knowledge or technical experience acquired in the United States constitutes an export of that knowledge and experience, and such an export must be licensed.
2.2 A foreign person is any person who is not a native or national of the United States unless lawfully admitted for permanent residence in the United States. This includes foreign corporations not incorporated in the United States, international organizations, foreign governments such as diplomatic missions and representatives of foreign interests.
2.3 As defined by the Department of Commerce, technical data means information of any kind that can be used, or adapted for use, in the design, production, manufacture, utilization, or reconstruction of articles or materials. The data may take a tangible form, such as a model, prototype, blueprint, or an operating manual; or they may take an intangible form, such as technical service. All software is technical data.
3.1 The Department of Commerce (DOC) regulations allow export of DOC-governed data under No License Required (NRL) for the following:
3.1.1 publicly available information;
3.1.2 information resulting from fundamental research; and,
3.1.3 educational information.
3.2 Failure to comply with the law could result in substantial fines and penalties for the DOE Management & Operating (M&O) contractor and the Individual, plus jeopardize national security. These penalties could include:
3.2.1 revocation of export privileges;
3.2.2 debarment of the M&O contractor from government procurement;
3.2.3 imposition of heavy fines;
3.2.4 loss of security clearances; and,
3.2.5 imprisonment.
3.3 The United States has controlled exports since 1935. Until recently, export control laws emphasized the control of hardware. However, as the world economy and the technological superiority of the United States change, national interest has increasingly focused on the export control of technical information, or technical data, in addition to hardware.
3.3.1 Hardware export situations are fairly straightforward and include items shipped or hand-carried to foreign destinations.
3.3.2 The most obvious export of technical data is the handling of a technical document to a foreign person in a foreign country. Other methods by which technical data may become exported include: conference papers, domestic or foreign symposia presentations and discussions, software, memoranda, work notes, telex/facsimile, journal articles, computer networking, conversations with foreign persons anywhere, telephone conversations, technical data exposed to foreign visitors, and specifications included in requests for quotations.
In passing export control legislation, Congress listed three general policy reasons for the control of exports.
4.1 National Security - Controls are placed on exports of certain strategic commodities or technology "which would make a significant contribution to the military potential of any other country or combination of countries which would prove detrimental to the national security of the United States."
4.2 Foreign Policy - Export controls are placed on some commodities "where necessary to further significantly the foreign policy of the United States or to fulfill its declared international obligations." These controls may be commodity oriented (i.e., crime control, regional stability) or country specific (i.e., Libya, Iraq, and embargoed countries). Foreign policy controls are also imposed on certain transactions for non-proliferation reasons such as nuclear, chemical and biological, and missile technology.
4.3 Short Supply - Controls are used "where necessary to protect the domestic economy from the excessive drain of scarce materials and to reduce the serious inflationary impact of foreign demand." A "short supply" commodity is one that has been found to be in short supply in the United States and is wanted abroad.
5.1 All exports of hardware, software, or technical data must be authorized by some form of license. In most cases, a general license may be used. General licenses typically apply to "low" technology, non-strategic hardware, or to technical data in the public domain. They are self-qualifying, self-administered licenses. If equipment or technical data qualifies for a general license, all documentation is accomplished within the DOE M&O contractor.
5.2 Validated licenses are issued by DOC and are required to export strategic or short supply commodities to any destination, for other commodities exported to destinations where there are foreign policy considerations, and/or for unpublished technical data exported to certain destinations. Validated licenses typically require three months to process.
6.1 Information that is correspondence, rather than technical data, can be exported without a license. Examples of correspondence are conference registrations, travel plans, visit requests, meeting invitations, letters, etc.
6.2 Information that does not fit the description of correspondence must be exported under other licensing agreements.
The FCPA requires certain U.S. companies to establish accounting and record keeping controls that will prevent the use of "slush funds" and "off-the-books" accounts which have been used in the past by some companies as a means of facilitating and concealing questionable foreign payments. In particular, the FCPA requires companies to establish and keep books, records, accounts and controls which accurately and fairly reflect their transactions and disposition of their assets.
The FCPA makes it illegal for a U.S. company to corruptly offer or give money or anything of value, directly or indirectly through agents or intermediaries, to foreign officials to assist the U.S. company in obtaining or retaining business. Specifically, the FCPA prohibits any use of the mails or means of interstate commerce "corruptly in furtherance of an offer, payment, promise to pay, or authorization of the giving of anything of value" to:
2.1 Any foreign official, which means any officer or employee of a foreign government or member of its armed forces or any department, agency, or instrumentality thereof, or any person acting in an official capacity for or on behalf of any such government or department, agency or instrumentality;
2.2 Any foreign political party or official thereof or any candidate for foreign political office; or
2.3 Any person (including any consultant), while knowing (or being aware of a high probability) that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to any foreign official, any foreign political party or official thereof, or any candidate for foreign political office for purposes of:
2.3.1 Influencing any act or decision in his, her or its official capacity (or in the case of a foreign official, inducing him or her to do or omit to do any act in violation of that official's lawful duty); or
2.3.2 Inducing him, her or it to use his, her or its influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality; in order to assist in obtaining or retaining business for or with, or directing business to, any person.
The FCPA contains certain limited exceptions to the prohibitions set forth in section 2.0 above.
3.1 Facilitating Payments
3.1.1 The FCPA provides that the prohibitions referred to in section 2.0 above do not apply to any facilitating or expediting payment to any foreign official, political party, or party official, "the purpose of which is to expedite or secure performance of a routine governmental action."
3.1.2 Examples of such "routine governmental action" include actions ordinarily and commonly performed by a foreign official in:
3.1.2.1 Obtaining permits, licenses, or other official documents to qualify a person to do business in a foreign country;
3.1.2.2 Processing governmental papers such as visas and work orders;
3.1.2.3 Providing police protection, mail pick-up and delivery, or scheduling inspections associated with contract performance or inspections related to transit of goods across country;
3.1.2.4 Providing phone service, power and water supply, loading and unloading cargo, or protecting perishable products or commodities from deterioration; or
3.1.2.5 Actions of similar nature.
3.1.3 The term "routine governmental action" does not include any decision by a foreign official whether, or on what terms, to award new business to or continue business with a particular party, or any action taken by a foreign official involved in the decision-making process to encourage a decision to award new business or to continue business with a particular party.
3.2 Affirmative Defenses
The FCPA also contains two affirmative defenses for: (a) "reasonable and bonafide" expenditures, such as travel and lodging expenses, incurred by or on behalf of a foreign official, party, party official, or candidate that are directly related to the promotion, demonstration, or explanation of products or services or the execution or performance of a contract with a foreign government or agency thereof; or (b) payments to foreign officials that are lawful under the written laws and regulations of the foreign official's country.
The FCPA's penalties relating to the anti-bribery provisions include fines of up to $2,000,000 per violation for companies and fines of up to $100,000 and/or imprisonment for up to five years per violation for individuals. The FCPA prohibits a company from reimbursing an officer, director, employee or consultant for the amount of the fine involved. Individuals are subject to criminal liability under the FCPA regardless of whether the company has been found guilty or prosecuted for a violation.
U.S. companies and their domestic subsidiaries are subject to the FCPA's anti-bribery provisions. The FCPA does not by its terms apply to payments made by foreign nationals not subject to the jurisdiction of the U.S. on behalf of foreign companies controlled by a U.S. company. In practice, however, this exception makes little difference. The FCPA applies to U.S. citizens and nationals living or working abroad, and to U.S. citizens, nationals and companies and their directors, officers, employees and consultants who authorize such U.S.-controlled foreign companies to make payments proscribed under the FCPA, or who know or are aware of a high probability that such foreign companies will offer, give or promise illegal payments to any foreign official.
6.1 As used in this document, foreign official means any officer or employee of a foreign government, its armed forces, or any department, agency, or instrumentality thereof, or any person acting in an official capacity for or on behalf of such government or department, agency, or instrumentality.
6.2 The prohibition against payments to foreign officials extends to the offering or giving of anything of value where the requisite criminal intent and business purpose are present. The thing of value given can be of any kind, not just money, and there is no minimum amount or threshold of value which must be exceeded before the gift becomes illegal.
6.3 The FCPA's former reason to know standard for vicarious liability was repealed by the Foreign Corrupt Practices Act Amendments of 1988 and was replaced with a defined knowing standard. Knowing requires awareness or a firm belief that the agent, representative, or the other third party is making a corrupt payment, or a substantial certainty that this will occur. The knowledge standard is also met where there is awareness of a high probability that the corrupt payment will be made, unless there is actual belief to the contrary. Willful ignorance (sticking one's head in the sand) is not excused. There may be circumstances in which an officer, director, employee or consultant becomes aware of facts which, while not of themselves causing the individual either to know or believe that a foreign official will be the ultimate recipient of a bribe, should cause suspicion. In these circumstances, if the individual fails to take steps to allay suspicion, he or she risks prosecution under the FCPA since the officer, director, employee or consultant could be alleged to have had the requisite knowledge for a violation.
6.4 Although the FCPA does not define government instrumentality, the term should be construed to include entities wholly- or partially-owned by foreign governments and specially chartered private corporations entrusted with quasi-governmental functions, as well as organizations such as INTELSAT and ARABSAT, because the majority of the membership of those organizations is composed of foreign governments and quasi-governmental entities.
Contact: David W. Bradford, fdb@ornl.gov
Date posted: February 23, 2001 (sas)