Where Industry and Security Intersect
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The U.S. Government maintains controls on exports of nuclear-related items under the authority of the Nuclear Nonproliferation Act of 1978 (NNPA) to further the United States ’ nuclear nonproliferation policy. Although these controls are primarily based on the NNPA, and therefore are not subject to this report, BIS has included information on the controls because they usually are grouped with other nonproliferation controls referenced in this report. Controls based on nuclear end-uses and end-users are maintained under the authority of Section 6 of the Export Administration Act (the Act), as part of the Enhanced Proliferation Control Initiative (EPCI). EPCI controls are described in detail in Chapters 6, 7, and 8 of this report.
Licensing Requirements and Licensing Policy
The Department of Commerce requires a license for the export of the following items:
commodities, related technology, or software that could be of significance for nuclear explosive purposes (i.e., the Nuclear Referral List included in the Commerce Control List); and
- any commodity, related technology, or software that the exporter knows, or has reason to know, will be used directly or indirectly in any of the following activities:
– nuclear explosive activities including the design, development, manufacture, or testing of nuclear weapons or nuclear explosive devices;
– unsafeguarded nuclear activities, including the design, development, or manufacture of any nuclear reactor, critical facility, facility for the fabrication of nuclear fuel, facility for the conversion of nuclear material from one chemical form to another, or separate storage installation where there is no obligation to accept International Atomic Energy Agency safeguards at the facility or installation, when it contains any source of special fissionable material, or where any such obligation is not met; or
– safeguarded and unsafeguarded nuclear activities, including the design, construction, fabrication, or operation of the following facilities, or components for such facilities: (i) facilities for the chemical processing of irradiated special nuclear or source materials; (ii) facilities for the production of heavy water; (iii) facilities for the separation of isotopes of source and special nuclear material; or (iv) facilities for the fabrication of nuclear reactor fuel containing plutonium.
The Department of Commerce may inform the exporter that a license is required for any item subject to the Export Administration Regulations when there is an unacceptable risk of use in or diversion to any of the activities described above.
Factors considered in reviewing applications for licenses include:
Section 17(d) of the Export Administration Act and Section 309(c) of the NNPA provide that: (1) nuclear nonproliferation controls do not expire annually and determinations to extend them are thus not required; and (2) the criteria and other factors set forth in Sections 6(b) through 6(f) of the Act are not applicable to these controls. The Department of Commerce is, therefore, notifying Congress that these controls continue in effect. These controls further the nuclear nonproliferation policy of the United States and have made it more difficult for nations to acquire sensitive nuclear technology or equipment.
These controls support U.S. international nuclear nonproliferation obligations. The United States is a member of the multilateral Nuclear Suppliers Group (NSG). The NSG, which has 45 members, sets forth export control guidelines applicable to a list of nuclear-related dual use items (see Appendix II for a complete list of regime members). The United States also is a member of the Zangger Committee, a multilateral group formed in the early 1970s to establish guidelines for the export control provisions of the Nuclear Nonproliferation Treaty. The United States regularly consults with non-NSG members to coordinate export controls for nuclear nonproliferation purposes as well.
The Departments of Commerce and Energy, in consultation with the Departments of State and Defense and the Nuclear Regulatory Commission, regularly review and revise the list of U.S. dual-use items controlled for nuclear nonproliferation reasons. This list is referred to as the Nuclear Referral List (NRL), and fulfills the United States ’ international commitments under the NSG. During Fiscal Year2006, there were no additions or updates to the NRL.
On August 1, 2006 , BIS denied the export privileges of Asher Karni for a period of ten years under Section 11(h) of the Export Administration Act. On August 4, 2005 , Karni was convicted of illegally exporting and attempting to export two oscilloscopes and triggered spark gaps, items controlled for nuclear nonproliferation reasons, from the United States to Pakistan via South Africa without the required export licenses. Karni was sentenced to three years of imprisonment and two years of supervised release. In addition, BIS denied the export privilieges of Pakland PME Corporation and Humayun Khan for ten years, as related parties to Karni, based on their role in the conspiracy with Karni and his company, Top Cape Technology, to divert U.S. origin goods to Pakistan .
In an October 23, 2006 , Federal Register notice (71 FR 62065), the Department of Commerce solicited comments from industry on the effectiveness of U.S. foreign policy-based export controls. In addition, comments were solicited from the public via the BIS website. Comments from the Department’s six Technical Advisory Committees and the President’s Export Council Subcommittee on Export Administration are solicited on an ongoing basis and are not specific to this report. The comment period closed on November 22, 2006 , and three comments were received. A detailed review of all public comments received can be found in Appendix I.
14 The analysis, required by law, differs for nuclear nonproliferation controls. It is governed by the Nuclear Nonproliferation Act of 1978 (NNPA). Therefore, the headings under this section differ from the rest of the report.