Foreign ownership, control or 

domination of U.S. nuclear 

reactors.

Public meeting

U.S. Nuclear Regulatory 

Commission

June 19, 2013

Michael Mariotte

Nuclear Information and Resource Service
The Atomic Energy Act is the law

• The Atomic Energy Act states in plain language, 

“No license may be issued to an alien or any 

corporation or other entity if the Commission 

knows or has reason to believe it is owned, 

controlled, or dominated by an alien, a foreign 

corporation, or a foreign government.” 

(emphasis added)

• Section 103(d), 42 USC 2133
NRC guidance recognizes 100% 

foreign ownership is illegal

“Where an applicant that is seeking to acquire a 

100% interest in the facility is wholly owned by a 

U.S. company that is wholly owned by a foreign 

corporation, the applicant will not be eligible for a 

license, unless the Commission knows that the 

foreign parent’s stock is ‘‘largely’’ owned by U.S. 

citizens.”

Final Standard Review Plan on Foreign Ownership, Control and 

Domination, September 28, 1999
NRC does not have authority to 

change the law

• 100% foreign ownership of a U.S. reactor is 

illegal and will remain so unless and until 

Congress changes the law.

• There is no distinction in the law between 

“direct” and “indirect” foreign ownership.

• NRC’s request for comments on FOCD issues 

“involving up to and including 100 percent 

indirect foreign ownership” is inappropriate. 

100% is illegal in every case.
“Indirect” foreign ownership is a 

false construct

In the case of UniStar Nuclear, UniStar is a U.S. corporation 

100% owned by Electricite de France.

There is no tangible difference between a “U.S.” corporation 

100% owned by a foreign corporation and a foreign corporation. 

The result is still a foreign-owned, controlled and dominated 

entity.

There are a myriad of potential corporate structures; the NRC 

must be alert and on-guard to protect against foreign control or 

domination. The NRC must ensure it has sufficient flexibility 

and authority to meet the demands of the Atomic Energy Act.
NRC Federal Register notice inappropriately 

focuses on ownership issues; control/domination 

are equally important.

• The NRC’s Federal Register notice focuses solely on the 

amount of foreign ownership, as if that were the only 

issue involved in the FOCD context.

• In fact, the AEA and legislative history indicate that 

control/domination are equally important. As every 

business student in the country already knows, either 

can be achieved with minority ownership, much less 

100%.

• It’s a three-legged stool—with ownership, control, 

domination each comprising one essential leg.
Legislative history indicates clear concern about any 

significant foreign involvement in U.S. reactor projects.

• Original language said no reactor could be owned by 

foreign interests, and set threshold at 5% ownership.

• Final version dropped 5% threshold and added “control 

or dominate.”

• Witnesses argued, with no Congressional dissent, that 

FCC Act should be used as precedent, which set (and still 

sets) a maximum of 25% foreign ownership.
NRC’s current guidance on FOCD issues is overly 

permissive and has no basis in legislation.

• NRC has bent over backwards—too far backwards—to 

allow foreign involvement in U.S. reactor projects, 

contrary to the Atomic Energy Act.

• Foreign ownership above 50% is de facto illegal; the 

burden is on applicants to show otherwise.

• Intent of AEA is that any significant foreign involvement 

should be examined and probably rejected.
Control and/or domination can be achieved with 

minority ownership

• For publicly-traded corporations, control and 

domination can be achieved with minority ownership, 

which is why FCC Act, which AEA was modeled after, 

wisely limits foreign ownership to 25%.

• Even for privately-held corporations, control and 

domination can be achieved with minority ownership, or 

at most 50-50 ownership, depending on other factors.
Control or domination does not require full 

ownership—part 2

• In UniStar’s case, EDF owned 50%, plus a 

significant portion of its partner, Constellation 

Energy. EDF is owned by French government. In 

addition, reactor was to be provided by French 

government entity Areva. This was clear FOCD 

violation, even before EDF owned 100% of the 

project.
NRC’s guidance does need improvement.

• NRC guidance on FOCD issues should provide 

clarity and transparency for public and 

applicants alike.

• Clarity and transparency should include 

definitions for “control” and “dominate,” which 

currently are lacking.

• Guidance should make clear that anything over 

50% foreign ownership will be considered illegal 

absent other mitigating factors. Control or 

domination can occur with less ownership.
NRC’s guidance does need improvement, 

continued.

• Corporate structures are frequently not 

transparent and frequently very complex. The 

burden must always be on applicants to 

demonstrate that they do not run afoul of FOCD 

restrictions; not on intervenors to try to make 

sense of convoluted corporate structures.

• NRC guidance should reflect that the burden is 

on applicants. In cases of domestic ownership, 

this would be no burden.
Why is FOCD important—part 1?

• Some in industry argue that with increasingly 

multinational nuclear industry, FOCD issues are 

no longer important.

• This is not the case. Reason #1: it is the law.

• Reason #2: reactors are licensed for 40 years 

and routinely receive licenses for 20 years more. 

There is considerable talk about extra license 

periods of 20 more years.
Why is FOCD important—part 2?

• 70 years ago—within the possible lifetime of new 

reactors--we were at war with two of our closest 

current allies, Germany and Japan. In fact, we 

dropped nuclear bombs on one of those nations.

• 40 years ago, we were BFFs with the Shah of 

Iran, and tried to sell Iran nuclear reactors.

• Does anyone really want China to own, control 

or dominate nuclear reactors on U.S soil?

• The AEA prohibition on FOCD still makes sense 

and must be enforced.
Michael Mariotte

Executive Director

301-270-6477

nirsnet@nirs.org

www.nirs.org