Perspectives on Foreign Ownership, 

Control or Domination Issues 

and the Global Nuclear Market

Ellen C. Ginsberg

Vice President, General Counsel and Secretary

Nuclear Energy Institute

NRC Public Meeting on Foreign Ownership of Nuclear Power Plants

Rockville, Maryland

June 19, 2013
Overview

• Why is this issue important?

• Can the NRC comply with Atomic Energy Act section 

103 d. and also read it in context?

• Does the AEA prohibit issuing a license to an applicant 

that is 100 percent indirectly foreign owned?

• What is the basis for the NRC assessment of a negation 

action plan? 

• Should the regulatory framework provide an 

opportunity to resolve an FOCD issue after issuance of 

a license?

• Would there be any limits on FOCD grounds?

• Should the guidance in the SRP be updated?

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In Brief...

• Why is this issue important? FOCD determinations have the 

potential to stymie new plant development; safety, security and 

economic benefits are derived from participation by certain 

foreign entities.

• Can the NRC comply with the AEA section 103 d. and also read it in 

context? Yes.

• Does the AEA prohibit issuing a license to an applicant that is 100 

percent indirectly foreign owned? No.

• What should be the bases for the NRC assessment of a negation 

action plan? Whether the foreign owner has control over nuclear 

safety or security, operational decisions, or special nuclear 

material. 

• Should the regulatory framework provide an opportunity to resolve 

an FOCD issue after issuance of a license? Yes.

• Would there be any limits on FOCD grounds? Yes.

• Should the guidance in the SRP be updated? Yes.

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FOCD Reviews Should Not Unnecessarily Impede New 

Nuclear Plant Development or Changes in Ownership 

• Application of NRC FOCD requirements is a generic 

issue affecting all new power reactor licensees and 

OL transfers involving foreign participation

• To appropriately structure participation in new and 

existing reactor projects, licensees, applicants, and 

prospective investors need to know with reasonable 

certainty what levels and types of foreign investment 

are acceptable and what specific negation actions 

are required to address FOCD restrictions in the 

United States

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Benefits of Foreign Participation/Investment 

in the Commercial Nuclear Sector

• Participation in the U.S. nuclear industry by 

foreign investors, vendors, and experienced 

operators provides significant benefits to 

public health and safety, and the economy

- Foreign entities can enhance domestic nuclear 

development and operations, including sharing 

successful approaches to procurement, 

construction, and operations 

- Foreign capital provides direct dollars to critical 

infrastructure and the U.S. economy 

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Atomic Energy Act Section 103.d

• 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. In any event, no license may be 

issued to any person within the United States if, in 

the opinion of the Commission, the issuance of a 

license to such person would be inimical to the 

common defense and security or to the health and 

safety of the public. (Emphasis added)

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“Fresh Look” Begins with Legislative History and 

Early Commission Precedent 

• Limited legislative history, but Congress chose not to 

impose a percentage restriction on foreign 

ownership in the AEA

• General Electric Company and Southwest Atomic 

Energy Assoc. (“SEFOR”) established an important 

precedent and continues to provide appropriate 

guidance

- The Commission reviewed the legislative history and held 

that “the words ‘owned, controlled or dominated’ refer to 

relationships where the will of one party is subjugated to 

the will of another,” and that Congress intended to 

prohibit such relationships “where an alien has the power 

to direct the actions of the licensee” (Emphasis added)

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SEFOR Precedent

• The SEFOR decision clarifies that the words “owned, 

controlled, or dominated” were meant to be read as 

one integrated concept -- not as separate restrictions

- The focus was not on ownership per se, but on 

preventing foreign “control or domination” of matters 

involving nuclear safety and security 

- “[t]he [alien control] limitation should be given an 

orientation toward safeguarding the national defense 

and security”

• NRC’s current SRP adopts the SEFOR position and directs 

NRC review to make the FOCD determination “with 

orientation toward common defense and security”

- Allows use of Negation Action Plan (NAP)

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FOCD Analysis

• Literal approach: “owned, controlled, or

dominated” focuses on “owned” in isolation

• Integrated approach: “owned, controlled, or 

dominated” are related in the FOCD construct

- Consistent with legislative history and SEFOR

- Consistent with NRC precedent granting licenses to 

foreign-owned minority owners

- Consistent with FOCI treatment under the NISPOM

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Reconciling the AEA 

and 100 percent Indirect Ownership

• Under SEFOR, AEA should be interpreted to focus on the 

requirement that no license be granted unless applicant 

is a U.S. entity 

- Subjugation of will is the operative concept for FOCD review

- Statute does not prohibit 100 percent indirect foreign 

ownership 

- Key inquiry is whether there is/can be control or domination 

through rights and powers 

• SRP allows more than 50 percent ownership and arguably 

up to 99 percent; same logic extends to 100 percent 

ownership so long as foreign control is mitigated

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Commission Should Establish Graded Approach

• Home country of ultimate owner should be heavily considered and 

should be basis for significantly reducing NAP requirements

- Foreign entities engaged in the global nuclear market from nations that 

support international safety and safeguards protocols pose little or no risk to 

any aspect of U.S. national security 

- Nations presumed to present proliferation or other national security concerns 

are listed as embargoed or restricted destinations in 10 CFR 110.28 and 110.29

• There is NO basis to assume 

- Foreign owners or investors would inappropriately exert influence that would 

circumvent negation measures

- U.S. citizens at management levels and below would violate commitments and 

U.S. laws due to foreign owner influence (e.g., licensed operators)

- Licensee programs designed to detect, among other issues, inappropriate 

foreign influence (QA, Employee Concerns programs, corrective action 

programs) will be ineffective

- NRC’s extensive oversight of plant operations/safety indicators would fail

- CFIUS would abdicate its responsibility 

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SRP 3.2 

Guidance on Applying Basic Limitations

• Add statements to more directly recognize context in 

which FOCD limitations would apply

- Nuclear industry is global

- Nuclear technology information is protected by 

international safeguards (e.g., Nuclear Suppliers Group 

Guidelines, treaties including the Treaty on the NonProliferation of Nuclear Weapons)

- Participation in the U.S. nuclear industry by foreign 

investors, vendors, and experienced operators provides 

significant benefits

• Experience can promote public health and safety 

• Foreign capital provides direct benefits to the domestic economy

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SRP 3.2

Guidance on Applying Basic Limitations

• Clarify that FOCD analysis is based on totality of the 

circumstances

- The Commission has long emphasized the need to “take 

into consideration the many aspects of corporate existence 

and activity,” and that “[t]he ability to restrict or inhibit 

compliance with security and other regulations of the 

[Commission], and the capacity to control the use of 

nuclear fuel and to dispose of special nuclear material 

generated in the reactor, would be of greatest 

significance.”

• Integrated approach should focus on indicia of control 

of nuclear operations with orientation to national 

security concerns 

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SRP 3.2

Guidance on Applying Basic Limitations

• Establish “safe harbor” or presumption 

- Foreign entity engaged in the global nuclear market from 

nation that supports international safety and safeguards 

protocols and that indirectly owns up to 100 percent of a 

licensee

- Foreign entity owning less than 10 percent of nuclear 

operator (absent special voting rights) 

- Foreign entity owns 100 percent of non-operating owner 

that holds less than a 50 percent interest in the nuclear 

plant

- Foreign entity owns or finances the nuclear plant where 

the foreign entity is also the reactor vendor

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SRP 3.2

Guidance on Applying Basic Limitations

• Ownership may be one indicator of potential 

control, but is not dispositive

- Delete language suggesting 100 percent indirect 

foreign ownership is prohibited

- Clarify that ownership alone does not confer control 

over nuclear safety and security matters, and related 

issues can be mitigated through a negation action plan

• Clarify that ownership of outstanding shares of a licensee 

must be interpreted in light of the corporate governance 

structure 

- Clarify that foreign debt financing does not pose FOCD 

concerns if no special control rights are conferred

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SRP 3.2

Guidance on Applying Basic Limitations

• Confirm the use of a license condition as 

part of a Part 50 or 52 license 

- Provide for issuance of a license with conditions 

establishing objectively verifiable criteria that will be 

implemented to address potential foreign 

ownership, control, or domination issues prior to 

activities with safety, security, or proliferation 

implications (e.g., certain construction activities, 

receipt of special nuclear material, initial plant 

operation)

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Perspectives on Foreign Ownership, 

Control or Domination Issues 

and the Global Nuclear Market

Ellen C. Ginsberg

Vice President, General Counsel and Secretary

Nuclear Energy Institute

NRC Public Meeting on Foreign Ownership of Nuclear Power Plants

Rockville, Maryland

June 19, 2013