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THE FUTURE OF U.S. INTERNATIONAL NUCLEAR

COOPERATION

HEARING

BEFORE THE

SUBCOMMITTEE ON TERRORISM, 

NONPROLIFERATION AND TRADE

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED ELEVENTH CONGRESS

SECOND SESSION

MAY 6, 2010

Serial No. 111–100

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

HOWARD L. BERMAN, California, Chairman 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

BRAD SHERMAN, California 

ELIOT L. ENGEL, New York 

BILL DELAHUNT, Massachusetts 

GREGORY W. MEEKS, New York 

DIANE E. WATSON, California 

RUSS CARNAHAN, Missouri 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

MICHAEL E. MCMAHON, New York 

THEODORE E. DEUTCH, Florida 

JOHN S. TANNER, Tennessee 

GENE GREEN, Texas 

LYNN WOOLSEY, California 

SHEILA JACKSON LEE, Texas 

BARBARA LEE, California 

SHELLEY BERKLEY, Nevada 

JOSEPH CROWLEY, New York 

MIKE ROSS, Arkansas 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

JIM COSTA, California 

KEITH ELLISON, Minnesota 

GABRIELLE GIFFORDS, Arizona 

RON KLEIN, Florida 

ILEANA ROS-LEHTINEN, Florida 

CHRISTOPHER H. SMITH, New Jersey 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

DANA ROHRABACHER, California 

DONALD A. MANZULLO, Illinois 

EDWARD R. ROYCE, California 

RON PAUL, Texas 

JEFF FLAKE, Arizona 

MIKE PENCE, Indiana 

JOE WILSON, South Carolina 

JOHN BOOZMAN, Arkansas 

J. GRESHAM BARRETT, South Carolina 

CONNIE MACK, Florida 

JEFF FORTENBERRY, Nebraska 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

BOB INGLIS, South Carolina 

GUS BILIRAKIS, Florida 

RICHARD J. KESSLER, Staff Director 

YLEEM POBLETE, Republican Staff Director 

SUBCOMMITTEE ON TERRORISM, NONPROLIFERATION AND TRADE

BRAD SHERMAN, California, Chairman 

GERALD E. CONNOLLY, Virginia 

DAVID SCOTT, Georgia 

DIANE E. WATSON, California 

MICHAEL E. MCMAHON, New York 

SHEILA JACKSON LEE, Texas 

RON KLEIN, Florida 

EDWARD R. ROYCE, California 

TED POE, Texas 

DONALD A. MANZULLO, Illinois 

JOHN BOOZMAN, Arkansas 

J. GRESHAM BARRETT, South Carolina 

DON MACDONALD, Subcommittee Staff Director 

JOHN BRODTKE, Subcommittee Professional Staff Member 

TOM SHEEHY, Republican Professional Staff Member 

ISIDRO MARISCAL, Subcommittee Staff Associate 

(III)

C O N T E N T S 

Page

WITNESSES 

Mr. Vann H. Van Diepen, Acting Assistant Secretary, Bureau of International 

Security and Nonproliferation, U.S. Department of State ................................ 12

Mr. Leonard S. Spector, Deputy Director, James Martin Center for Nonproliferation Studies, Monterey Institute of International Studies ................. 37

Mr. James A. Glasgow, Partner, Pillsbury Winthrop Shaw Pittman LLP (Representing The Nuclear Energy Institute) ........................................................... 51

Mr. Henry Sokolski, Executive Director, Nonproliferation Policy Education 

Center .................................................................................................................... 61

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Mr. Vann H. Van Diepen: Prepared statement ..................................................... 14

Mr. Leonard S. Spector: Prepared statement ........................................................ 40

Mr. James A. Glasgow: Prepared statement ......................................................... 53

Mr. Henry Sokolski: Prepared statement .............................................................. 64

APPENDIX 

Hearing notice .......................................................................................................... 80

Hearing minutes ...................................................................................................... 81

(1)

THE FUTURE OF U.S. INTERNATIONAL 

NUCLEAR COOPERATION 

THURSDAY, MAY 6, 2010

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON TERRORISM,

NONPROLIFERATION AND TRADE,

COMMITTEE ON FOREIGN AFFAIRS, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:05 a.m. in room 

2172, Rayburn House Office Building, the Honorable Brad Sherman, (chairman of the subcommittee) presiding. 

Mr. SHERMAN. I want to thank our witnesses for being here. As 

the world meets in New York to discuss the future of the NPT, concerns about climate change and the unreliable price of fossil fuel 

have created perhaps a renaissance in nuclear power. In fact, there 

was a noticeable up tick in interest in nuclear power. Unfortunately, some of this has been in the Middle East where some of the 

announcements seem to emulate Iran—that is, to announce that 

the country is basically going to develop nuclear weapons under the 

transparent pretence of developing nuclear power. 

Indeed, there is a right in the NPT to the peaceful use of nuclear 

power under Article 4. Unfortunately, under the interpretation of 

many, this right extends to the full fuel cycle, to enrichment and 

reprocessing, providing of course the country is in compliance with 

its NPT obligations. This would allow many dozens of countries to 

come right up to the threshold of nuclear weapons with the hope 

and expectation that they will not cross that threshold. 

It raises some questions. Are the current safeguard techniques 

and technologies of the IAE up to the task? Is enrichment and reprocessing capacity—does that take you so close to nuclear weapons that the final steps could take place more quickly than we 

could possibly detect? Are certain activities essentially 

unsafeguardable? 

The current multilateral solution, now approaching consensus at 

the Nuclear Suppliers Group, is to say that while you may have the 

right to enrichment and/or reprocessing, no one is required to provide you with the technology to provide such a ‘‘right’’ and hopefully no one in the Nuclear Suppliers Group will provide such technology unless there is adequate safeguards are met. This approach 

would represent a marked improvement over the current guidelines 

in the Nuclear Suppliers Group, but it does not address indigenous 

development in black and gray market acquisitions of this repressing technology. 

2

I would hope that the United States would begin to take the position that the full fuel cycle is not the entitlement of non-nuclear 

states where they have no legitimate economic reason for pursuing 

such capacity. For example, Iran’s desire or stated desire to enrich 

the amount of power they are planning to generate, and what they 

could generate from their own domestic uranium deposits, is like 

building a slaughterhouse and saying the reason is you want a 

sandwich. Full fuel cycle for no logical economic reason is the development of the nuclear weapon under the cover of Article 4, and 

certainly the full fuel cycle should not be available to those who 

have already violated the NPT. 

Under current U.S. law, civil nuclear cooperation agreements, 

known as 123 agreements, provide a framework for nuclear cooperation and commerce between the United States and foreign 

states. Normally these are negotiated by the President, submitted 

to Congress and become active operative 90 days after such submission. 

There is this process of a congressional right of disapproval, 

which is what we do in Congress when we want to give ourselves 

the illusion that we have some influence beyond merely advisory 

influence on foreign affairs. The fact is, a resolution of disapproval, 

as I understand Section 123, doesn’t even have to reach the floor. 

But even if it does, and even if it were passed overwhelmingly by 

both Houses of Congress, it is subject to a veto, and then one-third 

of either House constituting less than one-sixth of congressional 

opinion could block the resolution of disapproval. 

Now, India was a special case where we needed affirmative approval and in that situation I think Congress acted responsibly. 

Most recently we saw the US–UAE civil cooperation agreement go 

into force. I opposed that agreement initially, not so much because 

of its text, but because of UAE’s lack of export regulation enforcement. Notwithstanding the comprehensive legislation adopted 

there in 2007, the regulatory framework remains pretty much nonexistent. 

The administration was forced by Congress to re-negotiate that 

agreement, and to provide that we would not see enriching done by 

UAE and I think that that was a very good change and should be 

a model for future agreements. 

Another condition in the UAE agreement was a binding commitment from the UAE to implement the additional protocol to provide 

for greater inspection by the IAEA. This, among other things, 

grants the IAE access to undeclared facilities, given that any nuclear weapons development carried out by non-weapon states would 

have to be undeclared. The additional protocol seems necessary for 

any reasonable regime of PT compliance. 

Former IAEA Director Albarte has stated that the additional protocol is necessary for the IAEA to ensure that all the countries’ nuclear activities are dedicated to peaceful purposes. The U.S. should 

require nations to implement the additional protocol as part of 123 

agreements. 

Countries that sell nuclear technology and countries to which we 

sell our nuclear technology should restrict access to their nuclear 

facilities and to nuclear technology by preventing nationals of such 

countries as Iran, North Korea and Syria from having access. 

3

Those who have recently violated or are in violation of the NPT 

should not be able to learn nuclear technology at the hands of 

those who have been supplied by the United States. 

And we have to acknowledge that U.S. concerns over proliferation puts U.S. suppliers at a disadvantage. Our own industry base 

might suffer as we unilaterally impose restrictions on civil cooperation—restrictions that I believe are necessary for global security—

and other countries with similar capacities may not impose such 

restrictions. We must convince non-nuclear capable countries to 

adopt similar controls for nuclear technology. We have to explore 

what leverage we have to get them to join us in this. 

U.S. nonproliferation concerns are not the only disadvantage suffered by U.S. companies. Major competitors for U.S. firms in this 

industry are at least partially state-owned, and so they enjoy not 

only government backing but sovereign immunity protections 

against liability for accidents. U.S. firms cannot claim sovereign 

immunity. Under the auspices of the IAEA, a Convention on Supplementary Compensation for nuclear damage—I will refer to it as 

a supplementary convention—was negotiated to create a global 

legal framework for liability in nuclear accidents. Ratification and 

implementation of this convention helps to level the playing field 

for American businesses, and it must be a necessary condition for 

nuclear cooperation. 

When the State Department goes before the American people and 

says we are entering into a 123 agreement to provide jobs, and 

then signs an agreement in which America gets 0.0 jobs because 

the signing country has not implemented the supplementary compensation for nuclear damage, then the American people have been 

deliberately misled by their own government. 

And what we see with India is that we crashed down the door 

to get India what it wanted, and as of now we are eligible for 0.0 

jobs. Now I am sure the administration will tell us that in due time 

the Indian Parliament will pass the necessary legislation, and I can 

understand in the wake of Bhopal the reluctance of the Indian parliamentarians to do it, but for us to open the door only so that jobs 

can go to France and Russia is a disservice to the American people; 

it resembles—we had a very famous American diplomat here before 

us who was bragging about how as ambassador he had put on the 

grounds of the U.S. Embassy Chrysler automobiles to entice people 

as part of a show, to entice people to buy American cars, only to 

tell us that one of those cars was the Crossfire—a car that was 99 

percent European built, and 99 percent European value added. Attention at the State Department to the economic needs of the 

American people needs to be increased. 

Now, I would like to see us adopt legislation so that we don’t 

have this charade of congressional disapproval as the only way that 

Congress can pretend to have a role in 123 agreements. Instead, 

we should describe a model agreement which should include the 

Convention on Supplementary Compensation, the additional protocol, and a commitment by the other country not to enrich and reprocess, and a commitment by the other country to limit third 

party access to plants and information. Those four elements ought 

to be part of any model, and if the treaty matches that model, then 

the current system of congressional review seems adequate. 

4

But where it falls outside that model, then it should require affirmative votes in the House and in the Senate; only then will Congress play the role set forth in Article 1 of the American Constitution. 

I look forward to hearing from our witness, but with even greater 

intensity I look forward to hearing from my colleagues and their 

opening statements, starting with the ever eloquent Mr. Royce. 

Mr. ROYCE. Thank you, Mr. Chairman. 

I would like to make a note before I start my statement that we 

received the administration’s prepared testimony less than 1 hour 

before this hearing, and when I think back about how long this 

hearing has been scheduled—weeks at least on my calendar—it 

really does reduce the effectiveness of the hearing when the members and when the staff cannot review the administration position. 

In over 10 years of chairing or serving as ranking member, this 

is the worst showing I have seen, and I just wanted to make note 

of it, Mr. Chairman. 

Mr. Chairman, nuclear technology is spreading. It is spreading 

very rapidly. By one estimate, over 500 nuclear plants are under 

construction or are planned worldwide. Nuclear energy certainly 

has its advantages. Its risks are substantial though, especially as 

developing countries utilize that technology. The threats of terrorist attacks against nuclear facilities, nuclear theft, and states 

developing nuclear weapons, as is Iran, are all too real. This week 

the NTP review conference kicked off. For too long the NPT’s Article 4, so-called ‘‘right’’ to possess all elements of nuclear technology, 

particularly the fuel cycle, has gone unchallenged. This gutting of 

the NPT gives Iran a leg up as it relentlessly develops its uranium 

enrichment capacity, placing nuclear weapons within its very close 

reach. 

This dims my enthusiasm for the spread of nuclear energy. The 

Obama administration, like the previous ones, has unwisely conceded any NPT states the right to take this reckless enrichment 

course. Instead the administration is seeking bilateral agreements 

with countries, many in the Middle East, that they won’t enrich 

uranium. This is what the Bush administration did with the centerpiece being the Nuclear Cooperation Agreement with the United 

Arab Emeritus in which the UAE commits not to enrich. 

While the goal is good, but other countries are balking, and these 

bilateral agreements are piecemeal. Some exporters of nuclear technology are sure to work around them. The administration must do 

a better job at driving the Nuclear Suppliers Group to restrict the 

export of sensitive technology. 

Meanwhile, the volatile Middle East is racing toward 

nuclearization. Most every country in the region is developing or 

has expressed interest in developing nuclear facilities. The motives 

are mixed, but surely the prospect of nuclear armed Iran looms 

large. Addressing Iran in a very forceful way, and you and I serve 

on that conference committee, Mr. Chairman, would certainly take 

steam out of this rush. 

The process for approving nuclear cooperation agreements puts 

Congress in the cheap seats. An agreement is okayed unless both 

congressional bodies act to disapprove, and get a veto proof margin 

at that. The ranking member of the full committee introduced legVerDate 0ct 09 2002 18:16 Aug 04, 2010 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 F:\WORK\TNT\050610\56335 HFA PsN: SHIRL
5

islation earlier this Congress to reverse that process, requiring congressional approval, which I have co-sponsored. 

I am alarmed that the administration is pushing to approve a 

nuclear cooperation agreement with Russia. That agreement was 

pulled nearly 2 years ago. With Russia resisting meaningful sanctions on Iran, and its role in Iran’s nuclear and missile programs, 

the timing could not be worse. The provision is now being 

conferenced in the Iran sanctions bill. 

From my standpoint, I would conclude, Mr. Chairman, by saying 

what I said at the conference committee opening last week. To pass 

an Iran sanctions bill that this administration can eviscerate 

through maladministration, as it and others have done with existing Iran sanctions, would be worse than doing nothing. To merely 

pretend that we did something would be a harmful charade. The 

conference must produce dramatic, severe sanctions. The time for 

calibration is long gone. So it is very unfortunate that the administration is pressing for waivers and carve-outs to gut the bill. 

Thank you, Mr. Chairman. 

Mr. SHERMAN. I join in the ranking member’s concern for the administration’s attempt to gut the new Iran sanctions bill, and point 

out that a State Department that has systematically and intentionally violated America’s existing sanctions laws for the purpose 

of protecting Tehran’s business partners should not be given much 

weight as we craft new legislation. 

With that I yield to the vice chair of the committee, Mr. Scott. 

Mr. SCOTT. Thank you, Mr. Chairman, and it is a pleasure to be 

here as always on this most urgent issue. 

The topic of today’s hearing on the United States nuclear cooperation agreements is of the utmost importance as the United 

States and our allies continue to assess and respond to the everchanging geo-political climate. It is also of particular interest to me 

as a member of the NATO Parliamentary Assembly, and as the 

general rapporteur of NATO’s Science and Technology Committee, 

a nuclear security and weapons of mass destruction. 

We live in a nation that is in the eyes of billions of people to be 

the quintessential example of what it means to be in the first 

world, to be or not a remaining super power. We live in a world 

where in its increasing global population as well as the exponentially increasing energy demands require to achieve and maintain 

an industrialized standard of living has placed a strain on our fossil fuel supply; namely, coal and petroleum-based products. These 

sources are indeed finite—no question. At some point they are 

going to run out. As a matter of fact, many believe that we have 

already reached the peak of our supply. 

And so we must lead the way in providing guidance and assistance to the developing world in their quest to raise their standard 

of living of their people, to greater access to technology, and the energy resources required to do so. To deny them such would be hypocritical and, quite honestly, a human rights travesty. 

To provide such leadership is to all of our best interest but it 

must be it is critical that it be the right leadership. We must lead 

as all great leaders must—responsibly. Beyond the simple recognition that these resources are indeed finite, that they are going to 

rather quickly run out, lie other concerns that we must address. 

6

We need only look to the terrible incident off the Gulf of Mexico 

to become aware of the environmental devastation that can occur, 

and in the process realize that what these incidents occur it is not 

to the recognition of the loss of impact on our environment, but 

again quickening the pace for us to run out of these valuable resources. 

We must also be aware of the global security impact that access 

or lack thereof to all the revenue from its sale can have on rogue 

nations that support terrorism. Indeed, keeping nuclear fossil material from being in the hands of terrorists and nuclear weapons in 

the hands of terrorists is indeed our number one issue and concern. 

We witness almost monthly now incidents which tell us that they 

are in line, lined up, young, radical, and in most cases now citizens 

of the United States. We have got to act much more quickly. 

And as I said, the day will come when fossil fuels reliance will 

follow the way of the dinosaur, with extinction. The choice that we 

face, however, is whether such an extinction, like with the dinosaur, is abrupt and globally devastating or whether through the 

right kind of leadership we can evolve to a cleaner, better, cheaper 

alternatives that will bring all of us a brighter tomorrow. 

Nuclear energy has had many ups and down in both its perception and its implementation. There are, of course, legitimate concerns. Since the 1970s, no nuclear power plant has been constructed in the United States. Think about that. Since the 1970s, 

and this is largely due to the construction of such plants typically 

costing far more than initially estimated—at least historically 

speaking—as well as public perceptions regarding safety, transportation of waste, and its disposal and the fear of inadequately secured material again falling into the hands of terrorists, those who 

wish to develop and use nuclear weapons or a dirty bomb. 

With our hearing today, we must address all three points in 

order to better assess whether they are still relevant today, and if 

nuclear energy is a responsible vital option to decrease not only our 

reliance on fossil fuels but also the developing world’s growing reliance on them. If the transition to a viable alternative does not 

occur soon, we as Americans, as well as mankind as a whole, will 

experience devastating growing pains rather than the smart 

growth that we are capable of achieving. 

Nor can we leave this discussion without having on the table the 

situation facing us with Iran. You know, I was in New York on 

Monday sitting in the audience when the President of Iran 

Ahmadinejad came forward and spoke. It was amazing as I 

watched the strut as he took the podium. There was this sense of 

cockiness. There was this sense of throwing down. I am more convinced after being there in person at the U.N. to witness this 

speech that, ladies and gentleman, Iran presents an horrific challenge, and it is my hope that we understand what is before us as 

this committee and our conference committee extrapolates the significance of our role in history in putting forward the toughest, 

most significant Iran sanctions bill possible because not only in the 

strut to the podium, but in what he said. And then afterwards in 

the afternoon how our Secretary of State Hillary Clinton came forward and answered that challenge with the toughness and the resolve that is needed, and we in this Foreign Affairs Committee canVerDate 0ct 09 2002 18:16 Aug 04, 2010 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 F:\WORK\TNT\050610\56335 HFA PsN: SHIRL
7

not do any more different than support the toughness that our Secretary of State laid on the table in response to Ahmadinejad’s remarks at the US. 

And so in conclusion, Mr. Chairman, our committee must approach today’s topic with a recognition of this delicate balance necessary to promote America’s interest and interred and shared interest of our allies at home and abroad. We must promote an energy 

policy that recognizes basic rights of nations to develop, and we 

must also balance such policy with the responsible eye on the environmental impacts, but most importantly, global security. 

Thank you, Mr. Chairman. 

Mr. SHERMAN. I thank the gentleman for his comments, particularly those on the need for sanctions, and I now yield to Mr. Poe 

for an opening statement if he has one. 

Mr. POE. Thank you, Mr. Chairman and thank you for calling 

this hearing today. 

The future of international nuclear cooperation is certainly a 

timely topic. I am a strong believer in the use of nuclear energy 

nuclear power, and we need a whole lot more of it, especially in the 

United States. However, my chief concern at this moment is about 

Iran, one of the world’s most belligerent regimes. It has defied 

warnings again and again not to build nuclear weapons. 

Ahmadinejad has announced on April 9 that Iran had built a centrifuge machine capable of enriching uranium at six times the 

speed of its first generation machines, and then he said, ‘‘Iran’s nuclear path is irreversible.’’

The administration’s own nuclear posture review admits that 

Iran has ‘‘violated nonproliferation obligations, defied directives of 

the United Nations Security Council, pursued missile delivery capabilities and resisted international efforts to resolve through diplomatic means the crisis that they have created.’’

This, to me, sounds very serious, that they are a rogue nation 

and could care less what anybody thinks, the United Nations, the 

United States, or any other group of countries. This very week the 

United States is trying to build international cooperation at the 

U.N. to stop Iran from building those nuclear weapons that it 

wants to have, but Ahmadinejad is still singing the same old song 

and the same old verse—the threat of international sanctions don’t 

bother him at all, and don’t scare him. 

At the U.N., Ahmadinejad acknowledged new international sanctions could soon be imposed on Iran, but stresses that this wouldn’t 

deter his government from pushing forward with its own nuclear 

program in spite of world opinion and threats of sanctions. 

Historically, sanctions of any kind against countries don’t work. 

People cheat. They cheat in the name of money, the profit motive, 

and they sell their agreements to other people so that they can obtain, as I call it, filthy lucre profiteering on the will of countries 

that are opposed to trade with a certain country, and so they 

haven’t worked historically ever. 

I hope the world, the United Nations, the United States does not 

get in a Neville Chamberlain philosophy of appeasement and claim 

peace in our time. That didn’t work in the past and the world suffered for it, and it is still suffering for it. I would hope that sanctions would work, and strong sanctions must be imposed upon Iran. 

8

They must understand that we mean business with those companies that trade with Iran and violate those sanctions, and there 

must be consequences. Iran cannot obtain nuclear weapons. 

I look forward to hearing about what the United States is doing 

to make sure that this does not happen. I have question that I 

have been asking for some time. At the worst case scenario if Iran 

obtains nuclear weapons, what is Plan B? What are we going to do? 

We don’t want to get to that point, but what is Plan B? 

I have yet to hear an answer from really anyone on what we are 

going to do. The answer is always the same. We are not going to 

let that happen, but I would like to know what Plan B is, or if 

there even is a Plan B. We cannot allow Iran to use or obtain nuclear weapons. They have said that the first missile will be toward 

Tel aviv. I believe them when they say that, and they are building 

missiles, of course, or using missiles that—creating missiles that 

will have long-range capability that will eventually go to Western 

Europe or even the United States. This is the world crisis, and the 

world needs to be serious about this, work together and to stop this 

nonsense and Ahmadinejad. 

Thank you, Mr. Chairman. I yield back. 

Mr. SHERMAN. Thank you. It is not surprising Ahmadinejad is 

laughing at the tiny sanctions that are being talked about at the 

U.N. at the present time. 

With that, do we have an opening statement from Ambassador 

Watson? 

Ms. WATSON. Yes. I want to thank you, Mr. Chairman, for holding this very important hearing today on the future of the U.S. 

international nuclear cooperation. This hearing is especially timely 

as the nonproliferation treaty review conference continues in New 

York. 

As this conference moves forward, and as we discuss and review 

the security interests of the United States, we must also remember 

to look for alternatives to nuclear energy and require a long-term 

strategy for the disposal and storage of radioactive waste and nuclear waste can pose severe health and environmental concerns if 

not properly managed. It is also in our nation’s best interest to 

fully utilize all of our diplomatic resources. 

As a former diplomat myself, I understand the vital role that diplomacy plays in national security as well as aiding in regional stability around the globe. We must reason and we really must think 

this through. I believe that Ahmadinejad does a performance that 

even the majority of his people don’t go along with. He is known 

to be hospitalized for emotional and mental stress. So I think a lot 

of what he says and does is to put on a show for us. We must be 

smarter, we must be more thoughtful, we must be more intelligent 

about how we respond. 

So, I would like to thank today’s witnesses for their testimony, 

and as we continue to monitor updates and activities of the 2010 

nonproliferation review conference going on in New York we are reminded that it is important that we hold hearings, such as today’s, 

to aid us in the creation of a national security policy that is sustainable, smart, and safe. 

So I want to thank you, Mr. Chairman, and Ranking Member, 

and I yield back. 

9

Mr. SHERMAN. Thank you. Without objection, I will ask that 

member of the full committee, Dana Rohrabacher, be allowed to 

participate although he is not a member of our subcommittee, but 

participate after those members who are members of our subcommittee. Hearing no objection, I now ask the gentleman from 

Virginia if he has an opening statement. 

Mr. CONNOLLY. I thank you, Mr. Chairman. 

Mr. SHERMAN. He is recognized for 5 minutes. 

Mr. CONNOLLY. Thank you. 

The security of our borders is very much tied to our engagement 

with other nations on arms control. The growing nuclear ambitions 

of North Korea and Iran, coupled with potential threats from unsecured nuclear material, highlight the need for the United States to 

re-prioritize arms control and note the actions that past Presidents 

from both parties took with regard to nuclear weapons. 

President Obama’s recent renegotiation of the new strategic arms 

reduction treaty is a welcome continuation of a long legacy of nuclear cooperation between Washington and Moscow. Our two nations together hold more than 90 percent of the world’s nuclear 

weapons, and they agreed to reduce nuclear arms by an additional 

30 percent. Moreover, new start places no limits on the U.S.’s missile defense systems and plans. The treaty establishes a nuclear 

agreement between the two parties, and allows the United States 

and Russia and other nations to address threats posed by emerging 

nuclear ambitions from rogue states like North Korea and Iran. 

Recently the U.S. hosted a Nuclear Security Summit in which 47 

nations participated. The summit concluded with a joint communique in which they stated their commitment to nuclear security 

and reduce the threat of nuclear actions. The Nuclear Security 

Summit acknowledged the importance of concepts that are complementary to U.S. national security objectives. 

For example, the attendees recognized that highly enriched uranium and separated plutonium requires special precautions and 

agreed to promote measures to secure, account for, and consolidate 

those dangerous materials. Perhaps most notably the communique 

also recognized the need for cooperation among states to effectively 

prevent and respond to incidents of illicit nuclear trafficking. 

Given the growing threat to our borders from non-state actors 

over the past decade, this last declaration lays the foundation for 

future cooperation with regard to trafficking of nuclear material. 

The United States ought to cooperate with its allies to prevent nuclear proliferation to maximize the positive national security outcome. It may arguably be the biggest single threat, external threat 

we face. 

President Obama’s actions follow a long-established precedent 

with the United States leadership in nuclear cooperation. The 

Reagan administration outlined negotiating positions to address intermediate range missiles, long-range strategic weapons and ballistic missile defenses. During his second term, in 1987, President 

Reagan signed the Intermediate Range Nuclear Forces Treaty, 

eliminating all nuclear arm ground launched ballistic and cruise 

missiles with ranges between 300 and 3,400 miles, and their infrastructure. 

10

The momentum continued with President George H.W. Bush who 

continued to pursue the first Strategic Arms Reduction Treaty 

which the United States and the Soviet Union signed in 1991. In 

order for the United States to have credibility and authority in 

international nuclear issues, it continued engagement and cooperation as necessary. 

The U.S. convening and hosting of the recent summit, coupled 

with its recent renegotiation with new start with Russia places the 

United States in the unique negotiating position ahead of the upcoming review conference of the NPT. At the May conference the 

United States will have reserves of credibility and good will essential to gaining allies and addressing the looming threats from 

North Korea and Iran’s nuclear ambitions. 

With regard to Iran, Chairman Berman and this committee, this 

subcommittee, has shown exceptional leadership, and I look forward to supporting much further action on the Iran’s sanctions bill 

in the coming weeks on the floor. I welcome the testimony of our 

witnesses today on how the U.S. can work with other nations to 

take concrete action to deter these very real threats, and I yield 

back. 

Thank you, Mr. Chairman. 

Mr. SHERMAN. With that I will recognize for a brief opening 

statement our friendly interloper Mr. Rohrabacher. 

Mr. ROHRABACHER. Thank you very much, Mr. Chairman, and I 

appreciate my colleague reminding us that it was President Reagan 

who first achieved a major reduction, reduction of the number of 

nuclear weapons delivery systems, and I remember the fight over 

zero option versus the nuclear freeze movement at the time which 

seemed to be quite partisan in its nature, and ‘‘virulent in its attack on President Reagan’s sincerity in trying to achieve that goal.’’

Today we must make sure that the decisions that we make are 

not affected by such partisanship as I saw back in the 1980s, and 

that is why I am hoping that President Obama is successful in his 

efforts to reach a reduction in nuclear weapons with a democratic 

Russia as Ronald Reagan was successful in achieving a reduction 

in the delivery systems with the Soviet Union. 

Nuclear energy can make a major contribution to the well being 

of the people of the world. It should, in fact. But we know there 

is this downside and the downside is the byproduct of the peaceful 

use of nuclear energy is nuclear weapons material that can incinerate hundreds of thousands, if not millions, of people. 

The Iranian challenge that we face today underscores that dichotomy. The Mullah regime continues to claim that it has the 

right to use nuclear energy for peaceful purposes, and that is true, 

they do have a right to use it for peaceful purposes, but the rest 

of us have every reason to believe that that is not their motive in 

moving forward with their nuclear program and have every reason 

to fear a country like that governed by such a vicious, anti-Western 

Mullah dictatorship having a possession of weapons of mass destruction, especially nuclear weapons. 

Let us note today, however, there is a new technology and one 

of the things that concerns me, Mr. Chairman, in this debate, national debate, in this national approach to Iran and other challenges like this is we are not talking about the new potential techVerDate 0ct 09 2002 18:16 Aug 04, 2010 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 F:\WORK\TNT\050610\56335 HFA PsN: SHIRL
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nologies that offer us a way to permit countries in the third world 

and other countries that are claiming the right to use nuclear energy for their purposes, but do not provide a byproduct, do not 

leave a byproduct that can be used for weapons. 

General Atomics, a company in California, a much respected 

company, has a new nuclear power system that it is promoting that 

we have every reason to believe will provide nuclear energy. It is 

a high-temperature gas reactor that will not have the byproduct 

that can be used for nuclear weapons, and in fact eats the waste 

that has been left from other reactors. 

When are we going to make sure that that becomes part of this 

national debate, and that our people who are representing us are 

utilizing this new opportunity to overcome the challenge we face? 

We will never be able to eliminate nuclear weapons altogether, 

but we can reduce the threat of nuclear weapons to mankind, and 

I think that, number, one the new technology I must mentioned, 

but number two, in achieving that goal is we must work with Russia, our former enemy, former communist dictatorship ran that 

country, and now there is a government trying to be democratic, we 

need to be working with them to try to bring down the number of 

nuclear weapons that we maintain, which is incredibly costly for 

both of our countries, and the level of nuclear weapons which we 

will never use, then takes away money that we can use for other 

things that would be important to our national defense as well as 

the economic well being of our people. That is number one, to work 

with the Russians on that, and missile defense; and number two, 

utilizing the new technological opportunities that we have to use 

nuclear energy around the world for peaceful purposes that does 

not have the downside of producing material for nuclear weapons. 

I thank you very much, Mr. Chairman, for holding this hearing. 

I look forward to discussing this issue with the witnesses today. 

Mr. SHERMAN. Thank you. Thanks to all members for their opening statements. It is now my pleasure to introduce Vann Van 

Diepen. He is the principal Deputy Assistant Secretary of State for 

International Security and Nonproliferation. He has held that position since June 2009. I am informed he is also the Acting Assistant 

Secretary, and the International Security and Nonproliferation Bureau spearheads U.S. efforts to promote consensus on WMD proliferation through bilateral and multilateral diplomacy. 

I want to welcome Mr. Van Diepen here. He has been often before this subcommittee, not quite to the point where he has earned 

a personal parking space here at Rayburn, but he is getting close, 

and I also want to point out that either—I know Mr. Van Diepen 

will try to sit here for part of the second panel, but even after he 

leaves, a highly qualified, brilliant and incisive State Department 

personnel who will remain undisclosed will be lurking in our audience and they will brief Mr. Van Diepen and others of importance 

in the State Department on the testimony of the second panel. 

We look forward to hearing your testimony and I look forward, 

of course, to you giving me the copy that was sent to the White 

House and then the red line that shows me the changes that the 

White House made, but I will get that after the hearing. Mr. Van 

Diepen. 

12

STATEMENT OF MR. VANN H. VAN DIEPEN, ACTING ASSISTANT 

SECRETARY, BUREAU OF INTERNATIONAL SECURITY AND 

NONPROLIFERATION, U.S. DEPARTMENT OF STATE 

Mr. VAN DIEPEN. Thank you very much, Mr. Chairman and 

members of the subcommittee. I appreciate the opportunity to testify today on the future of U.S. international nuclear cooperation. 

The United States is leading the way to ensure that such cooperation properly balances the relevant nonproliferation, economic, and climate change factors. This morning I will describe the 

U.S. Government’s recent and planned future activities related to 

nuclear cooperation agreements, so called 123 agreements, and 

other U.S. Government efforts to meet this objective. 

The United States supports the responsible development of civil 

nuclear power; that is, a development in a manner consistent with 

the highest standards of safety, security and nonproliferation. In 

the forefront of this cooperation is the United States Arab Emeritus, with whom our 123 agreement entered into force on December 

19 of last year. The UAE agreed to rely on global nuclear services 

rather than developing domestic uranium enrichment or reprocessing capabilities. The U.S. believes this agreements sets a positive 

example of the responsible development of a nuclear power program. 

Additional 123 agreements with Australia, Russia, and Jordan 

are in varying stages of development. I am pleased to report that 

the United States and Australia signed a new 123 agreement on 

May 4 that was transmitted to the Congress yesterday. This new 

agreement which replaces the exiting agreement that expires in 

January will allow the continued import of Australian natural uranium to fuel America’s operating reactors for decades to come. 

On Russia, the White House continues to monitor what might be 

the appropriate time to resubmit the U.S.-Russia 123 agreement to 

Congress, and we are continuing negotiations with Jordan on a 123 

agreement. 

We also are considering negotiating new or reviewed 123 agreements with Vietnam and South Korea. The United States and Vietnam signed a Memorandum of Understanding on civil nuclear cooperation this March, and we have recently begun discussions with 

Vietnam regarding the benefits of a possible 123 agreement. 

The current U.S.-Republic of Korea Nuclear Cooperation Agreement expires in early 2014, and the South Korean Government has 

already expressed an interest in commencing negotiations on an extension, and in my written testimony a few other agreements we 

expect to begin negotiating soon are noted. 

Though not a 123 agreement, I also wanted to highlight the proposed so-called subsequent arrangement that the U.S. Department 

of Energy is planning to submit to Congress under the existing 

U.S.-India 123 agreement, and this grants India the right to reprocess U.S.-obligated material the 123 agreement already does. 

The proposed subsequent arrangement obligates India to maintain 

adequate safeguards and physical protection requirements on all 

U.S.-obligated material that may be reprocessed at the covered facilities. 

As noted by a number of you already, this week’s opening of the 

2010 NPT review conference reminds us that the peaceful uses of 

13

nuclear energy must be pursued in a manner consistent with avoiding the risk of proliferation. To this end, the United States is leading an effort to amend the Nuclear Suppliers Group, or NSG guidelines to strengthen controls on the transfer of enrichment and reprocessing technologies, and we are also pursuing the development 

of a number of mechanisms to assure reliable nuclear fuel services 

so that it is even clearer that countries seeking to develop nuclear 

power do not also need to develop their own enrichment or reprocessing facilities. 

In conclusion, the United States recognizes that the international 

community is at a turning point in the expansion of civil nuclear 

power. The U.S. is therefore taking the lead in the development of 

bilateral and multilateral agreements and guidelines to ensure that 

states in compliance with their nonproliferation obligations have 

access to the peaceful uses of nuclear power. 

Thank you very much. 

[The prepared statement of Mr. Van Diepen follows:]

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Mr. SHERMAN. Thank you for your testimony. I will now recognize for questions the vice chairman, Mr. Scott, then our ranking 

member, then I will ask my questions and move forward from 

there. 

Mr. SCOTT. Mr. Van Diepen, let me start off with the congressional role in the 123 agreements. Section 202 of P.L. 110–369, the 

United States-India Nuclear Cooperation Approval and Nonproliferation Enhancement Act, which President Bush signed into 

law in October 2008, amended Section 123 of the Atomic Energy 

Act to require the President of the United States to keep the Senate Foreign Relations Committee and our House Foreign Affairs 

Committee fully and currently informed of any initiative or negotiations relating to a new or amended agreement for peaceful nuclear cooperation. 

And my question is, how does the Obama administration interpret this requirement? 

Mr. VAN DIEPEN. Well, Congressman, not being a lawyer I am 

not sure how much detail I can go into on that, but I think the language is pretty clear on its face. We have a commitment to keep 

you fully and currently informed, and I believe we try very hard 

to do that. 

Mr. SCOTT. At what point or what stage in the discussions of 

such an agreement will the relevant congressional committees be 

notified? 

Mr. VAN DIEPEN. Sir, I think the right thing to do is to make 

sure that we have a correct and considered answer to that question, so if you don’t mind we will provide you something for the 

record and make sure it is authoritative. 

Mr. SCOTT. Okay. Let me go to the agreement with India and the 

Nuclear Suppliers Group if I could. The cooperation agreement 

with India which entered into force in 2008 is unusual because 

India is not a signatory to the NPT, and though India possesses 

and has tested nuclear weapons the Nuclear Proliferation Treaty 

does not recognize India as a nuclear weapons state because it acquired these weapons after January 1, 1967. 

So the Nuclear Suppliers Group is a multilateral control regime 

for nuclear technology, and India does not meet any of these criterions. In the lead up to the U.S.-India agreement with the Bush 

administration, they successfully negotiated an exemption for 

India, and this exemption was granted unanimously by the NSG. 

So my question is, what does the India exemption indicate about 

the strength of the Nuclear Suppliers Group? 

Mr. VAN DIEPEN. Thank you, Mr. Chairman. 

Well, first of all just to be clear what that exemption was was 

an exemption from an NSG requirement that substantial nuclear 

cooperation only occur with countries that have so-called full-scope 

IAE safeguards, IAE, that all of their nuclear activities are under 

safeguards, and India does not fall into that category, of course, because they are outside the NPT and are maintaining a nuclear 

weapons program, and so the exemption was simply to permit safeguarded peaceful nuclear cooperation with safeguarded peaceful 

India nuclear facilities that would otherwise have been precluded 

because of the full-scope safeguards requirement. 

29

That exemption was fully consistent with the NPT and by definition, given that it secured a consensus of the NSG countries, was 

agreed to be consistent with the purposes and objectives of the 

NSG. 

The fundamental purpose of the NSG is to make sure that nuclear exports are done responsibly and don’t contribute to proliferation, and I think all the NSG members agree that the types of exports that are subject to this exemption fall into that category. 

Mr. SCOTT. Now, in your opinion does the fact that the Bush administration sought and obtained a Nuclear Suppliers Group exception prior to concluding an agreement with India indicate that the 

Nuclear Suppliers Group’s compliance is a necessary priority for all 

supplier states? 

Mr. VAN DIEPEN. I am not quite sure I understand the question, 

Congressman, but certainly we seek for all countries to apply the 

guidelines and controls of all the various nonproliferation regimes, 

including the Nuclear Suppliers Group. 

Mr. SCOTT. I guess on that point I am simply asking does it indicate that the Nuclear Suppliers Group rules can be easily weakened in the face of political expediency? 

Mr. VAN DIEPEN. I can say from personal experience in these regimes, Congressman, that getting a consensus on anything is never 

easy, so I think the idea that there is an easy way to change the 

rules is not the lesson to be learned from this one. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Mr. SHERMAN. Mr. Royce. 

Mr. ROYCE. Thank you, Mr. Chairman. 

Mr. Van Diepen, the Iran Refined Petroleum Act of 2009 was 

passed overwhelmingly by the House and the Senate, and it contains a provision which precludes a nuclear cooperation agreement 

with any country in which an individual or an entity is implicated 

in selling nuclear technology to Iran, and in which that country, of 

course, fails to take any effective action to stop or to penalize the 

individual or the company that was involved in it. 

It is my understanding that the administration opposes this provision. Is this correct? 

Mr. VAN DIEPEN. I am sorry, Congressman. I am not aware of 

the details of that particular issue, but we will certainly get you 

an answer for the record on that. 

Mr. ROYCE. Well, let us ask a hypothetical then. Should the U.S. 

be engaged in nuclear commerce with such a country? I am just informing you it is in the legislation, all right? So the question is, 

should the United States be engaged in nuclear commerce with a 

country which is in fact failing to curtail that type of assistance to 

Iran? 

Mr. VAN DIEPEN. I think it probably depends a lot on the situation. I mean, for example, if you had a country that as an active 

state was deliberately assisting another country’s nuclear weapons 

program, I would assume that all of us would probably agree that 

that is not the kind of country that we would want to have peaceful 

nuclear cooperation with. 

On the other hand, if there is a country where contrary to the 

laws of that country and without the authorization that government’s individuals are engaging in various sorts of proliferation-reVerDate 0ct 09 2002 18:16 Aug 04, 2010 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 F:\WORK\TNT\050610\56335 HFA PsN: SHIRL
30

lated activities, that could be a very different situation, depending 

upon the extent to which that country was taking action to try and 

stop that type of activity. 

Mr. ROYCE. Well, the point is, is the administration asking for 

the nuclear cooperation with Russia to be reconsidered? 

Mr. VAN DIEPEN. As I noted in my statement, Mr. Chairman, the 

White House is looking at that issue right now and considering 

whether and when we should reintroduce the 123 agreement with 

Russia. 

Mr. ROYCE. Well, going back to the legislation that we are trying 

to pass out of conference committee, shouldn’t this agreement with 

Russia be held in abeyance until there is unambiguous evidence of 

cooperation from the Russian state on this issue of Iran given the 

technology transfers that have occurred? 

Mr. VAN DIEPEN. Again, that issue is with the White House so 

it is well above my pay grade, but clearly one of the things they 

are taking very careful consideration of is the extent to which the 

Russians are being cooperative with us on the Iran issue and, you 

know, clearly in a number of ways they are, including having supported past U.N. Security Council resolutions imposing sanctions 

against Iran for its nuclear program, supporting the kinds of things 

we are doing in the NSG to put more controls on enrichment reprocessing technology, being part of the P–5+1 process that is 

working to resolve the Iran nuclear issue, but ultimately the White 

House will make those decisions, very much including——

Mr. ROYCE. Yes, I failed to note a lot of cooperation from either 

Russia or China on this front, but let me ask another question. 

The U.S.-UAE Nuclear Cooperation Agreement went into force 

last December, and there has been great congressional concern over 

the UAE’s weak export controls. First, it was the UAE that was the 

principal conduit of goods and materials intended for Iran’s nuclear 

program; second, when we think about A.Q. Kahn, this is where 

A.Q. Kahn did much of his business in the UAE; and third, we 

know that the UAE has laundered Iranian money. So the administration has consistently testified about how the UAE has improved 

in theses three areas, but I think our concerns in Congress remain. 

I would like to hear from you on your assessment of the UAE. 

Mr. VAN DIEPEN. Thank you, Congressman, and I think it is one 

of these situations where both things are true simultaneously. The 

UAE has done a lot and has made a lot of improvements, but like 

you, we remain very watchful of activities there. The government 

has taken some very substantial steps, not just putting in place the 

legislation which is important, but in cooperating in an increasingly consistent and effective way with us on specific transactions 

of concern, improving implementations of U.N. Security Council 

sanctions, including financial controls against dealings with Iran, 

designated Iran entities, so on and so forth. 

We have got a very good working relationship established with 

the UAE. We have been providing them with increasingly substantial export control assistance to make sure they have the wherewithal to implement and enforce the laws that are on the books, 

so a lot has been done, but it is a big problem. It goes back a long 

way, and like you, we remain watchful and continue to intervene 

to try and keep things moving in the right direction. 

31

Mr. ROYCE. Thank you, Mr. Chairman. Thank you. 

Mr. SHERMAN. I thank the ranking member. I fear that Russia 

cooperating with the United States means—on Iran—means cooperating efforts to impose tiny sanctions whose sole effect will be 

to fool the American people into thinking we are doing something, 

but are so minuscule as to have no chance of forcing the regime in 

Tehran to change its behavior or lose its control of power. 

Turning to our 123 agreements, you identified quite a number of 

countries that we are in negotiations with, and I would like you to 

identify whether the agreements that you are working on will 

achieve the four model standard positions I set forth in my opening 

statement. 

For example, which of those agreements can you assure us will 

have a requirement that the other country enter into the Convention on Supplementary Compensation? Are you able to say any of 

these will have such a provision in the agreement? 

Mr. VAN DIEPEN. Congressman, I don’t believe that that is the 

case. I think perhaps the best——

Mr. SHERMAN. So this is a zero jobs—aside from the jobs of people who work at the State Department, this is a zero jobs strategy? 

Mr. VAN DIEPEN. No, sir, I don’t believe that is the case. First 

of all, our——

Mr. SHERMAN. Well, zero may overstate it, but the fact is American companies cannot compete with those companies that enjoy 

sovereign immunity since they face unlimited liability and the 

other company faces zero liability. 

Mr. VAN DIEPEN. Well, again, this ends up being a case-specific 

thing——

Mr. SHERMAN. When I say ‘‘enter into,’’ let me rephrase. Enter 

into that supplementary convention or enact a similar liability law. 

I don’t want to debate with you whether it is zero jobs or minuscule 

jobs. The fact is you are about to submit a bunch of agreements to 

us where most of the jobs are going to be at the State Department 

negotiating the agreement, and very few of them are going to be 

involved in our nuclear industry. 

What about the additional protocol, can you assure us that any 

of these agreements will require the other party, and not referring 

to our agreement with Russia, but all the other non-nuclear states 

to enter into the additional protocol? 

Mr. VAN DIEPEN. Again, I am not that familiar necessarily with 

the specific test of each and every agreement, but the great majority of the countries that we are engaged in these activities with already are states parties to an additional protocol, so such a provision really would not be necessary. 

Mr. SHERMAN. It certainly would be helpful for them to commit 

to us that they are not going to somehow evade or withdraw from 

the additional protocol. Which of these agreements will cause the 

other country to renounce enrichment and reprocess? 

Mr. VAN DIEPEN. Again, that will all be an agreement-specific activity. 

Mr. SHERMAN. Okay. I am going to ask for a comprehensive response for the record. 

Mr. VAN DIEPEN. I figured that is where you were going, Mr. 

Chairman. 

32

Mr. SHERMAN. And as of now you cannot assure us that any of 

these agreements will have either the liability laws or the enrichment and reprocessing provisions that I think are necessary. 

What about the provisions that a country will ban from its facilities and from obtaining nuclear technology nationals of countries of 

concern, especially Iran and North Korea? 

Mr. VAN DIEPEN. That I am pretty sure is not in these agreements. I mean that is——

Mr. SHERMAN. Not in the agreements. 

Mr. VAN DIEPEN [continuing]. Not that I am aware has come up 

previously. 

Mr. SHERMAN. You are saying we aren’t even bothering to try to 

get a provision like that in the agreement? 

Mr. VAN DIEPEN. Well, I guess it is probably fair to say that it 

would be useful for us to have a better understanding of what you 

have in mind. 

Mr. SHERMAN. Well, quite a number of countries have restrictions on whether persons of certain nationalities are allowed to 

tour their nuclear facilities or otherwise acquaint themselves with 

nuclear technology. There are models, I believe the United States 

would be one of them, and you would think that these other countries would not be taking Iranian scientists on tours of facilities 

that we helped build or other facilities that we didn’t if we are in 

cooperation with them. 

If you want, I will draft the treaty language for you, but as of 

now we are not seeking to insert such a provision into the 123 

agreements we are negotiating, is that correct? 

Mr. VAN DIEPEN. Not to my knowledge, sir. 

Mr. SHERMAN. Okay. Well, hopefully you are here not just to inform us, but also to learn. I hope you will go back and try to get 

these. 

So let us return to the whole issue of whether American companies will be able to compete. India has set aside roughly 10 reactor 

sites for us but it is very clear that the first construction sites will 

not be American, and that in fact until and unless, and it is very 

much unless, they change their law no American company is going 

to be able to participate. 

Why are these agreements in the interest of American workers? 

Mr. VAN DIEPEN. These agreements meaning 123 agreements? 

Mr. SHERMAN. The 123 agreements you are negotiating in which 

you are not getting any change in the liability laws of the country. 

Mr. VAN DIEPEN. Well, again, it is case-specific as to whether or 

not the country we happen to be negotiating 123 agreement is a 

part to the CSC. 

Mr. SHERMAN. Right. 

Mr. VAN DIEPEN. Which means this is not relevant. Now in India’s case, of course, it needs to pass proper domestic legislation 

and to become a party to the CSC. 

Mr. SHERMAN. Well, they don’t need it. We need it. We battered 

the door down for them, got them everything they want, and put 

ourselves in a position where we may be talking about zero participation of American companies. I guess that was before ‘‘jobs, jobs, 

jobs’’ was the official slogan. So in any case the issue of whether 

there are going to be any jobs for American companies or these 

33

other factors that I have outlined are not high enough on your list 

of priorities for you to be aware of how they are being treated in 

individual agreements, but you will furnish material as to the status of each of these agreements with non-nuclear states on these 

four criteria. Have you identified the criteria clearly enough for 

you? 

Mr. VAN DIEPEN. Well, Mr. Chairman, first of all, to be very clear 

here, the United States has long been pushing countries to subscribe to the CSC. We have been pushing the Indians to do the relevant legislation. I also know——

Mr. SHERMAN. Yes, our attitude toward pushing is we give them 

everything they want and then we go down on our knees and beg, 

and that strategy of negotiation doesn’t work in any other line of 

business. I doubt it is going to work here. Asking is one thing, requiring it as a condition of entering into agreement the other party 

wants is something else. 

Mr. VAN DIEPEN. Understood, Mr. Chairman. The other thing I 

would point out is that what a 123 enables is only certain categories of nuclear commerce, and there is a lot of opportunities for 

U.S. companies, which they are getting pursuant to these various 

nuclear cooperation deals that are not affected by 123. 

Mr. SHERMAN. Look, I have gone way over my time. I don’t think 

that we are doing a good job if we allow ourselves to be sub-subsubcontractors, and play no other role. You cannot support the foreign policy established in the United States and ignore the jobs aspect. 

With that I yield to the gentleman from Illinois, a gentleman 

from Illinois who is a member of the subcommittee, and therefore 

comes before our friendly interloper from the full committee. 

Mr. MANZULLO. I have always been concerned about manufacturing and the loss of our defense industrial base, and even though 

the Pentagon talks a lot about that, when you take a look at the 

way they award contracts they just don’t seem to get it, that we 

have to have the ability to fight our own wars and maintain our 

own defense industrial base, and I am really concerned over the 

fact that the United States has lost the cutting edge in development and manufacturing and sales of nuclear reactors, but I can 

understand that we have had a very unwise policy not to build any 

nuclear reactors in our country for the past 20 years or so while 

other countries have been doing that. 

And my question to you, and you will probably say it is not your 

area of expertise, but maybe you can give us some guidance on it—

a couple of questions. 

What is the overall impact of the United States no longer having—I hate to use these words—leading technologies because we 

have Westinghouse and GE that are still actively involved in this, 

but as you stated in your testimony on page 3,

‘‘If new nuclear plants are built in the U.S., they will likely involve substantial imports from designers and manufacturers 

abroad.’’

Do we have a lack of capacity here to design our own, and manufacture our own nuclear reactors in this country? 

34

Mr. VAN DIEPEN. Well, Congressman, my understanding is in 

terms of technology and reactor design and things like that we still 

are the cutting edge. Even though reactors have not been built here 

for many years, U.S. reactors have been built overseas and continue to be built overseas, and more importantly, U.S. technology 

and the future of the nuclear reactor business is still very much in 

the hands of U.S. technology and U.S. companies. 

One of the reasons why many countries want to cooperate with 

us in peaceful nuclear technology is to be able to get the benefits 

of this cutting edge U.S. technology. And so I think there is still 

a great deal of cutting edge technology in U.S. hands. 

Now that said, like many other businesses, the automobile business, the airplane business, you now have an increasingly internet 

network, global supply chain kind of operation, and if you think 

about all the different pieces of equipment and technology that are 

involved not only in the reactor but also the associated power generation infrastructure, et cetera. There is a very big global operation involved in that, and so there is really no such thing as a 

purely country X nuclear power project. Whether it is built here or 

built somewhere else, there is going to be U.S. involvement in 

many cases and there is going to be foreign involvement. 

Mr. MANZULLO. I understand that, but I presume, and maybe I 

am wrong, but the Russians and the Chinese, because they are 

building nuclear reactors in their own countries, respectively, 

would have more manufacturing in their own countries. Would that 

be correct? 

Mr. VAN DIEPEN. In terms of sort of gross manufacturing capability, that may well be correct, but in terms of who has got the 

most advanced reactors, it is definitely not the Russians and not 

the Chinese, and indeed one of the reasons why the Chinese sought 

nuclear cooperation with us in the 1990s was to be able to have access to more advanced U.S. reactor technology. 

Mr. MANZULLO. So where are these being built with U.S. technology? What countries are building these American reactors? 

Mr. VAN DIEPEN. It is probably better for me to give you an answer for the record that has not correct details, but in China, for 

example, reactors are being built based on U.S. technology. 

Mr. MANZULLO. And so we will be buying—we will be using U.S. 

technology and building reactors in China that will be exported to 

the United States to add to our nuclear capacity? 

Mr. VAN DIEPEN. No, sir. I mean, nuclear power reactors are 

huge multi-component structures that are not built in country A 

and moved to country B. Rather they are built in the place where 

they are intended to be. 

Mr. MANZULLO. But components from everywhere. 

Mr. VAN DIEPEN. Various components come from various places, 

and many of those components will come from the United States. 

Mr. MANZULLO. I will take you up on your very generous offer 

to research that and perhaps later on today we can talk on the 

phone. My concern is that we shouldn’t have lost this technology—

we shouldn’t have lost the manufacturing in the first place, but if 

you don’t build them here it is kind of hard to keep it here. But 

also if there is any way that we can regain that manufacturing caVerDate 0ct 09 2002 18:16 Aug 04, 2010 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 F:\WORK\TNT\050610\56335 HFA PsN: SHIRL
35

pability in this country through the tax code or something else like 

that. 

My district is heavily manufacturing. We are probably 25–26 percent unemployed at this point. No on really knows. Illinois, you 

know, is 50 percent nuclear. But if I or someone could call your office this afternoon, and we could follow up on that I would appreciate it. Thank you. 

Mr. SHERMAN. Let us now hear from Ambassador Watson. 

Ms. WATSON. Prior to its 1974 nuclear test, and this is about the 

agreement with India and the Nuclear Suppliers Group, India had 

received assistance in developing a civilian nuclear program from 

the United States and Canada. This assistance followed an Indian 

commitment to use nuclear trade only for peaceful purposes, and 

the shock of India’s nuclear test which contradicted this commitment was a key factor leading to the creation of the control regime 

that is now the Nuclear Suppliers Group. 

How has the formation of the Nuclear Suppliers Group improved 

the global nonproliferation regime, and are the NSG guidelines 

adequate for ensuring that nuclear trade be used only for peaceful 

purposes? 

Mr. VAN DIEPEN. Thank you, Congresswoman. 

I think the NSG has had a major impact in retarding the proliferation of nuclear weapons capabilities. For example, prior to the 

institution of the so-called dual use regime in the early 1990s there 

were no multilateral export controls on dual use items of particular 

applicability to nuclear fuel cycles and building nuclear weapons. 

The U.S. had unilateral controls, but no other country did, and so 

by putting those controls in place we have gone a long way toward 

impeding nuclear proliferation. 

Right now the control initiative are being reviewed again to 

make sure that they are up to date with the latest technological 

changes. 

In terms of the NSG guidelines, overall I think they are pretty 

adequate, but as we have already been discussing one area that we 

are trying to improve is the strength of the controls on enrichment 

and reprocessing technology, and so that is a particular area of 

focus at the moment. 

Ms. WATSON. Okay. What effect would an NSG rule change that 

establish a set of criteria for transferring enrichment and reprocessing technology have if it is adopted, and looking ahead, will 

more states who meet the criteria end up possessing enrichment 

and reprocessing plants under safeguards? 

Mr. VAN DIEPEN. Thank you, Congresswoman. 

That arrangement you have described is exactly what we are 

doing in the NSG to try to strengthen the control, and we think 

that will go a long way toward keeping adequate controls on these 

technologies, and I think it is important to point out that above 

and beyond the rules one should look at the actual behavior of the 

countries who are in a position to actually supply this technology, 

which is not very many, and over the past decade these countries 

have acted in a very responsible way in their controls of this technology, and so this criteria really are a way of sort of codifying 

practice that is already ongoing, practice that has been highly responsible, and to make sure that if other NSG countries develop 

36

their own indigenous enrichment and reprocessing capabilities, 

that they will exercise the same kind of restraint. 

Ms. WATSON. Would tighter restrictions on the sale of enrichment and processing technology backfire by inspiring countries to 

independently develop these technologies or cause black market demands for such technologies? What is the experience? 

Mr. VAN DIEPEN. No, I don’t believe that is the case, Congresswoman. In fact, under the existing system without having these 

controls in place you had under the A.Q. Kahn network a clandestine black market, and these kinds of technologies already in place. 

You had countries that were in fact trying to clandestinely develop 

nuclear fuel cycle activity. So I think I would say that that proves 

the value of adding those kinds of control which, of course, is exactly why we are trying to do it. 

Ms. WATSON. Thank you. Mr. Chairman, I would hope that we 

would have Mr. Van Diepen back again when we know more about, 

and I think you did mention there will be follow ups because we 

need to be better informed, and I yield back. 

Mr. SHERMAN. You are this close to getting that reserved parking 

spot. 

Ms. WATSON. I yield back, Mr. Chairman. 

Mr. SHERMAN. And now the gentleman from California. 

Mr. ROHRABACHER. Thank you very much, Mr. Chairman. Let me 

first and foremost identify myself with the line of questioning and 

the statements made by the chairman during his interrogation or 

discussion, if you will. I think he made some very important points, 

and let me note those are bipartisan points that are important to 

all Americans, and recognized on both sides of the aisle. 

I will also identify myself with the remarks of Mr. Manzullo and 

his concerns that we are not just setting up a scenario in which 

Americans will play a minor role in manufacturing and a support 

role rather than a lead role in manufacturing the technology that 

we are talking about in terms of nuclear power generation in the 

future. 

We have every reason to worry about that for a number of reasons, one of which Mr. Manzullo didn’t mention, and that is the actual—how do you say—quality of those items that are manufactured in China that become part of our very high technology 

projects that have a lot of risk associated with them because at 

times what we have found is those parts end up being either defective or substandard as compared to the quality of manufacturing 

that we have had in the United States. 

Of course, our manufacturers in the United States, many of 

whom have gone out of business because we have not pushed 

China on certain issues and we have opened up our markets and 

our country has been flooded with cheap substandard products 

which has, unfortunately, affected our manufacturers of very quality projects and products that Mr. Manzullo was referring to. 

I just think there is an undercurrent here which was indicated 

by the chairman’s questioning as well as Mr. Manzullo’s statements that our Government does not seem to be getting tough, and 

our representatives, meaning our friends at the State Department, 

are not reflecting the tough positioning that is necessary to protect 

37

the interests of the American people, especially the American manufacturers. 

So I would hope that as you proceed and as this administration 

proceeds to move forward on these various issues that we are discussing, whether it is nuclear arms reduction or whether it is the 

nonproliferation agreements along with these 123 agreements that 

the administration will learn from the mistakes of the past administrations, both Republicans and Democrats, and be a little tougher 

rather than relying on giving people what they want and begging, 

as the chairman said, for them to come to an agreement on other 

issues. 

I will just leave it at that and I think that there has been some 

very serious issues raised today, and I just wanted to make sure 

that I was identified with those people who were raising those 

issues. Thank you very much, Mr. Chairman. 

Mr. SHERMAN. Thank you. There is now a vote about to be called 

in the House. We could probably get in maybe one witness statement, so I will ask the second panel to come forward, but we won’t 

be hearing any of our questions until these votes. 

Thank you, Mr. Van Diepen. 

As they are stepping forward I would like to introduce our first 

speaker of the second panel, Mr. Leonard Spector. Mr. Spector is 

the deputy director of the James Martin Center for Nonproliferation Studies of the Monterey Institute of International Studies, and 

heads the center’s Washington, DC, office. He also co-directs the 

center’s program on nonproliferation policy in law. Mr. Spector was 

involved in drafting the current version of Section 123 of the Atomic Energy Act. Mr. Spector. 

STATEMENT OF MR. LEONARD S. SPECTOR, DEPUTY DIRECTOR, JAMES MARTIN CENTER FOR NONPROLIFERATION 

STUDIES, MONTEREY INSTITUTE OF INTERNATIONAL STUDIES 

Mr. SPECTOR. Thank you, Mr. Chairman. I will try to keep my 

remarks quite brief because I know that we have a very significant 

time constraint. 

The basic thrust of my remarks was that the idea of legislating 

to alter the criteria that are now used for agreements for cooperation as embodied in Section 123 of the Atomic Energy Act might 

not be the best course largely because on the one hand the administration is pretty actively pursuing very many of the initiatives 

that this step would reenforce, so in a sense you don’t really have 

an adversarial situation here with an administration—which sometimes happens—but much more of a consistency between national 

policy and the issues that you are trying to reenforce, and I think 

in my testimony I try to go through some of these efforts that are 

being undertaken. 

For example, on the additional protocol it is not only being included in new agreements for cooperation de facto, as seen in the 

UAE agreement and in the requirement of the UAE agreement 

that this be in other agreements in the region, but it is also being 

pursued at the Nuclear Suppliers Group as a condition of supply 

for all countries. 

38

So it is not as if the administration is sitting on its hands and 

it is not as if there is a kind of disposition not to make as aggressive efforts as possible to get this forward. 

So the question then becomes, and I would say the same is true 

for reprocessing and enrichment. The restrictions that were just 

discussed about reprocessing and enrichment transfers and the actual behavior of states in the Nuclear Suppliers Group has been 

pretty good, and the administration is pretty aggressively trying to 

get agreement on these restraints. 

The issue becomes is legislation helpful in this setting or does it 

sort of have some consequences that may not be helpful, and I 

think that is a difficult matter and I think something the committee needs to consider. One reason it may not be helpful is because as a result of the last 4 or 5 years when enrichment and reprocessing has been so central to the international debate on nuclear energy a lot of countries in the developing world have kind 

of fought back, not just Iran, but many others, to complain that the 

United States is intruding on their right to enjoy the full benefits 

of the nuclear fuel cycle. 

Legislation would sort of reenforce that sort of vision and that 

sense that the United States is sort of forcing into the system new 

explicit restrictions whereas the current approach, which is sort of 

country by country through the Nuclear Suppliers Group a little bit 

more behind the scenes, may have the same result, and I think it 

will, as legislation might without that sort of potential—you know, 

challenge of being a bit too overt and too explicit. 

I used to be a congressional staffer so I certainly appreciate the 

virtues of legislation, but I think at this moment and in this area 

it may not take things in the right direction. 

The other area, however, has to do with the possibility of the adjustment in the review process of agreements for cooperation, and 

there I think, you know, steps could be taken to reenforce the congressional role without necessarily having the same effect, and 

what I suggest in my testimony is a tradeoff that the Congress 

seek to require an affirmative vote on agreements for cooperation 

but in a sense give back—you know, yield some of your time so 

that instead of having a 90-day of continuous session review process, which can stretch on for 6 months sometime, maybe shorten 

it down to 60 days of continuous session. In other words, you accelerate the process but at the same time require the affirmative vote 

so that you really have more authority in the process than you 

would currently. 

Finally, I did emphasize the oversight function, and there are a 

number of areas I won’t have time to go into them in detail, but 

I would only say that this hearing itself has served a purpose. It 

has certainly put on the agenda the need for this being careful 

about access of foreign nationals to our technology from some countries. I don’t think that has been under discussion significantly 

until now, and I think the way the liability issue has come up in 

this hearing is another step forward to appreciate how serious that 

can be. 

On the liability matter, I had studied this a number of years ago 

and I felt the CSC was not a particularly good choice from the 

standpoint of the population that might be affected by a nuclear 

39

power plant accident because the limits are too low. So that while 

the U.S. vendor would have the protection it thinks of having the 

liability channeled to the operator, in fact the ultimate outcome 

might not be very good for the affected population. 

I think this is something of a trade issue. There are countries, 

Japan has privately-owned reactor vendors. South Korea’s reactor 

vendors are privately owned, and if they are able to somehow get 

guarantees from their government that the government will indemnify and therefore they don’t have to have a liability legislation 

that we have been discussing, that seems to me that the matter 

may be one to be taken up not only in the respect that you have 

been speaking of, of pressuring recipient countries, but also some 

of the other vendor countries to adopt trade practices that are more 

in keeping with the private sector. 

[The prepared statement of Mr. Spector follows:]

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Mr. SHERMAN. Mr. Spector, thank you for your testimony and, 

with the indulgence of my colleagues, since your whole opening 

statement was basically a rebuttal to my opening statement, would 

point out that your solution with regard to liability is to propose 

to the American taxpayer what I could only call the thermonuclear 

bailout level. I mean, right now in the Senate they are saying that 

we shouldn’t expose the American taxpayer to $50 billion worth of 

risk with regard to blowouts on Wall Street, and you are asking for 

trillions of dollars——

Mr. SPECTOR. No, I——

Mr. SHERMAN [continuing]. Or at least many billions of dollars 

of risk to the U.S. taxpayer. 

Mr. SPECTOR. Excuse me, I was not—if I may explain my point. 

I wasn’t propose that we adopt the same strategy as Japan and 

South Korea. I was proposing that our trade negotiators press 

them to adopt the same strategy as we are, which is to say the 

companies——

Mr. SHERMAN. Okay, reclaiming the time that I have stolen from 

my colleagues, you have basically said Congress should move over 

and get out of the way because the administration is going to seek 

our objectives. The previous witness made it clear that he doesn’t 

know if any of these agreements are going to contain the liability 

provisions necessary for us to get jobs; that he is unclear of the 

concept of getting restrictions on third party nationals access to facilities, and certainly is trying to achieve that objective. And with 

regard to enrichment and reprocessing, the UAE negotiated the 

agreement with the United States without such a restriction, and 

only with congressional demands was such a restriction added. 

So to say that we should go to sleep and count on the administration to achieve our objectives is something that we will explore in 

these hearings. 

Mr. ROHRABACHER. Mr. Chairman, I would ask unanimous consent to at this point in the record place some materials which my 

office will be forthcoming with that indicates that there is a technological alternative to the issues of liability that you have raised. 

Mr. SHERMAN. Without objection, the material that Mr. Rohrabacher wants to put in the record will be inserted at this point. 

And I believe we have votes, so we will stand adjourned and hear 

from our other witnesses when we reconvene after these votes. 

Thank you. 

[Recess.] 

Mr. SHERMAN. I would ask that people take their seats and we 

will be ready to hear from Mr. Glasgow in just a second. I am confident that several other members of the subcommittee will be joining us soon, but I have been notified by telepathy that they would 

like us to continue. 

I would now like to welcome Mr. James Glasgow. He is a partner 

in the Pillsbury law firm’s energy practice, and he serves as counsel on a number of nuclear energy-related issues. Mr. Glasgow is 

here as a representative of the Nuclear Energy Institute, the 350-

member policy organization for the nuclear technologies industry, 

and I would hope—I realize you already have your opening statement, but if part of it could comment on how through these agreements we can not just generate profits, which of course occurs with 

51

licensing agreements, but also jobs in the actual construction and 

manufacturing. Mr. Glasgow. 

STATEMENT OF MR. JAMES A. GLASGOW, PARTNER, PILLSBURY WINTHROP SHAW PITTMAN LLP (REPRESENTING THE 

NUCLEAR ENERGY INSTITUTE) 

Mr. GLASGOW. Mr. Chairman and members of the subcommittee, 

I am pleased to be invited to testify today on the subject of the future of U.S. international nuclear cooperation. I ask your permission to enter my prepared statement into the record, and I will provide a brief summary at this time. 

My testimony, as you mentioned, is presented on behalf of the 

Nuclear Energy Institute. The NEI is responsible for establishing 

U.S. nuclear industry policy on regulatory, financial, technical, and 

legislative issues. NEI members include all companies licensed to 

operate commercial nuclear power plants in the United States, nuclear plant designers, major architect engineering firms, fuel fabrication facilities, material licensees and other organizations and 

individuals involved in the nuclear energy industry. 

My law firm, Pillsbury Winthrop, is a longstanding member of 

NEI. For many years I have advised clients concerning international nuclear commerce matters, and during my tenure in the 

late seventies and early eighties in the Office of General Counsel 

at the Department of Energy, I helped negotiate a number of U.S. 

agreements for cooperation concerning peaceful uses of nuclear energy, so-called 123 agreements. 

As has been mentioned, this hearing is being held at the same 

time as the review conference for the treaty on the nonproliferation 

of nuclear weapons, the NTP. For 40 years the NTP has served as 

a principal international agreement that provides a global barrier 

for the spread of nuclear weapons, although there are challenges 

to it as has been discussed today. I should mention that the NEI 

over its history has made a number of strong efforts to support the 

NTP such as in the mid-90s when the NEI strongly supported renewal of the NPT. 

The U.S. nuclear industry does, however, have an important role 

with respect to the NPT specifically and bilateral 123 agreements 

as well. It plays an important role in achieving one of the key purposes of the NPT, which is to provide access to nuclear energy, but 

only, of course, in the NTP member states that agree not to acquire 

nuclear weapons, the so-called non-nuclear weapon states. 

Mr. Chairman, NEI believes the United States can best achieve 

its nonproliferation objectives when U.S. companies are major suppliers of nuclear reactor components, services, and the nuclear materials needed to run reactors. Recognition by U.S. trading partners 

that the United States is a reliable supplier gives the United 

States the ability to influence the type of nuclear power programs 

implemented in countries that have announced such programs and 

plan to build reactors. 

Now I should at the same time take up the point that you raised, 

Mr. Chairman, about jobs. Will the U.S. industry’s participation in 

the nuclear industry under 123 agreements create jobs? The answer is an affirmative resounding yes, and that has been the case 

already. American companies supplying power reactors to China 

52

have generated a substantial number of jobs, approximately 5,000, 

as I have heard, even though the reactors are being built in China, 

and one can cite many other examples. 

But I would like to mention a bit about impediments to such 

commerce and to creation of jobs, and one of those that I would like 

to mention is the Section 57(b) of the Atomic Energy Act and the 

DOE’s implementing rules. Now, the NEI is aware that DOE is 

going to mount an initiative to revise this 50-year-old rule, and 

NEI applauds that decision by DOE. These rules have the unintended effect of standing in the way of cooperative programs and 

exchange of information for purpose of improving the operational 

safety of nuclear power reactors around the world. They also unnecessarily constrain U.S. companies’ abilities to assist in the construction and operation of overseas nuclear power stations, so 

major changes are needed. 

Since little time remains I will touch on the 123 agreements and 

the idea of shifting more authority to Congress with respect to 

those agreements. My point, succinctly made, is that Congress has 

already expanded its authority with respect to such agreements. 

The Proxmire Amendment of 1985 is one such example. Does NEI 

see problems with creating a new role for Congress as would be 

done by H.R. 547 to require it to approve agreements before they 

could enter into force? This could long delay critical agreements 

that are needed in the national interest and should be approached 

with great caution, particularly because of some of the constitutional issues. 

I see that my time is at an end. NEI appreciates the opportunity 

to provide these views, and I stand ready to answer questions. 

[The prepared statement of Mr. Glasgow follows:]

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Mr. SHERMAN. And we now move onto our last witness, Henry 

Sokolski, executive director of the Nonproliferation Policy Education Center. He served as a member of the Congressional Commission on the Prevention of Weapons of Mass Destruction Proliferation and Terrorism. Previously he served as deputy for nonproliferation policy in the Department of Defense, and I should 

point out that this month he has already issued a new book, and 

I would make it part of the record but I want people to actually 

go out and buy the book themselves, and it is, of course, entitled 

‘‘Reviewing the Nuclear Nonproliferation and Treaty.’’

With that let us hear from our witness. 

STATEMENT OF MR. HENRY SOKOLSKI, EXECUTIVE 

DIRECTOR, NONPROLIFERATION POLICY EDUCATION CENTER 

Mr. SOKOLSKI. Mr. Chairman, it is kind of you to urge people to 

buy it, but since it was produced at taxpayers’ expense it is free. 

Mr. SHERMAN. Ah. 

Mr. SOKOLSKI. And they can get it from the Web without having 

to go anywhere. 

Mr. SHERMAN. And that Web site would be? 

Mr. SOKOLSKI. Yes, www.NPEC–WEB.org. Thank you very much. 

I would like to thank you and members of the committee for inviting me to testify today. I would ask that the lengthy testimony 

that I wrote, along with an article on nuclear power, energy markets and proliferation be entered into the record and I will summarize my testimony. 

In my testimony I note that despite our best efforts to establish 

a new model of tougher nuclear nonproliferation conditions with 

the UAE, most Middle Eastern states, including the ones the 

United States is currently negotiating deals, with are not buying 

these conditions. That with China’s recent sale of power reactors to 

Pakistan, the Nuclear Suppliers Group could soon become impotent 

and constraining civilian nuclear exports to countries like Pakistan, 

Israel and beyond. 

Also, with congressional and executive branch interest in reversing U.S. policy against the commercial use of plutonium-based nuclear fuels, future U.S. nuclear cooperative agreements may explicitly allow nuclear fuel making activities. 

Finally, it appears that the administration wants to resubmit the 

U.S.-Russia nuclear deal even though Russian entities are still assisting Iran’s nuclear missile and advanced conventional military 

programs. 

None of this, I note, will make future nuclear cooperative agreements that you will be receiving any less controversial. Moreover, 

all of them will continue to be fast track with some nominal congressional presenting requirements, but nothing more. This then 

brings me to my key recommendations which is that Congress 

needs to require that both houses approve all nuclear cooperative 

agreements that the executive branch negotiates. 

Having studied constitutional law myself and referring to others 

who have, I believe the power that you gave the executive to run 

these agreements for you is delegated from Article 1, so you have 

a genuine constitutional issue here, but you are not nude in this 

fight. 

62

An alternative might be to lay out detailed conditions which if 

met would make it possible for any agreement that met these conditions to be handled as they currently are, as so-called compliant 

agreements. The trick here is to get the conditions right. These 

would include having the country in question meet all the nonproliferation conditions contained in the UAE deal, and that they 

could not get around them by dealing with other supplier states—

a very important qualification which I don’t think was yet attended 

to in the UAE deal. Have the IAEA also be authorized in these 

deals to conduct near real-time surveillance inspections which is 

not covered by the additional protocol but is critical; that they 

agree that if they recycle U.S. nuclear material, receive intangible 

technical support or any other forms of nuclear cooperation, they 

would lose those rights if they tested nuclear weapons. 

I go in further as to when and how you resume such cooperation. 

They would have to do a number of things. 

In addition, I argue that it is essential that Congress insist that 

the executive specify what the legally binding requirement for 

timely warning entails with regard to U.S. exports; that they finally implement Title 5 of the Nuclear Nonproliferation Act, which 

requires the U.S. to conduct non-nuclear energy cooperation and 

energy assessment assistance with developing states; that American withhold support efforts by any international institution dealing with financial assistance—this would be the World Bank, regional banks—to use subsidized loans to promote civilian nuclear 

power programs; and closing significant loopholes that enable the 

Secretary of Energy to approve transfers of nuclear technology 

without advisement or presentment to Congress. 

Finally, that you reenforce the current policy of deferring the use 

of plutonium-based commercial fuels by demanding that any legislative efforts, such as in the Senate, to reverse this policy, be referred to your committee first before markup and finalization. 

Some, of course, will argue that all of this is unrealistic, that the 

United States can’t be expected to do anything more than what 

other leading nations are willing to do. This view, however, I think 

is mistaken. 

Consider France, it is losing billions in its effort to build a reactor in Finland, and lost out on a reactor bid in the UAE. It, however, is building nearly a $3 billion mixed oxide fuel fabrication 

plant here in the U.S., and it hopes to build power reactors worth 

many tens of millions of dollars, and an enrichment plant. All of 

these will require subsidized U.S. Federal loan guarantees, and licenses. This is reason enough for France to listen to what the 

United States might want to do with nonproliferation requirements. Assuming they are reasonable, if France, then Germany 

and the U.K., to maintain European Union harmony will likely follow, and Russia, which is now in need of security German assistance to perfect its power reactors, could find its own reactor exports operating under German export control provisions. I would 

think that we would be able to persuade South Korea and Japan 

to fall into line, leaving China as the odd man out. 

One last comment. It seems to me that this is more than merely 

plausible, and if we think back there are two agreements that the 

United States was vitally involved in with nuclear cooperation for 

63

Iran and India. Those agreements set the pace. There were no 

votes. There was no serious oversight. We are paying the price for 

that, so investment now would be cheap in the long run. I think 

revising the Atomic Energy Act is a good idea. 

[The prepared statement of Mr. Sokolski follows:]

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Mr. SHERMAN. Thank you for your testimony. 

Mr. Glasgow, you have put forward the idea that having Congress actually follow the roles set forth in Article 1 of the constitution and vote up or down on these agreements would create unwarranted delay, and I am really concerned about whether that is kind 

of a phony argument or whether you are really worried about the 

delay. 

Mr. Spector put forward the idea that instead of having 90 days 

during which the agreement is frozen as we wait to see if Congress 

will act we shorten that period to 60 days but during those 60 days 

we have an affirmative up or down vote of each House. Would you 

support an expedited, faster system that would require Congress to 

have an up or down vote or would you oppose a faster system using 

the argument that it creates unwarranted delay? 

Mr. GLASGOW. Mr. Chairman, certainly a faster system has much 

to recommend it, and originally the Atomic Energy Act provided for 

60 days of continuous session to review. It was only in 1985 that 

an additional 30-day period was——

Mr. SHERMAN. It is pretty obvious you would prefer 60 to 90, the 

question is will you go from 90 to 60 with an affirmative vote, and 

if not, how do you then say that you are concerned about unwarranted delay? 

Mr. GLASGOW. I would be troubled by a system that creates a requirement of an affirmative congressional vote before an agreement 

for cooperation could be put into force. I know there is a lot of history here, and I will be very brief, but it is—first of all——

Mr. SHERMAN. Sir, rather than looking at the history of these 

agreements, I would look at the history of the U.S. Constitution. 

I think that the framers would be aghast to think that statutes are 

created by the President signing an agreement with a foreign potentate, and then that becoming the law of the land unless Congress was able to overcome it with two-thirds vote in both Houses. 

The history of our constitution is at least as important as the history of companies in a particular industry trying to make a profit. 

Now, you have told us we have 5,000 jobs in one particular 

agreement with China. To me that is not the lion’s share. You can’t 

run the kind of country America has become with its international 

responsibilities. What percentage of worldwide employment in 

building and construction nuclear power plants does the United 

States have? Is it over 5 percent? 

Mr. GLASGOW. Mr. Chairman, I certainly don’t have that information right at hand. 

Mr. SHERMAN. Please try to get it from your members. 

Mr. GLASGOW. I will try to get that information. I know though 

that, of course, American industry wants to be able to compete on 

a level playing field. 

Mr. SHERMAN. Let us focus on the level playing field. We have 

the liability issue. Let us say a company that has sovereign immunity, say one based in Russia or China, buys an American part, and 

installs it in a nuclear facility that has a terrible accident. Now 

they could assert sovereign immunity, the prime contractor, but 

could the plaintiffs then come and sue the part manufacturer and 

seek compensation even though the part manufacturer sold it to a 

sovereign and then the sovereign built the facility? 

74

Mr. GLASGOW. This matter of being sued in the United States or 

other countries is an every day concern for U.S. companies that 

participate in this field. The NEI does back very strongly the Convention on Supplementary Compensation, the CSC, and would like 

it to come into force. We are short one country, and we have to 

come up to the 400,000 megawatt thermal threshold before it can 

enter into force as well. One more country that has a large program would do it, such as Japan. 

But to really put the point sharply on the question you raised 

earlier, Mr. Chairman, whether the CSC should be incorporated as 

a requirement——

Mr. SHERMAN. Sir, I asked you a very specific legal question as 

the only lawyer in the room that I think that has a microphone. 

If an American company provides a part to a government-run corporation, say one in Russia or China, and then there is an accident, 

does the sovereign immunity protect that company or does anything else protect that company assuming there isn’t a liability law 

or supplementary compensation convention in force? 

Mr. GLASGOW. In the example you gave I believe an American 

court should dismiss that type of a lawsuit on the ground of forum 

non conveniens, and that conclusion would be particularly strong 

if the country in question, and you used the example of Russia, 

does have its own modern nuclear liability law, as does Russia, 

the——

Mr. SHERMAN. Let us say then would the American company be 

held liable in a foreign court, just shifting the Court? God, I would 

hate to be a defendant in a foreign court on a matter like this. 

Mr. GLASGOW. In Russia, the answer should clearly be no. Russia 

is a party to the 1963 Vienna Convention which channels liability 

exclusively to the operator, and the Courts—Russian law requires——

Mr. SHERMAN. Speaking for your industry, is this a problem 

when—you talk about those 5,000 jobs and a few jobs here and a 

few jobs there that come from manufacturing components that will 

be used in facilities that will be located in countries that do not 

have liability conventions or laws. Do those companies get unlimited liability insurance, or what protects them from a $100 billion 

lawsuit? 

Mr. GLASGOW. Often, meaningful liability insurance would be unavailable, and in my experience U.S. companies, and as well European companies, are not willing to participate in contracts in countries that do not have modern nuclear liability laws. 

Mr. SHERMAN. So in the absence of those laws we don’t just lose 

the lion’s share, we lose the vulture’s share, we lose all of the jobs 

involved in the project? 

Mr. GLASGOW. Companies at all levels, even manufacturers of 

small parts and services, often decide not to participate in those 

contracts. This is the reason why CSC adherence is so important. 

Mr. SHERMAN. I believe I have exceeded time. We will see whether we do a second round, and I yield to Mr. Scott. 

Mr. SCOTT. Thank you. 

I would like to just ask a few questions on the relationship with 

Russia on this issue. We soon will be asked by the White House 

to approve a nuclear cooperative agreement with Russia, and I 

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would like to ask each of you to give your take on the situation as 

we are faced with on several fronts. One is, Russia has tons of 

highly enriched weapons material already. I would like your take 

on how should that be disposed of, what should we do with that? 

They continue to help Iran with their nuclear energy program 

and their nuclear weapons programs. I would like your take on 

that, specifically each of your conclusions whether or not in fact 

you believe without question, despite what Ahmadinejad said and 

spoke to the U.N. on Monday at the nonproliferation conference at 

the U.N., whether or not you feel each of you personally that they 

are in fact after procuring and developing nuclear weapons. I think 

that would be very important to establish from each of your perspectives, are they or are they not doing so? 

Then secondly, it is my understanding that their main help on 

paper in front, out in the open, above the table that we know of 

that Iran has been over these 14 years in building this Bashir 

plant supposedly for civilian use of nuclear energy. However, there 

is a tremendous amount of spent fuel there, and should not Russia 

have some responsibility for helping to clean that up, dispose of 

that, determine where it is going? 

So, I think that this would be a good departure just to get some 

response on Russia in these questions that I have asked because 

absolutely between the two of us, Russia and the United States, we 

hold almost all the trump cards on this whole issue of nuclear energy, and especially in view of the fact that over 90–95 percent of 

all the nuclear weapons are in either of our possessions or responsibilities. I would like each of your take on this 

Mr. SPECTOR. Let me see, I think as far as the U.S.-Russia 

Agreement for Cooperation is concerned, you know, you might want 

to divide issues into show stoppers and important, but maybe we 

can work them. If we had evidence that Russia was deliberately 

tolerating or encouraging support for the sensitive parts of the Iranian nuclear program, that is, his clandestine enrichment plants 

that have come out for the missile program, I would say that would 

be cause for deep concern and conceivably sufficient to freeze this 

agreement. I don’t think the agreement will come to you if that is 

going on at a level that is beyond individual companies operating—

you know, defeating Russian export control laws. 

Mr. SCOTT. Do you feel that it is going on 

Mr. SPECTOR. It was not my impression that was true but I am 

not privy to the classified information. If it were true, as I say, I 

don’t think the administration will come forward with the agreement. 

Mr. SCOTT. But somebody is helping them 

Mr. SPECTOR. Well, they have got an awful lot of assistance from 

A. Q. Kahn. They got a nuclear weapon design. They got the instructions as to how to manufacture the centrifuges and build 

them. They got technical assistance to support the hardware, and 

they have learned a lot independently. There is a lot of leakage 

from Western Europe. So they may not be getting that kind of insider information about how to design the bomb from the Russians 

or things of that kind, but I would say as you consider the agreement that would be crucial to look into and confirm that you were 

satisfied, and I think that is kind of a crucial issue. 

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High enriched uranium, there was an excellent program, I used 

to be at the Department of Energy and worked on some of these 

issues. I think 500 tons of that material was being downblended so 

it wasn’t being used for weapons anymore, made into nuclear 

power plant fuel, and actually sold to the United States and it is 

being used around the country now. It would be good to do that a 

second time or to find some kind of mechanism to encourage Russia 

to take another 500 tons and downblend it the same way. 

My sense is the evidence regarding Iran’s intentions is so—there 

is so much of it now and it has accumulated for so long you are 

sort of forced to the conclusion that this is a nuclear weapon program. Maybe they will pause before they go all the way. 

And as far as Bashir is concerned, there is this danger—I know 

Dr. Sokolski and others have raised it—about the spent fuel that 

will be there because it is a potential source of plutonium. But the 

Russians have pledged to take the stuff back to Russia, so at a certain stage it goes away from Iran. I don’t think anyone has been 

happy about this deal, the nuclear power plant deal, but I think 

it has reached a stage now where if we could get other matters settled with Iran, it could be part of a tolerated package to close this 

situation out if we can get a freeze and maybe a rollback of other 

more sensitive activities. 

Mr. SCOTT. Should that be a consideration of our consideration 

for the agreement that Russia be responsible for the spent fuel? 

Mr. SPECTOR. I think Russia has—the agreement does provide 

for the take back of the spent fuel, so maybe you want to probe 

about details, how long will the fuel stay in Iran, how much would 

accumulate, I think those are appropriate questions, but the core 

question is, is there an arrangement, that is, a good arrangement 

basically? I would say the answer is yes. 

Mr. SCOTT. Okay, thank you. 

Mr. SOKOLSKI. Mr. Scott. 

Mr. SCOTT. Mr. Sokolski. 

Mr. SOKOLSKI. I have a very different take on each one of those 

questions. Having served on the Commission on the Prevention of 

WMD Proliferation and Terrorism, we looked into each one of these 

questions in detail with clearances, and in the report cards that we 

laid out and in the report we were very concerned with the nuclear 

proliferation assessment statement that was handed in, in 2008, 

which was as the Government Accountability Office said, quite 

hastily done and incomplete. 

What they did and what you should not tolerate and actually get 

into if you get this agreement was they sent up an assessment that 

asked, ‘‘Is there anything that we know for sure the Russians are 

doing in violation of the law?’’ They then looked at that narrow 

question, and then went to the Russians and said, ‘‘Stop it.’’ Instead of asking is there criminal activity, gang activity in the 

neighborhood, what is it and what is the prospect for more crime, 

they didn’t look at that, and the Government Accountability Office 

was quite good in highlighting how much information was not in 

that report that was filtered out that you need to look at. That is 

point one. 

I think point two——

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Mr. SCOTT. If you could give me a couple of examples, what 

would that information be? 

Mr. SOKOLSKI. I can talk about unclassified news reports and I 

will right now just to give you a flavor. There was a report in The 

Washington Post that a high-speed camera may have left one of the 

facilities in Russia, and it was very useful in designing implosion 

device or shockwave analysis. There was some discussion that I believe is in the public realm that David Albright spoke about which 

had to do with assistance with the heavy water reactor fuel, which 

is a production reactor essentially. They call it a research reactor. 

In any case I will stop there because I want to make sure if it is 

unclassified. 

Mr. SCOTT. That is fine. 

Mr. SOKOLSKI. Certainly in the missile area you have a plethora 

of problems which, you know, need to be looked into. We just had 

an announcement by the Secretary of Defense that said that he is 

worried an ICBM might be made as soon as 2015 if there is foreign 

assistance. Well, you might look into what Russian assistance 

might be involved there. 

With regard to Bushehr, the Russian agreement is only to take 

the Russian fuel, and that is only the first 10 years worth. Moreover, that fuel sits there for several years before they take it, so 

I wouldn’t be—I mean, that is still an issue. Moreover, the Iranians 

have not agreed after repeated requests to allow near real time 

surveillance so that we can see what is going on at these facilities 

every 5 minutes by a secure link between the camera and Vienna. 

They won’t allow that so you can only see things every 90 days. 

That is a long enough period to divert fuel. That is a big concern. 

It is one of the things you wanted to have in that UAE agreement 

that you did not get. 

Finally, it seems to me that the Hugh (highly enriched uranium) 

issue is a very important one. I agree with Sandy that we had a 

great deal. We also know for a fact, and there is lots of analysis 

that I had a fellow do on our Web site, that the Russians are no 

longer interested in doing blenddown agreements. We need to give 

them a reason to come around on that before you give an approval 

to something they want much more than we do, which is this nuclear cooperative agreement, and the reason they want this agreement is because they are the odd man out. Everyone has a nuclear 

cooperative agreement with the U.S. and gets access to our quality 

regulatory and safety information, in addition design information, 

but them, and it is starting to hurt sales. Well, you have got to use 

that as leverage. 

Mr. SCOTT. And to my final question, it is your opinion unequivocally or not that Iran is after nuclear weapons? 

Mr. SOKOLSKI. There is no question in my mind that they are on 

the brink, they want to be on the brink, and they want you to be 

on the edge of your stool every minute watching. 

Mr. SCOTT. But your conclusion is that they are in fact after nuclear weapons? 

Mr. SOKOLSKI. No question. Absolutely no question. When I 

served in the Pentagon back in 1990, I sent the first memo to the 

Secretary of Defense, which was shared with, I hope, the President 

that we had evidence that Iran was restarting all of its weapons 

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programs, and you know, we didn’t do enough then and here we 

are now. 

Mr. GLASGOW. Mr. Scott, could I provide just a very brief industry perspective on these questions which will be quite selective because on some of the questions we don’t have enough information? 

But certainly, when it comes to your question about blenddown 

or what to do with the tons of weapons material in Russia, the U.S. 

industry’s role has been to help implement the Russia-U.S. highly 

enriched uranium agreement. American companies have stood 

ready to capably take on the task of accepting such material, blending it down in a swords to plowshares manner. American companies have performed the actual blend-down operations. This has 

been, I think, a good contribution to the effort. 

On the question of Iran, the industry itself of course accepts 

what the U.S. Government has to say about this issue. I don’t have 

anything new to present about whether they are developing nuclear weapons. I can say though that the industry has some tools 

at its disposal that could contribute in a way that I think would 

be constructive, if not for Iran, at least for some countries, and that 

is the idea of long-term fuel assurances and multilateral fuel cycle 

centers. 

The idea of commercial arrangements and how these things could 

be crafted so they work and provide the right kind of assurances 

is something to which the industry can contribute. While the industry doesn’t have the answer to Iran, it has some of the tools to 

frame the institutional and commercial arrangements that will 

help to address these problems. 

Mr. SCOTT. Thank you, sir. 

Mr. SHERMAN. I want to thank our witnesses for coming before 

us, and look forward to working with you to try to craft some better 

policy. Thank you very much. 

[Whereupon, at 12:51 p.m., the subcommittee was adjourned.] 

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