U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

19–118

" SENATE ! 107TH CONGRESS

2d Session 

TREATY DOC. 

2002

107–21

CONVENTION ON SUPPLEMENTARY COMPENSATION 

FOR NUCLEAR DAMAGE

MESSAGE

FROM

THE PRESIDENT OF THE UNITED STATES

TRANSMITTING

CONVENTION ON SUPPLEMENTARY COMPENSATION FOR NUCLEAR DAMAGE, DONE AT VIENNA ON SEPTEMBER 12, 1997. 

CONVENTION ADOPTED BY A DIPLOMATIC CONFERENCE CONVENED BY INTERNATIONAL ATOMIC ENERGY AGENCY (IAEA) 

AND OPENED FOR SIGNATURE AT VIENNA, SEPTEMBER 29, 1997 

DURING IAEA GENERAL CONFERENCE

NOVEMBER 15, 2002.—Convention was read the first time, and together 

with the accompanying papers, referred to the Committee on Foreign 

Relations and ordered to be printed for the use of the Senate 


E:\Seals\Congress.#13
(III)

LETTER OF TRANSMITTAL 

THE WHITE HOUSE, November 15, 2002. 

To the Senate of the United States: 

I transmit herewith, for Senate advice and consent to ratification, with a declaration, the Convention on Supplementary Compensation for Nuclear Damage done at Vienna on September 12, 

1997. This Convention was adopted by a Diplomatic Conference 

convened by the International Atomic Energy Agency (IAEA) and 

was opened for signature at Vienna on September 29, 1997, during 

the IAEA General Conference. Then-Secretary of Energy Federico 

Pen ̄ a signed the Convention for the United States on that date, 

subject to ratification. Also transmitted for the information of the 

Senate is the report of the Department of State concerning the 

Convention. 

The Convention establishes a legal framework for defining, adjudicating, and compensating civil liability for nuclear damage that 

results from an incident in the territory of a Party, or in certain 

circumstances in international waters, and creates a contingent 

international supplementary compensation fund. This fund would 

be activated in the event of an incident with damage so extensive 

that it exhausts the compensation funds that the Party where the 

incident occurs is obligated under the Convention to make available. 

The international supplementary fund would be made up largely 

of contributions from Parties that operate nuclear power plants. 

The improved legal certainty and uniformity provided under the 

Convention combined with the availability of additional resources 

provided by the international supplementary fund create a balanced package appealing both to countries that operate nuclear 

power plants and those that do not. The Convention thus creates 

for the first time the potential for a nuclear civil liability convention with global application. 

Prompt U.S. ratification of the Convention is important for two 

reasons. First, U.S. suppliers of nuclear technology now face potentially unlimited third-party civil liability arising from their activities in foreign markets because the United States is not currently 

party to any international nuclear civil liability convention. In addition to limiting commercial opportunities, lack of liability protection afforded by treaty obligations has limited the scope of participation by major U.S. companies in the provision of safety assistance to Soviet-designed nuclear power plants, increasing the risk 

of future accidents in these plants. Once widely applied, the Convention will create for suppliers of U.S. nuclear equipment and 

technology substantially the same legal environment in foreign 

markets that they now experience domestically under the Price-AnVerDate 0ct 31 2002 13:30 Nov 19, 2002 Jkt 019118 PO 00000 Frm 00003 Fmt 7633 Sfmt 7633 E:\HR\OC\TD021.XXX TD021
IV

derson Act. It will level the playing field on which they meet foreign competitors and eliminate the liability concerns that have inhibited them from providing the fullest range of safety assistance. 

Second, under existing nuclear liability conventions many potential victims outside the United States generally have no assurance 

that they will be adequately or promptly compensated in the event 

they are harmed by a civil nuclear incident, especially if that incident occurs outside their borders or damages their environment. 

The Convention, once widely accepted, will provide that assurance. 

United States leadership is essential in order to bring the Convention into force soon. With the United States as an initial Party, 

other countries will find the Convention attractive and the number 

of Parties is likely to grow quickly. Without U.S. leadership, the 

Convention could take many years to enter into force. The creation 

of a global civil liability regime will play a critical role in allowing 

nuclear power to achieve its full potential in the diverse and environmentally responsible world energy structure we need to build in 

the coming decades. 

The Convention is consistent with the primary existing U.S. statute governing nuclear civil liability, the Price-Anderson Act of 

1957. Adoption of the Convention would require virtually no substantive changes in that Act. Moreover, under legislation that is 

being submitted separately to implement the Convention, the U.S. 

contingent liability to contribute to the international supplementary fund would be completely covered, either by funds generated under the Price-Anderson Act in the event of an accident 

covered by both that Act and the Convention, or by funds contributed to a retrospective pool by U.S. suppliers of nuclear equipment 

and technology in the event of an accident covered by the Convention but falling outside the Price-Anderson system. In either case, 

U.S. taxpayers would not have to bear the burden of the U.S. contribution to the international supplementary fund. 

The Convention allows nations that are party to existing nuclear 

liability conventions to join the new global regime easily, without 

giving up their participation in those conventions. It also permits 

nations that do not belong to an existing convention to join the new 

regime easily and rapidly. The United States in particular benefits 

from a grandfather clause that allows it to join the Convention 

without being required to change certain aspects of the Price-Anderson system that would otherwise be inconsistent with its requirements. 

The Convention, without relying on taxpayer funds, will increase 

the compensation available to potential victims of a civil nuclear incident, strengthen the position of U.S. exporters of nuclear equipment and technology, and permit us to provide safety assistance to 

the world’s least-safe reactors more effectively. 

I urge the Senate to act expeditiously in giving its advice and 

consent to ratification of the Convention on Supplementary Compensation for Nuclear Damage, with a declaration as set forth in 

the accompanying report of the Department of State.

GEORGE W. BUSH. 

(V)

LETTER OF SUBMITTAL 

THE SECRETARY OF STATE, Washington, DC, August 7, 2001. 

The PRESIDENT, The White House.

THE PRESIDENT: I have the honor to submit to you the Convention on Supplementary Compensation for Nuclear Damage, done at 

Vienna on September 12, 1997. I recommend that this Convention 

be transmitted to the Senate for advice and consent to ratification, 

with a declaration. 

This Convention was adopted by a Diplomatic Conference convened by the International Atomic Energy Agency (IAEA), and was 

opened for signature at Vienna on September 29, 1997, during the 

IAEA General Conference. Then-Secretary of Energy Pen ̄ a signed 

the Convention for the United States on that date, subject to ratification. 

Acting in the light of the 1986 Chernobyl accident, the General 

Conference of the IAEA decided in 1989, with U.S. support, to establish within the IAEA a Standing Committee on Nuclear Liability (SCNL). The SCNL’s mandate was to examine ways to strengthen the existing international legal regime governing third party liability in the event of another nuclear accident. The SCNL met formally 17 times in Vienna over the intervening 7 years. It focused 

on two projects: (1) modernizing and strengthening the Vienna 

Convention on Civil Liability for Nuclear Damage of May 21, 1963 

(the Vienna Convention), to provide a greater level of protection to 

third party victims of a nuclear accident to which that convention 

applied; and (2) drafting a new convention on supplementary funding that would mobilize funds on the international plane to supplement national funds made available by the ‘‘installation state’’ under its national law and its obligations under other nuclear liability conventions to which it might also be party. 

In May 1997, the SCNL adopted and forwarded to the IAEA 

Board of Governors the texts of a Protocol to Amend the Vienna 

Convention and of a ‘‘Supplementary Funding Convention’’ (as the 

Convention on Supplementary Compensation for Nuclear Damage 

was then known). The texts were considered by the Board of Governors at its June 1997 meeting. It decided to convene a Diplomatic 

Conference for the week of September 8–12, 1997, to adopt the two 

texts and open them for signature. The Diplomatic Conference 

adopted the two texts on September 12 and opened them for signature on September 29, the first day of the 1997 IAEA General Conference. Along with the United States, six other states (Australia, 

Lebanon, Lithuania, Morocco, Romania, and Ukraine) signed the 

Convention on Supplementary Compensation for Nuclear Damage 

VI

1 A special drawing right is the unit of account defined by the International Monetary Fund 

and used by it for its own operations and transactions. 2 By contrast, the current version of the Vienna Convention allows parties to limit liability 

to as little as the equivalent of 5 million 1963 gold dollars (about $50 million at recent gold 

prices). Under the Paris Convention (to which most Western European countries belong) the operator’s liability maybe limited to as little as 15 million SDRs per incident. The January 31, 

1963, Brussels Convention Supplementary to the Paris Convention (the Brussels Convention), 

to which most Paris Convention Parties also belong, provides for the Paris/Brussel system to 

make available no less than 300 million SDRs to compensation damage in those Paris states 

that also being to the Brussels Convention. By comparison, once broadly adopted the CSCs will 

assure that no less than 600 million SDRs (about $800 million) will be available to victims. 3With respect to any nuclear incident occurring outside the United States involving contractors of the Department of Energy (DOE) transporting U.S. Government nuclear material, the 

Price-Anderson Act limits aggregate legal liability to $100 million. DOE has already recommended to Congress in its 1999 Report to Congress on the Price-Anderson Act, submitted to 

Congress in March 1999 (the 1999 Price-Anderson Act, submitted to Congress in March 1999 

(the 1999 Price-Anderson Report), that this amount be increased to about $500 million, which 

would exceed the CSC requirement of 300 million SDRs. See the analysis of Annex Article 5 

below for a discussion of a narrow set of potential accidents occurring outside the United States 

not covered by the Price-Anderson Act, but for which the United States would be the 

‘‘installation state.’’

(the ‘‘CSC’’) during the General Conference. Six other states 

(Argentina, the Czech Republic, Indonesia, Italy, Peru, and the 

Philippines) have since signed the CSC, and three states 

(Argentina, Morocco, and Romania) have ratified it. (The United 

States did not sign the Protocol to Amend the Vienna Convention; 

it is not party to the underlying Vienna Convention or to the Organization for Economic Cooperation and Development’s (OECD) 

Paris Convention on Third Party Liability in the Field of Nuclear 

Energy of July 29, 1960 (the Paris Convention), because those conventions do not take into account the U.S. system of tort liability 

based on the laws of the States of the United States.) 

The CSC is divided into two parts, a main body and an annex. 

The main body creates mechanisms for compensating nuclear damage caused within the territory of Parties to the CSC (and in certain cases outside their territory) by a nuclear incident in a covered 

installation for which an operator within a state that is a Party to 

the CSC is liable under the CSC. Under the regime created by the 

CSC, the first tier of compensation is provided by funds made 

available under the laws of the ‘‘installation state.’’ The CSC defines an ‘‘installation state’’ in relation to a covered nuclear installation as the Party within whose territory that installation is situated, or if it is not situated within the territory of any state, the 

Party by which or under the authority of which the nuclear installation is operated. The minimum first tier compensation level for 

CSC Parties is set at a convertible currency equivalent to 300 million special drawing rights (SDRs) 1 (about $400 million at current 

rates of exchange). There is, however, provision for a phrase-in period ending in 2007, until which time states may join the CSC with 

a first tier amount equivalent to not less than 150 million SDRs 

(about $200 million). After 2007, the 300 million SDRs requirement 

applies to all Parties.2 With respect to accidents within the territory of the United States (including its territory of the United 

States (including its territorial sea), and certain accidents occurring 

outside U.S. territory, the requirement for the United States to ensure the availability of the equivalent of 300 million SDRs in first 

tier compensation is already met (with two narrow exceptions) 3 by 

funds that would be provided under the Price-Anderson Act (42 

U.S.C. § 2210). 

VII

The second tier of compensation is provided by the international 

supplementary compensation fund that gives the CSC its name. 

The obligation to contribute to the fund would be triggered if the 

‘‘installation state’’ notifies the Parties that the amount of all eligible claims may exceed the minimum first tier amount that applies 

to that state. Approximately 90 percent of the international supplementary fund would be made up of contributions assessed on the 

basis of the nuclear power generating capacity (if any) of each 

Party to the CSC at the time the incident occurs; the remainder 

would be made up of contributions assessed on the basis of each 

Party’s United Nations assessment. 

Were it needed in its entirety today and were all major nuclear 

power generating states party to the CSC, the international supplementary fund would provide in excess of 300 million SDRs to compensate victims. Of this amount, the United States, as it possesses 

about one-third of the world’s nuclear generating capacity, would 

be obligated to contribute the U.S. dollar equivalent of approximately 100 million SDRs (about $131 million). When only a few 

states are party, the U.S. contribution would be far less (see discussion below of Article IV(1)). 

Legislation to implement this requirement in the United States 

in a manner that does not impose a cost on U.S. taxpayers is being 

submitted separately to Congress. It provides that, if an accident 

covered by the CSC is also covered by the Price-Anderson Act, 

funds drawn from contributions made pursuant to that Act by U.S. 

nuclear utilities will cover the U.S. contribution to the international supplementary fund. In the event of an accident covered 

by the CSC, but not covered by the Price-Anderson system, the legislation would provide that U.S. firms that supply nuclear equipment and technology will be required to contribute to a retrospective risk pooling program that will be used to reimburse the United 

States for its contribution to the international supplementary fund 

(plus any interest and costs awarded). The obligation of suppliers 

to pay into the pool would be deferred until the United States is 

called upon to contribute to the international supplementary fund 

with respect to an actual covered incident. 

A third tier of compensation would be available in some states, 

such as the United States, that make available national funds of 

more than 300 million SDRs under domestic legislation. States that 

make available third tier funds are free to raise and distribute 

them in accordance with domestic law, with the single condition 

(already met by the United States) that the availability of these 

funds not be conditioned on the existence of reciprocal obligations 

with other nations that do not have nuclear installations on their 

territory. 

The CSC incorporates three well-accepted principles that form 

the basis for the Price-Anderson system as well as the Paris and 

Vienna conventions. It (1) requires that all claims resulting from 

a covered nuclear incident be adjudicated in a single forum (in 

most cases the courts of the Party within which the nuclear incident occurs), (2) channels liability for all claims to the nuclear installation operator, and (3) provides for the strict liability of the operator (i.e., without the need to prove negligence). 

VIII

4 Becoming a Party, would, however, affect the U.S. Comprehensive Environmental Response, 

Compensation and Liability Act of 1980, as amended (42 U.S.C. § 9601, et seq.) (CERCLA), insofar as it applies to a narrow category of nuclear incidents, namely those occurring in international waters that affect the environment or natural resources of the U.S. Exclusive Economic 

Zone (EEZ) and over which U.S. courts would have jurisdiction under the CSC. This change 

would limit the scope of parties liable for damage but would result in the guarantee of more 

funds available to compensate nuclear damage from this category of nuclear incidents than is 

available under CERCLA. 

The CSC establishes two legal criteria to be met by a state wishing to become a Party. First, each CSC Party must also be a Party 

to the 1994 Convention on Nuclear Safety. The United States met 

this condition on July 10, 1999. The second is that each Party to 

the CSC must also either be party to the Vienna Convention, the 

Paris Convention, or must have domestic nuclear liability statutes 

that conform to the requirements set forth in the CSC’s Annex. The 

Annex, in turn, contains a grandfather clause specifically designed 

to permit the United States to join the new Convention without 

substantive change to the Price-Anderson system. 

The CSC assures that in most cases significantly greater resources will be available from both domestic and international 

sources to compensate potential victims and provide for restoration 

of the environment in the territory of Parties in the event of a nuclear incident. It also lays the foundation for a global legal regime 

governing nuclear liability. This regime would link, through legally 

binding treaty relations, states that are party to the Vienna Convention (32 states, including a number of Central and Eastern European states), the Paris Convention (17 states in Western Europe) 

and those states that are currently not party to either the Vienna 

Convention or the Paris Convention, including the United States, 

Canada, China, Japan, Russia, and South Korea, as well as many 

states that do not produce nuclear-generated power. Previous efforts (in particular those using the Vienna convention as a basis) 

failed to create such a global regime because the United States, the 

world’s largest nuclear power-generating state, was not prepared to 

alter its fundamental tort-law system to conform to the Vienna 

Convention and because non-nuclear power generating states had 

no incentive to join that regime. 

The CSC addresses the first of these problems by providing the 

grandfather clause in Article 2 of the Annex that allows the United 

States to become a Party without significantly altering Price-Anderson as it currently exists.4

The second problem is addressed by the international supplementary fund, which has no analog in the Vienna Convention. Fifty 

percent of the fund is to be used to compensate damage occurring 

outside the ‘‘installation state’’ (transboundary damage), including 

transboundary damage occurring in a non-nuclear power generating Party. The availability of this fund, especially as half of it 

must be applied toward transboundary damage, creates a strong 

incentive for such non-nuclear states to join the regime, creating 

for the first time the potential for a nuclear liability convention 

that will apply globally. 

Increasing potential compensation for victims and for environmental damage and eventually creating a uniform global legal regime are important goals in themselves, but U.S. ratification of the 

CSC may also have two additional benefits. First, the CSC can 

IX

strengthen U.S. efforts to improve nuclear safety, because, once 

widely accepted, the CSC will eliminate ongoing concerns on the 

part of U.S. suppliers of nuclear safety equipment and technology 

that they would be exposed to damage claims by victims of a possible future accident at a facility where they have provided assistance. This exposure to liability exists not only in the country where 

safety work has been performed and in other countries where damage might occur, but also in the United States because the suppliers are based here and are therefore subject to suit in U.S. 

courts. The CSC provides a mechanism for removing these liability 

concerns for suppliers, thus creating a legal environment that facilitates the provision of safety assistance. 

Second, U.S. participation in a global liability regime will allow 

U.S. exporters of nuclear technology and equipment to compete 

more effectively in foreign markets generally. Today, as noted 

above, these firms are exposed to potentially unlimited liability in 

their foreign businesses and to suit in U.S. courts. Even if the suits 

are baseless, expenses to defend such cases can be substantial. 

When the United States and the state whose nationals are involved 

are both Parties to the CSC, however, liability exposure will be 

channeled to the operator in the ‘‘installation state,’’ thus substantially limiting the nuclear liability risk of U.S. suppliers. Once the 

CSC is widely adopted, the entire nuclear supplier industry will be 

able to operate abroad under a single set of rules similar to those 

that have applied in the United States under the Price-Anderson 

Act since the beginning of the commercial nuclear power industry 

in the 1950s, and that have contributed to the development of safe 

and effective nuclear technology in this country.

The following is an article-by-article analysis of the CSC: 

The Preamble refers to the existing international instruments 

and national legislation that form the legal context within which 

the CSC is designed to operate, states the goals of creating a worldwide liability regime and increasing the amount of compensation 

for nuclear damage, and recognizes that the existence of such a 

worldwide regime would encourage regional and global cooperation 

to increase the level of nuclear safety. 

Article I contains definitions of 12 terms used in the CSC. They 

include definitions of the Vienna and Paris Conventions, ‘‘Special 

Drawing Right,’’ ‘‘nuclear reactor,’’ ‘‘installation state,’’ ‘‘nuclear 

damage,’’ ‘‘measures of reinstatement,’’ ‘‘preventive measures,’’

‘‘nuclear incident,’’ ‘‘installed nuclear capacity,’’ ‘‘law of the competent court’’ and ‘‘reasonable measures.’’ The definition of ‘‘nuclear 

damage’’ is substantially longer and more involved than the others, 

reflecting a need to accommodate different concepts of tort liability 

found in a wide variety of domestic legal systems while at the same 

time ensuring uniformity with respect to certain core elements. The 

types of damage covered by CSC are thus divided into two categories: those that must be compensated (loss of life, personnel injury, and property loss or damage), and those that are to be compensated ‘‘to the extent determined by the laws of the competent 

court.’’ This second category provides the national court adjudicating claims under the CSC with flexibility to determine under 

that state’s legal system how and to what extent to compensate the 

following types of losses: those economic losses not falling in the 

X

5 Each Party will decide which of its installations are used for peaceful purposes under the 

CSC. In the United States, installations used for peaceful purposes would not include nuclear 

submarines and other installations used for military operations, i.e., all operations of the Department of Defense. Some of the installations operated by the Department of Energy may also 

be excluded from coverage of the CSC. 

categories of loss of life, personnel injury, and property loss or damage; the costs of measures of reinstatement of impaired environment; loss of income deriving from an economic interest in any use 

or enjoyment of the environment; the costs of preventive measures 

taken to mitigate damage from an imminent or actual nuclear incident; and any other economic loss recognized by the general law on 

civil liability of that court. The types of loss or damage enumerated 

in Article I are (with the exception of the costs of preventive measures) only covered by the CSC to the extent that the loss or damage arises out of or results from ionizing radiation emitted inside 

a nuclear installation or emitted from nuclear fuel or radioactive 

products or waste in, or of nuclear material coming from, originating in, or sent to, a nuclear installation. 

Article II lays out the overarching scope of the CSC and the extent of its application and establishes the relationship of the Annex 

to the CSC. Paragraph 1 states that the CSC’s purpose is to supplement the system of compensation provided pursuant to national 

law that implements the Vienna Convention or the Paris Convention or that complies with the CSC’s Annex. Paragraph 2 states 

that the CSC applies ‘‘to nuclear damage for which an operator of 

a nuclear installation used for peaceful purposes situated in the 

territory of a Contracting Party is liable’’ under the Vienna or Paris 

Convention or under national law that complies with the Annex. 

The limitation to installations used for peaceful purposes excludes 

military facilities from the coverage of the CSC.5 Paragraph 3 incorporates the Annex as an integral part of the CSC. 

Article III contains the central undertaking of the CSC. Paragraph 1(a) obligates the ‘‘installation state’’ to ensure the availability of 300 million SDRs, or a greater amount it may have specified to the Depository (the Director General of the IAEA) before the 

incident, or an amount not less than 150 million SDRs during the 

transitional period ending September 29, 2007. The funds made 

available under this subparagraph constitute the first tier of compensation available in the event of a nuclear incident in a Party 

to the CSC. Paragraph 1(b) establishes the obligation on all Parties 

to the CSC to make available public funds according to the formula 

specified in Article IV. These contributions make up the international supplementary fund that constitutes the second tier of 

compensation. 

Paragraph 2(a) requires that first tier funds be distributed equitably without discrimination on the basis of nationality, domicile or 

residence. The courts of the ‘‘installation state’’ are thus required 

to treat domestic and transboundary victims without regard to 

their nationality when allocating the first tier of compensation. 

Subject to obligations it may have under other conventions on nuclear liability, the ‘‘installation state’’ is, however, free to include or 

exclude damage suffered in an non-Party state from the first tier. 

Paragraph 2(b) subjects the international supplementary fund to 

the same non-discrimination requirement, subject to Article V 

XI

6The recent reduction in the U.S. assessment to 22 percent lowers the U.S. contribution under 

Article IV(1)(b) and the U.S. cap under Article IV(1)(c) with respect to covered nuclear incidents 

occurring after the year 2001. 

(which determines the geographical scope within which damage 

must occur in order to be eligible for compensation from the fund) 

and Article XI(1)(b) (which reserves 50 percent of the fund in favor 

of compensating transboundary damage). 

Paragraph 3 of Article III reduces contributions to the fund proportionately among the contributing Parties if the damage compensated does not use up the entire fund. Paragraph 4 creates a 

separate category of interest and costs that may be assessed by a 

competent court and allocates any such interest and costs among 

the various possible contributors to the first two tiers proportionately. Contributions by the various possible contributors of their 

proportionate share of any interest and costs awarded will be required in addition to their actual contributions made pursuant to 

paragraph 1(a) and paragraph 1(b) of Article III and may cause 

their total contributions to exceed the contribution caps or minimums otherwise specified in the CSC. Interest and costs are allowed by the Price-Anderson Act and CERCLA and will be provided 

for in the implementing legislation that will be submitted with respect to the financing of U.S. contributions to the international 

supplementary fund. 

Article IV establishes the formula under which contributions to 

the fund are to be calculated. 

Paragraph 1(a)(i) assesses 300 SDRs per unit of installed capacity, which is defined in paragraph 2 as one megawatt of thermal 

power. Paragraph 1(a)(ii) assesses an additional amount equal to 

10 percent of the amount assessed in (i), to be contributed by all 

Parties on the basis of the ratio between their United Nations rate 

of assessment for the year preceding the year in which the nuclear 

incident occurs and the total of such rates for all CSC Parties. 

Subpargraph (b) states that each Party’s contribution shall constitute the sum of the amounts attributable to it under subparagraph (a), provided that states assessed the minimum rate by the 

United States and having no nuclear reactors shall be exempt from 

the requirement to contribute. The proviso was added in order to 

facilitate adherence to the CSC by very small developing states 

(e.g., Pacific Island nations). 

Subparagraph (c) contains a contribution cap. It provides that 

the maximum contribution that may be charged to a Party, other 

than the ‘‘installation state,’’ must not exceed a specified percentage, equal to its UN rate of assessment plus eight percentage 

points, of the fund as a whole. For the United States this percentage would be 33 percent (assuming a United Nations rate of assessment of 24 percent plus 8 percent); i.e., the U.S. share of the fund 

would be capped at one-third, based on a U.S. assessment of 25 

percent.6 Absent the cap, if the United States and only a few other 

states were Parties (e.g., soon after the CSC enters into force), the 

proportion represented by the U.S. contribution would otherwise be 

much higher. For example, if the supplementary fund were to be 

activated when the United States, South Korea, Canada and Japan 

were the only nuclear power-generating states party to the CSC, 

the U.S. contribution to the fund without the 33 percent cap would 

XII

be about 93 million SDRs out of a total fun of about 150 million 

SDRs (i.e., the United States would contribute 62 percent). Under 

the cap, however, the U.S. contribution would be limited to about 

50 million SDRs (33 percent of 150) and the fund would actually 

total 107 million SDRs. 

When the cap applies, the fund created would be smaller than 

it would otherwise have been, but this possible reduction of funds 

available for victims was judged to be acceptable when weighed 

against the likelihood that major nuclear power generating countries would not ratify the CSC if they faced a potentially disproportionate financial burden in the early states of building a global regime. To emphasize the transitional nature of the cap, the subparagraph further provides that it begins to phase out when a substantial fraction of the world’s nuclear generating capacity, 625,000 

MW, is represented by Parties to the CSC, at which point each 

Party’s cap is increased by one percentage point. For each 75,000 

MW in excess of 625,000 MW represented by CSC Parties, the level 

of the cap further increases one percentage point. 

Paragarph 2, which defines a unit of installed capacity as 1 MW 

of thermal power, states that the formula shall be calculated on the 

basis of the installed capacity of the reactors shown at the date of 

the incident on a list established and updated pursuant to Article 

VIII. 

Paragraph 3 provides that for the purpose of calculating contributions, a reactor shall be taken into account from the date 

when nuclear fuel elements are first loaded into the reactor and 

shall be excluded when all fuel elements have been removed permanently from the reactor core and have been safely stored in accordance with approved procedures. For the United States, these 

procedures are those approved by the Nuclear Regulatory Commission. 

Article V, paragraph 1, describes the geographical locations within which damage must be suffered in order to qualify a claimant 

for compensation from the international supplementary fund, provided a Party’s courts have jurisdiction under Article XIII. Nuclear 

damage is covered if suffered: within the territory of a Party, or in 

or above the EEZ or the continental shelf of a Party in connection 

with the exploitation or exploration of the natural resources of that 

zone or shelf. Also covered is nuclear damage suffered in or above 

maritime areas beyond the territorial sea of any Party (but outside 

the territorial sea of any non-Party) where the damage is suffered 

(a) by a national of a Party; (b) on board or by a ship flying the 

flag of a Party; (c) on or by an aircraft registered in a Party; or (d) 

on or by an artificial island, installation or structure under the jurisdiction of a Party. Paragraph 2 permits a state to assimilate persons having their habitual residence in its territory as its nationals 

for the purposes of paragraph 1(b)(ii) (concerning treatment of a 

national of a Party damaged while on the high seas). Paragraph 3 

clarifies that the term ‘‘national of a Contracting Party’’ includes 

juridical and natural persons, as well as the Party itself or any of 

its constituent subdivisions. 

Article VI obligates the Party whose courts have jurisdiction over 

claims arising from a nuclear incident to notify the other Parties 

of the incident if it appears that the damage caused by the incident 

XIII

exceeds, or is likely to exceed, its first tier amount and that contributions to the international supplementary fund may be required. Following such notification, Parties are required to make 

arrangements for determining which procedures shall apply for 

making funds available, if subsequently required. 

Article VII requires the Party whose courts have jurisdiction, 

once it has given notice pursuant to Article VI, to request the other 

Parties to make available funds for the international supplementary fund (up to the maximum amount required from each 

Party under the contribution formula) when and to the extent required without any restriction and gives that Party exclusive competence to disburse those funds. 

Article VIII sets up a system for establishing a list of nuclear reactors in each Party for the purpose of calculating the contributions 

to the international supplementary fund in the event an incident 

occurs. 

Paragraph 1 obligates a state when it deposits its instrument of 

ratification, acceptance, approval or accession to communicate to 

the Depository a list of its reactors containing the necessary particulars (i.e., the thermal capacity) of those reactors. Paragraph 2 

requires Parties to communicate promptly modifications to their 

list of reactors. When a reactor is to be added, the notification must 

be made at least 3 months in advance of the introduction of nuclear 

material into the reactor. Paragraph 3 permits other Parties to 

challenge particulars contained in the list submitted under paragraph 1 or subsequent modifications thereof and to submit any unresolved differences to the CSC’s dispute resolution provisions discussed below. Paragraph 4 obligates the IAEA to maintain, update 

and circulate the list on an annual basis. Paragraph 5 obligates the 

IAEA to notify Parties of communications and objections it receives 

with respect to this list. 

Article IX, paragraph 1, requires each Party to enact legislation 

permitting it or other Parties to the extent they have made contributions to the international supplementary fund to benefit from 

any right of recourse (a right to recover damages from a third 

party) enjoyed by the liable operator. The implementing legislation 

to be submitted separately to Congress will contain a provision giving effect to this requirement in the CSC with respect to situations 

where the Price-Anderson Act does not apply but there is a right 

of recourse. (There is no right of recourse under the Price-Anderson 

Act.) Paragraph 2 permits the Party of the liable operator to provide for the recovery from the operator of any public funds made 

available to compensate damage from a nuclear incident if the 

damage results from fault on the part of the operator. Paragraph 

3 permits the Party whose courts have jurisdiction over claims arising from an incident under the CSC to exercise the rights of recourse provided under paragraphs 1 and 2. 

Article X, paragraph 1, provides that the system of disbursements of the Party whose courts have jurisdiction shall be applied 

to all funds made available under the CSC. Paragraph 2 provides 

that the Party whose courts have jurisdiction shall not require 

claimants to bring separate proceedings depending on the source of 

the funds provided (i.e., whether they came from first tier funds, 

the second tier comprised of the international supplementary fund, 

XIV

or third tier funds provided under the law of the ‘‘installation 

state’’) and that Parties may intervene in the proceeding against 

the operator liable. Paragraph 3 guarantees that no Party will be 

asked to contribute to the international supplementary fund if required first tier funds are sufficient to cover all claims. 

Article XI, paragraph 1, stipulates the allocation of the international supplementary fund. Subparagraph 1(a) allocates one half 

of the fund for the compensation of damage in all Parties without 

differentiation. Subparagraph 1(b) makes the other half of the fund 

available for the compensation of transboundary damage. Subparagraph 1(c) provides that if the funds in the first tier are less than 

the equivalent of 300 million SDRs (i.e., if the ‘‘installation state’’ is benefiting from the 10-year phase in when the incident occurs), 

the proportion of the international supplementary fund available 

for transboundary damage is proportionately increased. 

Paragraph 2 deals with the special case when a Party has exercised its option under Article III(1)(a) and has declared a first tier 

amount that is 600 million SDRs or greater. In that case, the allocation to transboundary damage is eliminated and the entire international supplementary fund is available on a non-differentiated 

basis. 

Article XII deals with the relation between the CSC and other 

existing or possible future conventions in the field of nuclear liability. Paragraph 1 allows Parties to the Vienna Convention or Paris 

Convention to invoke their rights under those conventions against 

other Parties to them that are also party to the CSC in order to 

accumulate public funds that they may be called upon to supply to 

the CSC’s international supplementary fund. Paragraph 2 permits 

Parties to make provisions for a third tier of compensation of nuclear damage above and beyond the first tier amount and the international supplementary fund should they so choose (e.g., the provisions under the Price-Anderson Act that would result in additional 

compensation with respect to a U.S. accident once the first tier and 

the international supplementary fund had been exhausted). Where 

availability of the third tier under a Party’s domestic law would 

otherwise depend on reciprocity from a Party, lack of reciprocity 

may not be used to deny compensation to a Party that has no nuclear installations on its territory. (The Price-Anderson Act does 

not require reciprocity in any case, and, because Price-Anderson 

makes the U.S. third tier open to all, U.S. citizens would meet reciprocity requirements of any Party that mandates them.) Paragraph 

3 makes clear that Parties are free to enter into regional or other 

agreements for the purpose of accumulating funds to satisfy their 

obligation to provide first tier funds or to provide other additional 

funds for the compensation of nuclear damage. Notice of an intention to enter into such agreements must be given to the other Parties. 

Article XIII determines which Party’s courts shall have jurisdiction over claims brought under the CSC and how judgments rendered by the courts of one Party are to be recognized by those of 

another. Paragraph 1 states the general rule that (vis-a`-vis the 

courts of other Parties) only the courts of the Party within which 

the incident occurs shall have jurisdiction. Paragraph 2 deals with 

the exceptional case where the incident occurs within a maritime 

XV

area coextensive with an EEZ (i.e., an area extending seaward up 

to 200 nautical miles from the baselines from which a state’s territorial sea is measured) that has been or could be established by a 

Party and that has been notified to the Depositary. (The United 

States will notify the Depositary of its EEZ upon deposit of its instrument of ratification.) Under this paragraph, the courts of the 

coastal Parties exercise exclusive jurisdiction vis-a`-vis the courts of 

other Parties. Parties to the Paris or Vienna Convention are permitted to follow the corresponding jurisdictional provisions of those 

Conventions with respect to non-Parties to the CSC. Paragraph 3 

grants exclusive jurisdiction to the courts of the ‘‘installation state’’

vis-a ́-vis the courts of other Parties where the incident occurs outside the territory of any Party and outside the maritime area defined in paragraph 2. Paragraph 4 requires the Parties involved to 

determine by agreement which of their courts will have exclusive 

jurisdiction where jurisdiction would lie with the courts of more 

than one Party under the foregoing rules (e.g., if the incident were 

to occur in a maritime area where the actual or potential economic 

zone claims of two or more Parties overlap). Paragraph 5 stipulates 

that once no longer subject to appeal, a judgment rendered under 

the CSC in one Party’s courts shall be recognized in the courts of 

all other Parties, except when the judgment was obtained by fraud, 

the defendant was not given a fair opportunity to present his case, 

or where the judgment is contrary to the public policy (order 

publique) of the Party where enforcement is sought or is not in accord with fundamental standards of justice. Under paragraph 6, a 

judgment recognized under paragraph 5 shall be enforceable as 

though it were a judgment of the courts of the Party where enforcement is sought and the merits shall not be subject to further proceedings there. Paragraph 7 extends the recognition of judgments 

to include settlements effected in accordance with conditions established by national legislaiton that are paid out of the international 

supplementary fund. 

As with similar jurisdictional provisions in earlier treaties submitted to the Senate for advice and consent to ratification, it is anticipated that the provisions of Article XIII would be applied without the need for further implementing legislation. It should be 

noted that, after the United States deposits its instrument of ratification to the CSC, the effect of Article XIII will be to remove jurisdiction from all U.S. Federal and State courts over cases concerning nuclear damage from a nuclear incident covered by the 

CSC except to the extent provided in the CSC. Where jurisdiction 

would lie with courts in the United States under the CSC, however, 

the CSC will not affect the allocation of jurisdiction between State 

and Federal courts within the United States. 

Article XIV determines which law shall be applied by the competent court to cases arising under the CSC. Paragraph 1 stipulates that the Vienna Convention, the Paris Convention, or the 

Annex to the CSC, as appropriate, shall apply exclusively to a nuclear incident. Paragraph 2 stipulates that the law applied shall be 

that of the competent court, subject to the provisions of the Vienna 

Convention, the Paris Convention, or the Annex, whichever applies 

pursuant to paragraph 1. 

XVI

Article XV provides that the CSC does not affect the rights and 

obligations of a Party under public international law. Article XVI 

deals with dispute settlement. Paragraph 1 obligates the Parties 

involved in a dispute over the interpretation or application of the 

CSC to consult with a view to settling the dispute by negotiation 

or other peaceful means. Paragraph 2 permits any Party to a dispute to submit it after 6 months of consultations to binding arbitration or to the International Court of Justice. Paragraph 3 permits 

a Party to opt out of either of the dispute settlement procedures 

provided in paragraph 2 by declaring, at the time of ratification, acceptance, approval or accession, that it does not consider itself 

bound by either or both of the dispute settlement procedures provided for in paragraph 2. I recommend therefore that that the U.S. 

instrument of ratification be subject to the following declaration:

As provided for in paragraph 3 of Article XVI, the 

United States of America declares that it does not consider 

itself bound by either of the dispute settlement procedures 

provided for in paragraph 2 of that Article, but reserves 

the right in a particular case to agree to follow the dispute 

settlement procedures of the Convention or any other procedures.

Paragraph 4 permits a Party that has taken advantage of the option presented under paragraph 3 to reverse its decision at any 

time. 

Pursuant to Article XVII the CSC was opened for signature by 

all states on September 29, 1997, and it remains open for signature 

until its entry into force. 

Article XVIII deals with ratification, acceptance and approval of 

the CSC. Under paragraph 1, instruments of ratification, acceptance or approval may be accepted by the Depositary only from a 

state that is party to the Vienna Convention or the Paris Convention, or that declares that its national law complies with the provisions of the Annex, and provides further that such state, if it has 

a nuclear installation on its territory, must also be party to the 

1994 Convention on Nuclear Safety. Paragraph 2 designates the 

Director General of the IAEA as the CSC’s Depositary. Paragraph 

3 requires each Party to provide the Depositary with a copy of its 

national legislation implementing the Vienna or Paris Convention 

or the provisions of the Annex, as well as any notification pursuant 

to Article III(1)(a) (designating a first tier amount greater than 300 

million SDRs), Article XI(2) (indicating a first tier amount not less 

than 600 million SDRs), or Article III(1)(a)(ii) (taking advantage of 

the phase-in of the minimum national compensation amount). The 

Depositary is required to circulate these notifications to the Parties. 

Article XIX deals with accession. It applies the same criteria and 

provisions that are applied by Article XVIII to states that ratify, 

accept, or approve the CSC to states that accede to it (i.e., states 

that do not sign the CSC, but seek to become party after its entry 

into force). 

Article XX states that the CSC will enter into force on the 90th 

day following the date on which at least five states representing 

among them at least 400,000 units of installed nuclear capacity 

XVII

have deposited an instrument of ratification, acceptance, or approval and that the CSC will enter into force for any state which 

subsequently ratifies accepts, approves, or accedes to the CSC 90 

days following the deposit of its instrument. Article XXI permits 

any Party to denounce the CSC upon 1 year’s notice. 

Article XXII deals with cessation. Under paragraph 1, if a Party 

notifies the Depositary that it has ceased to be party to the Vienna 

or Paris Convention, it shall cease to be party to the CSC unless 

it notifies the Depositary that its national legislation complies with 

the provisions of the Annex and has provided the Depositary with 

a copy of that legislation. Under paragraph 2, a Party whose national law no longer complies with the provisions of the Annex and 

which is not party to the Vienna or Paris Convention ceases to be 

party to the CSC. 

Under paragraph 3, any Party having a nuclear installation on 

its territory which notifies the Depositary that it has ceased to be 

party to the 1994 Convention on Nuclear Safety ceases to be party 

to the CSC. 

Pursuant to Article XXIII, the CSC continues to apply to any nuclear damage caused by a nuclear incident which occurs before a 

Party’s denunciation or cessation becomes effective. 

Article XXIV authorizes the Depositary to convene, after consultations with the Parties, a conference for the purpose of revising 

or amending the CSC, and requires the Depositary to convene such 

a conference at the request of not less than one-third of the Parties. 

Article XXV deals with amendment of the CSC by simplified procedure. Under paragraph 1, the Depositary is required to convene 

a meeting of the Parties on the request of at least one-third of 

them for the limited purpose of amending the amounts stipulated 

in Article III(1)(a) and (b) (the first tier amount, the minimum level 

at which a state may phase in its first tier amount, and the 

amount of the international supplementary fund yielded by application of the contribution formula set out in Article IV) and the categories of installations, including contributions payable for them, 

referred to in Article IV(3). This reference to the categories of installations referred to in Article IV(3) was intended to allow the 

Parties to change the date when a nuclear reactor would be included or excluded from the contribution calculation. Under paragraph 2, amendments proposed at the meeting shall be adopted if 

no negative votes are cast. Under paragraph 3, amendments adopted at the meeting shall be notified to all Parties. If, within a period 

of 36 months following the notification, it is accepted by all states 

that were Parties at the time the amendment was adopted, the 

amendment will enter into force 12 months after the final acceptance is received. Under paragraph 4, if the amendment is not accepted by the states that were Parties at the time it was adopted 

within the 36-month period, it is to be considered rejected. Under 

paragraph 5 if a state becomes a Party to the CSC during the 36-

month period, that state will be bound by the amendment if it enters into force. If a state becomes a Party after the 36-month period, it will be bound by the amendment when it enters into force. 

In both cases, the amendment enters into force for the state in 

question when the amendment enters into force or when the CSC 

enters into force for that state, whichever is later. 

XVIII

Article XXVI specifies the functions of the Depositary, which is 

required to notify Parties and all other states and the SecretaryGeneral of the OECD (the Depositary of the Paris Convention) of 

all significant developments concerning the CSC. Article XXVII establishes the authentic languages of the CSC and directs the 

IAEA’s Director General to send certified copies of the CSC to all 

states. 

The Annex obligates a Party to the CSC that is not party to the 

Vienna or Paris Convention to ensure that its national legislation 

is consistent with the provisions of the Annex, insofar as those provisions are not directly applicable as national law in that Party. A 

Party having no nuclear legislation necessary to enable it to give 

effect to its obligations under the CSC. As noted above, in the few 

instances where implementing legislation is needed to meet the 

CSC’s obligations, such legislation will be submitted to Congress 

separately. With respect to the CSC’s other obligations, its provisions would operate directly. 

Article 1(1) sets out definitions of certain terms used in the 

Annex (the terms defined in Article I of the CSC also apply to their 

use in the Annex). Five terms are defined in Article 1: ‘‘nuclear 

fuel,’’ ‘‘nuclear installation,’’ ‘‘nuclear material,’’ ‘‘operator,’’ and ‘‘radioactive products or waste.’’ Paragraph 2 permits an ‘‘installation state’’ to exclude a nuclear installation or small quantities of nuclear material from the application of the CSC if criteria 

and limits for such exclusions have been established by the IAEA’s 

Board of Governors and the exclusions satisfy those criteria and do 

not exceed those limits.

Article 2 is a grandfather clause that permits the United States 

to become a Party to the CSC with only minor changes to the PriceAnderson system (although as noted below, certain provisions of 

the Annex could supersede other U.S. laws which could govern any 

nuclear incident that were to occur in the EEZ, to the extent such 

U.S. laws are inconsistent with the Annex and such unclear incident is not covered by the Price-Anderson system). In particular, 

the grandfather clause permits the United States to retain the concept of economic channeling, under which operators are required to 

indemnify those legally liable for nuclear damage. The Paris and 

Vienna Conventions, as well as the Annex provisions from which 

the United States is exempted under the grandfather clause, employ the concept of legal channeling, under which all legal liability 

for nuclear damage is imputed exclusively to the operator. In both 

systems, the end result is essentially the same in that no one but 

the operator is responsible for compensating nuclear damage 

caused by an incident in an installation of involving nuclear material for which the operator is responsible. Paragraph 1 deems the 

national legislation of a Party to be in conformity with the provisions of Annex Articles 3, 4, 5, and 7 if that legislation contained 

on January 1, 1995, and continues to provide for three elements: 

(1) strict liability in the event of a nuclear incident, (2) the indemnification of any person liable for nuclear damage other than the 

operator (i.e., economic channeling of liability to the operator), and 

(3) the availability of the equivalent of at least 1,000 million SDRs 

in the event of an accident in a civil nuclear power plant and at 

least 300 million SDRs in the event of an accident in other types 

XIX

7 In the 1999 Price-Anderson Report, the Department of Energy suggested that Congress consider amending the Price-Anderson Act by revising the definition of the United States to include 

the EEZ. Such action would eliminate almost all situations where the United States would have 

jurisdiction under the CSC but Price-Anderson would not apply. 8To avoid any ambiguity concerning the application of Article 4, legislation, which is being 

submitted separately to Congress, should be adopted to make explicit that, notwithstanding any 

other provision of law, the legal liability of the operator may not be limited to less than 300 

million SDRs, plus the amount to be made available under the international supplementary 

fund with respect to nuclear incidents outside the United States for which U.S. courts have jurisdiction pursuant to the CSC but as to which Price-Anderson is not applicable.

of civil nuclear installations. The United States is the only state 

that meets these three criteria, through the Price-Anderson Act. It 

is intended that, where the Price-Anderson Act does apply, it will 

apply to the exclusion of any other causes of actions or remedies 

(except for availability of funds from the international supplementary fund) that might be implied in or created by the CSC. 

Subparagraph 2(a) permits a Party that satisfies the criteria of 

paragraph 1 to apply a broader definition of nuclear damage than 

other Parties, thus allowing the damage concept under applicable 

U.S. law to be applied without any restrictions with respect to incidents where the United States is the ‘‘installation state.’’ Paragraph 2(b) permits a grandfathered Party to apply a more narrow 

definition of ‘‘nuclear installation.’’ This definition is found in paragraph 3 and is consistent with the types of installations currently 

covered by the Price-Anderson Act. 

Paragraph 4 of Article 2 applies the provisions of Annex Articles 

3–11 to a nuclear incident occurring outside the territory of a 

grandfathered Party over which its courts have been granted jurisdiction under Article XIII, but to which the national law under 

which it qualified as a grandfathered Party (i.e., the Price-Anderson Act) does not apply. To the extent Annex Articles 3–11 are inconsistent with other laws of the grandfathered Party, the Annex 

provisions prevail. In the case of the United States, the Price-Anderson Act, under which the United States qualified for grandfathered status, does not apply to most potential incidents within 

the U.S. EEZ, but Article XIII grants U.S. courts jurisdiction over 

incidents occurring there.7 Annex Articles 3–11 would as a result 

apply directly to a non-Price-Anderson incident covered by the CSC 

occurring in the U.S. EEZ, and would prevail over other existing 

U.S. statutes to the extent they are inconsistent. For example, 

CERCLA currently imposes potential liability on several categories 

of parties connected to the nuclear material in the event of a nuclear incident in the U.S. EEZ (vessel owners, vessel operators, 

shippers, cask manufacturers, etc.). Annex Article 3 of the CSC, 

however, provides for channeling of all nuclear liability to the operator on the basis of strict liability, and would thus prevail over the 

provisions of the CERCLA to the extent such provisions would otherwise permit different defendants to be sued. In addition, to the 

extent CERCLA or any other existing law established lower limits 

on operator liability than does Annex Article 4, the provisions of 

the Annex would prevail.8

With respect to incidents occurring outside the U.S. EEZ (other 

than those involving DOE contractors and U.S. Government-owned 

material, to which the Price-Anderson Act applies) with regard to 

which the United States is the ‘‘installation state,’’ but which cause 

damage only in the EEZ or territory of another CSC Party and not 

XX

in the U.S. EEZ or territory, neither Price Anderson nor CERCLA 

currently apply. In such circumstances, Annex Articles 3–11 would 

create causes of action cognizable in U.S. courts for loss of life, personal injury, and property loss or damage. Consistent with the CSC 

definition of ‘‘nuclear damage’’ in Article 1(f), Annex Articles 3–11 

would not, however, create any obligations with respect to any 

other economic loss (such as the cost of environmental restoration 

in international waters), unless there is a cause of action for such 

other economic loss recognized under U.S. law independent of 

Price-Anderson or CERCLA. 

Article 3 establishes and describes the liability of the operator in 

the event of a nuclear incident. As noted above, since the United 

States would benefit from the Article 2 grandfather clause, for the 

United States Article 3 would only apply to an incident that is not 

covered by the Price-Anderson Act. Paragraph 1 establishes the operator’s liability for nuclear damage when it is proved that the 

damage was caused by a nuclear incident in that operator’s installation or involving nuclear material coming from or originating in 

that installation over which that operator has control, unless the 

incident involves nuclear material in transit stored in that installation, but for which another operator is responsible. 

Paragraphs 1(b)(iv) and 1(c)(iv) are intended to establish when 

an operator of a nuclear installation covered by the CSC is liable 

for nuclear damage with respect to nuclear material sent between 

such covered installation and a person within the territory of a 

non-Party. 

Paragraph 2 permits Parties under their national law to allow a 

carrier of nuclear material or a person handling nuclear waste to 

be designated as an operator at the carrier’s request and with the 

approval of the actual operator concerned so that the carrier is 

treated under the CSC as the operator with respect to that nuclear 

material. 

Paragraph 3 states that the liability of the operator for nuclear 

damage shall be absolute (i.e., applying the doctrine of strict liability to nuclear incidents covered by the Article). 

Paragraph 4 deems non-nuclear damage that is not reasonably 

separable from nuclear damage to be nuclear damage. Paragraph 

4 also provides that, to the extent that damage is caused jointly by 

a nuclear incident covered by the CSC Annex and by an emission 

of ionizing radiation not covered by it, the Annex does not limit or 

otherwise affect the liability of any person who may be held liable 

in connection with the emission of ionizing radiation. 

Subparagraph 5(a) excuses an operator from liability if the nuclear incident was caused directly by an act of armed conflict, hostilities, civil war or insurrection. Subparagraph 5(b) similarly excludes damage caused by a nuclear incident directly due to a grave 

natural disaster of an exceptional character unless the law of the 

‘‘installation state’’ provides to the contrary. 

Paragraph 6 permits Parties through their national law to relieve an operator from the obligation to pay compensation to a person the operator proves was responsible for the incident due to 

gross negligence or an intentional act or omission. 

Subparagraphs 7(a) and (b) relieve the operator from liability for 

nuclear damage to the installation itself and associated property or 

XXI

9To the extent that there are currently not any limits in U.S. law on the liability of operators 

for damages arising from certain nuclear incidents (e.g., an accident on the high sea not covered 

by Price-Anderson or CERCLA), neither the ratification of the CSC by the United States nor 

the changes in U.S. domestic law contemplated in connection with ratification will establish 

upper limits on that liability. 

to any other nuclear installation on the same site. Subparagraph 

7(c) relieves the operator in the event of a transport incident from 

liability for nuclear damage to the means of transport upon which 

the nuclear material involved was at the time of the incident, unless otherwise provided by the national law of the ‘‘installation 

state.’’ In that case, damages paid to compensate nuclear damage 

to the means of transport may not reduce the operator’s remaining 

liability below 150 million SDRs or any higher amount established 

under that national law.

Paragraph 8 stipulates that the operator’s liability outside the 

CSC for damage to means of transport for which the operator is not 

liable under subparagraph 7(c) remains unaffected. 

Paragraph 9 states that the right to compensation for nuclear 

damage may only be exercised against the operator liable, or, if national law permits, against any supplier of funds (e.g., an insurer 

or pooling arrangement among operators) made available under national law to ensure compensation. This paragraph incorporates the 

principle of legal channeling, which is central to the Vienna and 

Paris Conventions. As noted above, the Price-Anderson Act employs 

economic channeling to reach substantially the same objective. 

Paragraph 10 states that the operator shall not incur liability for 

damage that lies outside the provisions of national law that is in 

accordance with the CSC. This provision is intended to prevent 

Parties from defining damage covered by the CSC as non-nuclear 

in their domestic law, thus circumventing the CSC’s channeling requirement. 

Article 4 elaborates upon the obligation created in Article III(1) 

(a) to make available a first tier of compensation funds of not less 

than 300 million SDRs (subject to a possible phase-in) with respect 

to Parties that are subject to the Annex (i.e., non-Parties to the Vienna or Paris Convention), to the extent they are not exempted 

from Article 4 by the grandfather clause (as the United States is 

with respect to those nuclear incidents covered by the Price-Anderson Act). In situations to which Article 4 applies, paragraph 1 allows such Parties to limit the liability of its operators to an amount 

not less than 150 million SDRs per incident if public funds are 

available to make up the difference between that amount and 300 

million SDRs.9 Paragraph 2 creates an exception to paragraph 1, 

allowing such Parties to reduce maximum operator liability to not 

less than five million SDRs having regard to the nature of the nuclear installation or the nuclear substances involved and to the 

likely consequences of an incident arising from that installation or 

material, again so long as public funds are available to cover the 

gap between the operator’s liability and the applicable first tier 

amount. Under paragraph 3, the amounts established under paragraphs 1 and 2 are to be applied wherever the nuclear incident occurs. 

Article 5 deals with financial security to be provided by operators. Under subparagraph 1(a) operators in ‘‘installation states’’

XXII

10This administrative authority also could be used to specify requirements as to when title 

transferred and could establish certain necessary terms of any insurance required to be obtained 

by shippers. 

that are Parties subject to the Annex, to the extent such states are 

not exempted by the grandfather clause (as the United States is 

with respect to those incidents covered by the Price-Anderson Act), 

must be required to obtain financial security (e.g., insurance) to 

cover their liability for nuclear damage in such amount, of such 

type, and under such terms as the ‘‘installation state’’ may require. 

Claims that exceed the yield of financial security maintained by the 

operator must be met through the provision of public funds, up to 

the applicable limit, if any, established under Article 4. When an 

installation state has not limited the liability of an operator, the 

amount of financial security that operator is required to obtain 

may not be less than 300 million SDRs. Again, if the yield of financial security is insufficient to meet claims up to the amount of security required, the difference must be made up through public funds. 

A provision similar to that found in Article 4(2) is included in subparagraph 1(b) to permit ‘‘installation states’’ to impose a requirement that operators obtain financial security as low as five million 

SDRs with respect to installations and materials that pose a reduced risk of nuclear damage in the event of an incident, but in 

this case public funds must be made available to cover any claims 

not covered by this lower amount of security up to the limit specified in subparagraph 1(a). Paragraph 2 exempts Parties and their 

political subdivisions that are operators for the purposes of the 

CSC from the requirement found in subparagraph 1 to obtain insurance or other financial security. Paragraph 3 states that funds 

provided by insurance or other financial security or by the 

‘‘installation state’’ pursuant to paragraph 1 of Article 4(1)(b) shall 

be used exclusively for compensation due under the Annex. Paragraph 4 states that no insurer or financial guarantor shall suspend 

or cancel the insurance or other financial security provided pursuant to paragraph 1 without giving at least 2 months’ written notice 

to the competent public authority, or, in the case when insurance 

applies to nuclear material being transported, while the material 

is being transported. 

Article 5 does not apply to the United States with respect to incidents covered by the Price-Anderson Act. It would apply to the 

United States with respect to any nuclear incidents outside the 

United States not covered by the Price-Anderson Act where the 

United States is the ‘‘installation state.’’ Such situations would be 

rare because U.S. shippers normally transfer title to nuclear materials to their foreign consignees (which then become the operator 

for purposes of the CSC) when the shipment first enters international waters. To cover the unlikely possibility that title is not 

transferred, administrative authority exists under the Atomic Energy Act that could be used to require that insurance be taken out 

by U.S. operators to the extent it was determined that the nature 

of the transportation and the nuclear material involved and the 

likely consequences of a nuclear incident during transportation required mandatory insurance.10 As noted above, if the proceeds of 

such insurance and the contribution of the liable operator were to 

fail to cover claims up the applicable limit of liability, or if there 

XXIII

11See footnote, page 39. 

were no insurance, the U.S. Government would be obligated to 

make up the differences or pay any otherwise unpaid portion of the 

required United States share. 

Article 6 (from which the United States is not exempted under 

the grandfather clause) pertains to incidents occurring during the 

transportation of nuclear materials. Paragraph 1 states the general 

rule that during carriage the maximum amount of liability is determined by the national law of the ‘‘installation state.’’ 11 Paragraph 

2 creates an exception to the general rule, permitting a Party 

through whose territory nuclear material is passing to require that 

the liability of the operator be increased to an amount not to exceed the limit of liability of an operator of a ‘‘nuclear installation’’ situated in that state. Paragraph 3 stipulates that the option created under paragraph 2 may not be exercised with respect to shipments of nuclear material by sea when there is a right of entry in 

cases of urgent distress into the ports of a Party or a right of innocent passage through its territorial sea, or to shipments by air 

where, by agreement or under international law, there is a right 

to fly over or land on the territory of a Party. 

Article 7 covers the theoretically conceivable case where more 

than one operator may be liable for a single nuclear incident. (The 

Article does not apply to the United States under the grandfather 

clause with respect to those incidents covered by the Price-Anderson Act.) Under paragraph 1, the operators liable shall be held 

jointly and severally liable unless the damage attributable to the 

respective operators is reasonably separably. The ‘‘installation 

state’’ is authorized to limit the amount of public funds made available in this case to the difference between the amount made available by the liable operators directly or through their insurers and 

the first tier compensation amount established pursuant to Annex 

Article 4(1) and Article III(1)(b). 

Paragraph 2 deals with an incident occurring during transportation (e.g., when nuclear material belonging to more than one operator is being shipped together). In this case, the total amount of 

liability shall not exceed the highest amount applicable to any one 

of the operators involved pursuant to Article 4(1). Under paragraph 

3, the liability of any one operator involved shall not exceed the 

amount applicable to that operator under Article 4(1). Paragraph 

4 covers the possibility of an operator having more than one installation involved in the same incident. In this case, the liability limit 

applicable to that operator is multiplied by the number of installations involved. The ‘‘installation state,’’ however, is authorized to 

limit public funds made available to the difference between the 

total amount made available by the operator and the amount it has 

established pursuant to Article 4(1). 

Article 8 deals with compensation under national law. (The 

United States is not exempt from Article 8 or subsequent Annex 

Articles.) Under paragraph 1, the amount of compensation provided 

pursuant to the CSC shall be determined without regard to any interest or costs awarded. Paragraph 2 requires that compensation 

for nuclear damage outside the ‘‘installation state’’ be provided in 

freely convertible form. Paragraph 3 allows the national law of the 

XXIV

Party where damage has been compensated to be applied to the 

question of whether and to what extent public health insurance, social insurance, and other national or applicable intergovernmental 

programs that may have compensated victims of a nuclear incident 

have rights of recourse. 

Article 9 establishes periods of extinction for rights of compensation for claims brought under the CSC. Paragraph 1 establishes the 

period of extinction at 10 years, but allows this period to be extended if, under the law of the ‘‘installation state,’’ the liability of 

the operator is covered by insurance or other financial security or 

by state funds for a longer period, which then becomes the limit 

under the CSC. Under paragraph 2, the period of extinction for an 

incident involving stolen, lost, jettisoned, or abandoned nuclear material is calculated from the date of the incident, but in no case, 

unless the national law of the ‘‘installation state’’ permits and operator and state funds remain available, shall the period exceed 20 

years from the date of the theft, loss, jettison, or abandonment. 

Paragraph 3 permits the law of the competent court to establish a 

period of prescription or extinction of not less than 3 years from the 

date a person suffering nuclear damage had actual or constructive 

knowledge of the damage and of the operator liable for that damage, but this period may not exceed the periods established under 

paragraphs 1 and 2. Under paragraph 4 the law of a Party that 

provides for a period of extinction or prescription longer than 10 

years must contain provisions for the equitable and timely satisfaction of claims for loss of life or personal injury filed within 10 years 

from the date of the nuclear incident. The provisions of the PriceAnderson Act already satisfy these requirements. With respect to 

nuclear incidents not covered by Price-Anderson (i.e., certain incidents outside U.S. territorial waters), the provisions of Article 9 

govern and, in the absence of U.S. statutory provisions for a period 

of extinction longer than 10 years, rights of compensation will be 

extinguished in the United States if an action is not brought within 

10 years from the date of the nuclear incident. 

Article 10 addresses rights of recourse. It permits the national 

law of a Party to allow an operator to have rights of recourse 

against others only if these rights are provided for by a written 

contract or, if the nuclear incident for which the operator is liable 

under the CSC results from an act or omission done with intent to 

cause damage, against the individual who has acted or omitted to 

act with such intent. 

Article 11 states that, subject to the provisions of the CSC, the 

nature, form, extent and equitable distribution of compensation for 

nuclear damage caused by a nuclear incident shall be governed by 

the law of the competent court. 

The Department of Energy, the Nuclear Regulatory Commission 

and other interested U.S. Government agencies join the Department of State in recommending that the Convention on Supplementary Compensation for Nuclear Damage be transmitted to the 

Senate at an early date with a view to receiving its advice and consent to ratification, subject to the declaration permitted under Article XVI, paragraph 2, as described above. 

Respectfully submitted. 

COLIN L. POWELL. 

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