Nuclear Nonproliferation: Information on Nuclear Exports Controlled by U.S.-EURATOM Agreement
Published: 1995-06-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Pursuant to a congressional request, GAO provided information on the United States-European Atomic Energy Community (EURATOM) agreement, focusing on the: (1) amount of U.S. nuclear exports to EURATOM and Japan and U.S.-origin nuclear materials transferred from Japan to EURATOM; (2) value of U.S. nuclear exports to EURATOM and Japan; and (3) nuclear industry's views on the potential impact on nuclear commerce if the U.S.-EURATOM agreement is not renewed.
section_title: What GAO Found
paragraphs: GAO found that: (1) from 1980 through 1994, the United States exported about 32.6 million kilograms (kgs) of nuclear materials to EURATOM and 11 million kgs to Japan, and Japan transferred about 4.7 million kgs of U.S.-origin nuclear materials to EURATOM for reprocessing; (2) various forms of uranium constituted the majority of the nuclear material exports and enriched uranium constituted the majority of the U.S.-origin material transferred to EURATOM; (3) Japan also transferred about 37,187 kgs of U.S.-origin plutonium to EURATOM from 1980 through 1994; (4) no nuclear power reactors were exported to EURATOM or Japan during this period, but reactor equipment and components were exported to EURATOM and Japan under general license agreements; (5) U.S. nuclear materials exported from 1989 through August 1994 were worth about $1.1 billion for EURATOM countries and $4 billion for Japan; (6) for fiscal years 1989 through 1993, U.S. enrichment services worth $168 million and $1.6 billion were charged to EURATOM and Japan, respectively; (7) the U.S. nuclear industry believes that if the U.S.-EURATOM agreement expires, EURATOM and Japan would seek other non-U.S. suppliers of nuclear materials and services and the industry would be substantially weakened; and (8) the expiration of the agreement could seriously affect the future of the U.S. Enrichment Corporation's uranium enrichment services, since it would jeopardize $630 million in current contracts and $1.8 billion in potential new contracts.

section_title: Letter
paragraphs: The Agreement for Cooperation Between the United States of America and the European Atomic Energy Community Concerning Peaceful Uses of Atomic Energy (U.S.-EURATOM agreement) expires on December 31, 1995. The U.S.-EURATOM agreement controls the exports of certain nuclear materials—specifically, enriched uranium, natural and depleted uranium with specific nuclear uses, plutonium, thorium, and nuclear reactors and their major components and parts—between the United States and 15 western European countries. If a new agreement is not concluded before the expiration date, the export of these U.S. nuclear materials and components to EURATOM would be prohibited. In addition, the expiration of the U.S.-EURATOM agreement would also prohibit Japan from transferring U.S.-origin nuclear materials to EURATOM because U.S.-origin nuclear materials cannot be transferred to countries that do not have in place an agreement for cooperation with the United States.
This report responds to your request for information on (1) the amount of U.S. nuclear exports to EURATOM and Japan and U.S.-origin nuclear materials transferred from Japan to EURATOM, (2) the value of U.S. nuclear exports to EURATOM and Japan, and (3) the nuclear industry’s views on the potential impact on nuclear commerce with EURATOM and Japan if the U.S.-EURATOM agreement is not renewed.
subsections: section_title: Background
paragraphs: EURATOM, a group of 15 western European countries in the European Union, was established in 1957 to promote and facilitate the growth of nuclear industries through the research and development of nuclear energy in the Union, to ensure a supply of nuclear materials, and to foster progress in the peaceful uses of nuclear energy. Figure 1 shows EURATOM’s 15 member countries.
The U.S.-EURATOM agreement was signed in 1958. According to a State Department official, the agreement has served as the basis for substantial and historic peaceful nuclear cooperation and trade between the United States and the EURATOM countries for nearly 40 years. Negotiations are currently under way to try to secure a new U.S.-EURATOM agreement before the present agreement expires at the end of 1995. According to a State Department official, if a new agreement is not concluded prior to the expiration date, significant nuclear commerce between the two parties must be suspended. According to a Department of Energy (DOE) official, the existing U.S.-EURATOM agreement prohibits the EURATOM countries from using U.S.-origin nuclear materials or equipment for nuclear weapons or for other military purposes, and it requires that EURATOM safeguards or controls be applied to U.S.-origin materials in a EURATOM country. These safeguards are augmented by full-scope International Atomic Energy Agency safeguards in the EURATOM states that do not have nuclear weapons. The EURATOM nations are required to obtain U.S. consent before transferring U.S.-origin nuclear materials or equipment to a third party outside of the European Union. However, the agreement does not contain any other U.S. consent rights and therefore differs significantly from other U.S. nuclear cooperation agreements, which contain U.S. consent rights over the use (including reprocessing) of U.S.-origin nuclear materials.
section_title: Quantities of U.S. Nuclear Materials Exported to EURATOM and Japan From 1980-94
paragraphs: The largest amount of U.S. nuclear materials exported to EURATOM and Japan during the last 15 years was made up of depleted, natural, and enriched uranium. Table 1 shows the total amount of U.S. nuclear materials exported to EURATOM from 1980 through 1994 that are controlled by the agreement. Table 2 summarizes the total amount of nuclear materials exported to Japan during the same period. (App. I contains detailed information on U.S. exports to EURATOM and Japan.)
section_title: Quantities of U.S.-Origin Nuclear Materials Transferred From Japan to EURATOM From 1980-94
paragraphs: Japan uses enriched and natural uranium as fuel for nuclear power reactors. The used or spent fuel is transferred to EURATOM for reprocessing, which chemically separates the depleted uranium and plutonium. Enriched uranium, totaling 4,542,383 kgs, constituted the largest amount of U.S.-origin nuclear materials transferred from Japan to EURATOM. From 1980 through 1994, Japan transferred to EURATOM between 115,651 kgs and 404,935 kgs annually of enriched uranium. Japan also exported about 37,187 kgs of plutonium to EURATOM during this period. Table 3 summarizes the total amount of U.S.-origin nuclear materials Japan transferred to EURATOM during the period. (App. I contains information on the amount of U.S.-origin nuclear materials Japan transferred to EURATOM annually during this period.)
section_title: Exports of Reactors and Reactor Components
paragraphs: According to NRC officials, no nuclear power reactors were exported to EURATOM or Japan from 1980 through 1994. However, NRC issued licenses for the export of four major reactor components for use in research and nuclear power reactors to EURATOM in 1986, 1991, and 1992. In addition, nuclear reactor equipment and components have been exported by the United States to Japan annually between 1980 and 1994 under NRC’s general licenses.
section_title: Dollar Value of U.S. Nuclear Exports to EURATOM and Japan From 1989 Through August 1994
paragraphs: We obtained the dollar values of the uranium and plutonium exports from the Department of Commerce’s National Trade Data Base. However, this data base excludes the cost of loading the merchandise aboard the exporting carrier and also excludes freight, insurance, and any other charges or transportation costs beyond the port of exportation. The reliability of the data also depends on the accuracy of reporting by shippers on their export declarations. According to the Department of Commerce’s data base, the dollar value of U.S. exports to EURATOM countries of uranium (natural, enriched, and depleted) and plutonium in 1989 through August 1994 was about $1.1 billion. The value of these U.S. exports to Japan for the same period was about $4 billion. (App. II contains detailed information on the dollar value of U.S. exports to EURATOM and Japan.)
subsections: section_title: U.S. Uranium Enrichment Services
paragraphs: According to U.S. nuclear industry officials, the services related to exported nuclear materials, such as uranium mining, enrichment, and fuel fabrication, should be factored into the value of U.S. nuclear exports. In the past, DOE provided uranium enrichment services to EURATOM and Japan. In 1993, uranium enrichment services were transferred to the U.S. Enrichment Corporation (USEC), a government-owned corporation, which was created to operate the U.S.-owned uranium enrichment plants and to market enrichment services. We contacted DOE and USEC to obtain the amount billed to EURATOM and Japan for enrichment services from 1989 through 1994. According to information from DOE, EURATOM was billed a total of $167,527,507 for enrichment services in fiscal years 1989 through 1993. Japan was billed a total of $1,593,567,205 for the same period. DOE’s billings under EURATOM and Japanese contracts, by fiscal year (FY), are shown in figure 2.
The amounts billed by DOE included the cost of enriching the uranium delivered to the enrichment plant and of packaging and handling the services at the enrichment plant. The enriched uranium is delivered to the customer at the enrichment plant, but its cost does not include any subsequent services, such as fabricating reactor fuel assemblies. According to USEC, the amount billed under Japanese contracts for the period from 1989 through 1994 was $350 million to $400 million per year.
section_title: U.S. Nuclear Industry’s Views on Potential Impact of Nonrenewal of Agreement on Nuclear Commerce With EURATOM and Japan
paragraphs: Industry representatives anticipate that if the U.S.-EURATOM agreement is allowed to expire, EURATOM and Japan would turn to other suppliers of nuclear products and services outside the United States. U.S. participation in the European nuclear markets would be greatly reduced. In addition, because Japan also exports U.S.-origin spent fuel to EURATOM for reprocessing, Japan would be less likely to purchase uranium fuel sources from the United States in the future. The absence of a U.S.-EURATOM agreement would prohibit Japan from transferring this U.S.-origin spent fuel for reprocessing in any EURATOM country.
Furthermore, these industry representatives point out that part of nuclear commerce includes relationships with the customers and the guarantee of reliable supply and services to them. A break in any of these ties, such as a failure to renew the U.S.-EURATOM agreement, would weaken the U.S. nuclear industry substantially, because the industry needs both its domestic and foreign markets. U.S. nuclear industry representatives stated that the nuclear industry is a market industry that can exist only in a global environment.
According to USEC officials, if the U.S.-EURATOM agreement for cooperation expires, USEC’s future enrichment services would be seriously affected. Specifically, existing contracts with EURATOM, worth approximately $160 million, could be terminated. Other contracts, valued at approximately $470 million, would be in jeopardy. Another $1.8 billion in potential new business from EURATOM and Japan might be lost. According to a nuclear industry representative, the U.S. share of the European nuclear industry market currently is about $100 million and may reach $300 million annually after the year 2000. In addition, Japan currently is the largest single foreign purchaser from U.S. suppliers of nuclear power systems equipment, materials, and services. In the next 5 years, according to industry officials, anticipated U.S. participation in construction, equipment, start-up services, spare parts, and fuel for 10 nuclear power plants in Japan is expected to amount to about $500 million to $800 million annually throughout the plants’ lives.
section_title: Agency Comments
paragraphs: During May 1995, we provided drafts of this report to officials in NRC and the Departments of Commerce, Energy, and State to obtain their comments on the facts presented in this report. In general, these officials agreed with the facts presented in the draft report. NRC officials, including the Director, Division of Nonproliferation, Exports, and Multilateral Relations, Office of International Programs, made several editorial suggestions to improve the clarity of the information and noted that they had some questions about the Department of Commerce’s National Trade Data Bank information presented in table II.8 in appendix II. In particular, NRC officials stated that they were puzzled by the reported plutonium sales to some of the listed countries, especially Denmark, Greece, and Portugal. According to the NRC officials, these countries have very small nuclear research programs and no nuclear power programs; thus, they doubt that these countries have in fact imported plutonium from the United States. In addition, NRC stated that NRC’s export licensing data base shows no licenses for exports to Greece or Portugal, one small (0.005 kg) plutonium export case for Denmark, and only three plutonium export cases for Spain. However, NRC noted that U.S.-supplied nuclear materials to any country within EURATOM can be freely transferred within EURATOM without prior notification to, or approval by, the United States. Thus, according to NRC, it is possible, although not considered likely, that U.S.-supplied plutonium has gone to the countries in question and has been reported to the Department of Commerce’s National Trade Data Bank system without appearing in NRC’s export licensing records. (The text of NRC’s comments appears in app. III.)
In their review of the draft, Department of Commerce officials, including officials at the Bureau of Export Administration, acknowledged the differences in NRC’s export licensing data base, DOE’s data base, and the National Trade Data Bank’s data. However, neither the Department of Commerce nor DOE has determined why these data bases differ. According to the Department of Commerce officials, they may, at a later date, examine why these differences exist. According to a DOE official, DOE is attempting to determine why the differences exist between the data bases. It was not within the scope of our review to determine why the various data bases differ. (The text of the Department of Commerce’s comments appears in app. IV.)
DOE officials, including the Acting Director, Office of Nonproliferation and National Security, reviewed the draft and had no comments on the facts presented. DOE stated that it is confident that a new U.S.-EURATOM agreement will be achieved before the December 31, 1995, expiration of the current agreement. (The text of the Department of Energy’s comments appears in app. V.) The State Department’s Foreign Affairs Officer, Office of Nuclear Energy Affairs, Bureau of Political-Military Affairs, reviewed the draft and had no comments on the facts presented in the report. (The text of the Department of State’s comments appears in app. VI.)
section_title: Scope and Methodology
paragraphs: To determine what nuclear commerce items are subject to export controls under the U.S.-EURATOM agreement, we interviewed officials in NRC’s Office of International Programs, Division of Nonproliferation, Exports, and Multilateral Relations. We reviewed the export license requirements covered by 10 C.F.R. part 110. In addition, we obtained data on NRC’s approved licenses for U.S. nuclear material exports to EURATOM and Japan for 1980 through 1994 (the period selected was judgmental) from NRC’s Office of International Programs, Division of Nonproliferation, Exports, and Multilateral Relations.
To determine what data bases contain data on nuclear material exports, we interviewed officials at DOE’s Energy Information Administration (EIA); the Program Manager for DOE’s Nuclear Materials Management and Safeguards System (NMMSS), and NMMSS officials at the Oak Ridge Operations Office in Oak Ridge, Tennessee; officials at the Customs EXODUS Command Center; NRC officials in the Office of International Programs, Division of Nonproliferation, Exports, and Multilateral Relations; and U.S. nuclear industry representatives, including the Nuclear Energy Institute, General Electric, Energy Resources International, Inc., and Edlow International, Inc. On the basis of these discussions, we found that the best data available on U.S. nuclear exports are contained in the NMMSS data base, which accounts for U.S. nuclear material exports controlled under the U.S.-EURATOM agreement. The information on exported nuclear materials and U.S.-origin materials transferred from Japan to EURATOM in the NMMSS data base is collected from DOE and NRC forms. These forms are filled out by parties involved in the shipment of these materials. According to an NMMSS official, the data in the NMMSS data base reflect the amounts of nuclear materials that were actually exported or transferred from one country to another country.
To obtain the DOE/NMMSS export information, we worked with DOE/NMMSS staff at the Oak Ridge Operations Office in Oak Ridge, Tennessee, and NRC officials in the Office of International Programs, Division of Nonproliferation, Exports, and Multilateral Relations. However, we did not independently verify the accuracy of these data.
To determine the dollar value of uranium and plutonium exports to EURATOM countries and Japan, we obtained available data (1989-Aug. 1994) from the Department of Commerce’s National Trade Data Bank. The accuracy of these data depends largely on the accuracy of the reporting by shippers in their export declarations. We did not independently verify the accuracy and completeness of the data. We recognize that DOE’s and the Department of Commerce’s data show different quantities of nuclear material exports. Both DOE and Department of Commerce officials also acknowledge the differences in these data. However, it was not within the scope of this review to determine why the various data bases differ. According to a DOE official, DOE is attempting to determine why the two data bases differ. According to Department of Commerce officials, they may, at a later date, examine why these differences exist.
We interviewed nuclear industry officials, NRC officials, DOE/NMMSS staff, EIA officials, and officials from the State Department to obtain information on the nuclear commerce subject to the U.S.-EURATOM agreement. We also interviewed USEC officials to obtain available data (FYs 1989-93) on the value of enrichment services provided by DOE and USEC.
Our work was performed between September 1994 and May 1995 in accordance with generally accepted government auditing standards.
As arranged with your offices, unless you publicly announce its contents earlier, we plan no further distribution of this report until 15 days from the date of this letter. At that time, we will send copies to the Secretaries of Commerce, Energy, and State and to the Chairman, Nuclear Regulatory Commission. We will make copies available to others on request.
Please call me at (202) 512-3841 if you or your staff have any questions. Major contributors to this report are listed in appendix VI.
section_title: U.S. Nuclear Material Exports to EURATOM and Japan
subsections: section_title: U.S. Exports to EURATOM
paragraphs: Figure I.1 shows that U.S. exports of natural uranium to EURATOM ranged from 4,324 kilograms (kgs) to 1,811,478 kgs annually during 1980 through 1994. The total amount of natural uranium exported was 11,886,101 kgs during this period. Natural uranium is used for fuel in some nuclear power reactors, but it is usually enriched or used for blending to produce low-enriched fuel.
Figure I.2 shows that U.S. exports of enriched uranium to EURATOM ranged from 197,186 kgs to 615,415 kgs annually during 1980 through 1994. The total amount of enriched uranium exported was 6,049,307 kgs during this period. Enriched uranium contains 0.711 percent of the isotope uranium-235. Examples of enriched uranium’s typical uses include fuel for commercial power reactors (low-enriched uranium) and research reactor fuel (highly enriched uranium).
Figure I.3 shows that U.S. exports to EURATOM of depleted uranium, with nuclear end use, ranged from 3,086 kgs to 10,286,236 kgs annually during 1980 through 1994. A total of 14,649,985 kgs were exported during this period. Depleted uranium also contains uranium-235 but contains less than 0.711 percent of this isotope. Depleted uranium is very dense and can be used in high-impact projectiles and as a shielding material against radiation.
Figure I.4 shows that U.S. exports of thorium to EURATOM ranged from 0 to 2,517 kgs annually during 1980 through 1994. A total of 3,188 kgs of thorium were exported during this period. According to a DOE official, thorium is used for research and development purposes.
Figure I.5 shows that U.S. exports of uranium-233 to EURATOM ranged from 0 to 26 grams annually during 1980 through 1994. A total of 62 grams of uranium-233 were exported during this period. According to the NRC, this uranium-233 was for use as standard samples in laboratory analyses and tests.
section_title: U.S. Exports of Plutonium to EURATOM
paragraphs: Figure I.6 shows that U.S. exports of plutonium to EURATOM ranged from 0 to 32,307 grams, or 32.3 kgs, annually during 1980 through 1994. A total of 32,793 grams, or 32.8 kgs, were exported during this period. According to DOE, the plutonium category in the NMMSS includes all plutonium that contains less than 20 percent of the plutonium-242 isotope. This category may also include the isotopes plutonium-239, –240 and –241. Plutonium in this category has research uses.
Figure I.7 shows that U.S. exports of plutonium-242 to EURATOM ranged from 0 to 41 grams annually during 1980 through 1994. A total of 94 grams were exported during this period. This category includes all plutonium that has greater than 20 percent of plutonium-242. According to NRC, plutonium-242 is used for research purposes in calibrating equipment, such as mass spectrometers used in research institutes.
Figure I.8 shows that U.S. exports of plutonium-238 to EURATOM ranged from 0 to 83 grams annually during 1980 through 1994. A total of 99 grams of plutonium-238 were exported during this period. According to DOE and NRC, plutonium-238 can be used for research and thermionic heating sources.
section_title: U.S. Exports to Japan
paragraphs: Figure I.9 shows that U.S. exports of enriched uranium to Japan ranged from 331,067 kgs to 823,421 kgs annually during 1980 through 1994. A total of 10,031,810 kgs were exported during this period.
Figure I.10 shows that U.S. exports of natural uranium to Japan ranged from 1 kg to 301,883 kgs annually during 1980 through 1994. A total of 917,621 kilograms of natural uranium were exported during this period.
Figure I.11 shows that U.S. exports of depleted uranium to Japan ranged from 0 to 7,502 kgs annually during 1980 through 1994. A total of 7,937 kgs of depleted uranium were exported during this period.
Figure I.12 shows that U.S. exports of thorium to Japan ranged from 0 to 475 kgs annually during 1980 through 1994. A total of 2,705 kgs were exported during this period.
Figure I.13 shows that U.S. exports of uranium-233 to Japan ranged from 0 to 20 grams annually during 1980 through 1994. A total of 56 grams were exported during this period.
section_title: U.S. Exports to Japan of Plutonium
paragraphs: Figure I.14 shows that U.S. exports of plutonium to Japan ranged from 0 to 1,949 grams, or 1.95 kgs, annually during 1980 through 1994. The total amount of plutonium exported during this period was 2,420 grams, or 2.42 kgs. These exports, like the exports to EURATOM, are used as laboratory standards and for research purposes, according to NRC.
Figure I.15 shows that U.S. exports of plutonium-242 to Japan ranged from 0 to 3 grams annually, during 1980 through 1994. A total of 7 grams were exported during this period. Like EURATOM, Japan uses plutonium-242 as laboratory standards and for research purposes.
Figure I.16 shows that U.S. exports of plutonium-238 to Japan ranged from 0 to 15 grams annually during 1980 through 1994. A total of 19 grams were exported during this period.
section_title: U.S.-Origin Nuclear Material Transferred From Japan to EURATOM
paragraphs: Figure I.17 shows that U.S.-origin enriched uranium transferred from Japan to EURATOM ranged from 115,651 kgs to 404,935 kgs annually during 1980 through 1994. Japan transferred a total of 4,542,383 kgs of U.S.-origin enriched uranium to EURATOM during this period.
Figure I.18 shows that U.S.-origin depleted uranium transferred from Japan to EURATOM ranged from 0 to 23,822 kgs annually during 1980 through 1994. A total of 98,178 kgs were exported during this period.
Figure I.19 shows that U.S.-origin plutonium transferred from Japan to EURATOM ranged from 780 kgs to 3,433 kgs annually during 1980 through 1994. A total of 37,187 kgs were exported by Japan to EURATOM during this period.
section_title: Dollar Values and Amounts of U.S. Exports to EURATOM Countries and Japan
paragraphs: We obtained the dollar values for uranium and plutonium exports from the Department of Commerce’s National Trade Data Bank. According to the Department of Commerce, the data bank was established by the Omnibus Trade and Competitiveness Act of 1988 to provide “reasonable public access” to an Export Promotion data system and an International Economic data system from 15 federal agencies. The export data bank contains statistics on the values of U.S. exports measured at the U.S. port of export. The value of a nuclear export item (material or component) is based on the transaction price, including inland freight, insurance, and the other charges incurred in placing the freight alongside the carrier at the U.S. port of export. The value excludes the cost of loading the merchandise aboard the exporting carrier and also excludes freight, insurance, and any other charges or transportation costs beyond the port of export. These statistics, however, do not always reflect the value as defined above, as exporters sometimes find it difficult to assign a value in accordance with this definition. The extent to which the statistics reflect this state depends largely on the accuracy of reporting by shippers on their export declarations.
We used information from the export data bank to identify the total value and quantities for the commodities uranium and plutonium shipped by the United States to EURATOM countries and Japan. The data bank information covered the period for calendar years 1989 through August 1994. Tables II.1 through II.11 show the dollar values and amounts of uranium and plutonium exports to EURATOM countries, and tables II.9 through II.11 show the U.S. dollar values and amounts of U.S. exports to Japan.
section_title: Comments From the Nuclear Regulatory Commission
section_title: Comments From the Department of Commerce
section_title: Comments From the Department of Energy
section_title: Comments From the Department of State
section_title: Major Contributors to This Report
subsections: section_title: Resources, Community, and Economic Development Division, Washington, D.C.
paragraphs: Bernice Steinhart, Associate     Director, Energy and Science Issues Gene Aloise, Assistant Director Mary Alice A. Hayward, Evaluator-in-Charge Thomas J. Flaherty, Senior Evaluator Mario Zavala, Senior Evaluator Duane G. Fitzgerald, Nuclear Engineer The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent.
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subsections: section_title: Address Correction Requested