Nuclear Nonproliferation: U.S. Agencies Have Limited Ability to Account for, Monitor, and Evaluate the Security of U.S. Nuclear Material Overseas
Published: 2011-09-08T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The United States has exported special nuclear material, including enriched uranium, and source material such as natural uranium under nuclear cooperation agreements. The United States has 27 nuclear cooperation agreements for peaceful civilian cooperation. Under the U.S. Atomic Energy Act of 1954 (AEA), as amended, partners are required to guarantee the physical protection of U.S. nuclear material. GAO was asked to (1) assess U.S. agency efforts to account for U.S. nuclear material overseas, (2) assess the Department of Energy's (DOE) and U.S. agencies' efforts to evaluate the security of U.S. material overseas, and (3) describe DOE's activities to secure or remove potentially vulnerable U.S. nuclear material at partner facilities. GAO analyzed agency records and interviewed DOE, Nuclear Regulatory Commission (NRC), Department of State (State), and partner country officials. This report summarizes GAO's classified report issued in June 2011.
section_title: What GAO Found
paragraphs: DOE, NRC, and State are not able to fully account for U.S. nuclear material overseas that is subject to nuclear cooperation agreement terms because the agreements do not stipulate systematic reporting of such information, and there is no U.S. policy to pursue or obtain such information. U.S. nuclear cooperation agreements generally require that partners report inventory information upon request, however, DOE and NRC have not systematically sought such data. DOE and NRC do not have a comprehensive, detailed, current inventory of U.S. nuclear material--including weapon-usable material such as highly enriched uranium (HEU) and separated plutonium--overseas that includes the country, facility, and quantity of material. In addition, NRC and DOE could not fully account for the current location and disposition of U.S. HEU overseas in response to a 1992 congressional mandate. U.S. agencies, in a 1993 report produced in response to the mandate, were able to verify the location of 1,160 kilograms out of 17,500 kilograms of U.S. HEU estimated to have been exported. DOE, NRC, and State have established annual inventory reconciliations with five U.S. partners, but not the others it has transferred material to or trades with. Nuclear cooperation agreements do not contain specific access rights that enable DOE, NRC, or State to monitor and evaluate the physical security of U.S. nuclear material overseas, and the United States relies on its partners to maintain adequate security. In the absence of access rights, DOE's Office of Nonproliferation and International Security, NRC, and State have conducted physical protection visits to monitor and evaluate the physical security of U.S. nuclear material at facilities overseas when permitted. However, the agencies have not systematically visited countries believed to be holding the highest proliferation risk quantities of U.S. nuclear material, or systematically revisited facilities not meeting international physical security guidelines in a timely manner. Of the 55 visits made from 1994 through 2010, U.S. teams found that countries met international security guidelines approximately 50 percent of the time. DOE has taken steps to improve security at a number of facilities overseas that hold U.S. nuclear material but faces constraints. DOE's Global Threat Reduction Initiative (GTRI) removes U.S. nuclear material from vulnerable facilities overseas but can only bring back materials that have an approved disposition pathway and meet the program's eligibility criteria. GTRI officials told GAO that, of the approximately 17,500 kilograms of HEU exported from the United States, 12,400 kilograms are currently not eligible for return to the United States. Specifically, GTRI reported that over 10,000 kilograms of U.S. HEU are believed to be in fuels from reactors in Germany, France, and Japan that have no disposition pathways in the United States and are adequately protected. In addition, according to GTRI, 2,000 kilograms of transferred U.S. HEU are located primarily in European Atomic Energy Community countries and are currently in use or adequately protected. GAO suggests, among other things, that Congress consider directing DOE and NRC to compile an inventory of U.S. nuclear material overseas. DOE, NRC, and State generally disagreed with GAO's recommendations, including that they conduct annual inventory reconciliations with all partners, stating they were unnecessary. GAO continues to believe that its recommendations could help improve the accountability of U.S. nuclear material in foreign countries.

section_title: Letter
paragraphs: The United States has 27 nuclear cooperation agreements in force for  peaceful civilian cooperation with partners including foreign countries, the  European Atomic Energy Community (EURATOM), the International  Atomic Energy Agency (IAEA), and Taiwan. A nuclear cooperation  agreement is a bilateral agreement that establishes the legal framework  for significant civilian nuclear cooperation between the United States and  other parties, including the transfer of certain nuclear material, including  special nuclear material such as enriched uranium, and source material  such as natural uranium, nuclear reactors, and certain components of  nuclear reactors. The agreements are reciprocal, with both parties  generally agreeing to all conditions specified in them. Under the U.S.  Atomic Energy Act of 1954 (AEA), as amended, these agreements must  contain certain obligations that govern, among other things, the U.S.  rights of approval over the transfer, retransfer, enrichment, and  reprocessing of certain kinds of nuclear material transferred from the  United States and, in some cases produced overseas. A list of current  and former U.S. nuclear cooperation agreement partners can be found in  appendix II.
Thousands of kilograms of U.S. highly enriched uranium (HEU) and tens  of thousands of kilograms of U.S. plutonium in spent fuel have  accumulated overseas, as a result of foreign nuclear research and  commercial nuclear power activities, which are subject to the terms in  U.S. nuclear cooperation agreements. Inventories of U.S. nuclear  material overseas could continue to grow as the result of reprocessing or  recovery activities. As we have previously reported, tracking and  accounting for nuclear materials are important to (1) ensure that nuclear  materials are used only for peaceful purposes, (2) comply with  international treaty obligations, and (3) provide data to policymakers and  other government officials. According to DOE and NRC officials, the  United States obtains written assurances from partners in advance of  each transfer of U.S.-obligated nuclear material that commits the partner  to treat the transferred nuclear material according to the terms of its  nuclear cooperation agreement with the United States. Nuclear material  transferred from the United States, as well as special nuclear material  produced overseas through the use of U.S.-supplied nuclear material or  reactors, is known as “U.S.-obligated” material.
As the technology to design and create nuclear weapons has spread, one  of the most serious threats facing the United States and other countries is  the possibility that a nation or terrorist organization could steal weapon- usable nuclear materials from poorly secured stockpiles in various  locations around the world. In April 2009, President Obama made  securing all vulnerable nuclear material worldwide within the next 4 years  a key U.S. nonproliferation goal, and the Department of Energy (DOE)  has stated that doing so will require greater security cooperation with key  countries; pursuing new partnerships to secure nuclear material; and  strengthening nuclear security standards, practices, and international  safeguards.
Securing nuclear material worldwide is a priority for DOE, through its  National Nuclear Security Administration (NNSA), which, as one of its  core mission areas, aims to keep dangerous nuclear materials out of the  hands of terrorists by securing nuclear weapons and nuclear materials at  their source and by improving security practices around the world. In  particular, two key DOE NNSA offices work with U.S. nuclear cooperation  agreement partners to strengthen nuclear security practices and identify  and secure vulnerable nuclear materials. First, DOE’s Office of  Nonproliferation and International Security works with countries to ensure  that provisions in the agreements are met by, among other things,  providing physical protection training, assessment, and guidance on a  bilateral basis, and leading U.S. interagency physical protection visits to  countries with U.S. nuclear material. Second, DOE’s Office of Global  Threat Reduction implements the Global Threat Reduction Initiative  (GTRI) and, among other things, identifies, secures, removes, and/or  facilitates the disposition of high-risk, vulnerable nuclear and radiological  material at civilian sites around the world that pose a threat.
In November 2010, we reported on the export benefits facilitated by U.S.  nuclear cooperation agreements. In light of the quantities of nuclear  material exported overseas under the framework of U.S. nuclear  cooperation agreements, you asked us to also report on how U.S.  agencies account for nuclear material overseas and monitor and evaluate  the materials’ physical security. Specifically, our objectives were to:   (1) assess U.S. agency efforts to account for U.S. nuclear material  overseas, (2) assess DOE’s and other U.S. agencies’ efforts to monitor  and evaluate the physical security conditions of U.S. nuclear material  subject to the terms of nuclear cooperation agreements, and (3) describe  DOE’s activities to secure or remove potentially vulnerable U.S. nuclear  material at partner facilities. In June 2011, we reported to you on the  results of our work in a classified report. This report summarizes certain  aspects of our classified report.
To conduct this work, we reviewed relevant statutes, including the AEA,  as amended, and the texts of all current U.S. nuclear cooperation  agreements. We obtained data from the Nuclear Materials Management  and Safeguards System (NMMSS), a database jointly operated by DOE  and the Nuclear Regulatory Commission (NRC). This database, among  other things, maintains data on U.S. peaceful use exports and retransfers  of enriched uranium and plutonium that have occurred since 1950. To  assess the reliability of data in NMMSS, we interviewed officials from  DOE and NRC and a former DOE contractor to identify any limitations in  NMMSS’s data on the location and status of U.S. material overseas and  found these data to be sufficiently reliable for the purposes of accounting  for U.S. exports of nuclear material. We also compared NMMSS data with  other sources of information regarding U.S. nuclear material transfers,  including DOE data on nuclear material returns. We reviewed DOE, NRC,  and Department of State (State) records and interviewed officials at those  agencies to determine the extent to which DOE, NRC, and State are able  to identify where U.S. nuclear material was exported, retransferred, and is  currently held. We selected a non-probability sample of partners based  on, among other considerations, quantities of U.S. special nuclear  material transferred to them. We conducted site visits in four countries  that currently hold U.S.-obligated nuclear material and interviewed  governmental officials and nuclear facility operators in these countries to  discuss material accounting procedures and observe physical protection  measures. Further, we interviewed officials from several other partners  regarding their observations about working with the U.S. government to  account for material subject to the terms of nuclear cooperation  agreements. We reviewed IAEA’s security guidelines, “The Physical  Protection of Nuclear Material and Nuclear Facilities,”  INFCIRC/225/Rev.4, and relevant international treaties. We also  obtained and analyzed available records of U.S. physical protection visits  to partner facilities from 1974 through 2010. We reviewed agency  documents and interviewed officials from DOE, NRC, and State to  determine the process used for conducting physical protection visits at  partner facilities. We obtained information from GTRI regarding its  program’s activities. We interviewed IAEA officials and reviewed relevant  documents to better understand IAEA’s role in maintaining safeguards  and evaluating physical security measures. Additional details on our  scope and methodology can be found in appendix I.
We conducted this performance audit from September 2010 to June 2011  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: The AEA, as amended, sets forth the procedures and requirements for  the U.S. government’s negotiating, proposing, and entering into nuclear  cooperation agreements with foreign partners. The AEA, as amended,  requires that U.S. peaceful nuclear cooperation agreements contain the  following nine provisions:   1.  Safeguards: Safeguards, as agreed to by the parties, are to be  maintained over all nuclear material and equipment transferred, and  all special nuclear material used in or produced through the use of  such nuclear material and equipment, as long as the material or  equipment remains under the jurisdiction or control of the cooperating  party, irrespective of the duration of other provisions in the agreement  or whether the agreement is terminated or suspended for any reason.  Such safeguards are known as “safeguards in perpetuity.” 2.  Full-scope IAEA safeguards as a condition of supply: In the case of  non-nuclear weapons states, continued U.S. nuclear supply is to be  conditioned on the maintenance of IAEA “full-scope” safeguards over  all nuclear materials in all peaceful nuclear activities within the  territory, under the jurisdiction, or subject to the control of the  cooperating party. 3.  Peaceful use guaranty: The cooperating party must guarantee that it  will not use the transferred nuclear materials, equipment, or sensitive  nuclear technology, or any special nuclear material produced through  the use of such, for any nuclear explosive device, for research on or  development of any nuclear explosive device, or for any other military  purpose. 4.  Right to require return: An agreement with a non-nuclear weapon  state must stipulate that the United States has the right to require the  return of any transferred nuclear materials and equipment, and any  special nuclear material produced through the use thereof, if the  cooperating party detonates a nuclear device, or terminates or  abrogates an agreement providing for IAEA safeguards. 5.  Physical security: The cooperating party must guarantee that it will  maintain adequate physical security for transferred nuclear material  and any special nuclear material used in or produced through the use  of any material, or production or utilization facilities transferred  pursuant to the agreement. 6.  Retransfer rights: The cooperating party must guarantee that it will not  transfer any material, Restricted Data, or any production or utilization  facility transferred pursuant to the agreement, or any special nuclear  material subsequently produced through the use of any such  transferred material, or facilities, to unauthorized persons or beyond  its jurisdiction or control, without the consent of the United States. 7.  Restrictions on enrichment or reprocessing of U.S.-obligated material:  The cooperating party must guarantee that no material transferred, or  used in, or produced through the use of transferred material or  production or utilization facilities, will be reprocessed or enriched, or  with respect to plutonium, uranium-233, HEU, or irradiated nuclear  materials, otherwise altered in form or content without the prior  approval of the United States. 8.  Storage facility approval: The cooperating party must guarantee not to  store any plutonium, uranium-233, or HEU that was transferred  pursuant to a cooperation agreement, or recovered from any source  or special nuclear material transferred, or from any source or special  nuclear material used in a production facility or utilization facility  transferred pursuant to the cooperation agreement, in a facility that  has not been approved in advance by the United States. 9.  Additional restrictions: The cooperating party must guarantee that any  special nuclear material, production facility, or utilization facility  produced or constructed under the jurisdiction of the cooperating party  by or through the use of transferred sensitive nuclear technology, will  be subject to all the requirements listed above.
In addition, the United States is a party to the Treaty on the Non- Proliferation of Nuclear Weapons (NPT). The NPT binds each of the  treaty’s signatory states that had not manufactured and exploded a  nuclear weapon or other nuclear explosive device prior to January 1,  1967 (referred to as non-nuclear weapon states) to accept safeguards as  set forth in an agreement to be concluded with IAEA. Under the  safeguards system, IAEA, among other things, inspects facilities and  locations containing nuclear material, as declared by each country, to  verify its peaceful use. IAEA standards for safeguards agreements  provide that the agreements should commit parties to establish and  maintain a system of accounting for nuclear material, with a view to  preventing diversion of nuclear energy from peaceful uses, and reporting  certain data to IAEA.
IAEA’s security guidelines provide the basis by which the United States  and other countries generally classify the categories of protection that  should be afforded nuclear material, based on the type, quantity, and  enrichment of the nuclear material. For example, Category I material is  defined as 2 kilograms or more of unirradiated or “separated” plutonium  or 5 kilograms of uranium-235 contained in unirradiated or “fresh” HEU  and has the most stringent set of recommended physical protection  measures. The recommended physical protection measures for Category  II and Category III nuclear materials are less stringent. Appendix III  contains further details on the categorization of nuclear material.
section_title: DOE, NRC, and State Are Not Able to Fully Account for U.S. Nuclear Material Located at Foreign Facilities
paragraphs: DOE, NRC, and State are not able to fully account for U.S. nuclear  material overseas that is subject to nuclear cooperation agreement terms  because the agreements do not stipulate systematic reporting of such  information, and there is no U.S. policy to pursue or obtain such  information. Section 123 of the AEA, as amended, does not require  nuclear cooperation agreements to contain provisions stipulating that  partners report information on the amount, status, or location (facility) of  special nuclear material subject to the agreement terms. However, U.S.  nuclear cooperation agreements generally require that partners report  inventory information upon request, although DOE and NRC have not  systematically sought such data. We requested from multiple offices at  DOE and NRC a current and comprehensive inventory of U.S. nuclear  material overseas, to include country, site, or facility, and whether the  quantity of material was rated as Category I or Category II material.  However, neither agency has provided such an inventory. NMMSS does  not contain the data necessary to maintain an inventory of U.S. special  nuclear material overseas. DOE, NRC, and State have not pursued  annual inventory reconciliations of nuclear material subject to U.S.  cooperation agreement terms with all foreign partners that would provide  the U.S. government with better information about where such material is  held. Furthermore, according to DOE, NRC, and State officials, no U.S.  law or policy directs U.S. agencies to obtain information regarding the  location and disposition of U.S. nuclear material at foreign facilities.
subsections: section_title: U.S. Nuclear Cooperation Agreements Generally Require That Partners Report Inventory Information upon Request, but DOE and NRC Have Not Systematically Sought Such Data
paragraphs: Section 123 of the AEA, as amended, does not require nuclear  cooperation agreements to contain provisions stipulating that partners  report information on the amount, status, or location (facility) of special  nuclear material subject to the agreement terms. However, the texts of  most U.S. nuclear cooperation agreements contain a provision calling for  each partner to maintain a system of material accounting and control and  to do so consistent with IAEA safeguards standards or agreements. In  addition, we found that all agreements, except three negotiated prior to  1978 and the U.S.-China agreement, contain a provision that the other  party shall report, or shall authorize the IAEA to report, inventory  information upon request. However, according to DOE and NRC officials,  with the exception of the administrative arrangements with five partners,  the United States has not requested such information from all partners on  an annual or systematic basis.
Nonetheless, the AEA requires U.S. nuclear cooperation agreements to  include terms that, among other things, obligate partners to obtain U.S.  approval for the transfer, retransfer, enrichment and reprocessing, and  the storage of U.S.-obligated uranium-233, HEU, or other nuclear  materials that have been irradiated. In addition, according to DOE and  NRC officials, the United States obtains written assurances from partners  in advance of each transfer of U.S. nuclear material that commits them to  maintain the transferred nuclear material according to the terms of its  nuclear cooperation agreement with the United States. DOE and NRC  officials told us these assurances help the United States ensure that  partner countries comply with the terms of the nuclear cooperation  agreement.
In addition, IAEA, DOE, NRC, and State officials told us that IAEA’s  safeguards activities provide a level of assurance that nuclear material is  accounted for at partner facilities. The safeguards system, which has  been a cornerstone of U.S. efforts to prevent nuclear proliferation, allows  IAEA to independently verify that non-nuclear weapons states that signed  the NPT are complying with its requirements. Under the safeguards  system, IAEA, among other things, inspects facilities and locations  containing nuclear material declared by countries to verify its peaceful  use. Inspectors from IAEA’s Department of Safeguards verify that the  quantities of nuclear material that these non-nuclear weapons states  declared to IAEA are not diverted for other uses. IAEA considers such  information confidential and does not share it with its member states,  including the United States, unless the parties have agreed that IAEA can  share the information.
IAEA’s inspectors do not verify nuclear material by country of origin or  associated obligation. DOE, State, and IAEA officials told us that,  because IAEA does not track the obligation of the material under  safeguards, IAEA may notice discrepancies in nuclear material balances  through periodic reviews of countries’ shipping records. However, these  officials said that IAEA does not have the ability to identify whether and  what volume of nuclear material at partner country facilities is U.S.- obligated and therefore subject to the terms of U.S. nuclear cooperation  agreements.
section_title: DOE and NRC Do Not Have a Current Comprehensive Inventory of U.S. Material Overseas
paragraphs: DOE and NRC do not have a comprehensive, detailed, current inventory  of U.S. nuclear material overseas that would enable the United States to  identify material subject to U.S. nuclear cooperation agreement terms.  We requested from multiple offices at DOE and NRC a current and  comprehensive inventory of U.S. nuclear material overseas, to include  country, site, or facility, and whether the quantity of material was  Category I or Category II. However, the agencies have not provided such  a list. DOE officials from the Office of Nonproliferation and International  Security told us that they have multiple mechanisms to account for the  amount of U.S.-obligated nuclear material at foreign facilities. They stated  that they use NMMSS records to obtain information regarding U.S.  nuclear material inventories held in other countries. However, NMMSS  officials told us that NMMSS was an accurate record of material exports  from the United States, but that it should not be used to estimate current  inventories. In addition, NMMSS officials stated that DOE’s GTRI program  has good data regarding the location of U.S. nuclear material overseas  and that this information should be reconciled with NMMSS data.
However, when we requested information regarding the amount of U.S.  material at partner facilities, GTRI stated that they could not report on the  amount of U.S. nuclear material remaining at facilities unless it was  scheduled for GTRI to return. In addition, in February 2011 written  comments to us, GTRI stated it was not responsible for acquiring or  maintaining inventory information regarding U.S. nuclear material  overseas. A long-time contract employee for DOE’s Office of  Nonproliferation and International Security stated he has tried to collect  information regarding U.S. nuclear material overseas from various  sources including a list of countries eligible for GTRI’s fuel return  program, NMMSS, and other sources, but it is not possible to reconcile  information from the various lists and sources and consequently there is  no list of U.S. inventories overseas.
According to public information, the United States has additional  measures known as administrative arrangements with five of its trading  partners to conduct annual reconciliations of nuclear material amounts. In  addition, for all partners, DOE and NRC officials told us that an exchange  of diplomatic notes is sent prior to any transfer to ensure that U.S. nuclear  material is not diverted for non-peaceful purposes, and which binds the  partner to comply with the terms of the nuclear cooperation agreement.  However, the measures cited by DOE are not comprehensive or  sufficiently detailed to provide the specific location of U.S. nuclear  material overseas.
NRC and DOE could not fully account for U.S. exports of HEU in  response to a congressional mandate that the agencies report on the  current location and disposition of U.S. HEU overseas. In 1992, Congress  mandated that NRC, in consultation with other relevant agencies,  submit to Congress a report detailing the current status of previous U.S.  exports of HEU, including its location, disposition (status), and how it had  been used. The January 1993 report that NRC produced in response to  the mandate stated it was not possible to reconcile this information from  available U.S. sources of data with all foreign holders of U.S. HEU within  the 90-day period specified in the act. The report further states that a  thorough reconciliation of U.S and foreign records with respect to end use  could require several months of additional effort, assuming that  EURATOM would agree to participate. According to DOE and NRC  officials, no further update to the report was issued, and the U.S.  government has not subsequently attempted to develop such a  comprehensive estimate of the location and status of U.S. HEU overseas.
The 1993 report provided estimated material balances based on the  transfer, receipt, or other adjustments reported to the NMMSS and other  U.S. agencies. The report stated that the estimated material balances  should match partners’ reported inventories. However, the report did not  compare the balances or explain the differences.
Our analysis of other documentation associated with the report shows  that NRC, in consultation with U.S. agencies, was able to verify the  location of 1,160 kilograms out of an estimated 17,500 kilograms of U.S.  HEU remaining overseas as of January 1993. NRC’s estimates matched  partner estimates in 22 cases; did not match partner estimates in 6 cases;  and, in 8 cases, partners did not respond in time to NRC’s request.
The 1993 report noted that, in cases where U.S. estimates did not match  partners’ inventory reports, “reconciliation efforts are underway.”  However, DOE, NRC, and NMMSS officials told us that no further report  was issued. In addition, NMMSS officials told us that they were unaware  of any subsequent efforts to reconcile U.S. estimates with partners’  reports, or update the January 1993 report. In addition, we found no  indication that DOE, NMMSS, or NRC officials have updated the January  1993 report, or undertaken a comprehensive accounting of U.S. nuclear  material overseas.
section_title: NMMSS Does Not Contain Data Necessary to Identify Where U.S. Material Is Located Overseas
paragraphs: We found that NMMSS does not contain the data necessary to maintain  an inventory of U.S. nuclear material overseas subject to U.S. nuclear  cooperation agreements. According to NRC documents, NMMSS is part  of an overall program to help satisfy the United States’ accounting,  controlling, and reporting obligations to IAEA and its nuclear trading  partners. NMMSS, the official central repository of information on  domestic inventories and exports of U.S. nuclear material, contains  current and historic data on the possession, use, and shipment of nuclear  material. It includes data on U.S.-supplied nuclear material transactions  with other countries and international organizations, foreign contracts,  import/export licenses, government-to-government approvals, and other  DOE authorizations such as authorizations to retransfer U.S. nuclear  material between foreign countries. DOE and NRC officials told us that  NMMSS contains the best available information regarding U.S. exports  and retransfers of special nuclear material.
DOE and NRC do not collect data necessary for NMMSS to keep an  accurate inventory of U.S. nuclear material overseas. According to NRC  officials, NMMSS cannot track U.S. nuclear material overseas because  data regarding the current location and status of U.S. nuclear material,  such as irradiation, decay, burn up, or production, are not collected.  NMMSS only contains data on domestic inventories and transaction  receipts from imports and exports reported by domestic nuclear facilities  and some retransfers reported by partners to the United States and  added to the system by DOE. Therefore, while the 1995 Nuclear  Proliferation Assessment Statement accompanying the U.S.-EURATOM  agreement estimated 250 tons of U.S.-obligated plutonium are planned to  be separated from spent power reactor fuel in Europe and Japan for use  in civilian energy programs in the next 10 to 20 years, our review  indicates that the United States would not be able to identify the  European countries or facilities where such U.S.-obligated material is  located.
section_title: DOE, NRC, and State Have Not Pursued Annual Reconciliations of Inventories of Nuclear Material Subject to U.S. Nuclear Cooperation Agreement Terms with All Partners
paragraphs: DOE, NRC, and State have not pursued annual inventory reconciliations  of nuclear material subject to U.S. nuclear cooperation agreement terms  with all partners that would provide the U.S. government with better  information about where such material is held overseas. Specifically,  once a nuclear cooperation agreement is concluded, U.S. government  officials—generally led by DOE—and partner country officials may  negotiate an administrative arrangement for an annual inventory  reconciliation to exchange information regarding each country’s nuclear  material accounting balances. Inventory reconciliations typically compare  the countries’ data and material transfer and retransfer records, and can  help account for material consumed or irradiated by reactors.
Government officials from several leading nuclear material exporting and  importing countries told us that they have negotiated with all their other  partners to exchange annual inventory reconciliations to provide a  common understanding of the amount of their special material held by  another country or within their country. For example, Australia, which  exports about 13 percent of the world’s uranium each year, conducts  annual reconciliations with each of its partners, and reports annually to  the Australian Parliament regarding the location and disposition of all  Australian nuclear material. NRC officials told us that Australia has some  of the strictest reporting requirements for its nuclear material.
The United States conducts annual inventory reconciliations with five  partners but does not conduct inventory reconciliations with the other  partners it has transferred material to or trades with. According to DOE  officials, for the five reconciliations currently conducted, NMMSS data are  compared with the partner’s records and, if warranted, each country’s  records are adjusted, where necessary, to reflect the current status of U.S  special nuclear material. As of February 2011, the United States  conducted bilateral annual exchanges of total material balances for  special nuclear materials with five partners. Of these partners, the United  States exchanges detailed information regarding inventories at each  specific facility only with one partner. DOE officials noted that they  exchange information with particular trading partners on a transactional  basis during the reporting year and work with the partners at that time to  resolve any potential discrepancies that may arise. In the case of  EURATOM, material information is reported as the cumulative total of all  27 EURATOM members. For the purposes of nuclear cooperation with  the United States, EURATOM is treated as one entity rather than its 27  constituent parts. None of the 27 EURATOM member states have  bilateral nuclear cooperation agreements in force with the United States.
According to a 2010 DOE presentation for NMMSS users, the difference  in reporting requirements results in a 69-page report for Japan and a   1-page report for EURATOM. In addition, information exchanged with  other trading partners also is not reported by facility. DOE and NRC  officials told us that the United States may not have accurate information  regarding the inventories of U.S. nuclear material held by its 21 other  partners.
DOE officials told us that, in addition to benefits, there were costs to  pursuing facility-by-facility reconciliations and reporting. In particular, DOE  officials told us they have not pursued facility-by-facility accounting in  annual reconciliations with other partners because it would be difficult for  the United States to supply such detailed information regarding partner  material held in U.S. facilities. DOE and NRC officials told us this would  also create an administrative burden for the United States. According to  DOE officials, the relative burden with which the United States can  perform facility-by-facility accounting by foreign trading partner varies  greatly based on the amount of material in the United States that is  obligated to such partners. For example, the United States can perform  facility-by-facility accounting with one country, because U.S. officials told  us there is not much of that country’s nuclear material in the United  States. However, if the United States were to conduct facility-by-facility  accounting with Australia, it would create burdensome reporting  requirements. Specifically, according to DOE officials, Australia would  have to report to the United States on the status of a few facilities holding  U.S. nuclear material, but the United States would be required to report  on hundreds of U.S. facilities holding Australian nuclear material. Without  information on foreign facilities, however, it may be difficult to track U.S.  nuclear materials for accounting and control purposes.
section_title: No U.S. Law or Policy Directs U.S. Agencies to Obtain Information Regarding the Location and Disposition of U.S. Nuclear Material at Foreign Facilities
paragraphs: DOE, NRC, and State officials told us neither U.S. law nor U.S. policy  explicitly requires the United States to track U.S. special nuclear material  overseas. Moreover, U.S. law does not require peaceful nuclear  cooperation agreements to require cooperating parties to provide reports  to the United States of nuclear material on a facility-by-facility basis. A  March 2002 DOE Inspector General’s audit raised concerns about the  U.S. government’s ability to track sealed sources, which could contain  nuclear or radioactive material. In response to the audit’s findings,  NNSA’s Associate Administrator for Management and Administration  wrote that “While it is a good idea to be aware of the locations and  conditions of any  material, it is not the current policy of the U.S.  government.” Furthermore, the Associate Administrator asserted that  various U.S. government agencies, including State, DOE, and NRC,  would need to be involved should DOE change its policy and undertake  an initiative to track the location and condition of U.S. sealed sources in  foreign countries. Similarly, DOE, NRC, and State officials told us that if it  became the policy of the U.S. government to track nuclear material  overseas—and in particular, by facility—then requirements would have to  be negotiated into the nuclear cooperation agreements or the associated  administrative arrangements.
NMMSS officials told us that NMMSS is currently capable of maintaining  information regarding inventories of U.S. nuclear material overseas.  However, as we reported in 1982, NMMSS information is not designed  to track the location (facility) or the status—such as whether the material  is irradiated or unirradiated, fabricated into fuel, burned up, or  reprocessed. As a result, NMMSS neither identifies where U.S. material is  located overseas nor maintains a comprehensive inventory of U.S.- obligated material. In addition, NMMSS officials emphasized that this  information would need to be systematically reported. According to these  officials, such reporting is not done on a regular basis by other DOE  offices and State. In some instances, State receives a written notice of a  material transfer at its embassies and then transmits this notice to DOE.  Officials from DOE’s Office of Nonproliferation and International Security  told us that, while they could attempt to account for U.S. material  overseas on a case-by-case basis, obtaining the information to  systematically track this material would require renegotiating the terms of  nuclear cooperation agreements.
DOE has recently issued proposed guidance clarifying the role of DOE  offices for maintaining and controlling U.S. nuclear material. An October  2010 draft DOE order states that DOE “Manages the development and  maintenance of NMMSS by: (a) collecting data relative to nuclear  materials including those for which the United States has a safeguards  interest both domestically and abroad; (b) processing the data; and (c)  issuing reports to support the safeguards and management needs of  DOE and NRC, and other government organizations, including those  associated with international treaties and organizations.” However, we  did not find any evidence that DOE will be able to meet those  responsibilities in the current configuration of NMMSS without obtaining  additional information from partners and additional and systematic data  sharing among DOE offices.
section_title: DOE, NRC, and State Do Not Have Access Rights to Monitor and Evaluate That U.S. Nuclear Material Located at Foreign Facilities Is Adequately Protected
paragraphs: Nuclear cooperation agreements do not contain specific access rights  that enable DOE, NRC, or State to monitor and evaluate the physical  security of U.S. nuclear material overseas, and the United States relies  on partners to maintain adequate security. In the absence of specific  access rights, DOE, NRC, and State have jointly conducted interagency  physical protection visits to monitor and evaluate the physical security of  nuclear material when given permission by the partner country. However,  the interagency physical protection teams have neither systematically  visited countries believed to be holding Category I quantities of U.S.  nuclear material, nor have they systematically revisited facilities  determined to not be meeting IAEA security guidelines in a timely  manner.
subsections: section_title: U.S. Agencies’ Ability to Evaluate the Security of U.S. Nuclear Material Overseas Is Limited by Lack of Access Rights, and the United States Relies on Partners to Maintain Adequate Security
paragraphs: DOE’s, NRC’s, and State’s ability to monitor and evaluate whether  material subject to U.S. nuclear cooperation agreement terms is  physically secure is contingent on partners granting access to facilities  where such material is stored. Countries, including the United States,  believe that the physical protection of nuclear materials is a national  responsibility. This principle is reflected both in IAEA’s guidelines on the  “Physical Protection of Nuclear Material and Nuclear Facilities” and in  pending amendments to the Convention on the Physical Protection of  Nuclear Material. Our review of section 123 of the AEA and all U.S.  nuclear cooperation agreements currently in force found that they do not  explicitly include a provision granting the United States access to verify  the physical protection of facilities or sites holding material subject to U.S.  nuclear cooperation agreement terms. However, in accordance with the  AEA, as amended, all nuclear cooperation agreements, excepting three  negotiated prior to 1978, contain provisions requiring both partners to  maintain adequate physical security over transferred material.
The AEA, as amended, requires that the cooperating party must  guarantee that it will maintain adequate physical security for transferred  nuclear material and any special nuclear material used in or produced  through the use of any material, or production, or utilization facility  transferred pursuant to the agreement. However, it does not specify that  State, in cooperation with other U.S. agencies, negotiates agreement  terms that must include rights of access or other measures for the United  States to verify whether a partner is maintaining adequate physical  security over U.S. material. Our review of the texts of all 27 U.S. nuclear  cooperation agreements in force found that most of them contain a  provision providing that the adequacy of physical protection measures  shall be subject to review and consultations by the parties. However,  none of the agreements include specific provisions stipulating that the  United States has the right to verify whether a partner is adequately  securing U.S. nuclear material. As a result, several DOE and State  officials told us the United States’ ability to monitor and evaluate the  physical security of U.S. nuclear material overseas is contingent on  partners’ cooperation and access to facilities where U.S. material is  stored.
State, DOE, and NRC officials told us that they rely on partners to comply  with IAEA’s security guidelines for physical protection. However, the  guidelines, which are voluntary, do not provide for access rights for other  states to verify whether physical protection measures for nuclear material  are adequate. IAEA’s security guideline document states that the  “responsibility for establishing and operating a comprehensive physical  protection system for nuclear materials and facilities within a State rests  entirely with the Government of that State.” In addition, according to the  guidelines, member states should ensure that their national laws provide  for the proper implementation of physical protection and verify continued  compliance with physical protection regulations. For example, according  to IAEA’s security guidelines, a comprehensive physical protection  system to secure nuclear material should include, among other things,  technical measures such as vaults, perimeter barriers, intrusion  sensors, and alarms;   material control procedures; and    adequately equipped and appropriately trained guard and emergency  response forces.
In addition, according to DOE and State officials, key international  treaties, including the Convention on the Physical Protection of Nuclear  Material—which calls for signatory states to provide adequate physical  protection of nuclear material while in international transit—do not provide  states the right to verify the adequacy of physical protection measures. A  senior official from IAEA’s Office of Nuclear Security told us that physical  security is a national responsibility and that governments may choose to  organize their various physical security components differently, as long as  the components add up to an effective regime.
Despite these constraints on access, the U.S. government can take  certain actions to protect U.S. nuclear material located at foreign facilities.  For example, NRC licensing for the export of nuclear equipment and  material is conditioned on partner maintenance of adequate physical  security. NRC officials stated that, when an export license application for  nuclear materials or equipment is submitted, the U.S. government seeks  confirmation, in the form of peaceful use assurances, from the foreign  government that the material and equipment, if exported, will be subject  to the terms and conditions of that government’s nuclear cooperation  agreement with the United States. In addition, NRC officials stated that  this government-to-government reconfirmation of the terms and  conditions of the agreement meets the “letter and spirit” of the AEA and  Nuclear Non-Proliferation Act of 1978 (NNPA) and underscores that the  partner is aware of and accepts the terms and conditions of the  agreement.
NRC officials also noted that the NNPA amendments to the AEA were  designed and intended to encourage foreign governments to agree to  U.S. nonproliferation criteria in exchange for nuclear commodities.  However, the AEA does not empower the U.S. government through  inspections or other means to enforce foreign government compliance  with nuclear cooperation agreements once U.S. nuclear commodities are  in a foreign country. Importantly, according to NRC, the onus is on the  receiving country as a sovereign right and responsibility and consistent  with its national laws and international commitments, to adequately  secure the nuclear material.
According to DOE and State, as well as foreign government officials, the  United States and the partner share a strong common interest in deterring  and preventing the misuse of nuclear material, as well as an interest in  maintaining the rights afforded to sovereign countries. The partner’s  interest in applying adequate security measures, for instance, is  particularly strong because the nuclear material is located within its  territory. Moreover, specific physical security needs may often depend on  unique circumstances and sensitive intelligence information known only to  the partner.
In addition, the AEA requires that U.S. nuclear cooperation agreements  with non-nuclear weapon states contain a stipulation that the United  States shall have the right to require the return of certain nuclear material,  as well as equipment, should the partner detonate a nuclear device or  terminate or abrogate its safeguards agreements with IAEA. However,  DOE, NRC, and State officials told us that the U.S. government has never  exercised the “right to require return” provisions in its nuclear cooperation  agreements. In addition, the United States typically includes “fall-back  safeguards”—contingency plans for the application of alternative  safeguards should IAEA safeguards become inapplicable for any other  reason. DOE and State officials told us, however, that the United States  has not exercised its fall-back safeguards provisions, because the United  States has not identified a situation where IAEA was unable to perform its  safeguards duties.
section_title: U.S. Agencies Have Visited Foreign Sites to Monitor and Evaluate the Physical Security of U.S. Nuclear Material
paragraphs: U.S. agencies have, over time, made arrangements with partners to visit  certain facilities where U.S. nuclear material is stored. As we reported in  August 1982 and in December 1994, U.S. interagency physical  protection teams visit partner country facilities to monitor and evaluate  whether the physical protection provided to U.S. nuclear material meets  IAEA physical security guidelines. In 1974, DOE’s predecessor, the  Energy Research and Development Administration, began leading teams  composed of State, NRC, and DOE national laboratory officials to review  the partner’s legal and regulatory basis for physical protection and to  ensure that U.S. nuclear material was adequately protected. In 1988, the  Department of Defense’s Defense Threat Reduction Agency began to  participate in these visits, and officials from other agencies and offices,  such as GTRI, have participated. The visits have generally focused on  research reactors containing HEU but have also included assessments,  when partners voluntarily grant access, of other facilities’ physical  security, including nuclear power plants, reprocessing facilities, and  research and development facilities containing U.S. nuclear material.
According to DOE documents and DOE, NRC, and State officials, the  primary factors for selecting countries for visits are the type, quantity, and  form of nuclear material, with priority given to countries with U.S. HEU or  plutonium in Category I amounts. In addition, in 1987, NRC  recommended that countries possessing U.S. Category I nuclear material  be revisited at least every 5 years. DOE and NRC officials told us this has  become an official goal for prioritizing visits. According to DOE,  interagency physical protection visits are also made whenever the country  has had or expects to have a significant change in its U.S. nuclear  material inventory, along with other factors, such as previous findings that  physical protection was not adequate. These criteria and other factors are  used to help U.S. agencies prioritize visits on a countrywide basis and  also supplement other information that is known about a partner’s  physical protection system and the current threat environment. Moreover,  while the U.S. physical protection program assesses physical security  conditions on a site-specific basis, NRC’s regulations permit the  determination of adequacy of foreign physical protection systems on a  countrywide basis. Therefore, DOE, NRC, and State officials told us that  the results of the interagency physical protection visits, combined with  other sources of information such as country threat assessments, are  used as a measure of the physical security system countrywide.
The U.S. teams visit certain facilities where U.S. nuclear material is used  or stored to observe physical protection measures after discussing the  relevant nuclear security regulatory framework with the partner  government. DOE and State officials told us these physical protection  visits help U.S. officials develop relationships with partner officials, share  best practices and, in some cases, recommend physical security  improvements.
We visited four facilities that hold U.S.-obligated nuclear material. The  partner officials and facility operators we met shared their observations  regarding the U.S. physical protection visits. Representatives from one  site characterized a recent interagency physical protection visit as a  “tour.” These officials told us the U.S. government officials had shared  some high-level observations regarding their visit with government  officials and nuclear reactor site operators but did not provide the  government or site operators with written observations or  recommendations. On the other hand, government officials from another  country we visited told us that a recent interagency physical protection  visit had resulted in a useful and detailed exchange of information about  physical security procedures. These government officials told us they had  learned “quite a lot” from the interagency physical protection visit and that  they hoped the dialogue would continue, since security could always be  improved. In February 2011, DOE officials told us they had begun to  distribute the briefing slides they use at the conclusion of a physical  protection visit to foreign officials. State officials told us that the briefings  are considered government-to-government activities, and it is the partner  government’s choice on whether to include facility operators in the  briefings.
In addition, we reviewed U.S. agencies’ records of these and other  physical protection visits and found that, over the 17-year period from  1994 through 2010, U.S. interagency physical protection teams made 55  visits. Of the 55 visits, interagency physical protection teams found the  sites met IAEA security guidelines on 27 visits, did not meet IAEA security  guidelines on 21 visits, and the results of 7 visits are unknown because  the physical protection team was unable to assess the sites, or agency  documentation was missing.
According to DOE, State, and NRC officials, the visits are used to  encourage security improvements by the partner. For example, based on  the circumstances of one particular facility visited in the last 5 years, the  physical protection team made several recommendations to improve  security, including installing (1) fences around the site’s perimeter, (2)  sensors between fences, (3) video assessment systems for those  sensors, and (4) vehicle barriers. According to DOE officials, these  observations were taken seriously by the country, which subsequently  made the improvements.
When we visited the site as part of our review, government officials from  that country told us the U.S. interagency team had provided useful advice  and, as a result, the government had approved a new physical protection  plan. These government officials characterized their interactions with  DOE and other U.S. agency officials as positive and told us that the  government’s new physical protection plan had been partly implemented.  Moreover, although we were not granted access to the building, we  observed several physical protection upgrades already implemented or in  progress, including: (1) the stationing of an armed guard outside the  facility holding U.S. Category I material; (2) ongoing construction of a 12- foot perimeter fence around the facility; and (3) construction of a fence  equipped with barbed wire and motion detectors around the entire  research complex. We were also told that, among other things, remote  monitoring equipment had been installed in key areas in response to the  interagency visit. The Central Alarm Station was hardened, and the  entrance to the complex was controlled by turnstiles and a specially  issued badge, which entrants received after supplying a passport or other  government-issued identification. Private automobiles were not allowed in  the facility.
Not all U.S. physical protection visits proceed smoothly. In some cases,  U.S. agencies have attempted repeatedly to convince partner officials of  the seriousness of meeting IAEA security guidelines and to fund  improvements. For example, a U.S. interagency physical protection team  in the early 2000s found numerous security problems at a certain  country’s research reactor. The site supervisor objected to the  interagency team’s assessment because physical security was a matter  of national sovereignty, and IAEA security guidelines were subject to  interpretation. The site supervisor also objected to some of the U.S.  team’s recommendations. In some instances, under U.S. pressure,  countries have agreed to make necessary improvements with DOE  technical and material assistance.
Our review of agency records indicates that, in recent years, as the  number of countries relying on U.S. HEU to fuel research reactors has  continued to decline, U.S. agencies have succeeded in using a partner’s  pending export license for U.S. HEU or expected change in inventory of  U.S. special nuclear material as leverage for a U.S. interagency physical  protection visit. For example, we identified two cases since 2000 where a  partner country applied for a license to transfer U.S. HEU, and a U.S.  interagency team subsequently visited those two sites. In addition, we  identified a recent situation where a partner country’s inventory of U.S.  plutonium at a certain site was expected to significantly increase, and a  U.S. interagency team visited the site to determine whether the site could  adequately protect these additional inventories.
According to DOE officials, requests for U.S. low enriched uranium (LEU)  export licenses have increased in recent years. In response, DOE  officials told us that U.S. agencies have begun to prioritize visits to  countries making such requests, and our review of agency documentation  corroborates this. For example, physical protection visit records we  reviewed state that recent interagency physical protection visits were  made to two sites to evaluate the facilities’ physical security in advance of  pending U.S. LEU license applications. In addition, a DOE contractor and  State official told us that a U.S. team planned to visit another partner  country site in late 2011 in order to verify the adequacy of physical  protection for U.S.-obligated LEU.
section_title: U.S. Agencies Do Not Have a Formal Process for Coordinating and Prioritizing U.S. Physical Protection Visits
paragraphs: DOE, NRC, and State do not have a formal process for coordinating and  prioritizing U.S. interagency physical protection visits. In particular, DOE,  which has the technical lead and is the agency lead on most visits has  neither (1) worked with NRC and State to establish a plan and prioritize  interagency physical protection visits, nor (2) measured performance in a  systematic way. Specifically:    Establishing a plan and prioritizing and coordinating efforts. A U.S.  agency formal plan for which countries or facilities to visit has not  been established, nor have goals for the monitoring and evaluation  activities been formalized. In October 2009, DOE reported to us that it  had formulated a list of countries that contained U.S. nuclear material  and were priorities for U.S. teams to visit. However, in a subsequent  written communication to us, a senior DOE official stated that DOE  had not yet discussed this list with State, NRC, or other agency  officials.  As a result, the list of countries had not been properly  vetted at that time and did not represent an interagency agreed-upon  list. In February 2011, DOE officials told us that U.S. agencies will be  considering a revised methodology for prioritizing physical protection  visits. NRC officials told us they thought the interagency coordination  and prioritization of the visit process could be improved. A State  official, who regularly participates in the U.S. physical protection visits,  told us that interagency coordination had improved in the past 6  months, in response to a recognized need by U.S. agencies to be  prepared for an expected increase in requests for exports of U.S.  LEU.   Measuring performance. The agencies have not developed  performance metrics to gauge progress in achieving stated goals  related to physical protection visits. Specifically, DOE, NRC, and State  have not performed an analysis to determine whether the stated  interagency goal of visiting countries containing U.S. Category I  nuclear material within 5 years has been met. In addition, although  DOE has stated U.S. physical protection teams revisit sites whenever  there is an indication that security does not meet IAEA security  guidelines, DOE has not quantified its efforts in a meaningful way. In  response to our questions about metrics, DOE officials stated that  there is no U.S. law regarding the frequency of visits or revisits and  that the agency’s internal goals are not requirements. These officials  told us that DOE, NRC, and State recognize that the “number one  goal” is to ensure the physical security of U.S. nuclear material  abroad. DOE officials stated that the best measure of the U.S.  physical protection visits’ effectiveness is that there has not been a  theft of U.S. nuclear material from a foreign facility since the 1970s,  when two LEU fuel rods were stolen from a certain country. However,  officials reported to us that, in 1990, the facility was determined to be  well below IAEA security guidelines. Our review of DOE  documentation shows that other U.S. LEU transferred to the facility  remains at the site.
In July 2011, in conjunction with the classification review for this report,  DOE officials stated that while DOE, NRC, and State work together on  coordinating U.S. government positions regarding priorities and  procedures for the interagency physical protection program, no updated  document exists that formalizes the process for planning, coordinating,  and prioritizing U.S. interagency physical protection visits. We note that  the documents that DOE refers to are internal DOE documents presented  to us in 2008 and 2009 in response to questions regarding nuclear  cooperation agreements. These documents are not an interagency  agreed-upon document, but reflect DOE’s views on determining which  countries and facilities interagency physical protection teams should visit.  Further, DOE officials in July 2011 stated that DOE, NRC, and State do  not have an agreed-upon way to measure performance in a systematic  way, and that while the goals for the monitoring and evaluation activities  have not yet been formalized through necessary updated documents, a  prioritized list of countries to visit does exist. These officials noted that the  U.S. government is working to update its planning documents and is  examining its methodology for prioritizing physical protection visits. Any  changes will be included in these updated documents.
DOE and U.S. agencies’ activities for prioritizing and coordinating U.S.  interagency physical protection visits and measuring performance do not  meet our best practices for agency performance or DOE’s standards for  internal control. We have reported that defining the mission and desired  outcomes, measuring performance, and using performance information to  identify performance gaps are critical if agencies are to be accountable  for achieving intended results. In addition, DOE’s own standards for  internal control call for “processes for planning, organizing, directing, and  controlling operations designed to reasonably assure that programs  achieve intended results… and decisions are based on reliable data.”  However, DOE, NRC, and State have neither established a plan nor  measured performance to determine whether they are meeting internal  goals and whether U.S. agencies’ activities are systematic.
section_title: DOE and U.S. Agencies Do Not Systematically Visit Countries with Category I U.S. Nuclear Material or Revisit Foreign Facilities Not Meeting Security Guidelines
paragraphs: U.S. agencies have not systematically evaluated the security of foreign  facilities holding U.S. nuclear material in two key ways. First, U.S.  interagency physical protection teams have not systematically visited  countries holding Category I quantities of U.S. nuclear material. Second,  interagency teams have not revisited sites that did not meet IAEA security  guidelines in a timely manner.
U.S. interagency physical protection teams have not systematically visited  countries believed to be holding Category I quantities of U.S. special  nuclear material at least once every 5 years—a key programmatic goal. In  a December 2008 document, DOE officials noted that, in 1987, NRC  recommended that countries possessing Category I nuclear material be  revisited at least once every 5 years. This recommendation was adopted  as a goal for determining the frequency of follow-on visits. In addition,  DOE, NRC, and State officials told us that they aim to conduct physical  protection visits at each country holding Category I quantities of U.S.  nuclear material at least once every 5 years. We evaluated U.S.  agencies’ performance at meeting this goal by reviewing records of U.S.  physical protection visits and other information.  We found that the  United States had met this goal with respect to two countries by  conducting physical protection visits at least once every 5 years since  1987 while they held Category I quantities of U.S. nuclear material.  However, we estimated that 21 countries held Category I amounts of U.S.  nuclear material during the period from 1987 through 2010 but were not  visited once every 5 years while they held such quantities of U.S. nuclear  material.
In addition, U.S. interagency physical protection teams have not visited all  partner facilities believed to contain Category I quantities of U.S. special  nuclear material to determine whether the security measures in place  meet IAEA security guidelines. Specifically, we reviewed physical  protection visit records and NMMSS data and identified 12 facilities that  NMMSS records indicate received Category I quantities of U.S. HEU that  interagency physical protection teams have never visited.
We identified four additional facilities that GTRI officials told us currently  hold, and will continue to hold, Category I quantities of U.S. special  nuclear material for which there is no acceptable disposition path in the  United States. In addition, these facilities have not been visited by a U.S.  interagency physical protection team, according to our review of available  documentation.
Moreover, U.S. interagency physical protection teams have not  systematically visited partner storage facilities for U.S. nuclear material.  The AEA, as amended, requires that U.S. nuclear cooperation  agreements contain a stipulation giving the United States approval rights  over any storage facility containing U.S. unirradiated or “separated”  plutonium or HEU. DOE and NRC officials told us there is no list of such  storage facilities besides those listed in a U.S. nuclear cooperation  agreement with a certain partner. They stated—and our review of  available documents corroborated—that a number of the U.S. physical  protection visits have included assessments of overseas storage sites for  U.S. nuclear material, since such sites are often collocated with research  reactors. However, our review also found two instances where partner  storage areas containing U.S. HEU or separated plutonium did not meet  IAEA guidelines or were identified as potentially vulnerable.
DOE and U.S. agencies do not have a systematic process to revisit or  monitor security improvements at facilities that do not meet IAEA security  guidelines. Based on our analysis of available documentation, we found  that, since 1994, U.S. interagency physical protection teams determined  that partner country sites did not meet IAEA security guidelines on 21  visits. We then examined how long it took for a U.S. team to revisit the  sites that did not meet IAEA security guidelines and found that, in 13 of  21 cases, U.S. interagency teams took 5 years or longer to revisit the  facilities.
According to DOE, NRC, and State officials, the interagency physical  protection visits are not the only way to determine whether partner  facilities are meeting IAEA security guidelines. For example, the United  States is able to rely on information provided by other visits and U.S.  embassy staff to monitor physical security practices. These visits include  DOE-only trips and trips by DOE national laboratory staff and NRC  physical protection experts who worked with the host country to improve  physical security at the sites. NRC officials also stated that, in some  cases, the partner’s corrective actions at the site are verified by U.S.  officials stationed in the country, and a repeat physical protection visit is  not always required.
IAEA officials told us that U.S. technical experts often participate in  voluntary IAEA physical security assessments at IAEA member states’  facilities. Specifically, IAEA created the International Physical Protection  Advisory Service (IPPAS) to assist IAEA member states in strengthening  their national security regime. At the request of a member state, IAEA  assembles a team of international experts who assess the member  state’s system of physical protection in accordance with IAEA security  guidelines. As of December 2010, 49 IPPAS missions spanning about 30  countries had been completed.
section_title: DOE Seeks to Increase Security or Remove Vulnerable U.S. Nuclear Material at Partner Facilities but Faces Challenges
paragraphs: DOE has taken steps to improve security at a number of facilities  overseas that hold U.S. nuclear material. DOE’s GTRI program removes  nuclear material from vulnerable facilities overseas and has achieved a  number of successes. However, DOE faces a number of constraints.  Specifically, GTRI can only bring certain types of nuclear material back to  the United States that have an approved disposition pathway and meet  the program’s eligibility criteria. In addition, obtaining access to the  partner facilities to make physical security improvements may be difficult.  There are a few countries that are special cases where the likelihood of  returning the U.S. nuclear material to the United States is considered  doubtful.
DOE’s Office of Nonproliferation and International Security and GTRI  officials told us that when a foreign facility with U.S.-obligated nuclear  material does not meet IAEA security guidelines, the U.S. government’s  first response is to work with the partner country to encourage physical  security improvements. In addition, the GTRI program was established in  2004 to identify, secure, and remove vulnerable nuclear material at  civilian sites around the world and to provide physical protection upgrades  at nuclear facilities that are (1) outside the former Soviet Union, (2) in  non-weapon states, and (3) not in high-income countries. According to  GTRI officials, the U.S. government’s strategy for working with partner  countries to improve physical security includes: (1) encouraging   high-income countries to fund their own physical protection upgrades with  recommendations by the U.S. government and (2) working with other- than-high-income countries to provide technical expertise and funding to  implement physical protection upgrades. If the material is excess to the  country’s needs and can be returned to the United States under an  approved disposition pathway, GTRI will work with the country to  repatriate the material.
According to GTRI officials, GTRI was originally authorized to remove to  the United States, under its U.S. fuel return program, only U.S.-obligated  fresh and spent HEU in Material Test Reactor fuel, and Training  Research Isotope General Atomics (TRIGA) fuel rod form. According to  GTRI officials, GTRI has also obtained the authorization to return  additional forms of U.S. fresh and spent HEU, as well as U.S. plutonium  from foreign countries, so long as there is no alternative disposition path.  The material must (1) pose a threat to national security, (2) be usable for  an improvised nuclear device, (3) present a high-risk of terrorist theft, and  (4) meet U.S. acceptance criteria.
To date, GTRI has removed more than 1,240 kilograms of U.S. HEU from  Australia, Argentina, Austria, Belgium, Brazil, Canada, Chile, Colombia,  Denmark, Germany, Greece, Japan, the Netherlands, Philippines,  Portugal, Romania, Slovenia, South Korea, Spain, Sweden, Switzerland,  Taiwan, Thailand, and Turkey. It has also performed security upgrades  at reactors containing U.S. nuclear material that were not meeting IAEA  security guidelines in 10 partner countries. As we reported in September  2009, GTRI has improved the security of research reactors, and GTRI  officials told us in April 2011 that they plan to continue to engage other  countries to upgrade security.
In a separate report published in December 2010, we noted that GTRI  has assisted in the conversion from the use of HEU to LEU or verified the  shutdown of 72 HEU research reactors around the world, 52 of which  previously used U.S. HEU. GTRI prioritizes its schedule for upgrading the  security of research reactors and removing nuclear material based on the  amount and type of nuclear material at the reactor and other threat  factors, such as the vulnerability of facilities, country-level threat, and  proximity to strategic assets. Our review identified several situations  where GTRI or its predecessor program removed vulnerable U.S. nuclear  material.
Notwithstanding these successes, the GTRI program has some  limitations. GTRI cannot remove all potentially vulnerable nuclear material  worldwide because the program’s scope is limited to only certain types of  material that meet the eligibility criteria. GTRI officials told us that, of the  approximately 17,500 kilograms of HEU it estimates was exported from  the United States, the majority—12,400 kilograms—is currently not  eligible for return to the United States. According to GTRI officials, over  10,000 kilograms is contained in fuels from “special purpose” reactors  that are not included in GTRI’s nuclear material return program because  they were not traditional aluminum-based fuels, TRIGA fuels, or target  material. As a result, this material does not have an acceptable  disposition pathway in the United States, according to GTRI officials.  GTRI officials stated that these reactors are in Germany, France, and  Japan, and that the material has been deemed to be adequately  protected. GTRI reported that the other approximately 2,000 kilograms of  transferred U.S. nuclear material is located primarily in EURATOM  member countries and is either currently in use or adequately protected.
In addition, the potential vulnerability of nuclear material at certain high- income facilities was raised to us by officials at the National Security  Council (NSC)—the President’s principal forum for considering national  security and foreign policy matters—and included in a prior report.  Specifically, we reported that, there may be security vulnerabilities in  certain high-income countries, including three specific high-income  countries named by the NSC officials. For sites in these countries, GTRI  officials told us the U.S. government’s strategy is to work bilaterally with  the countries and to provide recommendations to improve physical  protection, and follow up as needed.
Our analysis of available agency physical protection visit documents also  raises concerns regarding the physical security conditions in these  countries, including facilities that did not meet IAEA security guidelines  and interagency physical protection teams’ lack of access issues.
DOE also works with countries to remove material if it is in excess of the  country’s needs and meets DOE acceptance criteria. The ability of DOE  to return U.S. nuclear material depends, however, on the willingness of  the foreign country to cooperate. As we reported in September 2009,   because GTRI’s program for physical security upgrades and nuclear  material returns is voluntary, DOE faces some challenges in obtaining  consistent and timely cooperation from other countries to address security  weaknesses. Our report further noted that DOE has experienced  situations where a foreign government has refused its assistance to make  security upgrades. For example, we reported that one country had  refused offers of DOE physical security upgrades at a research reactor for  9 years. However, this situation was subsequently resolved when all HEU  was removed from this country, according to GTRI officials. In addition,  we reported that DOE had experienced two other situations where the  partner country would not accept security assistance until agreements  with the United States were reached on other issues related to nuclear  energy and security.
There are several countries that have U.S. nuclear material that are  particularly problematic and represent special cases. Specifically, U.S.  nuclear material has remained at sites in three countries where physical  protection measures are unknown or have not been visited by an  interagency physical protection team in decades. GTRI removed a large  quantity of U.S. spent HEU recently from one of these countries.
According to NRC and State officials, U.S. transfers to these three  countries were made prior to 1978, when the physical protection  requirements were added to the AEA. Therefore, these countries have  not made the same commitments regarding physical security of U.S.- transferred material. Finally, we identified another country that poses  special challenges. All U.S-obligated HEU has been removed from this  country, which was one of the GTRI program’s highest priorities. Previous  U.S. interagency physical protection visits found a site in this country did  not meet IAEA security guidelines.
section_title: Conclusions
paragraphs: The world today is dramatically different than when most U.S. nuclear  cooperation agreements were negotiated. Many new threats have  emerged, and nuclear proliferation risks have increased significantly. We  recognize that the United States and its partners share a strong common  interest in deterring and preventing the misuse of U.S. nuclear material— or any nuclear material—and that flexibility in the agreements is  necessary to forge strong and cooperative working relationships with our  partners. The fundamental question, in our view, is whether nuclear  cooperation agreements and their underlying legislative underpinnings  need to be reassessed given the weaknesses in inventory management  and physical security that we identified.
Specifically, we found these agreements may not be sufficiently robust in  two areas—inventories and physical security. Without an accurate  inventory of U.S. nuclear materials—in particular, weapon-usable HEU  and separated plutonium—the United States does not have sufficient  assurances regarding the location of materials. As a result, the United  States may not be able to monitor whether the partner country is  appropriately notifying the United States and whether the United States is  appropriately and fully exercising its rights of approval regarding the  transfer, retransfer, enrichment and reprocessing and, in some cases,  storage of nuclear materials subject to the agreement terms. NRC and  multiple offices within DOE could not provide us with an authoritative list  of the amount, location, and disposition of U.S. HEU or separated  plutonium overseas. We are particularly concerned that NRC and DOE  could not account, in response to a 1992 mandate by Congress, on the  location and disposition of U.S. nuclear material overseas—and that they  have not developed such an inventory in the almost two decades since  that mandate.
We recognize that physical security is a national responsibility. We also  recognize that neither the AEA, as amended, nor the U.S. nuclear  cooperation agreements in force require that State negotiate new or  renewed nuclear cooperation agreement terms that include specific  access rights for the United States to verify whether a partner is  maintaining adequate physical security of U.S. nuclear material. Without  such rights, it may be difficult for the United States to have access to  critical facilities overseas—especially those believed to be holding  weapon-usable materials—to better ensure that U.S. material is in fact  adequately protected while the material remains in the partner’s custody.  We note the agreements are reciprocal, with both parties generally  agreeing to all conditions specified in them. We acknowledge that any  change to the nuclear cooperation framework or authorizing legislation  will be very sensitive. Careful consideration should be given to the impact  of any reciprocity clauses on U.S. national security when negotiating or  reviewing these agreements. However, it may be possible to do so in a  way that includes greater access to critical facilities where weapon-usable  U.S. nuclear material is stored, without infringing on the sovereign rights  of our partners or hampering the ability of the U.S. nuclear industry to  remain competitive.
In the course of our work, we identified several weaknesses in DOE,  NRC, and State’s efforts to develop and manage activities that ensure  that U.S. nuclear cooperation agreements are properly implemented.  Specifically, the lack of a baseline inventory of U.S. nuclear materials—in  particular, weapon-usable materials—and annual inventory reconciliations  with all partners limits the ability of the U.S. government to identify where  the material is located. Currently, annual reconciliations with five partners  are undertaken. However, the information, with the exception of one  country, is aggregated and not provided on a facility-by-facility basis.  Without such information on facilities, it may be difficult to track U.S.  material for accounting and control purposes. No annual reconciliations  currently exist for the United States’ other partners that it has transferred  material to or trades with. The NMMSS database could be the official  central repository of data regarding U.S. inventories of nuclear material  overseas if DOE and NRC are able to collect better data.
We are concerned that DOE has not worked with NRC and State to  develop a systematic process for monitoring and evaluating the physical  security of U.S. nuclear material overseas, including which foreign  facilities to visit for future physical protection visits. In particular, U.S.  interagency physical protection teams have neither met a key  programmatic goal for visiting countries containing Category I quantities  of U.S. special nuclear material every 5 years, nor have they visited all  partner facilities believed to be holding Category I quantities of U.S.  nuclear material, nor revisited facilities that were found to not meet IAEA  security guidelines in a timely manner. Moreover, relying on reported  thefts of U.S. nuclear material as a gauge of security is not the best  measure of program effectiveness when accounting processes for  inventory of U.S. material at foreign facilities are limited. Improving the  U.S. government’s management of nuclear cooperation agreements  could contribute to the administration achieving its goal of securing all  vulnerable nuclear material worldwide in 4 years.
section_title: Matters for Congressional Consideration
paragraphs:   Congress may wish to consider directing DOE and NRC to complete a  full accounting of U.S. weapon-usable nuclear materials—in  particular, HEU and separated plutonium—with its nuclear  cooperation agreement partners and other countries that may  possess such U.S. nuclear material.
In addition, Congress may wish to consider amending the AEA if  State, working with other U.S. agencies, does not include enhanced  measures regarding physical protection access rights in future  agreements and renewed agreements, so that U.S. interagency  physical protection teams may obtain access when necessary to  verify that U.S. nuclear materials have adequate physical protection.  The amendment could provide that the U.S. government may not  enter into nuclear cooperation agreements unless such agreements  contain provisions allowing the United States to verify that adequate  physical security is exercised over nuclear material subject to the  terms of these agreements.
section_title: Recommendations for Executive Action
paragraphs: We are making seven recommendations to enable agencies to better  account for, and ensure the physical protection of, U.S. nuclear material  overseas.
To help federal agencies better understand where U.S. nuclear material is  currently located overseas, we recommend that the Secretary of State,  working with the Secretary of Energy and the Chairman of the Nuclear  Regulatory Commission, take the following four actions to strengthen  controls over U.S. nuclear material subject to these agreements:    determine, for those partners with which the United States has  transferred material but does not have annual inventory reconciliation,  a baseline inventory of weapon-usable U.S. nuclear material, and  establish a process for conducting annual reconciliations of  inventories of nuclear material on a facility-by-facility basis;   establish for those partners with which the United States has an  annual inventory reconciliation, reporting on a facility-by-facility basis  for weapon-usable material where possible; facilitate visits to sites that U.S. physical protection teams have not  visited that are believed to be holding U.S. Category I nuclear  material; and seek to include measures that provide for physical protection access  rights in new or renewed nuclear cooperation agreements so that U.S.  interagency physical protection teams may in the future obtain access  when necessary to verify that U.S. nuclear materials are adequately  protected. Careful consideration should be given to the impact of any  reciprocity clauses on U.S. national security when negotiating or  reviewing these agreements.
In addition, we recommend that the Secretary of Energy, working with the  Secretary of State, and the Chairman of the Nuclear Regulatory  Commission take the following three actions:    develop an official central repository to maintain data regarding U.S.  inventories of nuclear material overseas. This repository could be the  NMMSS database, or if the U.S. agencies so determine, some other  official database;   develop formal goals for and a systematic process to determine which  foreign facilities to visit for future interagency physical protection visits.  The goals and process should be formalized and agreed to by all  relevant agencies; and   periodically review performance in meeting key programmatic goals  for the physical protection program, including determining which  countries containing Category I U.S. nuclear material have been  visited within the last 5 years, as well as determining whether partner  facilities previously found to not meet IAEA security guidelines were  revisited in a timely manner.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Secretaries of Energy and State,  and the Chairman of the NRC for their review and comment. Each agency  provided written comments on the draft report, which are presented in  appendixes IV, VI, and V, respectively. All three agencies generally  disagreed with our conclusions and recommendations. DOE, NRC, and  State disagreed with GAO in three general areas of the report.  Specifically, all the agencies (1) disagree with our recommendations to  establish annual inventory reconciliations with all trading partners and  establish a system to comprehensively track and account for U.S. nuclear  material overseas, because the agencies believe this is impractical and  unwarranted; (2) maintain that IAEA safeguards are sufficient or an  important tool to account for U.S. nuclear material overseas; and (3)  assert that any requirement in future nuclear cooperation agreements  calling for enhanced physical protection access rights is unnecessary and  could hamper sensitive relationships.
With regard to the three general areas of disagreement, our response is  as follows:    DOE, NRC, and State assert that it is not necessary to implement  GAO’s recommendation that agencies undertake an annual inventory  reconciliation and report on a facility-by-facility basis for weapon- usable material where possible for all countries that hold U.S.- obligated nuclear material. We stand by this recommendation for  numerous reasons. First, as stated in the report, we found—and none  of the agencies refuted—that the U.S. government does not have an  inventory of U.S. nuclear material overseas and, in particular, is not  able to identify where weapon-usable materials such as HEU and  separated plutonium that can be used for a nuclear weapon may  reside. In fact, NRC commented that “inventory knowledge is very  important for high-consequence materials, e.g., high enriched uranium  and separated plutonium.” Because DOE, NRC, and State do not  have comprehensive knowledge of where U.S.-obligated material is  located at foreign facilities, it is unknown whether the United States is  appropriately and fully exercising its rights of approval regarding the  transfer, retransfer, enrichment, and reprocessing and, in some  cases, storage of nuclear materials subject to the agreements’ terms.  In addition, the lack of inventory information hampers U.S. agencies in  identifying priorities for interagency physical protection visits. We are  particularly concerned that NRC and DOE, in response to a 1992  mandate by Congress, could only account for the location and  disposition of about 1,160 kilograms out of an estimated 17,500  kilograms of U.S.-exported HEU. Furthermore, the agencies have not  developed such an inventory or performed an additional  comprehensive review in the almost two decades since that mandate.  We believe it is important that DOE, NRC, and State pursue all means  possible to better identify where U.S.-obligated material is located  overseas—and for weapon-usable HEU and separated plutonium,  seek to do so on a facility-by-facility basis. Annual inventory  reconciliations with all partners provide one way to do that. The United  States has demonstrated it has the ability to conduct such exchanges,  which none of the agencies disputed. Our report notes that the United  States conducts annual inventory reconciliations with five partners,  including one where facility-level information is annually exchanged.  We believe the recent signing of nuclear cooperation agreements with  India and Russia, as well as the situation where current partners  whose agreements are set to expire in coming years must be  renegotiated—including Peru and South Korea—provide a convenient  and timely opportunity for DOE, NRC, and State to pursue such  enhanced material accountancy measures.   DOE, NRC, and State commented that IAEA’s comprehensive  safeguards program is another tool to maintain the knowledge of  locations of nuclear material in a country, including U.S.-obligated  material, and that IAEA inspection, surveillance, and reporting  processes are effective tools for material tracking and accounting. We  agree that IAEA safeguards are an important nuclear nonproliferation  mechanism. However, our report found IAEA’s safeguards have a  limited ability to identify, track, and account for U.S.-obligated  material. Specifically, as our report notes, and as confirmed to us by  senior IAEA officials, IAEA does not track the obligation of the nuclear  material under safeguards and, therefore, IAEA may not have the  ability to identify whether and what volume of nuclear material at  partner country facilities is U.S.-obligated and subject to the terms of  U.S. nuclear cooperation agreements. In addition, our report notes  that IAEA considers member country nuclear material inventory  information confidential and does not share it with its member  countries, including the United States. Therefore, IAEA has a limited  ability to account for nuclear material subject to the terms of U.S.  nuclear cooperation agreements. Importantly, safeguards are not a  substitute for physical security and serve a different function. As our  report notes, safeguards are primarily a way to detect diversion of  nuclear material from peaceful to military purposes but do not ensure  that facilities are physically secure to prevent theft or sabotage of  such material.   DOE, NRC, and State disagreed with our recommendation that State,  working with DOE and NRC, should seek to negotiate terms that  include enhanced measures regarding physical protection access  rights in future and renewed agreements. They also raised concerns  with our Matter for Congressional Consideration to amend the AEA  should State not implement our recommendation. We do not agree  with agencies’ comments that our recommendation that agencies  “seek to include” such measures is impractical. As we note in our  report, an enhanced measure for access rights is in place in the  recently negotiated U.S.-India arrangements and procedures  document. Further, while partner countries pledge at the outset of an  agreement that they will physically protect U.S.- obligated material,  the results of our work show that they have not always adequately  done so. Specifically, our report noted that, of the 55 interagency  physical protection visits made from 1994 through 2010, interagency  teams found that countries met IAEA security guidelines on only 27  visits; did not meet IAEA security guidelines on 21 visits, and the  results of 7 visits are unknown because the U.S. team was unable to  assess the sites or agency documentation of the physical protection  visits was missing. In addition, we identified 12 facilities that are  believed to have or previously had Category I U.S. nuclear material  that have not been visited by an interagency physical protection team.  We agree with the agencies’ comments that the licensing process for  U.S. nuclear material offers some assurances that physical security  will be maintained and that an exchange of diplomatic notes at the  time of a transfer is designed to ensure the partners maintain the  material according to the terms of the agreements. However, these  measures are implemented at the time of licensing or material  transfer, and insight into the physical security arrangements of the  nuclear material over the longer-term, often 30-year duration of these  agreements is by no means guaranteed. Ensuring that the United  States has the tools it needs to visit facilities in the future—even after  an initial transfer of material is made per a conditional export  license—is important to supporting U.S. nuclear nonproliferation  objectives. We continue to believe that our recommendation and  Matter for Congressional Consideration are consistent with the  report’s findings and would enhance the security of U.S.-obligated  nuclear material in other countries.
In addition, DOE and NRC commented that (1) our report contained  errors in fact and judgment, (2) our report’s recommendations could result  in foreign partners requiring reciprocal access rights to U.S. facilities that  contain nuclear material that they transferred to the United States, which  could have national security implications, and (3) our recommendation  that agencies establish a process for conducting annual reconciliations of  inventories of nuclear material and develop a repository to maintain data  regarding U.S. inventories of nuclear material overseas would be costly to  implement. Our response to these comments is as follows:    None of the agencies’ comments caused us to change any factual  statement we made in the report. DOE provided a limited number of  technical comments, which we incorporated as appropriate.  Importantly, some of the facts that agencies did not dispute included:  (1) our analysis that found U.S. agencies made only a single attempt  to comprehensively account for transferred U.S. HEU almost 20 years  ago and, at that time, were only able to verify the amount and location  of less than one-tenth of transferred U.S. HEU; and (2) partner  countries did not meet IAEA physical security guidelines for protecting  U.S. nuclear material in about half of the cases we reviewed from  1994 through 2010. In our view, these security weaknesses place  U.S.-obligated nuclear material at risk and raise potential proliferation  concerns. These agreements for nuclear cooperation are long-term in  scope and are often in force for 30 years or more. As we noted in our  report, the world today is dramatically different than the time when  most of the agreements were negotiated. New threats have emerged,  and nuclear proliferation risks have increased significantly. NRC  commented that countries may not want to change the “status quo” as  it pertains to nuclear cooperation agreement terms, including those  regarding the physical protection of U.S.-obligated nuclear material. In  our view, the status quo, or business-as-usual approach should not  apply to matters related to the security of U.S.-obligated nuclear  material located at partner facilities throughout the world. Moreover,  implementing a more robust security regime is consistent with and  complements the administration’s goal of securing all vulnerable  nuclear material worldwide within a 4-year period.   DOE and NRC’s comment that the United States may be asked to  demonstrate reciprocity by nuclear cooperation agreement partners to  verify that adequate physical protection is being provided to their  nuclear material while in U.S. custody has merit and needs to be  taken into consideration when developing or reviewing nuclear  cooperation agreements. As a result, we added language to the  conclusions and recommendation sections to additionally state that  “careful consideration should be given to the impact of any reciprocity  clauses on U.S. national security when negotiating or reviewing these  agreements.”
In addition, DOE and NRC commented that we are suggesting a  costly new effort in recommending that agencies account for and track  U.S.-obligated nuclear material overseas. However, we noted in our  report that NMMSS officials told us that NMMSS is currently capable  of maintaining information regarding inventories of U.S. nuclear  material overseas. Moreover, DOE and NRC did not conduct an  analysis to support their assertion that such a system would be costly.  Although we did not perform a cost-benefit analysis, based on our  conversations with NMMSS staff and the lack of a DOE cost-benefit  analysis, to the contrary, there is no evidence to suggest that adding  additional information to the NMMSS database would necessarily  entail significant incremental costs or administrative overhead. We are  sensitive to suggesting or recommending new requirements on  federal agencies that may impose additional costs. However, it is  important to note that the U.S. government has already spent billions  of dollars to secure nuclear materials overseas, as well as radiation  detection equipment to detect possible smuggled nuclear material at  our borders and the border crossings of other countries. The  administration intends to spend hundreds of millions more to support  the president’s 4-year goal to secure all vulnerable nuclear material  worldwide. If necessary, an expenditure of some resources to account  for U.S. nuclear material overseas is worthy of consideration. We  stand by our recommendations that State work with nuclear  cooperation agreement partners that the United States has  transferred material to, to develop a baseline inventory of U.S. nuclear  material overseas, and that DOE work with other federal agencies to  develop a central repository to maintain data regarding U.S.  inventories of nuclear material overseas.
DOE disagreed with our findings that the U.S. interagency physical  protection visit program (1) lacked formal goals, and that (2) U.S.  agencies have not established a formal process for coordinating and  prioritizing interagency physical protection visits, in addition to the three  areas of general disagreement. During the course of our work, we found  no evidence of an interagency agreed-upon list of program goals. In its  comments, DOE stated that the formal goal of the program is to  determine whether U.S.-obligated nuclear material at the partner country  facility is being protected according to the intent of IAEA security  guidelines. This is the first time the goal has been articulated to us as  such. Moreover, we disagree with DOE’s second assertion that it has  established a formal process for coordinating and prioritizing visits. Our  report notes that we found DOE has not (1) worked with NRC and State  to establish a plan and prioritize U.S. physical protection visits or (2)  measured performance in a systematic way. In particular, our report notes  that, in October 2009, a DOE Office of Nonproliferation and International  Security official reported to us that it had formulated a list of 10 countries  that contained U.S. nuclear material and were priorities for physical  protection teams to visit. However, a senior-level DOE nonproliferation  official told us that DOE had not discussed this list with State or NRC, or  other agency officials, and it could not be considered an interagency  agreed-upon list. In addition, NRC Office of International Program officials  told us they thought interagency coordination could be improved, and a  State Bureau of International Security and Nonproliferation official told us  that agency coordination has improved in the past 6 months. Moreover,  as we further state in the report, in February 2011, DOE officials told us  that the department is conducting a study of its methodology for  prioritizing physical protection visits.
In addition, in July 2011, in conjunction with the classification review for  this report, DOE officials stated that while DOE, NRC, and State work  together on coordinating U.S. government positions regarding priorities  and procedures for the interagency physical protection program, no  updated document exists that formalizes the process for planning,  coordinating, and prioritizing U.S. interagency physical protection visits.  We note that the documents that DOE refers to are internal DOE  documents presented to GAO in 2008 and 2009 in response to questions  regarding nuclear cooperation agreements. These documents are not an  interagency agreed upon document, but reflects DOE’s views on  determining which countries and facilities interagency physical protection  teams should visit. Further, DOE officials in July 2011 stated that DOE,  NRC, and State do not have an agreed-upon way to measure  performance in a systematic way, and that while the goals for the  monitoring and evaluation activities have not yet been formalized through  necessary updated documents, a prioritized list of countries to visit does  exist. These officials noted that the U.S. government is working to update  its planning documents and examining its methodology for prioritizing  physical protection visits. Any changes will be included in these updated  documents. Therefore, we continue to believe that DOE should work with  the other agencies to develop formal goals for and a systematic process  for determining which foreign facilities to visit for future physical protection  visits, and that the process should be formalized and agreed to by all  agencies.
NRC commented that in order to demonstrate that U.S. nuclear material  located abroad is potentially insecure, GAO made an assessment based  on U.S. agencies not conducting activities which are, according to NRC,  neither authorized nor required by U.S. law or by agreements negotiated  under Section 123 of the AEA. In fact, we acknowledge that U.S.  agencies are not required to conduct certain activities or collect certain  information. Moreover, we do not suggest that agencies undertake  activities that are not authorized by law. We recommend that the  agencies either expand upon and refine outreach they are already  conducting, contingent on the willingness of our cooperation agreement  partners, or negotiate new terms in nuclear cooperation agreements as  necessary. If the agencies find that they are unable to negotiate new  terms we recommend that Congress consider amending the AEA to  require such terms.
State commented that determining annual inventories and reconciliations  of nuclear material, as well as establishing enhanced facility-by-facility  reporting for those partners with which the United States already has an  annual inventory reconciliation is a DOE function, not a State function.  We agree that DOE plays a vital role in carrying out these activities— once such bilaterally agreed upon measures are in place. However, we  believe it is appropriate to recommend that the Department of State—as  the agency with the lead role in any negotiation regarding the terms and  conditions of U.S. nuclear cooperation agreements—work with DOE and  NRC to secure these measures with all U.S. partners. State also  commented that there is a cost to the U.S. nuclear industry in terms of  lost competitiveness should the requirements in U.S. nuclear cooperation  agreements be strengthened to include better access to critical facilities  for U.S. interagency physical protection teams. State provided no further  information to support this point. Our report acknowledges that any  change to the nuclear cooperation framework or authorizing legislation  will be very sensitive and that flexibility in the agreements is necessary.
We also stated that it may be possible to change the framework of  agreements in a way that does not hamper the ability of the U.S. nuclear  industry to remain competitive. While we would not want to alter these  agreements in such a way that our nuclear industry is put at a competitive  disadvantage, in our view, the security of U.S. nuclear material overseas  should never be compromised to achieve a commercial goal.
Finally, State asserted that interagency physical protection teams have  been granted access to every site they have requested under the  consultation terms of U.S. nuclear cooperation agreements. As a result,  State believes the provisions of the current agreements are adequate. As  we note in our report, access to partner facilities is not explicitly spelled  out in the agreements and, in our view, this is a limitation for the U.S.  agencies in obtaining timely and systematic access to partner nuclear  facilities. While State may be technically correct that access has been  granted, our report clearly shows that many sites believed to contain  Category I quantities of U.S. nuclear material have been visited only after  lengthy periods of time, or have not been visited at all. We continue to  believe that enhanced physical protection access measures could help  interagency teams ensure that they are able to visit sites containing U.S.  nuclear material in a timely, systematic, and comprehensive fashion.
We are sending copies of this report to the appropriate congressional  committees, the Secretaries of Energy and State, the Chairman of the  Nuclear Regulatory Commission, and other interested parties. In addition,  this report will be available at no charge on the GAO Web site at  http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-3841 or aloisee@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix VII.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: We addressed the following questions during our review: (1) assess U.S.  agency efforts to account for U.S. nuclear material overseas, (2) assess  the Department of Energy’s (DOE) and other U.S. agencies’ efforts to  monitor and evaluate the physical security conditions of U.S. nuclear  material subject to the terms of nuclear cooperation agreements, and (3)  describe DOE’s activities to secure or remove potentially vulnerable U.S.  nuclear material at partner facilities.
To assess U.S. agency efforts to account for U.S. nuclear material  overseas, we reviewed relevant statutes, including the Atomic Energy Act  of 1954 (AEA), as amended, as well as the texts of all current nuclear  cooperation agreements. We obtained data from the Nuclear Materials  Management and Safeguards System (NMMSS), a database jointly run  by DOE and the Nuclear Regulatory Commission (NRC), which, among  other things, maintains data on U.S. peaceful use exports and retransfers  of enriched uranium and plutonium that have occurred since 1950, and  reviewed DOE and GAO reviews of the NMMSS database. To assess the  reliability of data in the NMMSS database, we interviewed officials from  DOE and NRC and a former DOE contractor to identify any limitations in  NMMSS’s data on the location and status of U.S. material overseas and  found these data to be sufficiently reliable for the purposes of accounting  for U.S. exports of nuclear material. We compared NMMSS data with  other official and unofficial DOE sources of information regarding U.S.  nuclear material transfers, including DOE data on nuclear material  returns, to determine the reliability of DOE’s inventory data for U.S.  nuclear material transferred overseas. We reviewed DOE, NRC, and  other U.S. agency records and interviewed officials at those agencies to  determine the extent to which DOE, NRC, and State are able to identify  where U.S. nuclear material was exported, retransferred, and is currently  held. We selected a non-probability sample of partners based on, among  other considerations, quantities of U.S. special nuclear material  transferred to them. Results of interviews of non-probability samples are  not generalizeable to all partners but provide an understanding of those  partners’ views of the U.S. government’s efforts to account for its nuclear  material inventories overseas subject to nuclear cooperation agreement  terms. We conducted site visits in four countries holding U.S.-obligated  material and interviewed governmental officials and nuclear facility  operators in these countries to discuss material accounting procedures.  Further, we interviewed officials from five partners regarding their  observations about working with the U.S. government to account for  material subject to the terms of nuclear cooperation agreements. We  analyzed the texts of administrative arrangements with key countries to  determine the extent to which DOE conducts inventory reconciliations of  inventory transferred between the United States and a partner country.
To assess DOE’s and other U.S. agencies’ efforts to monitor and  evaluate the physical security conditions of U.S. nuclear material  overseas subject to nuclear cooperation agreement terms and describe  DOE’s activities to secure or remove potentially vulnerable U.S. nuclear  material at partner facilities, we reviewed all U.S. nuclear cooperation  agreements in force, as well as other U.S. statutes, and IAEA’s security  guidelines, “The Physical Protection of Nuclear Material and Nuclear  Facilities,” INFCIRC/225/Rev.4, and other relevant international  conventions to determine the extent to which such laws and international  conventions provide for DOE and U.S. agencies to monitor and evaluate  the physical security of transferred U.S. nuclear material subject to U.S.  nuclear cooperation agreement terms. We interviewed officials from DOE,  NRC, and the Department of State (State) to gain insights into how  effective their efforts are, and how their efforts might be improved. We  selected a nonprobability sample of partners based on, among other  considerations, quantities of U.S. special nuclear material transferred to  them and interviewed officials to determine how DOE and other U.S.  agencies work with partner countries to exchange views on physical  security and the process by which U.S. nuclear material is returned to the  United States. Results of interviews of non-probability samples are not  generalizeable to all partners but provide an understanding of those  partners’ views of the U.S. government’s efforts to monitor and evaluate  the physical security conditions of U.S. nuclear material overseas subject  to nuclear cooperation agreement terms. We also obtained and analyzed  the records of all available U.S. physical protection visits to partner  facilities from 1974 through 2010. We reviewed agency documents and  interviewed officials from DOE, NRC, and State regarding the policies and  procedures for determining which partners to visit, how they conducted  physical protection visits at partner facilities, and mechanisms for  following up on the results of these visits. In particular, we compared the  sites visited with NMMSS records of U.S. material exported and  retransferred, and other information to evaluate the extent to which U.S.  physical protection visits were made to all sites overseas containing U.S.  special nuclear material. We obtained written responses from Global  Threat Reduction Initiative (GTRI), and reviewed other information  regarding their program activities. To better understand IAEA’s role in  maintaining safeguards and evaluating physical security measures, we  interviewed IAEA officials and reviewed relevant documents.
We conducted this performance audit from September 2010 to June 2011  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Current and Previous U.S. Nuclear Cooperation Agreement Partners
paragraphs: The United States currently has 27 agreements in force for peaceful  nuclear cooperation with foreign countries, the European Atomic Energy  Community (EURATOM), the International Atomic Energy Agency (IAEA),  and Taiwan. Figure 1 shows the partner countries with which the United  States currently has or previously had a nuclear cooperation agreement  with.
As indicated in figure 1, the United States has nuclear cooperation  agreements in force with Argentina, Australia, Bangladesh, Brazil,  Canada, China, Colombia, EURATOM, Egypt, India, Indonesia, IAEA,  Japan, Kazakhstan, Morocco, Norway, Peru, Russia, South Africa, South  Korea, Switzerland, Taiwan, Thailand, Turkey, Ukraine, and United Arab  Emirates. In addition, the United States previously had nuclear  cooperation agreements with Chile, Dominican Republic, Iran, Israel,  Lebanon, New Zealand, Pakistan, Philippines, Uruguay, Venezuela, and  Vietnam.
section_title: Appendix III: International Guidelines for the Categorization of Nuclear Material
section_title: Appendix IV: Comments from the Department of Energy
section_title: Appendix V: Comments from the Nuclear Regulatory Commission
section_title: Appendix VI: Comments from the Department of State
section_title: Appendix VII: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Glen Levis, Assistant Director;  Antoinette Capaccio; Julia Coulter; Michelle Munn; and Alison O’Neill  made key contributions to this report.