COMMISSION DECISION
of 4 March 1992
relating to a procedure in  application of Article 83 of the Euratom Treaty (XVII-002 - UKAEA Dounreay)
(Only the English text  is authentic)
(92/194/Euratom)
THE COMMISSION OF THE EUROPEAN COMMUNITIES
,
Having regard to the Treaty establishing the European Atomic Energy Community, and in particular  Article 83 thereof,
Having given UKAEA Dounreay (United Kingdom) the opportunity to express its point of view on the  objections raised by the Commission,
Whereas as follows:
I. THE FACTS
This Decision concerns non-compliance with essential safeguard requirements by the  United Kingdom Atomic Energy Authority (UKAEA Dounreay) (UK) during the period from April to  November 1991.
The Dounreay site is located about 10 miles west of Thurso in Scotland (UK). The site comprises  both military and civil installations which are physically separated.
The civil part of the site comprises major installations performing a variety of fuel-cycle  activities, such as operating a fast reactor, plutonium reprocessing, uranium fuel reprocessing,  uranium fuel fabrication, waste treatment/disposal, a decommissioned prototype fast reactor and  laboratories/other associated services.
Within the uranium fuel fabrication installation a rebuilt, upgraded and refurbished uranium  scrap/residue recovery plant was put into operation in September 1990. This plant is designed to  recover valuable uranium contained in all sorts of 'odd` materials such as residues, ashes, scraps  etc. stemming from fabrication of uranium fuel.
Through a series of documents referred to hereinafter, on-site verifications and the hearing held  in Brussels in the offices of the Commission on 10 February 1992, the following facts were  established:
-  In the course of 1991 the UKAEA Dounreay Management became increasingly concerned about the  adequacy of the accounting system for nuclear materials and improvement was considered necessary.  Following a physical inventory taking in March 1991, Euratom safeguards inspectors drew the  attention of UKAEA Dounreay to shortcomings in the accountancy system and in particular to  unrecorded transfers.
-  In August 1991 the uranium scrap/residue recovery plant underwent some modifications following  Euratom inspectors' findings. Despite this, unrecorded transfers continued and were notified to the  operator by Euratom safeguards inspectors who also drew the operator's attention to deficiencies in  the records system.
-  In November 1991 the operator carried out one of the two physical inventory takings which are  required under code 5 of the Commisison Decision of 4 February 1981 laying down particular  safeguard provisions. On 30 November 1991 UKAEA Dounreay completed the physical inventory taking at  the uranium fuel fabrication installation. Its results reveaaled an unacceptably high difference  between the physical and the book stocks of uranium (Material Unaccounted For: 'MUF`) which was  attributed predominantly to the uranium scrap/residue recovery plant.
-  On 4 December 1991 UKAEA Dounreay decided to withdraw the Authority To Operate (ATO) for the  plant and to set up an Internal Inquiry Team to Investigage the circumstance leading to the  unacceptably high MUF and to make appropriate recommendations.
-  Immediate anomaly investigation procedures were carried out by Euratom safeguard inespectors in  December 1991 and January 1992 and a reinventory after a complete wash out was considered  necessary. These investigations up to the re-inventory established or reconfirmed:
-  an insufficient oeprating records system,
-  an overstatement of shipper's data (considered only likely for a small proportion of the  material treated),
-  undeclared transfers between the uranium scrap/residue recovery plant and the waste plant,
-  uncertainties in the weights of slags, swabs and sweepings (these weights seemed to be  underestimated),
-  unmeasured quantities of uranium in the solvent,
-  unmeasured inventories in tanks and in the dissolvers,
-  inconsistent measurements on slags from some campaigns,
-  a number of unrecorded transfers having taken place during the material balance period,
-  material omitted from the inventory in November 1991.
-  On 22 January 1992 the UK Department of Energy transmitted to the Commission the report of the  UKAEA Inquiry Team which concluded that the originally assessed MUF had to be reduced  considerably.
-  On 3 February 1992 the re-inventory was completed and also showed a considerable reduction of  the originally assessed MUF.
-  After the hearing of 10 February 1992 the Euratom Safeguards Inspectorate confirmed its previous  findings set out above and concluded that altough the remaining MUF's were not significantly  different from the zero-hypothesis, the associated uncertainties and the original high MUF indicate  significant deficiencies in the operator's materials accounting system for transfers, inventory  procedures and system of measurement.
The facts related to the failures of the accounting system and its implementation are not disputed  by the operator.
II.  LEGAL ASSESSMENT
A.  The legal provisions
By virtue of its activities, UKAEA Dounreay is an  undertaking falling within the terms of Article 196 (b) of the Euratom Treaty. It is therefore  subject to the provisions of Chapter VII, Title Two, of the Treaty, to Commission Regulation  (Euratom) No 3227/76 of 19 October 1976 concerning the application of the provisions on Euratom  safeguards  (1), as amended by Regulation (Euratom) No 220/90  (2), and to the Commission Decision  of 4 February 1981 laying down the particular safeguard provisions for this undertaking.
In accordance with Article 77 of the Treaty, the Commission must satisfy itself that, in the  territories of the Member States:
(a)  ores, source materials and special fissile materials are not diverted from their intended uses  as declared by the users;
(b)  the provisions relating to supply and any particular safeguarding obligations assumed by the  Community under an agreement concluded with a third State or an international organization are  complied with.
To this end the Commission requires, in accordance with Article 79 of the Treaty, that operating  records be kept and produced in order to permit accounting for ores, source materials and special  fissile materials used or produced. The same requirement applies in the case of the transport of  source materials and special fissile materials.
Pursuant to Article 3 of Regulation (Euratom) No 3227/76 the particular safeguard provisions shall  specify those important changes in the basic technical characteristics for which advance  notification is required. Any other changes in the basic technical characteristics shall be  communicated to the Commission, together with the first inventory change report made after the  modification is complete.
As regards nuclear material accontancy and control the specific requirements concerning control of  measurement accuracy and statistical evaluation are set out in detail in items 24 and 25 of Annex I  C to Regulation (Euratom) No 3227/76.
Pursuant to Article 9 of Regulation (Euratom) No 3227/76 the undertakings shall maintain a system  of accounting for and control of nuclear materials. This system shall include accounting and  operating records and, in particular, information on the quantities, nature, form and composition  of these materials, their actual location and the particular safeguarding obligation. The system of  measurements on which the records are based shall comply with the most recent international  standards or shall be equivalent in quality to those standards. On the basis of these records it  must be possible to establish and justify the communications addressed to the Commission.
Specific records requirements are set out in code 3 of the Commission Decision of 4 February 1981  laying down particular safeguard provisions.
Pursuant to Article 10 of Regulation (Euratom) No 3227/76 the acconting records shall show in  respect of each material balance area:
-  all inventory changes, so as to permit a determination of the book inventory at any time,
-  all measurement and counting results that are used for determination of the physical inventory,
-  all corrections that have been made in respect of inventory changes, book inventories and  physical inventories.
Thus for all inventory changes and physical inventories the accounting records shall show, in  respect of each batch of nuclear material, material identification, batch data and source data.  Moreover for each inventory change, the date of the inventory change and, when appropriate, the  dispatching material balance area and the receiving material balance area or the recipient, shall  be indicated.
Article 11 of Regulation (Euratom) No 3227/76 provides that the operating records shall include, if  appropriate, for each material balance area:
-  those operating data which are used to establish changes in the quantities and composition of  the nuclear material,
-  the data obtained from the calibration of tanks and instruments and from sampling and analysis,  the procedures to control the quality of measurements and the derived estimates of random and  systematic error,
-  a description of the sequence of actions taken in preparing for, and in taking, a physical  inventory in order to ensure that it is correct and complete,
-  a description of the actions taken in order to ascertain the cause and magnitude of any  accidental or unmeasured loss that might have occurred.
In accordance with Article 14 of Regulation (Euratom) No 3227/76 the undertakings shall transmit to  the Commisison, for each material balance area, inventory change reports in respect of all nuclear  materials. The reports shall identify the materials and give batch data for each batch thereof, the  date of the inventory change and, when appropriate, the dispatching material balance area and the  receiving material balance area or the recipient.
Pursuant to Article 16 of Regulation (Euratom) No 3227/76 the undertakings shall transmit to the  Commission, for each material balance area, material balance reports showing:
-  beginning physical inventory,
-  inventory changes (first increases, then decreases),
-  ending book inventory,
-  ending physical inventory,
-  material unaccounted for.
A physical inventory listing with all batches separately giving, inter alia, identification of the  materials and giving batch data for each batch thereof and the use which the persons or  undertakings concerned intend to make of the materials, shall be attached to each material balance  report.
B.  The infringements established
Following an examination of the facts by the Euratom Safeguards  Directorate, the following infringements have been established:
1.  Breach of the provisions on the obligation to communicate in advance changes in the basic  technical characteristics laid down in Article 3 of Regulation (Euratom) No 3227/76 in conjunction  with items 24 and 25 of Annex I C thereof;
2.  Breach of the provisions on accounting for and control of nuclear materials laid down in  Article 9 of that Regulation, in conjunction with code 3 of the Commission Decision of 4 February  1981, particularly as regards:
-  data on changes in quantities, nature, form and composition of these materials and their actual  location,
-  non-compliance of the system of measurements with the most recent international standards or  their equivalent;
3.  Breach of the provisions on recording inventory changes and physical inventories laid down in  Article 10 of that Regulation;
4.  Breach the provisions on operating records for transfer of nuclear material laid down in  Article 11 of that Regulation;
5.  As a consequence of 2 to 4, breaches of the provisions on the reporting of inventory changes  and physical inventory data laid down in Articles 14 and 16 of that Regulation.
C.  The sanction to be applied
Under the terms of Article 83 (1) of the Treaty, in the event of an  infringement on the part of persons or undertakings of the obligations imposed on them, the  Commission may impose sanctions on such persons or undertakings.
These sanctions are in order of severity;
(a)  a warning;
(b)  the withdrawal of special benefits such as financial or technical assistance;
(c)  the placing of the undertaking for a period not exceeding four months under the administration  of a person or board appointed by common accord of the Commission and the State having jurisdiction  over the undertaking;
(d)  total or partial withdrawal of source materials or special fissile materials.
Given that the determining criterion for application of this Article is the severity of the  infringement committed, it is first necessary to carry out both an objective and a subjective  analysis of the nature of the offences.
From an objective point of view, the provisions breached are essential elements of Community  legislation in the field of safeguards, and observance of them is essential if the aims set out in  Articles 77 and 79 of the Treaty are to be attained.
In assessing the severity of the infringements, however, objective specificities in the operation  of the uranium scrap/residue recovery plant must be taken into account. These specificities are in  particular due to the nature and complexity of the chemical processes involved. In addition, the  exact chemical composition of input materials may sometimes not be fully known due to their  inhomogeneity and their mixed origins.
Because the uranium scrap/residue recovery plant in question does not treat irridiated nuclear  materials, it does not come under Article 78 (2) of the Treaty which requires the Commission to  approve the techniques to be used for the chemical processing of irradiated materials.
Despite apparent shortcomings of the measurement systems and the accounting system applied, the  investigations carried out finally resulted in converging low MUF figures, indicating that a  diversion of nuclear materials to purposes other then those for which they were intended cannot be  stated.
From a subjective point of view, if appears that there was no intention behind the actions and that  these should not be seen as a form of diversion.
Moreover, it is to be noted that the operator, experiencing doubts about the adequacy of his  accounting system, partly due to the Euratom safeguards inspectors' comments, decided to postpone a  physical inventory taking to November 1991 in order to wash out the plant.
In carrying out this physical inventory taking, the operator himself detected the deficiencies of  the accounting system through his investigations into the causes of the MUF. Upon detecting the  MUF, the operator decided to take the following immediate actions:
-  informing Euratom safeguards inspectors on site,
-  withdrawal of the authority to operate the uranium scrap/residue recovery plant,
-  notification of the incident to the UK Department of Energy and to the Commission,
-  setting up of an inquiry team.
In appreciating both the objective and the subjective factors set out above the Commission feels  that the infringements committed by UKAEA Dounreay are such that a sanction is warranted.
Given the nature of the failures established, the Commission regards it essential that all  necessary action be taken to rectify the situation and to ensure that failures cannot recur in the  future, all the more so since UKAEA Dounreay intends to continue to operate the uranium  scrap/residue recovery plant.
In order to guarantee that the shortcomings of the measurement systems and the failures of the  accounting system fo not recur, appropriate measures to improve them must be drawn up and  implemented.
In view of the nature of the failures recognized and in order to guarantee that the failures do not  recur, and taking into account that the operation of the uranium scrap/residue recovery plant has  been suspended since immediately after the physical inventory taking in November 1991 and there is  therefore no immediate danger of a recurence of the failures as long as the plant is not operating,  the appropriate sanction to impose is that laid down in Article 83 (1) (a) of the Treaty.
It is necessary however, formally to require the operator to rectify the failures so that they do  not recur when the plant resumes normal operation and to warn him about the possible consequences  of a continued breach of the relevant provisions under Community law.
In order to enable the Commission to satisfy itself that the legal requirements will be fully met  in the future, the operator should report on the intended rectifications and the actual performance  of the rectified accounting system. In assessing the structural system modifications and their  implementation, the Commission will also take into account whether the operator has made the  necessary improvements in the following areas not covered in the recommendations of the UKAEA  Inquiry Team Report:
-  technical methods and measurement procedures for waste streams,
-  procedures for materials control, materials accounting (source documentation, operating records,  accounting records, reports), and physical inventory taking, including implications of human  factors and consideration of decommissionned plant areas containing nuclear material,
-  declaration of basic technical characteristics to take account of modifications of measurement  methods, accuracy values and changed procedures,
-  the possible positive impact on the materials accounting system of the operational separation of  processing of well characterized residues from inhomogeneous material,
UKAEA Dounreay has infringed Article 79 of  the Treaty as defined in Articles 3, 9, 10, 11, 14 and 16 of Commission Regulation (Euratom) No  3227/76 of 19 October 1976 and in code 3 of the Commission Decision of 4 February 1981 laying down  particular safeguard provisions, through:
(a)  its failure to communicate in advance changes in the basic technical characteristics of its  uranium scrap/residue recovery plant;
(b)  its failure to maintain a system of accounting for, and control of, nuclear materials which  includes accounting and operating records and, in particular, information on the quantities,  nature, form and composition of these materials and their actual location;
(c)  its failure to apply a system of measurements on which the records are based which complies  with the most recent international standards;
(d)  its failure to meet the requirements on recording inventory changes and physical inventory  data;
(e)  its failure to meet the requirements on operating records for transfer of nuclear material;
(f)  as a consequence of the failures listed under (b) to (e), its failure to report inventory  changes and physical inventory data.
1.  The Commission issues a warning to UKAEA  Dounreay.
2.  The warning is imposed with the understanding that the failures listed in Article 1 be  rectified so that they do not recur when the uranium scrap-residue recovery plant resumes  operations for purposes other than testing or calibration.
3.  Based on the reports referred to in Article 3 and its own verifications the Commission will  assess UKAEA Dounreay's compliance with the requirement set out in paragraph 2.
4.  If UKAEA Dounreay does not provide the Commission with the report referred to in Article 3 (2)  or if any of the failures listed in Article 1 is not rectified when the uranium scrap/residue  recovery plant has resumed its normal operation, the Commission will consider imposing a further  sanction.
1.  UKAEA Dounreay shall provide the Commission with a report describing the  measures intended to rectify the failures listed in Article 1 at least two weeks before the uranium  scrap/residue recovery plant resumes its normal operation.
2.  Within one month after the uranium scrap/residue recovery plant has resumed its normal  operation UKAEA Dounreay shall provide the Commission with a report on the performance of the  rectified accounting system.
1.  This Decision is addressed to the United Kingdom  Atomic Energy Authority, Corporate Headquarters, 11 Charles II Street, London SW1Y 4QP.
2.  This Decision shall be communicated to the United Kingdom.