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New Rules Affecting U.S. Nuclear Technology Exports to Mainland China

The U.S. Department of Energy announced on 11 October new rules on exports of U.S. civil nuclear technology to mainland China. Exports of these products totalled US$170 million last year but recent activity by mainland China's state-owned China General Nuclear Power Group (CGN) triggered a National Security Council-led policy review of the U.S. approach to civil nuclear co-operation. U.S. Energy Secretary Rick Perry stated in the press release that "the United States cannot ignore the national security implications of China's efforts to obtain nuclear technology outside of established processes of U.S.-China civil nuclear cooperation.” 

The U.S. Policy Framework on Civil Nuclear Cooperation with China announced by the DOE distinguishes between presumptions of approval and presumptions of denial. For items subject to a presumption of denial, it will be up to a U.S. exporter to convince the DOE’s National Nuclear Security Administration that the export will not endanger U.S. interests. In particular, the DOE announced a presumption of denial for (1) exports related to light water small modular reactors; (2) non-light water advanced reactors; (3) new technology transfers after 1 January 2018; and (4) any transfer to CGN-related entities.

For exports to CGN, its subsidiaries and CGN-related entities, there will be a presumption of denial for new licence applications and amendments or extensions to existing authorisations for exports of technology, equipment and components, and material. The Policy Framework specifies that the presumption of denial will be in place until the U.S. government is satisfied with CGN engagement on its indictment with the U.S. legal system. Any changes to this policy will be communicated to the industry.

There will be a presumption of approval for exports of components and equipment for continuing projects using commonly available technology, but a presumption of denial for requests that are more advanced such as the Hualong One and unique U.S. components supporting CAP-1400 reactors as well as any transfer to CGN or CGN-related entities. Even with a presumption of approval, the Policy Framework specifies that for exports to non-CGN intermediaries and end users there will be a case-by-case review. Additionally, the export of source codes (that includes for computer programmes, systems or components) and certain engineering and manufacturing techniques will not be approved. The Policy Framework refers to end-user checks even for presumption of approval sales, so exporters of nuclear technology products and services to mainland China should anticipate additional time for DOE review.

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