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MAXIMIZING U.S.-RUSSIAN NUCLEAR SECURITY COOPERATION IN 2015: LEGAL OBSTACLES AND OPPORTUNITIES*

Orde F. Kittrie,

Arizona State University’s Sandra Day O’Connor College of Law and University of Maryland Law School277


Maximizing U.S.-Russian nuclear security cooperation in 2015 is dependent on the two countries successfully managing several critical legal issues over the next seven years. Much attention has been paid in recent months to the pending U.S.-Russian agreement designed to meet the legal requirements for peaceful nuclear cooperation set forth in Section 123 of the U.S. Atomic Energy Act of 1954 as amended (the agreement is commonly referred to as the U.S.-Russian 123 Agreement).278 However, several other legal issues are equally if not more important to the future of U.S.-Russian nuclear security cooperation.

The first part of this paper will focus on the pending U.S.-Russian 123 Agreement. It will describe the U.S. legal requirements the agreement is designed to meet, summarize the agreement’s current status, and provide an overview of the types of cooperative projects that would be made possible by entry into force of such an agreement. The second part of this paper will discuss other critical legal issues relevant to the future of U.S.-Russian cooperation on international nuclear security. These include legal issues related to nuclear material security and arms control. Key legal issues related to nuclear material security include access, sustainability, the expiration in 2013 of the Cooperative Threat Reduction Agreement,279 and the expiration in 2013 of the highly enriched uranium (HEU) Purchase Agreement (also known as the “Megatons to Megawatts Agreement”).280 Key legal issues related to arms control include the expiration on

*

Orde F. Kittrie was unable to attend the workshop in November.

277

Prior to joining the Arizona State University law faculty in 2004, Orde F. Kittrie served for 11 years at the U.S. Department of State, including for three years as the Department’s senior attorney for nuclear affairs.

278

The U.S. Atomic Energy Act of 1954 can be found at http://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr0980/ml022200075-vol1.pdf; accessed April 8, 2008.

279

The Bob Stump National Defense Authorization Act of 2003 mandates that a sustainable materials protection, control, and accounting system be transferred to sole Russian Federation support no later than January 1, 2013. For further information regarding the Bob Stump Act, see http://www.army.mil/armybtkc/docs/PL%20107-314.pdf; accessed May 1, 2008.

280

For further information regarding the HEU Agreement, see http://www.nti.org/db/nisprofs/russia/fissmat/heudeal/heudeal.htm; accessed April 6, 2008.



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MAXIMIZING U.S.-RUSSIAN NUCLEAR SECURITY COOPERATION IN 2015: LEGAL OBSTACLES AND OPPORTUNITIES* Orde F. Kittrie, Arizona State University’s Sandra Day O’Connor College of Law and University of Maryland Law School277 Maximizing U.S.-Russian nuclear security cooperation in 2015 is dependent on the two countries successfully managing several critical legal issues over the next seven years. Much attention has been paid in recent months to the pending U.S.-Russian agreement designed to meet the legal requirements for peaceful nuclear cooperation set forth in Section 123 of the U.S. Atomic Energy Act of 1954 as amended (the agreement is commonly referred to as the U.S.- Russian 123 Agreement).278 However, several other legal issues are equally if not more important to the future of U.S.-Russian nuclear security cooperation. The first part of this paper will focus on the pending U.S.-Russian 123 Agreement. It will describe the U.S. legal requirements the agreement is designed to meet, summarize the agreement’s current status, and provide an overview of the types of cooperative projects that would be made possible by entry into force of such an agreement. The second part of this paper will discuss other critical legal issues relevant to the future of U.S.-Russian cooperation on international nuclear security. These include legal issues related to nuclear material security and arms control. Key legal issues related to nuclear material security include access, sustainability, the expiration in 2013 of the Cooperative Threat Reduction Agreement,279 and the expiration in 2013 of the highly enriched uranium (HEU) Purchase Agreement (also known as the “Megatons to Megawatts Agreement”).280 Key legal issues related to arms control include the expiration on * Orde F. Kittrie was unable to attend the workshop in November. 277 Prior to joining the Arizona State University law faculty in 2004, Orde F. Kittrie served for 11 years at the U.S. Department of State, including for three years as the Department’s senior attorney for nuclear affairs. 278 The U.S. Atomic Energy Act of 1954 can be found at http://www.nrc.gov/reading-rm/doc- collections/nuregs/staff/sr0980/ml022200075-vol1.pdf; accessed April 8, 2008. 279 The Bob Stump National Defense Authorization Act of 2003 mandates that a sustainable materials protection, control, and accounting system be transferred to sole Russian Federation support no later than January 1, 2013. For further information regarding the Bob Stump Act, see http://www.army.mil/armybtkc/docs/PL%20107-314.pdf; accessed May 1, 2008. 280 For further information regarding the HEU Agreement, see http://www.nti.org/db/nisprofs/russia/fissmat/heudeal/heudeal.htm; accessed April 6, 2008. 203

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December 5, 2009, of the Strategic Arms Reduction Treaty (START I)281 and on December 31, 2012 of the Strategic Offensive Reductions Treaty (SORT).282 THE PROPOSED 123 AGREEMENT In a joint statement issued on July 3, 2007, Presidents George W. Bush and Vladimir V. Putin announced the initialing of a U.S.-Russia agreement designed to meet the legal requirements for transnational cooperation in the peaceful use of nuclear energy which are set forth at Section 123 of the U.S. Atomic Energy Act of 1954 as amended.283 “We share the view,” said the joint statement, “that this Agreement will provide an essential basis for the expansion of Russian-U.S. cooperation in the field of peaceful use of nuclear energy and expect this document to be signed and brought into force in accordance with existing legal requirements.”284 The U.S.-Russian 123 Agreement was signed on May 6, 2008285 and transmitted to Congress on May 12, 2008286 for the requisite statutory review period. The following sections will describe the requirements of section 123, summarize the agreement’s current status, and provide an overview of the types of cooperative projects that would be made possible by entry into force of such an agreement. 123 Agreement Requirements Under U.S. Law Section 123 of the U.S. Atomic Energy Act of 1954 as amended, 42 U.S.C. § 2153, requires that significant nuclear exports from the United States take place only pursuant to an agreement for peaceful nuclear cooperation with the recipient. Significant nuclear exports include power reactors, research reactors, nuclear source material (including reactor fuel), and four major components of reactors (pressure vessels, fuel charging and discharging machines, complete control rod drive units, and primary coolant pumps).287 As is typical with agreements 281 To read the text of the START I Treaty, see http://www.fas.org/nuke/control/start1/text/index.html; accessed April 6, 2008. START I entered into force on December 5, 1994. Article XVII of the START I Treaty provides that the Treaty shall remain in force for 15 years. START II was signed in January 1993 but never entered into force. 282 The text of the Treaty on Strategic Offensive Reductions can be found at http://www.whitehouse.gov/news/releases/2002/05/20020524-3.html; accessed April 6, 2008. 283 The text of the pending 123 Agreement between the United States and the Russian Federation can be found in Appendix E. 284 The text of this Joint Statement, which was titled Declaration of Nuclear Energy and Nonproliferation: Joint Actions, can be found at http://www.whitehouse.gov/news/releases/2007/07/20070703.html; accessed April 8, 2008. 285 The text of the White House announcement of the signing can be found at http://www.whitehouse.gov/news/releases/2008/05/print/20080506-5.html; accessed May 30, 2008. 286 The text of the President’s transmittal letter can be found at http://www.whitehouse .gov/news/releases/2008/05/20080513-1.html; accessed May 30, 2008. 287 Some types of peaceful nuclear cooperation, including a broad range of technical assistance in such areas as nuclear safety, are possible outside the framework of an agreement for cooperation. Examples include imports of nuclear material and equipment into the United States; exports from the United States of nuclear components (other than the four major reactor components noted above) under licenses issued by the Nuclear Regulatory Commission; nuclear technology (as information) approved for export by the U.S. Department of Energy pursuant to 10 CFR Part 810; and exports of nuclear-related dual-use items such as simulators, detectors, analytic equipment, and many types of pipes, valves and other parts licensed by the U.S. Department of Commerce. Consistent with this, a limited amount of peaceful nuclear cooperation between the United States and Russia has for many years taken place under 204

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for peaceful nuclear cooperation, the proposed U.S.-Russian agreement does not commit the United States to any specific exports or other cooperative activities, but rather establishes a framework of conditions and controls to govern subsequent transactions, if any. The proposed U.S.-Russia agreement also continues the practice, which is not required by U.S. law, of applying nonproliferation conditions, assurances and controls in a reciprocal manner (i.e. obligation that section 123 requirements be applied with respect to U.S. nuclear exports in Russia are also applied with respect to Russian nuclear exports in the U.S.). The proposed U.S.-Russian 123 Agreement includes the following key conditions and controls:288 • a guarantee that safeguards as set forth in the agreement will be maintained in perpetuity on items transferred pursuant to the agreement and on nuclear material produced through their use • a peaceful use guarantee (i.e., that items subject to the agreement will never be used for any nuclear explosive device, for research on or development of such a device, or for any other military purpose) • a guarantee that adequate physical protection will be maintained in perpetuity with respect to items subject to the agreement • a transferring state right in perpetuity of prior consent to re-transfers by the recipient state of items transferred pursuant to the agreement and of any special nuclear material produced through their use • a transferring state right in perpetuity of prior consent to alteration in form or content of nuclear material transferred pursuant to the agreement or used in or produced through the use of material or equipment so transferred (the proposed U.S.-Russia agreement provides prior consent to certain types of alteration, including enrichment to less than twenty percent in the isotope U235) • a transferring state right to approve in advance storage facilities for plutonium, uranium 233, and highly enriched uranium subject to the agreement The proposed U.S.-Russian agreement will permit transfers of sensitive nuclear facilities, sensitive nuclear technology, and major critical components only if it is subsequently amended. Section 123 provides that an agreement for peaceful nuclear cooperation must be approved by the Secretary of Energy and the Secretary of State, following consultation with the Nuclear Regulatory Commission, and must thereafter be approved by the President, who must make certain statutory determinations and authorize execution of the agreement. The President must submit an agreement for cooperation to Congress for a statutory review period of 90 days continuous session, as specially defined for this purpose at section 130(g)(2) of the Atomic Energy Act of 1954 as amended, 42 U.S.C. § 2159 (g)(2). Depending on the Congressional schedule, the review period can take four to six calendar months, and agreements including the U.S.-Soviet Agreement on Scientific and Technical Cooperation in the Field of Peaceful Uses of Atomic Energy, which was signed by Presidents George H.W. Bush and Mikhail S. Gorbachev in Washington, D.C. on June 1, 1990. 288 It is worth noting that 123 agreements typically have applied non-proliferation conditions, assurances and controls in a reciprocal manner. If this practice, which is not required by U.S. law, is continued in the U.S.-Russia 123 Agreement, the United States would assume all the obligations contained in the agreement with respect to any nuclear materials or equipment that it might import from Russia pursuant to the agreement. 205

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sometimes longer. An agreement, such as the proposed U.S.-Russian agreement, which is fully consistent with the relevant conditions and controls contained in section 123 of the Act does not require specific Congressional approval before it may be brought into effect but rather, so long as Congress does not enact legislation to disapprove the agreement, the agreement may be brought into force following the close of the Congressional review period. However, even if Congress does not adopt a resolution of disapproval, it may adopt a resolution attaching conditions to the agreement as it did with the U.S.-China 123 Agreement in 1985.289 Exports made pursuant to an agreement for cooperation require a license from the U.S. Nuclear Regulatory Commission and must satisfy the U.S. nuclear export criteria set forth in sections 127 and 128 of the Atomic Energy Act (these criteria generally track the conditions and controls required in agreements for cooperation by section 123 of the Act.) Current Status of the U.S.-Russia 123 Agreement The U.S. and Russian governments commenced negotiation of a 123 Agreement in 2006. The text was initialed in Moscow on June 29, 2007, by William Burns, the U.S. Ambassador to Russia, and Nikolai Spassky, the Deputy Director of Russia’s Federal Atomic Energy Agency (Rosatom). The U.S.-Russian 123 Agreement was signed on May 6, 2008, and transmitted to Congress on May 12, 2008, for the requisite statutory review period. In addition, Russian officials have said that they plan to submit the 123 Agreement to the Duma for approval.290 Congress has already passed legislation expressing concern regarding a U.S.-Russian 123 Agreement, and stronger legislation targeting the agreement is currently pending. In September 2006, Congress passed, and on September 30, 2006, the President signed into law, the Iran Freedom Support Act, Public Law 109-293, which in relevant part expresses the non-binding “sense of Congress” that “it should be the policy of the United States not to bring into force an agreement for cooperation with the government of any country that is assisting the nuclear program of Iran or transferring advanced conventional weapons or missiles to Iran” unless the President has determined that: 1) “Iran has suspended” and “has committed to verifiably refrain permanently” from “all enrichment-related and reprocessing-related activity” (except uranium conversion exclusively for export to foreign nuclear production facilities pursuant to 289 The United States currently has 123 agreements in force with 19 individual countries plus Taiwan and two international organizations, the International Atomic Energy Agency and EURATOM (which includes 27 individual countries). The United States has 123 agreements with each of its fellow nuclear weapon states parties to the Treaty on the Non-proliferation of Nuclear Weapons (NPT) other than Russia, namely France and the United Kingdom (both via the U.S.-Euratom Agreement) and China. It is worth noting, however, that the U.S.-China 123 Agreement took a tortuous path to entry into force. The U.S.-China 123 Agreement was submitted to Congress by President Ronald Reagan on July 24, 1985. In response, Congress passed Public Law 99-183, the Joint Resolution Relating to the Approval and Implementation of the Proposed Agreement for Nuclear Cooperation Between the United States and the People’s Republic of China, enacted on December 16, 1985, which required a Presidential certification and a report followed by an additional waiting period before the agreement could be implemented. After the 1989 Tiananmen crackdown, Congress imposed sanctions in Public Law 101-246, the Foreign Relations Authorization Act for Fiscal Years 1990 and 1991, enacted on February 16, 1990, which suspended nuclear cooperation with China and required an additional Presidential certification on the People’s Republic of China nuclear non- proliferation assurances. The certifications required by Public Laws 99-183 and 101-246 were not made until President Bill Clinton did so on January 12, 1998. The additional congressional review period ended on March 18, 1998, and the Agreement was thereafter implemented, thirteen years after President Ronald Reagan submitted it to Congress. 290 For further information about the passing of the 123 Agreement in Russia, see the paper by Alexander Pikaev in this document. 206

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internationally agreed arrangements); or 2) such other country has “suspended all nuclear assistance to Iran and all transfers of advanced conventional weapons and missiles to Iran,” and “is committed to maintaining that suspension until Iran has implemented measures that would permit the President to make such determination.”291 On September 25, 2007, almost a year later, the U.S. House of Representatives passed by a vote of 397 to 16 the Iran Counter-Proliferation Act of 2007, H.R. 1400, which would impose legally binding linkage between a 123 Agreement and a country’s assistance to the Iranian nuclear program. H.R. 1400 specifies in relevant part that “no agreement for cooperation between the United States and the government of any country that is assisting the nuclear program of Iran or transferring conventional weapons or missiles to Iran may be submitted to the President or to Congress pursuant to section 123 of the Atomic Energy Act of 1954,” no such agreement may enter into force, and no nuclear trade may be licensed under such an agreement, until the President determines and reports to Congress that “(A) Iran has ceased its efforts to design, develop, or acquire a nuclear explosive device or related materials or technology; or (B) the government of the country that is assisting the nuclear program of Iran or transferring advanced conventional weapons or missiles to Iran – (i) has suspended all nuclear assistance to Iran and all transfers of advanced conventional weapons and missiles to Iran; and (ii) is committed to maintaining that suspension until Iran has implemented measures that would permit the President to make the determination described in subparagraph (A).”292 H.R. 1400 defines the term “country that is assisting the nuclear program of Iran or transferring advanced conventional weapons or missiles to Iran” as meaning “(A) the Russian Federation; and (b) any other country determined by the President to be assisting the nuclear program of Iran or transferring advanced conventional weapons or missiles to Iran.” H.R. 1400 contains no provision for an executive branch waiver relating to this agreement for cooperation requirement. As of May 30, 2008, H.R. 1400 and a similar Senate bill, S. 970 (which had 71 cosponsors as of May 30, 2008), were pending before the Senate committees to which they had been referred. Cooperative Projects that would be Made Possible by a U.S.-Russian 123 Agreement As is typical with agreements for peaceful nuclear cooperation, the proposed U.S.- Russian agreement would not commit the United States or Russia to any specific exports or other cooperative activities, but rather would create a legal framework under which such activities can take place. The entry into force of such a framework agreement would make possible a variety of exports and other cooperative activities that are prohibited by U.S. law in the absence of a 123 Agreement. Various sources, including the December 2006 Report of the U.S.-Russian Civil Nuclear Energy Working Group,293 have suggested the following cooperative projects that could be facilitated by a U.S.-Russian 123 Agreement. Joint Development of Advanced Nuclear Technologies. A 123 Agreement could 291 The text of the Iran Freedom Support Act can be found at http://bulk.resource.org/gpo.gov/laws/109/publ293.109.txt; accessed April 8, 2008. 292 The Iran Counter-Proliferation Act of 2007, H.R. 1400, can be found at http://www.govtrack.us/congress/billtext.xpd?bill=h110-1400; accessed April 8, 2008. 293 Report of the U.S.-Russian Civil Nuclear Energy Working Group: A Bilateral Action Plan to Enhance Global and Bilateral Nuclear Energy Cooperation. The report was signed by U.S. Assistant Secretary of Energy Dennis Spurgeon and Nikolay Spasskiy, Deputy Director of the Russian Federal Atomic Energy Agency, in December 2006. 207

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facilitate joint development of proliferation-resistant and other advanced nuclear technologies including those envisioned by the U.S. Department of Energy’s (DOE) Global Nuclear Energy Partnership (GNEP).294 Storage and Possible Reprocessing of U.S.-Origin Spent Nuclear Fuel in Russia. It has been estimated that Russian provision of spent fuel management services could generate up to $20 billion in storage fees from South Korea, Taiwan and other possible customers lacking their own permanent nuclear waste repositories. However, most spent fuel in the possession of potential customers is of U.S. origin and thus cannot be sent to a country that does not have a 123 Agreement with the United States. A U.S.-Russian 123 Agreement is therefore necessary to open up this market for Russia. Fees from spent fuel management services could provide Russia’s nuclear administration with additional funds for nuclear security upgrades and maintenance. The shipping of U.S.-origin fuel to Russia could also serve as an early and high- profile demonstration of the possibilities embodied in the system envisioned by GNEP and President Putin’s proposal to establish an International Uranium Enrichment Center, under which nations with established nuclear energy capabilities provide nuclear fuel supply and disposal services to nations which agree to forego nuclear fuel enrichment and recycling technologies, which give rise to nuclear non-proliferation concerns. Increasing the Efficiency and Safety of Current and Future Russian-made Nuclear Power Plants. According to Anton Khlopkov, in his article entitled What Will a Nuclear Agreement with the United States Bring Russia?,295 U.S.-Russian cooperation pursuant to a 123 Agreement could help increase the capacity factor and safety of Russian nuclear power plants, extend their operating life, and decrease their maintenance costs. This could benefit Russian consumers. In addition, the participation of U.S. companies in manufacturing equipment for Russian nuclear power plants, including the use of U.S. components in such plants, could enhance the attractiveness of Russian nuclear equipment exports to third countries. OTHER LEGAL ISSUES RELEVANT TO FUTURE U.S.-RUSSIAN COOPERATION ON INTERNATIONAL NUCLEAR SECURITY As of mid-2008 there are, in addition to the proposed 123 Agreement, a number of other potential legal agreements and other key looming legal issues relevant to future U.S.-Russian cooperation on international nuclear security. In October 2007, Senator Richard Lugar called for a new “package of agreements designed to make progress on the non-proliferation, nuclear energy, arms control and missile defense fronts.”296 The following, derived from various sources, is a compendium of potential legal agreements and other key legal issues, in addition to the pending 123 Agreement, which are relevant to future U.S.-Russian cooperation on international nuclear security. 294 For further information about the U.S. Global Nuclear Energy Partnership, see http://nuclear.inl.gov/gnep/index.shtml; accessed April 6, 2008. 295 Anton Khlopkov, “What Will a Nuclear Agreement with the United States Bring Russia?,” 13 Security Index, N. 2, 82; available at http://pircenter.org/data/ib/sieng2/khlopkov_eng.pdf. 296 For further information regarding the Cooperative Threat Reduction programs, see http://www.nti.org/db/nisprofs/russia/forasst/nunn_lug/overview.htm; accessed April 8, 2008. See also http://www.lugar.senate.gov/press/record.cfm?id=285095; accessed July 14, 2008. 208

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Legal Issues Related to the Security of Nuclear Material Cooperative Threat Reduction Umbrella Agreement Expiration in 2013. On June 19, 2006, the United States and Russia signed a protocol to extend for another seven-year period the U.S.-Russian Cooperative Threat Reduction (CTR) umbrella agreement, which entered into force in 1992 and was first extended in 1999. As a result of protracted negotiations over the agreement’s liability protections, the 2006 protocol was signed just days before the agreement was due to expire. The CTR agreement’s taxation exemption and access provisions have also at times been the subject of contention. Disputes over one or more of these issues could again threaten the umbrella agreement’s extension when the 2006 protocol expires in 2013. Continuing Disputes Over Access. Agreements under which the U.S. government supplies cooperative threat reduction and analogous assistance grant the U.S. government the right to examine the use of materials or services provided by it as part of the assistance process. However, the Russian government, at least in part because of the sensitive nature of this own work at some sites which receive assistance, has been loath to grant such access to the U.S. government. A February 2007 report by the U.S. Government Accountability Office (GAO) warned of continuing restrictions on U.S. access to facilities that store, manufacture, or dismantle Russian nuclear weapons.297 The GAO report noted that “access difficulties at some Russian nuclear warhead sites may . . . prohibit DOE and Department of Defense (DOD) from ensuring that U.S.-funded security upgrades are being properly sustained.”298 For example, “Russia has denied DOE access at some sites after the completion of security upgrades, making it difficult for the department to ensure that funds intended for sustainability of U.S.-funded upgrades are being properly spent.”299 Specifically, neither DOE nor DOD has “reached an agreement with the Russian Ministry of Defense on access procedures for sustainability visits to 44 permanent warhead storage sites where the agencies are installing security upgrades.”300 Absent such agreement, DOE and DOD “will be unable to determine if U.S.-funded security upgrades are being properly sustained and may not be able to spend funds allotted for these efforts.”301 Such limitations could impede compliance with U.S. laws requiring verification of the proper use of U.S. government funds. Perhaps the best-known standoff over access involves the DOD-funded Fissile Material Storage Facility at Mayak. The United States and Russia, from the outset of the project, agreed in principle that the United States would have the right to some form of monitoring of this site, to ensure that it is being used for its intended purpose. However, as of December 2007, four years after the site was commissioned and ten years after transparency negotiations began, negotiations were continuing over the parameters of such a transparency agreement. Sustainability of U.S.-Funded Security Upgrades. The February 2007 GAO report stated that “during our visit to Russia, officials at three of the four civilian nuclear research institutes we visited told us that they are concerned about their sites’ financial ability to maintain 297 Government Accountability Office, Progress Made in Improving Security at Russian Nuclear Sites, but the Long-term Sustainability of U.S.-Funded Security Upgrades is Uncertain (2007), available at http://www.gao.gov/new.items/d07404.pdf. 298 Ibid, p. 22. 299 Ibid, p. 26. 300 Ibid, p. 29. 301 Ibid. 209

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U.S.-funded security upgrades after . . . DOE financial support ends in 2013.”302 DOD plans to halt funding for analogous activities in 2011. In April 2007, the DOE’s National Nuclear Security Administration (NNSA) announced that it had reached a non-binding agreement with Russia’s Federal Atomic Energy Agency (Rosatom) on a plan for sustaining U.S.-funded security upgrades at nuclear material sites after DOE ceases its financial support.303 Separate discussions were reportedly underway with regard to sustaining work performed at sites with nuclear warheads and at nuclear material sites controlled by other agencies. Additional, legally- binding arrangements may have a useful role to play in ensuring that operation and maintenance of U.S.-funded security upgrades continues to receive the requisite levels of Russian funding after 2011 and 2013. Consideration should also be given as to whether and how to address similar sustainability challenges with respect to U.S. and other international efforts to engage former Soviet weapons of mass destruction (WMD) scientists in non-WMD-related employment. One mechanism for increasing confidence that security upgrades will be sustained after U.S. funding ends could be publication of the specific lines which are dedicated to security for nuclear sites in the long-term budgets of the relevant Russian agencies. However, U.S. officials have been told that such publication is forbidden under Russian law. If this is correct, Russian law should be amended to permit such publication. Low Penalties for Nuclear Material Trafficking. Nuclear material security depends both on physical barriers to theft and deterrence of potential thieves. Nuclear smuggling networks can include principals, corrupt officials, and middlemen who transport nuclear material, forge export licenses and customs slips, and engage in other black market activities. For individuals and businesses that engage in or facilitate illicit smuggling of fissile material and related nuclear components for financial reasons, the choice to do so will depend in part on the magnitude of the penalty if caught. Russian law’s currently low criminal penalties for nuclear material trafficking304 could more effectively deter nuclear material trafficking if they were increased. For example, Article 188 of Russia’s Criminal Code imposes penalties of no more than ten years’ imprisonment for smuggling weapons of mass destruction.305 Of even greater concern from a deterrence perspective are the extraordinarily low sentences, often entirely suspended, actually imposed by Russian authorities on those convicted of nuclear smuggling.306 The Duma should consider amending the relevant Russian laws so as to impose mandatory minimum sentences for nuclear smuggling. Need for Improved Material Protection, Control, and Accounting (MPC&A) Regulations. Although Russia has developed a considerable body of laws and regulations governing nuclear safety and security, there is still considerable room for improvement. A 302 Ibid, pp. 26-7. In section 3156(b)1 of the Bob Stump National Defense Authorization Act of 2003, Congress directed as follows: “The Secretary of Energy shall work cooperatively with the Russian Federation to develop, as soon as practicable but no later than January 1, 2013, a sustainable nuclear materials protection, control, and accounting system for the nuclear materials of the Russian Federation that is supported solely by the Russian Federation.” 303 National Nuclear Security Administration, U.S. & Russia Agree to Sustain Security Upgrades at Nuclear Material Facilities: Agreement Helps to Ensure that U.S. Investments Will be Maintained, March 29, 2007; available at http://www.nnsa.doe.gov/docs/newsreleases/2007/PR_2007-04-11_NA-07-11.htm; accessed May 1, 2008. 304 Igor Khripunov and James Holmes, eds., “Enforcement as Deterrent,” Nuclear Security Culture: The Case of Russia, (University of Georgia Center for International Trade and Security: December 2004), available at http://www.uga.edu/cits/documents/pdf/Security%20Culture%20Report%2020041118.pdf. 305 Ibid. 306 Ibid. 210

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detailed analysis by the University of Georgia’s Center for International Trade and Security found that Russia’s nuclear regulations are too often obsolete and in urgent need of updating, frequently contradictory, sometimes ambiguous (thus leaving unacceptably wide discretion for interpretation), pervaded by unnecessary technical jargon that makes them difficult to understand, and too often lack specific and detailed practical instructions for handling critical tasks.307 Russian Federation MPC&A regulations also fail to preclude the most high-risk categories of nuclear material from being accessed or handled by single individuals. In contrast, the U.S. nuclear complex requires application of the prophylactic two-person rule with respect to all access to or handling of the highest-risk categories of nuclear material. Various Russian government agencies are currently working, with assistance from DOE/NNSA, to enhance Russia’s MPC&A regulations. This is an important project that ought to be completed expeditiously. Material Consolidation and Conversion Agreement Negotiation. The DOE-run Material Consolidation and Conversion project has operated on a “pilot” basis since 1999. During that time, the project has supported the transfer of HEU from various sites where it is no longer needed to fewer and more secure locations. The project has also supported the conversion of almost ten metric tons of HEU to low-enriched uranium (LEU). For example, it has supported the secure storage and conversion of Russian-origin HEU that has been returned to Russia from countries such as Bulgaria, the Czech Republic, Latvia, Serbia and Uzbekistan.308 Both consolidation and conversion reduce security requirements and long-term costs associated with protecting highly sensitive nuclear material. However, Russia has rejected DOE’s proposal to cover the conversion aspect of this cooperation under the existing MPC&A agreement, and the resultant lack of an agreed legal framework has limited the extent of material consolidation and conversion cooperation. As a result, negotiations have begun on a standalone, government-to- government Material Consolidation and Conversion Agreement. Three negotiating sessions have been held and a fourth was scheduled for March 2008. Plutonium Management and Disposition. Several legal issues currently stand as obstacles to implementation of the U.S.-Russian Agreement Concerning the Management and Disposition of Plutonium Designated as No Longer Required for Defense Purposes and Related Cooperation (PMDA), signed in September 2000, which provides for cooperation between the two countries to convert 34 metric tons each of excess weapon-grade plutonium into forms unusable for weapons.309 The PMDA does not contain liability protections but rather provides that the parties “shall continue negotiations on liability provisions to apply to all claims that may arise from activities undertaken pursuant to the Agreement and shall seek to conclude an agreement in writing containing such provisions at the earliest practicable date.”310 On September 15, 2006, the two countries signed a protocol designed to provide a framework for resolving liability issues.311 However, while the PMDA is currently being provisionally applied by the Russian government pending ratification by the Duma, the Russian Foreign Ministry has advised that the liability protocol has neither been ratified by the Duma nor can it be provisionally applied. 307 Ibid, “MPC&A Legal and Regulatory Framework,” Chapter 6. 308 For further information, see the paper by Philipp Bleek and Laura Holgate in this volume. 309 For further information regarding this agreement, please see http://www.energy.gov/print/5742.htm; accessed April 8, 2008. 310 Ibid, at Annex on Assistance, Section II-Liability. 311 Further information regarding the liability protocol is available at http://nnsa.energy.gov/news/1013.htm; accessed July 14, 2008. 211

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In addition, the PMDA’s Annex on Monitoring and Inspections provides that the parties “shall seek to complete by December 2002 an agreed set of detailed measures, procedures and administrative arrangements . . . for monitoring and inspections of disposition plutonium, blend stock, spent plutonium fuel, immobilized forms, and disposition facilities.”312 The Annex specifies that this “set of detailed measures, procedures, and administrative arrangements shall be completed in writing prior to beginning construction of industrial-scale disposition facilities in the Russian Federation.”313 As of February 2008, the parties had yet to reach agreements on such a set of measures, procedures and arrangement. In November 2007, U.S. Secretary of Energy Samuel W. Bodman and Russian Federal Atomic Energy Agency Director Sergei Kirienko signed a joint statement outlining a revised plan to dispose of 34 metric tons of surplus plutonium from Russia’s weapons program.314 The revisions have been characterized as designed to maximize technical and financial viability and more closely align Russian plutonium disposition with Russia’s national energy strategy. The joint statement commits the two sides to negotiating amendment of the PMDA to reflect the revised plan.315 As of March 2008, the U.S. had submitted to Russia a draft protocol amending the PMDA but it seemed likely that the next stage of negotiations would be delayed several months by the pending reorganization of Rosatom. Russia is to provide a significant portion of funding for the revised plutonium disposition plan. In addition, the U.S. has pledged $400 million to support the Russian program. The November 2007 joint statement also commits the U.S. and Russia to seek contributions from other international donor countries and institutions. DOE plans to ask Congress to pass legislation that would facilitate DOE accepting, and then disbursing to Russia, funds from international donors for this purpose. Expiration of HEU Purchase Agreement. The HEU Purchase Agreement (also known as the “Megatons to Megawatts Agreement”), which was signed in 1993, is currently due to expire in 2013. Under the agreement, the United States is purchasing what will amount to 500 metric tons of HEU from dismantled Russian nuclear warheads. The HEU is converted into LEU for use in U.S. commercial reactors. These purchases currently supply the fuel for approximately half of the commercial nuclear power production in the U.S. (meaning that about ten percent of U.S. electricity needs are met thanks to these purchases) and have already resulted in the elimination of weapons-grade uranium sufficient for the manufacture of more than 10,000 nuclear weapons. Recent developments have significantly altered the prospects for the continued flow to the U.S. of HEU from dismantled Russian nuclear warheads after the scheduled expiration date of the HEU Purchase Agreement. On February 1, 2008, U.S. Commerce Secretary Carlos M. Gutierrez and Russian Federal Atomic Energy Agency Director Sergei Kirienko signed an amendment to the 1992 Agreement Suspending the Antidumping Investigation on Uranium from the Russian Federation.316 Prior to this amendment, the only Russian uranium product entering 312 The text of the agreement, including this annex, is available at http://www.nti.org/db/nisprofs/russia/fulltext/plutdisp/pudispft.pdf; accessed July 14, 2008. 313 Ibid. 314 The text of the joint statement is available at http://www.energy.gov/print/5742.htm; accessed July 14, 2008. 315 Ibid. 316 The text of a February 11, 2008, Federal Register announcement containing the amendment is available at http://frwebgate4.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=82779314129+0+0+0&WAISaction=retrieve. The amendment came in the wake of a September 26, 2007, decision by the United States Court of International Trade, available at http://www.cit.uscourts.gov/slip_op/Slip_op07/07-143.pdf, that called into question the 212

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the United States for consumption in nuclear reactors was low-enriched uranium down-blended from bomb-grade material and sold to U.S. utilities through the United States Enrichment Corporation pursuant to the HEU Purchase Agreement. The amendment allows Russia to make direct sales of commercial Russian uranium products to U.S. utilities, beginning in 2011. Russia will be permitted to export relatively small quantities of such uranium during the years 2011 to 2013, and relatively larger quantities from 2014 to 2020,317 at the end of which Russia is scheduled to gain full access to this U.S. market. Legal Issues Related to Arms Control Strategic Offensive Reductions Treaty Expiration in 2012. The Strategic Offensive Reductions Treaty (SORT) expires on December 31, 2012. After signing SORT in May 2002, the United States and Russia committed to negotiate transparency measures to accompany the treaty. Such measures have yet to be concluded. In addition, it is not too soon to begin thinking about a follow-on to SORT. Strategic Arms Reduction Treaty Expiration in 2009. The Strategic Arms Reduction Treaty (START) expires on December 5, 2009. Both sides fulfilled their START reductions several years ago, but they continue to employ the treaty’s verification regime to conduct inspections and exchange data on their deployed strategic nuclear forces. Indeed, SORT, which still does not include substantive verification provisions of its own, has been buttressed by START’s verification procedures. During 2007, the United States and Russia exchanged post- START proposals while some U.S. lawmakers and others urged the two sides to consider exercising START’s five-year extension option. applicability of anti-dumping measures to sales in the United States of Russian LEU obtained pursuant to enrichment services contracts. 317 Russian uranium imported for U.S. initial cores (the LEU necessary to start a U.S. nuclear reactor that is entering service for the first time) is exempted from the annual export quotas set forth in the amendment. 213

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