The Export reorganization act, 1975 : hearings before the Committee on Government Operations, United States Senate, Ninety-fourth Congress, first session, April 24, 30, and May 1, 1975 online

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THE EXPORT REORGANIZATION ACT-1975

RECEIVED

APR 1 4 1977

HEARINGS KM*""""

BEFORE THE

COMMITTEE ON

GOVERNMENT OPERATIONS

UNITED STATES SENATE

NINETY-FOUKTH CONGKESS

FIRST SESSION



APRIL 24, 30, AND MAY 1, 1975



Printed for the use of the Committee on Government Operations




*A 1



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U.S. GOVERNMENT PRINTING OFFICE
55-430 O WASHINGTON : 1975



For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 - Price $4.50



COMMITTEE ON GOVERNMENT OPERATIONS

ABRAHAM RIBICOFF, Connecticut, Chairman

JOHN L. McCLELLAN, Arkansas CHARLES H. PERCY. Illinois

HENRY M. JACKSON, Washington JACOB K. JAVITS, New York

EDMUND S. MUSKIE, Maine WILLIAM V. ROTH, Jr., Delaware

LEE METCALF, Montana BILL BROCK, Tennessee

JAMES B. ALLEN, Alabama LOWELL P. WEICKER, Jr., Connecticut

LAWTON CHILES, Florida
SAM NUNN, Georgia
JOHN GLENN, Ohio

Richard A. Wegman, Chief Counsel and Staff Director

Paul Hoff, Counsel

Clifton Leonhardt, Counsel

Paul L. Leventhal, Counsel

Eli E. Nobleman, Counsel

Matthew Schneider, Counsel

J. Robert Vastine, Chief Counsel to the Minority

Brian Conboy, Special Counsel to the Minority

Marilyn A Harris, Chief Clerk

Elizabeth A. Preast, Assistant Chief Clerk

Harold C. Anderson, Editor

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CONTENTS

Opening statements: Tage

Hon Abraham Ribicoff, U S. Senator from the State of Connecticut - 1

Hon. John Glenn, U.S. Senator from the State of Ohio 3

Hon. Charles H. Percy, U.S. Senator from the State of Illinois 5

WITNESSES

Thursday, April 24, 1975

Dr. Fred Ikle, Director of the Arms Control and Disarmament Agency,

accompanied by James L. Malone, General Counsel 7

John F. O'Leary, Director of Licensing, Atomic Energy Commission 21

Dr. David M. Rosenbaum, Nuclear Safeguards Specialist 23

Mason Willrich, Professor of Law, University of Virginia 25

Gen. Edward B. Giller, Deputy Assistant Administrator for National
Security; accompanied by Dr. Abraham Friedman, Director, Division
of International Programs, Energy Research and Development Ad-
ministration; Howard J. Larson, Director, Division of Materials and
Fuel Cycle Licensing; Ralph G. Page, Acting Director, Division of
Safeguards, Nuclear Regulatory Commission; Rauer H. Meyer, Director,
Office of Export Administration, Department of Commerce; Dixon
Hoyle, Acting Deputy Assistant Secretary for Energy and Technology
Affairs; Harold D. Bengelsdorf, Director of Office Policy, Planning, and
Analysis, OES, Department of State; and David Elliott, staff member,
National Security Council, a panel 63

Wednesday, April 30, 1975

William A. Anders, Chairman, U.S. Nuclear Regulatory Commission 87

Dr. Dixy Lee Ray, Assistant Secretary of State for Oceans, International
Environmental and Scientific Affairs, and former Chairman of the

Atomic Energy Commission 124

Dr. Robert C. Seamans, Jr., Administrator, Energy Research and De-
velopment Administration 140

John K. Tabor, Deputy Secretary of Commerce 153

Dr. Gerald F. Tape, U.S. Representative to the International Atomic

Energy Agency 261

Thursday, May 1, 1975

Eldon V. C. Greenberg, Center for Law and Social Policy, representing
the Sierra Club, Natural Resources Defense Council, Friends of the
Earth, the Environmental Defense Fund, and the National Parks and
Conservation Association, accompanied bv Jeffrey Knight, Friends of
the Earth 277

Carl Walske, President of the Atomic Industrial Forum, Inc 424

Adrian Fisher, Dean, Georgetown University Law Center, former U.S.

Negotiator of the Nuclear Non-Proliferation Treaty 447

Admiral Gene La Rocque, Director of the Center for Defense Information. 453

Alphabetical list of witnesses:
Anders, William A. :

Testimony - 87

Memorandum for the Chairman, Nuclear Regulatory Commis-
sion, re Annur.l Report to the President on Domestic Nuclear
Safeguards, from Henry A. Kissinger, April 29, 1975 96

Letter to Senator Glenn from William A. Anders, Chairman,
Nuclear Regulatory Commission, with enclosures, June 6,
1975 98

(m)



IV

Alphabetical list of witnesses — Continued

Anders, William A. — Continued

Questions submitted by Senator Ribicoff to William A. Anders, Page
with responses HO

Bengelsdorf, Harold D.: Testimony 78

Elliott, David : Testimony 63

Fisher, Dean Adrian : Testimony 447

Friedman, Dr. Abraham:

Testimony 64

Memorandum re South Africa, Safari-I Research Reactor 67

Giller, General Edward B. :

Testimony 63

Information re ERDA inspectors of Government-owned plants— 78

Greenberg, Eldon V. C. :

Testimony 277

Memorandum on International Nuclear Power Program 291

Prepared statement 339

Appendix to testimony 369

Answers to written questions submitted by Senator Ribicoff 421

Hoyle, Dixon: Testimony 77

Ikle, Dr. Fred:

Testimony 7

La Rocque, Admiral Gene:

Testimony 453

Larson, Howard J. : Testimony 71

Meyer, Rauer H.:

Testimony 72

List of countries and name of computers each manufactures 72

O'Leary, John F.:

Testimony 21

Prepared statement 38

Page, Ralph G.: Testimony 76

Ray, Dr. Dixy Lee:

Testimony 124

Additional questions submitted by Senator Ribicoff with

responses 128

Country-by-country breakdown in uranium fuel fabrication,

reprocessing, and enrichment 158

Rosenbaum, Dr. David M.:

Testimony 23

Prepared statement 42

Seamans, Dr. Robert C, Jr.:

Testimony 140

Prepared statement 164

Memorandum: Contributions made by the U.S. in support of
development and strengthening of international safeguards

and physical security measures 177

Statistics on the World Nuclear Industry and U.S. Agreements

for Cooperation and related safeguards 185

Additional questions submitted by Senator Ribicoff with

responses 214

Design information questionnaire 239

Tabor, John K.:

Testimony 153

Prepared statement 250

Additional questions submitted by Senator Ribicoff with

responses 259

Tape, Dr. Gerald F. : Testimony . _ 261

Walske, Carl:

Testimony 424

Prepared statement 429

Additional questions submitted by Senator Ribicoff with

responses 432

List of members of the Atomic Industrial Forum 437



V

Alphabetical list of witnesses — Continued

Willrich, Mason: Page

Testimony 25

Prepared statement 48

Appendix

Statement by John Nelson Washburn, Washington-based international

lawyer, with attachment 463

"U.S. Arms to the Persian Gulf: $10 Billion Since 1973," from Center for

Defense Information, May 1975 473

"30,000 U.S. Nuclear Weapons," from Center for Defense Information,

February 1975 48 1

"Does the Shah Need Those F-14s?" by Stefan Leader and Bob Berman,

from Newsday, May 1, 1975 492

Remarks by Senator Percy upon introduction of S. 1439 on the floor of

the Senate 493

Text of S. 1439, To reorganize certain export functions of the Federal

Government to promote more efficient administration of such functions. _ 499

Statement by Hon. Charles C. Diggs, Jr 513

Comments by Howard G. and Harriet B. Kurtz, War Control Planners,

Inc 519

Remarks by Senator Pastore on the floor of the Senate re background and

status of U.S. export of nuclear technology to other nations 522



THE EXPORT REORGANIZATION ACT— 1975



THURSDAY, APRIL 24, 1975

U.S. Senate,
Committee on Government Operations,

Washington, B.C.
The committee met, pursuant to notice, at 10 a.m., room 3302,
Dirksen Building, Senator Abraham A. Ribicoff, Chairman, pre-
siding.

Present : Senators Ribicoff, Percy, and Glenn.

Staff members present : Dick Wegman, chief counsel and staff di-
rector; Paul Leventhal, counsel; Marilyn Harris, chief clerk; and
Pat Donat, clerical assistant.

OPENING STATEMENT OF SENATOR PERCY

Chairman Ribicoff. The committee will come to order.

The main question before us today, as we begin to explore the
various controls that the United States places on its peaceful nuclear
exports, is whether all the responsible agencies have been working
together to ensure that none of these exports can be converted by
nations or terrorist groups into atomic weapons.

The bill which Senator Percy, Senator Glenn and I have joined in
introducing, S. 1439, the Export Reorganization Act of 1975, 1 would
require that all nuclear exports by the United States be made con-
tingent on a finding by the Nuclear Regulatory Commission that safe-
guards against diversion, theft, and sabotage in recipient countries
are substantially comparable to safeguards required by the Commis-
sion to obtain a commercial nuclear license in the United States.

Xo such test to ensure the comparability of international safe-
guards to our own is being used today. In fact, the Nuclear Regula-
tory Commission, according to our preliminary committee inquiry,
has been excluded from playing any role in a major share of our
Nation's nuclear exports, despite the fact that it is designated by the
Atomic Energy Act to regulate such exports in the interest of public
health and safety, and common defense and security.

Last year, when this committee managed the Energy Reorganiza-
tion Act, our primary purpose in abolishing the Atomic Energy Com-
mission was to ensure that promotional and regulatory activities with
respect to atomic energy would be clearly separated in two new
agencies — the Energy Research and Development Administration and
the Nuclear Regulatory Commission.

1 See appendix p. 499.

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Now it appears that ERDA, which has taken over the nuclear pro-
motional functions of the AEC, continues to make the basic regula-
tory findings and decisions with respect to nuclear exports. NRC now
licenses the export of nuclear materials and complete facilities, but it
is essentially a rubberstamp operation. NRC has no choice but to rely
on ERDA to determine the adequacy of safeguards because the com-
mission has no resources to do the job itself.

Under the Export Reorganization Act, this export safeguard func-
tion will be transferred from ERDA to NRC to enable the inde-
pendent regulatory agency to make the safeguards comparability
finding required by the act. NRC now has no voice in exports of
nuclear technology, such as blueprints, and of component parts for
nuclear facilities, which are handled by ERDA and the Department
of Commerce respectively. Under the act, licensing of all types of
nuclear exports would be centralized in the Commerce Department,
and the certifying of adequate safegards on all nuclear exports would
be centralized in the Nuclear Regulatory Commission.

The proposed reorganization of Federal controls over peaceful
nuclear exports is crucial because it seeks to reverse the present
dangerous proliferation of commercial reactors and materials
throughout the world without the strictest possible safeguards to pre-
vent the spread of nuclear weapons.

For years we have been the sole exporter of the enriched uranium
needed to fuel the free world's commercial reactors, but we never
used this monopoly to insist on strict safeguards to prevent the plu-
tonium byproduct of these reactors from being made into atomic
bombs.

We have ratified the Nuclear NonProliferation Treaty, but we con-
tinue to sell our nuclear exports to nonNPT countries like India and
South Africa which refuse to place all of their nuclear facilities
under even the limited safeguards of the International Atomic
Energy Agency.

IAEA safeguards are designed only to detect diversion of nuclear
materials by nations, not to prevent theft and shortage by terrorist
groups. It is questionable whether present IAEA safeguards are ade-
quate to foil a nation that seeks to secretly stockpile plutonium.

The explanation that our Government and our nuclear industry
give for continuing to export nuclear reactors under presently in-
adequate safeguards is that if we do not sell our reactors to nations
that want to buy them, other nuclear exporting nations will make the
sales — and under safeguards conditions that are less strict than our
own.

The terrible irony of all this is that the reactors now being sold
by such exporters as France and West Germany in competition with
our own reactors are based on designs that American manufacturers
originally sold to France and West Germany manufacturers. The
exports of this American nuclear technology had been approved by
the old Atomic Energy Commission without requiring, as a condition
of the sale, that foreign manufacturers impose strict safeguards on
their own reactor exports. The result is that we now find ourselves in
an increasingly nuclear-powered world that is governed by nation-
alism and commercialism.



Unless something is done — and done quickly — to reverse this trend,
the spread of nuclear weapons and the threat of nuclear blackmail
may be irreversible.

Plutonium stolen abroad poses as great a danger to our defense
and security, to our health and safety, as plutonium stolen at home.
The same holds true for every nation in the world. Therefore, I do
not accept the argument that we cannot condition our nuclear sales on
strict safeguards because other nuclear exporting nations will not
follow our example.

I believe that if the United States exerts world leadership on this
momentous issue, other nations will follow. We are still the world
leader in nuclear technology: we are still the major supplier of en-
riched nuclear fuel. Other nations cannot ignore us — yet. But time is
running out. In a world of nuclear disorganization, we must begin to
act wisely now.

The place to start is at home by imposing tight regulatory controls
over our nuclear exports. I believe this bill takes the right approach
by making the Nuclear Regulatory Commission the lead agency in
this area. Our Government will then be in a position to influence
other nuclear exporting nations to do the same and to protect our
competitive position in international nuclear trade.

I am pleased to designate Senator Glenn as ad hoc chairman of
these hearings. His unique scientific and technical skills are a valuable
resource to this committee and the Congress in considering as complex
an area as nuclear technology.

Senator Glenn?

OPENING STATEMENT OF SENATOR GLENN

Senator Glenn. It is both a privilege and a challenge to serve as ad
hoc chairman of these hearings of the Senate Government Operations
Committee on the activities of the executive branch with respect to
certain strategically significant exports. The bill we have before us,
S. 1439, the Export Reorganization Act of 1975, proposes significant
reforms of the present interagency system for controlling these ex-
ports both from the standpoint of economy and efficiency in Govern-
ment and of promoting the vital national interests of the United
States.

We open these hearings by reviewing the present system by which
the Federal Government controls the export of nuclear technology —
including designs, facilities, materials, and component parts — for
peaceful purposes. It should be made clear at the outset that our
purpose is not to determine whether civilian nuclear exports should be
stopped, but rather how they might be better controlled to promote
common defense and security and public health and safety.

Last fall, the Secretary of State, in an address to the United Na-
tions General Assembly, acknowledged that the plutonium byproduct
of peaceful reactors is also the main ingredient of nuclear explosives,
and he warned that the U.S. policy of exporting reactor fuel and
other materials "cannot continue if it leads to the proliferation of
nuclear explosives."

The Director of the Arms Control and Disarmament Agency, who
is our leadoff witness today, has spoken out on the danger that our



Nation's Atoms for Peace program could be the vehicle for prolifer-
ating nuclear weapons throughout the world.

The Energy Research and Development Administration, in its
interim environmental impact statement on the nuclear export pro-
gram, described recent efforts to respond to the increase of worldwide
terrorist activities by strengthening physical security measures both
domestically and internationally.

Next month, a special fifth-anniversary review conference of the
Nuclear NonProliferation Treaty nations will convene in Geneva to
review the adequacy of present international safeguards against di-
version of peaceful nuclear materials by nations for weapons pur-
poses, as well as to explore the need for uniform physical security
measures to prevent theft and sabotage by terrorists. At present, the
safeguards administered by the International Atomic Energy Agency
for the parties to the treaty deal only with national diversion, and it
has been questioned whether these safeguards are sufficient to detect
the secret stockpiling of plutonium.

Our hearing into the adequacy of Federal nuclear export controls,
therefore, come during an important period of revaluation by our
own Government and the international community. The proposed
Export Reorganization Act provides an excellent vehicle for defining
the objectives of our nuclear export program in relation to a realistic
appraisal of present dangers and difficulties.

India's use of imported civilian nuclear materials and technology,
apparently from Canada, to carry out a "peaceful" nuclear explosion
is an example of the dangers we face. Potentially more significant in
terms of proliferation, is the recent announcement by South Africa
that it has developed a new, relatively cheap process for enriching
natural uranium to the levels of concentration needed to make reactor
fuel or nuclear explosives.

Neither India nor South Africa are parties to the Non-Prolofera-
tion Treaty, and both have nuclear facilities that are not subject to
IAEA safeguards. Nevertheless, the Tinted States has continued to
make civilian nuclear exports to these nations. Our nuclear trade with
India, South Africa, and other non-NPT nations is an important
issue which we Avill want to explore today.

The purpose of the bill we consider today is to "reorganize certain
export functions of the Federal Government to promote more efficient
administration of such functions".

More specifically, it is the intent of the Act :

To reorganize and centralize certain export licensing functions of
the Government in a single agency to which all persons and com-
mercial interests seeking to engage in foreign commerce can apply.

That licensing and approval authorities be transferred to the De-
partment of Commerce, with appropriate coordination with other
agencies to insure that the national interest is protected in the licens-
ing and approval of exports.

That the licensing of exports of nonmilitary nuclear facilities, ma-
terial, and technology be made contingent upon a determination that
safeguards against theft, diversions, and sabotage in recipient nations
are substantially comparable to the safeguards requirements for com-
mercial nuclear licenses in the United States.



That the determinations of safeguards comparability be made by
the Nuclear Regulatory Commission.

That commercial nuclear exports by the United States be made in
the context of meaningful international controls.

The motivations for this proposed bill are fairly self-evident. With
the growth of the nuclear industry, there is concern that relatively
easy access to plutonium and other special nuclear materials, world-
wide, could pose a serious threat to the security of the United States.

Plutonium stolen abroad poses as great a danger as plutonium
stolen in the United States. It is the intent of the present bill to
tighten controls on the potential spread of plutonium and other
special nuclear materials.

Establishing that a single lead agency is responsible for the critical
determination regarding export of nuclear technology and material
should not only help to streamline existing procedures, but should
also assist in implementing the necessary controls we are striving for.

"We certainly want to be sure that this proposed bill will indeed
lead to the results we intend to achieve. Undue restrictions on U.S.
nuclear exports that do not simultaneously reduce U.S. vulnerability
to nuclear risks should be avoided.

We are very pleased that our witnesses could come today and give
us their views and comments on this bill. We hope that they will be
frank and candid with us and help us in the formulation of an export
act which will have the intended results.

It is clear to me that the bill we introduce will not remedy all
difficulties with respect to exports or avert all risks arising from the
technologies involved. Yet if we define our objective in terms of
minimizing those risks and difficulties, I believe the bill points the
way toward achieving that objective. I congratulate Senators Percy
and Ribieoff on their work to this end and am grateful and proud to
be a part of their effort.

Chairman Ribicoff. All opening statements will be in the record
as if read in full.

Senator Percy, who has taken the lead in this field, do you have
an opening statement?

OPENING STATEMENT OF SENATOR PERCY

Senator Percy. Dr. Ikle, we appreciate your being here this morn-
ing. We know you had other conflicts, and we appreciate your setting
those aside.

I had invited Secretary Kissinger to be here, because I know of his
deep interest in this field. However, in my letter of invitation, I
implied that I felt he should spend his time on other crises, and that
you would be, in our judgment, an extraordinary witness in his stead.

Mr. Chairman, I want to thank you for the way that you have ex-
pedited these hearings, for your cosponsorship of this legislation, and
for the decision that has been made to have a large part of the load
in chairing the hearings carried by our distinguished colleague, and
cosponsor of this legislation, Senator Glenn, who has expertise in this
field, and to whom I would yield any day on technical matters.

They never chose me for my technical competence, but I would
like to give just a brief statement, because I think it might be some-



what helpful to our principal witnesses, and to those of us who have
put together this legislation, to know the spirit in which we have
offered it, and why we have done so.

The issue we want to explore here today relates directly to the
future of our own and world civilization. Whether we can now master
the will to control the worldwide proliferation of the capacity to
fashion deadly nuclear weapons from peaceful nuclear materials, is,
I believe, central to the future of man.

Time is running out fast. We are literally racing the clock. The
day when the United States held a monopoly in nuclear technology,
engineering, and manufacturing is long past. Other major countries
are fast developing and applying enrichment technology that may
even be superior- to our own, and less costly. They already have the
capacity to reprocess spent reactor fuel and thus to manufacture —
and to sell — their plutonium to still other countries.

As a practical matter, we thus have only a very short time — per-
haps 2 or 3 years — during which the U.S. position as major world
suppliers of enriched uranium can provide the basis on which we can
lead the world toward adequate nuclear safeguards. The hope that
we can bottle up the nuclear genie is completely vain. But what we
can — what we must — do is strengthen in every way possible the safe-
guards all countries use to protect peaceful nuclear materials and
facilities from diversion to purposes that are dangerous to mankind.
This strengthening should be in the plain best interest of all nations.

Thus, the pragmatic question before us is how we can use the
transistory U.S. position as the predominant nuclear supplier to im-
prove substantially the safeguards all countries use to prevent theft
and diversion.

S. 1439, which I have introduced with the cosponsorship of my dis-
tinguished colleagues, Senator Ribicoff and Senator Glenn, proposes
one means by which such international safeguards might be up-
graded.

The bill is the result of my request that the minority and majority
staffs of the committee inquire in detail into the current organization
of our Government to authorize nuclear exports, and that they draft
a proposal that could serve as a focus for hearings. It stems from
my concern that these hearings might merely provide the forum in
which frightening pictures of nuclear sabotage and terrorism could
be painted.

Instead, I wanted these hearings to have a constructive focus. I
believe the bill provides a positive alternative that hopefully will
assure people that, while we are airing the alarming problems, we are
also intent on doing something concrete to correct them.