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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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Online LibraryUnited States. Congress. Senate. Committee on GoveThe 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 text (page 44 of 47)
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Mr. President, 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 technol-
ogies 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 Ribicoff on their work to this end
and am grateful and proud to be a part of their effort.



499



94th CONGRESS

1st Session



S. 1439



IN THE SENATE OF THE UNITED STATES



April 15, 1975



Mr. Percy (for himself, Mr. Glenx, and Mr. Eibicoff) introduced the follow-
ing bill ; which was read twice and referred to the Committee on Govern-
ment Operations



A BILL

To reorganize certain export functions of the Federal Govern-
ment to promote more efficient administration of such
functions.

1 Be it enacted by the Senate and House of Representa-

2 tives of the United States of America in Congress assembled,

3 That this Act may be cited as the "Export Reorganization

4 Act of 1975".

5 STATEMENT OP PURPOSE

6 Sec. 2. (a) The Congress hereby finds and declares —

7 (1) that it is in the interest of the economy and

8 effectiveness of the executive branch, and in the interest

9 of the effectiveness of congressional oversight, to reor-
II



15
16



500

2

1 ganize and centralize certain export licensing functions

2 of the Government in a single agency to which all per-

3 sons and commercial interests seeking to engage in for-

4 eign commerce can apply ;

5 (2) that the Department of Commerce now has the

6 responsibility for providing such a centralized function

7 by issuing most export licenses required by the laws of

8 the United States ;

9 (3) that the Department of State, the Department

10 of the Treasury, the Energy Research and Development

11 Administration, and the Nuclear Regulatory Commission

12 now exercise export licensing and approval authorities

13 that are substantially similar to the authorities now exer-
■" cised by the Department of Commerce;

(4) that these licensing and approval authorities
should be transferred to the Department of Commerce,
!' with appropriate coordination with other agencies to in-

1° sure that the national interest is protected in the liccns-

19 ing and approval of exports ;

2° (5) that the exporting of nonmilitary nuclear fa-

21 cilities, material, and technology involves special prob-

lems related to common defense and security and public

23 health and safety posed by the international proliferation

24 of plutonium and other special nuclear materials, and by



501

3

1 their potential conversion by nations and summational

2 groups into explosive weapons or dispersal devices;

3 (6) that the licensing of such exports should be

4 made contingent upon a determination that safeguards

5 against theft, diversion, and sabotage in recipient nations
G are at least substantially comparable to the safeguards

7 that are required in order to obtain a commercial nuclear

8 license in the United States;

9 (7) that determinations of safeguards comparability

10 should be made by the Nuclear Regulatory Commission,

11 the agency responsible for protecting common defense

12 and security and public health and safety through the

13 issuance of commercial nuclear licenses in the United
1-t States, and

15 (8) that commercial nuclear exports by the United

16 States should be made in the context of meaningful

17 international controls, and that consideration should be

18 given to the internationalization of all strategically

19 significant aspects of the nonmilitary nuclear fuel cycle.

20 DEFINITIONS

21 Sec. 3. As used in this Act, the term—

22 (1) "atomic energy facility or material for use for

23 nonmilitary purposes" means any production or utiliza-

24 tion facility, any special nuclear material, any source



502

4

1 material or any byproduct material as defined in sec-

2 tion 11 of the Atomic Energy Act of 1954, to be used

3 for nomnilitary purposes;

4 (2) "Commission" means the Nuclear Regulatory

5 Commission ;

6 (3) "Department" means the Department of Com-

7 merce ;

8 (4) "function" includes power and duty;

9 (5) "nomnilitary atomic energy technology" means

10 any technology which the Commission determines to

11 relate to atomic energy facilities or materials for use for

12 nonmilitary purposes;

13 (6) "safeguards" means materials accountability

14 and physical security ; and

15 (7) "Secretary" means the Secretary of Commerce:

1G TRANSFERS TO THE SECRETARY OF COMMERCE

17 Sec. 4. (a) (1) There are transferred to the Secretary

18 of Commerce, and the Secretary shall perform, such functions

19 of the Secretary of State under section 414 of the Mutual

20 Security Act of 1954 as relate to the approval for export

21 (including the issuance of export licenses) of arms, ammu-

22 nition, and the implements of war.

23 (2) No export license for arms, ammunition, and the

24 implements of war which prior to the effective date of this

25 Act would have been issued by the Secretary of State for



503

5

1 arms, ammunition, and the implements of war may be issued

2 by the Secretary unless the Secretary of State has given writ-

3 ten approval for the issuance of such a license.

4 (b)(1) There are transf erred to the Secretary , and the

5 Secretary shall perform, such functions of the Secretary of
q the Treasury under the Trading With the Enemy Act as re-

7 late to the issuance of export licenses.

8 (2) No export license which prior to the effective date

9 of this Act was issued by the Secretary of the Treasury un-

10 der the Trading With the Enemy Act may be issued by the

11 Secretary unless the Secretary of the Treasury has given

12 written approval for the issuance of such a license.

13 (c) (1) There are transferred to the Secretary, and the
11 Secretary shall perform, such functions of the Nuclear Regu-

15 latory Commission under sections 53(a), 62, 82(c), 103,

16 and 104 of the Atomic Energy Act as relate to the issuance

17 of export licenses for atomic energy facilities or materials for

18 use for nonmilitary purposes.

19 (2) No export license for atomic energy facilities or

20 materials for use for nonmilitary purposes may be issued

21 after the effective date of this Act unless the provisions of

22 section 7 (a) of this Act are met.

23 (d)(1) There are transferred to the Secretary, and the

24 Secretary shall perforin, such functions of the Administrator

25 of the Energy Research and Development Administration as



504

6

1 relate to the approval for export of nonmilitary atomic energy

2 technology.

3 (2) No approval for export may be given for nomnili-

4 tary atomic energy technology after the effective date of this

5 Act, unless the provisions of section 7 (a) of this Act are

6 met.

7 TRANSFER TO THE SECRETARY OF STATE

8 Sec. 5. There are transferred to the Secretary of State,

9 and the Secretaiy shall perform, all functions of the Admin-

10 istrator of the Energy Research and Development Adminis-

11 tration relating to the development of international agree-

12 ments for cooperation on atomic energy facilities or materials

13 for use for nonmilitary purposes and nonmilitary atomic

14 energy technology.

15 TRANSFERS TO THE NUCLEAR REGULATORY COMMISSION

16 Sec. 6. (a) There are transferred to the Commission,

17 and the Commission shall perform, such functions of the

18 Administrator of the Energy Research and Development

19 Administration as relate to safeguards for atomic energy

20 facilities or materials for use for nonmilitary purposes and

21 nonmilitary atomic energy technology which are to be

22 exported.

23 (b) There are transferred to the Commission, and the

24 Commission shall perform, such functions of the Secretary of

25 Transportation under sections 832 and 833 of title 18, United



505

7

1 States Code, that relate to the transportation of radioactive

2 materials.

3 SAFEGUARDS COMPARABILITY

4 Sec. 7. (a) No export License for the exportation of

5 atomic energy facilities or materials for use for nonmilitary

6 purposes may be issued by the Secretary, and no approval

7 for the export of nonmilitary atomic energy technology may
S be given by the Secretary, unless the Commission determines
9 that the recipient country to which any such technology,

10 facility, or material is to be exported has safeguards sub-

11 stantially at least comparable to safeguards required by the

12 Commission in the United States.

13 (b) The Commission shall establish criteria for use

14 hi the development of international agreements for coopera-

15 tion with foreign countries relating to safeguards with respect

16 to atomic energy facilities or materials for use for nonmili-

17 tary purposes and nonmilitary atomic energy technology.

18 (c)(1) The Commission shall establish and operate a

19 framing program to be made available to persons from coun-

20 tries which purchase licensed atomic energy facilities or

21 materials for use for nonmilitary purposes from any person

22 in the United States. Any such program shall include the

23 most advanced techniques and technology for materials ac-

24 counting and physical security, consistent with national

25 security interests of the United States.



506

8

I (2) There are authorized to be appropriated such sums

o as may be necessary to carry out the provisions of this

3 subsection.

4 NUCLEAR PROLIFERATION ASSESSMENT STATEMENT

5 Sec. 8. (a) The Commission shall, with respect to each
(j determination pursuant to section 7(a) involving strategi-

7 cally significant atomic energy facilities or materials for use

8 for nonmilitary purposes and nonmilitary atomic energy tech-

9 nology, prepare and furnish a nuclear proliferation assessment

10 statement to the Arms Control and Disarmament Agency.

11 (b) In any case of a determination under section 7 (a)

12 to which subsection (a) applies, the Commission shall notify

13 the Arms Control and Disarmament Agency of the proposed

14 approval or license and offer that Agency an opportunity

15 to comment on such approval or license.

16 SAFEGUAKDS STUDY

17 Sec. 9. (a) (1) The Commission shall conduct a thor-
38 ough study of the safeguards guidelines and regulations for

19 atomic energy facilities or materials for use for nonmilitary

20 purposes established by the United States and by the Inter-

21 national Atomic Energy Agency, with special consideration

22 of the differences in such safeguards.

23 (2) Not later than nine months from the date of en-

24 actment of this Act, the Commission shall prepare and

25 transmit to the President and the Congress a report on the



507



9

1 study required by this subsection, together with such rec-

2 ommendations, including recommendations for the upgrading

3 of such safeguards, as the Commission deems advisable.

4 (b)(1) The Commission shall conduct a thorough

5 study of the feasibility of internationalization of all strategi-

6 cally significant aspects of the nonmilitary atomic energy

7 fuel cycle.

8 (2) Not later than nine months from the date of en-

9 actment of this Act, the Commission shall prepare and trans-

10 mit to the President and the Congress a report on the study

11 required b}^ this subsection, together with such recommenda-

12 tions as the Commission deems advisable.

13 (c) Such sums as may be necessary are hereby au-

14 thorized to carry out the provisions of this section.

15 TRANSFER OF PERSONNEL AND PROPERTY

16 Sec. 10. (a) All personnel, liabilities, contracts, prop-
*• crty, and records as are determined by the Director of the

18 Office of Management and Budget to be employed, held, or

19 used primarily in connection with any function transferred

20 under the provisions of this Act, are transferred to the Sec-

21 retary, to the Secretary of State, or to the Commission, as

22 the case may be.

23 (b) (1) Except as provided in paragraph (2) of this

24 subsection, personnel engaged in functions transferred under



508



10

1 this Act shall be transferred in accordance with applicable

2 laws and regulations relating to transfer of functions.

3 (2) The transfer of personnel pursuant to subsection
1 (a) shall be without reduction in classification or conipensa-
3 tion for one year after such transfer.

6 SAVINGS PROVISIONS

7 Sec. 11. (a) All orders, determinations, rules, regula-

8 tions, permits, contracts, certificates, licenses, and privi-

9 leges—

10 (1) which have been issued, made, granted, or al-
ii lowed to become effective in the exercise of functions

12 which are transferred under this Act, by (A) any

13 agency or office, or part thereof, any functions of which

11 are transferred by this Act, or (B) any court of compe-
ls tent jurisdiction, and

16 (2) which are in effect at the time this Act takes

17 effect, shall continue in effect according to their terms

18 until modified, terminated, superseded, set aside, or re-

19 pealed by the Secretary, by the Secretary of State, or

20 by the Commission, as the case may be, or by any court

21 of competent jurisdiction, or by operation of law.

22 (b) The provisions of this Act shall not affect any pro-

23 ceedings pending at the time this section takes effect before

24 any agency or office, or part thereof, functions of which are

25 transferred by this Act; but such proceedings, to the extent



509

11

1 that they relate to functions so transferred, shall be continued

2 before the Department, the Department of State, the Energy

3 Research and Development Administration, or the Commis-

4 sion, as the case may be. Such proceedings, to the extent they

5 do not relate to functions so transferred, shall be continued

6 before the agency or office, or part thereof, before which they

7 were pending at the time of such transfer. In either case

8 orders shall be issued in such proceedings, appeals shall be

9 taken therefrom, and payments shall be made pursuant to

10 such orders, as if this Act had not been enacted; and orders

11 issued in any such proceedings shall continue in effect until

12 modified, terminated, superseded, or repealed by the Secre-

13 tary, by the Secretary of State, or by the Commission, as
11 the case may be, or b}' a court of competent jurisdiction, or

15 by operation of law.

16 (c)(1) Except as provided in paragraph (2) —

1^ (A) the provisions of this Act shall not affect suits

18 commenced prior to the date this section takes effect, and

19 (B) in all such suits proceedings shall be had, ap-

20 peals taken, and judgments rendered, in the same manner

21 and effect as if this Act had not been enacted.

22 No suit, action, or other proceeding commenced by or against

23 any officer in his official capacity as an officer of any agency

24 or office, or part thereof, functions of which are transferred

25 by this Act, shall abate by reason of the enactment of this



510



12

1 Act. No cause of action by or against any agency or office, or

2 part thereof, functions of which are transferred by this Act,

3 or by or against any officer (hereof in his official capacity

4 shall abate by reason of the enactment of this Act. Causes of

5 actions, suits, or other proceedings may be asserted by or

6 against the United States or such official of the Department,

7 the Department of State, or the Commission, as may be ap-

8 propriate and, in airy litigation pending when this section

9 takes effect, the court ma}' at any time, on its own motion or

10 that of any party, enter an order which will give effect to the

11 provisions of this subsection.

12 (2) If before the date on which this Act takes effect,

13 any agency or office, or officer thereof in his official capacity,

14 is a party to a suit, and under this Act —

15 (A) such agency or office, or any part thereof, is

16 transferred to the Secretary, the Secretary of State, or

17 the Commission, as the case may be, or

18 (B) any function of such agency, office, or part

19 thereof, or officer is transferred to the Secretary, the

20 Secretary of State, or the Commission, as the case may

21 be,

22 then such suit shall lie continued by the Secretary, the Secre-

23 tar}' of State, or the Commission, as the case may be (except

24 in the case of a suit not involving functions transferred to the

25 Secretary, the Secretary of State, or the Commission, as the



511



13

1 case may be, in which case the suit shall be continued by the

2 agency, office, or part thereof, or officer which was a party to

3 the suit prior to the effective date of this Act) .

4 (d) With respect to any function transferred by this Act

5 and exercised after the effective date of this Act, reference
G in any other Federal law to any agency, office, or part

7 thereof, or officer so transferred or functions of which are so

8 transferred shall be deemed to mean the Department, the
D Department of State, or the Commission, or officer in which

10 such function is vested pursuant to this Act.

11 (e) Orders and actions of the Secretary, the Secretary of

12 State, or the Commission, as the case may be, in the exercise
33 of functions transferred under this Act shall be subject to

14 judicial review in the same extent and in the same manner as

15 if such orders and actions had been by the agency or office, or
1G part thereof, exercising such functions, immediately preceding

17 their transfer. Any statutory requirements relating to notice,

18 hearings, action upon the record, or administrative review

19 that apply to any function transferred by this Act shall apply

20 to the exercise of such function by the Secretary, the Secre-

21 tary of State, or the Commission, as the case may be.

22 (f) In the exercise of the functions transferred under

23 this Act, the Secretary, the Secretary of State, or the Com-

24 mission, as the case may be, shall have the same authority

25 as that vested in the agency or office, or part thereof, ex-



512



14

1 ercising such functions immediately preceding their transfer,

2 and his actions in exercising such functions shall have the

3 same force and effect as when exercised by such agency or

4 office, or part thereof.

5 EFFECTIVE DATE

6 Sec. 12. This Act, other than this section, shall take

7 effect ninety days after the date of enactment of this Act,

8 or on such prior date after enactment of this Act as the

9 President shall prescribe and publish in the Federal Register.



513



STATEMENT BY HONORABLE CHARLES C. DIQGS, JR.
SUBMITTED FOR THE RECORD BEFORE THE
SENATE GOVERNMENT OPERATIONS COMMITTEE
HEARINGS ON THE EXPORT REORGANI2ATION ACT OF 1975



I appreciate the opportunity to present this statement for the
Conmittee's consideration as it reviews United States policy with respect
to the export of nuclear technology. The essential idea behind this
statement is embodied in a bill I have introduced in the Congress which
would prohibit the sale or exchange of nuclear materials or technology
to any country which has not ratified the Treaty on the Non-Proliferation
of Nuclear Weapons (NPT) .

The prevention of a nuclear war is one of the most crucial
objectives facing our world today. An important part of the effort to
avoid nuclear war is stopping the spread of nuclear weapons to additional
countries, which is the principal purpose behind the NPT.

The major arguments supporting this proposed export prohibition
are the following:

(1) The countries which have not ratified the NPT are not fully
and comprehensively covered by the International Atomic Energy Agency
(IAEA) safeguards, whose stated purpose is the timely detection of
diversion of significant quantities of nuclear materials from
peaceful to military uses and deterrence of such diversion by the
risk of early detection. Under Article III of the NPT, all non-
nuclear weapon countries party to the Treaty agree to accept IAEA



514



safeguards on all nuclear materials in all peaceful nuclear activities
within its territory. However, as to countries not party to the NPT,
IAEA safeguards apply only to the particular materials being transferred.

My colleague, Mr. Aspin of Wisconsin, recently revealed that the
U. S. Nuclear Regulatory Commission authorized the sale of 97 pounds
of highly enriched uranium to South Africa over the past year. Pursuant
to the bilateral United States/South African Civil Nuclear Assistance
Agreement, IAEA safeguards apply to these uranium shipments.

In April of this year, Prime Minister John Vorster announced the
success of South Africa's own uranium enrichment pilot plant at Valindaba.
Since South Africa is not a party to the NPT, and therefore not subject
to the comprehensive and complete safeguard coverage required by Article
III, the uranium enrichment facility as well as other nuclear facilities
indigenous to South Africa are not subject to any external safeguard
coverage. This means, in fact, that South Africa has the option to
divert its nuclear materials to military use at its own discretion. The
possibility of this outcome is based on the fact that there is no explicit
requirement in the U. S. /South African bilateral agreement that spent
fuel be reprocessed outside South Africa. (Article VIII, sec. G of the
bilateral agreement, as amended May 22, 1974, states only that "... such
reprocessing or alteration shall be performed in facilities acceptable
to both Parties. . . .")



515



-3-
(2) The second argument supporting this proposal is that the
continued supply of nuclear assistance to countries which are not parties
to the NPT serves as a disincentive for joining the NPT. In other words,
since the United States provides nuclear assistance to countries, whether
or not party to the NPT, it therefore makes little difference to a country
whether or not it signs and ratifies the Treaty. In short, there is
presently no penalty for being outside the NPT and the IAEA system nor a
real incentive to join. Furthermore, non-weapon countries which have
accepted IAEA safeguards on their entire civilian nuclear program are
discriminated against. Nevertheless, the U.S. continues to profess its
policy of encouraging widespread adherence to the NPT - a policy which was
most recently reaffirmed by Dr. Fred Ikle, Director of the Arms Control
and Disarmament Agency and Chief U.S. Representative to the NPT Review



;ion in *Hn



Conference, currently in session in Vienna .

Notwithstanding any economic arguments of the importance of nuclear
trade to U.S. balance of payments, and that non-parties to the NPT might
obtain assistance from other non-party suppliers, this still does not justi-
fy the U.S., or any party, in compromising the non-proliferation principle
and therefore facilitating Treaty abstention. The U.S. must assume the
leadership role in deed as well as word.

(3) The third argument in support of this proposal is that the U.S.,
as a matter of policy, should not actively assist countries which have
the technical capability to build a nuclear bomb, the political/military
incentive to build a bomb, but have not even indicated willingness or
intent to sign and ratify the NPT.



516



-4-

Countries which do not intend to pursue the course of nuclear
weapons development, even where the capability is present, have taken
clear political action to indicate such by either signing or ratifying
the NPT.

I have been particularly concerned about South Africa's growing
nuclear capability and its possible implications for contributing to
tensions in Southern Africa. Recent events have confirmed observations
of South Africa's ability to eventually become totally self-sufficient
in its nuclear program. The success of the uranium enrichment plant
is one instance. In addition, it is expected, although not yet confirmed,
that South Africa is about to undertake construction of a full-scale
chemical separation plant. Further, it is well known that South Africa
possesses an abundant supply of its own uranium ore, from which nuclear
fuel is fabricated. These factors, together with apparent U. S. willing-
ness to provide nuclear reactors, combine to enable South Africa
to produce all the nuclear bombs it wants. The United States should
not and must not be connected with this effort in any respect.



517



- 5 -



Nevertheless, there is presently under consideration a $12 million
agreement between South Africa's Escom, Inc. and the U.S. Energy



Online LibraryUnited States. Congress. Senate. Committee on GoveThe 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 text (page 44 of 47)