The new guidelines impose additional and specific criteria for access to this technology at a time when more countries are planning to deploy nuclear power reactors and supporting infrastructure, and developing countries are objecting that advanced nuclear states are not assisting, and in some cases are impeding, their efforts.
For over thirty years, the NSG has urged holders of sensitive nuclear fuel technology to “exercise restraint” in decisions about exports. The guidelines for ENR are found in two paragraphs—6 and 7—of the NSG’s trade rules which were first published by the IAEA in 1978.
But until now this most important nuclear trade rule maker has imposed few specific extra conditions on sensitive nuclear commerce. In 2003, however, it was confirmed that an international smuggling ring had proliferated uranium enrichment technology to Iran, Libya, North Korea, and perhaps elsewhere. At the urging of President George W. Bush, the NSG then began a project to tighten its ENR guidelines.
Bush first urged the NSG to ban the spread of ENR altogether to countries that do not yet have these capabilities. Virtually all other countries in the group objected to this. In 2008, the United States fell into line with the rest. The group then drafted a so-called “clean text” for new guidelines—“clean” because it had no bracketed language in it—that became the basis for further negotiations about the criteria for sensitive trade.
During the last two years, many changes were made in the proposed guidelines to accommodate weighty objections made by some states to the “clean text.” Some governments were concerned that proposed new terms of trade would prevent them from being able to develop fuel cycle capabilities at a later time. Others raised broader equity issues. When the NSG began an annual week-long meeting held in the Netherlands last month, only one state, South Africa, had not yet given its consent. During the meeting, South Africa agreed, assuring that the new guidelines would be adopted by consensus by all participating governments.
Compared to the NSG’s original guidelines, the new ones establish a raft of specific conditions that a recipient must meet to obtain ENR items. These include being a party to and in full compliance with the Nuclear Non-Proliferation Treaty (NPT); not being cited by the IAEA board of governors or secretariat for safeguards deficits; having and complying with a comprehensive safeguards agreement with the IAEA; reporting on national export controls as called for under United Nations Security Council Resolution 1540; committing and adhering to international nuclear safety norms; and having a bilateral agreement with the ENR supplier state covering retransfer and assuring safeguards in perpetuity.
How countries outside the NSG will respond to this package of specific restrictions is not yet clear. In recent years, developing countries, many of which are members of the Non-Aligned Movement (NAM), have increasingly objected that the NSG contradicts NPT Article IV, which commits the parties to cooperate with each other in the “fullest possible exchange” of nuclear goods and information. Iran for nearly a decade has claimed that it developed ENR capabilities because the NSG systematically denied technology and nuclear fuel transfer to Iran. Iran’s claim resonates with NAM countries at the IAEA. It can be assumed that Iran will charge that the new ENR guidelines prove that the NSG is a cartel. In the view of some NSG negotiators, it is also conceivable that Iran might react by demonstrating its commitment to NPT Article IV by sharing its uranium enrichment technology with another NAM state, perhaps Egypt.
During the negotiation of the guidelines, concerns related to NPT Article IV were also raised by certain NSG participating governments themselves. In particular, several states, most recently Turkey, had objected to specific “subjective” criteria in the 2008 “clean text.” The criteria of concern had called on suppliers to “exercise vigilance” and to “consider other factors” in export decisions such as “general conditions of stability and security,” and to make a judgment whether a recipient state’s nuclear program provided a “credible and coherent rationale for pursuing enrichment and reprocessing capability.” Turkey—a country on the cusp of the Middle East with an ambitious nuclear power development plan—finally lifted its objections earlier this year when the draft text was changed to eliminate the offending criteria.
These changes will have no effect in substance, because while the specific “subjective” criteria are gone, exporters are instead provided great overall leeway in judging the legitimacy of a recipient state’s quest for ENR. The final text of the guidelines urges suppliers to take “into account, at their national discretion, any relevant factors as may be applicable.” On top of that, the final text also refers back to language in the existing NSG guidelines’ Paragraph 4 which states that “suppliers reserve the right to apply additional conditions of supply as a matter of national policy.”
Additional Protocol
The 2008 “clean text” required that ENR recipient states have an Additional Protocol with the IAEA, or instead—to satisfy Brazil and Argentina, which have not agreed to sign such a protocol—implement a “regional arrangement approved by the IAEA which operates to achieve the same objective by providing confidence in the peaceful nature of civilian nuclear programs.” There are only two such “regional arrangements” in the world today—Euratom, representing members of the European Union, and a bilateral safeguards agency for Argentina and Brazil called Abacc.
Some NSG participating governments—and officials at the IAEA—objected to the implication in the “clean text” that the Additional Protocol and Abacc were somehow equivalent. They argued, correctly, that the Additional Protocol was a tool needed by the IAEA to confidently assess that a country had no undeclared nuclear activities, and that if the NSG gave Argentina and Brazil a blanket exemption from the Additional Protocol requirement, it would make it more difficult for the IAEA to obtain universal adherence to it. South Africa specifically objected to making the Additional Protocol a requirement for access to ENR because the protocol is a voluntary safeguards commitment by individual states.
The language in the ENR guidelines approved by NSG participating governments last month reflects their efforts to address these objections.
In the new guidelines, the Additional Protocol was deleted from the “clean text” list of proposed specific criteria for ENR that recipient states must meet. Instead, the issue is treated in a separate paragraph calling on suppliers to “make special efforts in support of effective implementation of IAEA safeguards,” a topic also referenced in Paragraph 13 of the existing NSG guidelines. Abacc is viewed as “support[ing]… effective implementation of IAEA safeguards” for ENR-related installations because Abacc goes beyond routine practice of IAEA safeguards in providing for permanent bilateral resident inspectors.
The final text also fudged the controversial exception to the Additional Protocol in the 2008 “clean text” given to Argentina and Brazil. If a recipient does not have a comprehensive safeguards agreement and an Additional Protocol in force, “pending this” transfers may be authorized to countries implementing “appropriate” IAEA safeguards “including a regional accounting and control arrangement” such as Abacc.
Currently, Argentina has no real problems in signing an Additional Protocol, but has not done so in consideration of its bilateral relationship with Brazil. But Brazil will not sign a protocol for reasons having to do with its defense posture and officials in Brazil’s Ministry of Defense are currently opposed to it.
Must Brazil have an Additional Protocol in force to obtain ENR? Brazil will interpret the guideline language to mean no, and officials from many other supplier states agree that Brazil will not need an Additional Protocol to get ENR. A supplier could in principle agree to provide ENR to Argentina or Brazil without an Additional Protocol and require it to be in force before the ENR is transferred. In reality, however, it is unlikely that any current ENR technology holder will provide ENR to either Argentina or Brazil for an indefinite period.
Brazil made no formal commitment to have an Additional Protocol in agreeing to the final text of the new guidelines. But at the NSG meeting last month, when Brazil agreed to the final text of the guidelines, it also agreed to go forward with discussions toward the goal of eventually establishing the Additional Protocol as a condition of supply for exports of all nuclear items to non-nuclear weapons states.
Brazil’s rejection of the Additional Protocol is spearheaded by officials in its Ministry of Defense. That policy could in the future change and the language of the ENR guidelines was created to give Brazil and Argentina space to sign and implement an Additional Protocol at a later date.
The NSG’s participating governments know that the language concerning the Additional Protocol is vague. But they agreed to it in order to get a consensus on the whole package of conditions and criteria contained in the new guidelines. The main difference between the “clean text” and the final new guidelines is that the former obligated ENR recipients to have an Additional Protocol and that the latter stipulate that suppliers should themselves require it.
India and NSG
The requirement in the new guidelines that ENR recipients must be NPT parties provoked claims by the Indian media that the NSG thereby defaulted on its pledge to permit India—not a party to the NPT—the “full” nuclear cooperation that the NSG accorded when it exempted India from trade restrictions in September 2008.
That version of events is wrong. The NSG’s 2008 exemption decision for India spelled out that India’s access to nuclear commerce from NSG participating governments would be subject to the terms of paragraphs 6 and 7 covering ENR. And India was informed at that time that the NSG intended to revise those paragraphs to further restrict access. The NSG’s exemption decision for India states: “Participating governments may transfer trigger list items and/or related technology to India…provided that transfers of sensitive exports remain subject to paragraphs 6 and 7 of the guidelines.”
The NSG awarded India an exemption from its trade sanctions at the request of the United States and other important supplier states, principally France and Russia. The United States in 2005 initiated the process leading to the NSG exemption when the Bush administration and India jointly agreed to negotiate a bilateral nuclear cooperation agreement.
After the NSG agreed to the new ENR guidelines, the U.S. Department of State in a statement on June 23 reiterated that it is committed to “full civilian nuclear cooperation” with India. But that doesn’t imply that the United States will provide India sensitive technology. In November 2005, then-Undersecretaries of State Nicholas Burns and Robert Joseph told the U.S. Senate Foreign Relations Committee that “full” nuclear cooperation with India did not imply the United States had committed to supply ENR. “We do not intend to provide enrichment or reprocessing technology to India,” they said.
Russia’s foreign ministry also issued a statement on the new ENR guidelines, similar to that released by the U.S. State Department, likewise underscoring that the ENR language “does not affect in any way the [NSG] decision to unfreeze peaceful nuclear cooperation with India.” Russia’s historical reluctance to export its centrifuge enrichment and reprocessing know-how suggests Moscow will not provide ENR to India. French officials prior to the conclusion of the ENR negotiations had also made clear that French industry would not transfer ENR technology to India. Thus, the United States, Russia, and France can say that the new ENR guidelines do not change their planned nuclear cooperation with India.
Under the new guidelines, India is currently barred from access to ENR from NSG members also because Indian entities are “the object of active NSG…denial notifications from more than one NSG participating government” concerning so-called “dual-use” items that could be used for either nuclear or non-nuclear purposes. Under NSG practice, the term of an “active” denial notification is two years. In addition, India would be disqualified because it doesn’t have a comprehensive safeguards agreement with the IAEA and also perhaps because its Additional Protocol is not based on the “model” protocol, as called for by the guidelines.
Last November, the United States announced that it would in principle favor having the NSG go beyond its exemption for India from trade restrictions, and welcome India as a member of the NSG. That provoked objections from a number of NSG participating governments concerned that, once India were a full member of the group, it would seek to block efforts to tighten the rules, including on ENR. Over Indian objections, many NSG participating governments were not prepared to delete or qualify the NPT requirement in the ENR guidelines. Some NSG participating governments felt strongly that, during the three years since India obtained the NSG exemption, it has so far insufficiently cooperated in implementing nuclear cooperation with nuclear suppliers.
Under current NSG practice, were India to become a member of the NSG, it would have to write the NSG guidelines—including the onerous NPT requirement for ENR transfers—into Indian law. Were India granted NSG membership, it could in the future block consensus required to take NSG decisions, but it could not on its own undo the terms of trade for ENR. An India that is a member of the NSG would not be eligible to obtain ENR.
During the NSG meeting last month, the United States launched a discussion of possible future criteria for Indian membership in the NSG. But many other NSG participating governments remain cautious and will not move forward on this unless India presents a credible argument for membership. Under President Obama it is not expected that the United States will advocate a fast-track membership for India and a few senior administration officials are skeptical that India will be accepted as a member, regardless of India’s strong desire to obtain from the group what would amount to a next-best validation of its nuclear-armed status, given that amending the NPT to include India as a nuclear weapons state is virtually impossible.
Focus on Future Suppliers
The new ENR guidelines represent a compromise. Compared to the guidelines hitherto in place, the new ones go much further than the requirements of the NPT. That will exacerbate the discourse between nuclear “haves” and “have nots” in Vienna, Geneva, and New York.
But from its inception, the NSG has not drawn its legitimacy from the NPT. The NSG was created because nuclear supplier states, in the shadow of India’s nuclear test in 1974, believed that the NPT’s provisions did not provide sufficient assurance that nuclear technology, material, and equipment would not be shared with parties seeking to develop nuclear weapons.
The nuclear smugglers who prompted Bush’s concern about sensitive nuclear trade back in 2004 were selling technology that had been stolen three decades ago by Pakistan—a country outside both the NPT and NSG—from established uranium enrichment programs in the Netherlands and Germany. These countries themselves did not export their centrifuge enrichment know-how. In practice, since the NSG guidelines went into use in 1978, countries in the group have not willingly transferred ENR technology to others with very few exceptions. Most exceptions that were made were for transfers to states already possessing such technology.
The developing world may therefore suspect that new, tighter NSG trade rules are aimed at budding “nuclear newcomers.” In fact, established supplier states are concerned that as more countries generate more nuclear electricity, the more likely it will be that sensitive fuel technology will spread, including into the hands of those who want to use it to make nuclear weapons. The success of terrorists in attacking targets in the United States on 9/11 underscored that non-state actors could become customers for nuclear weapons-related know-how.
Technologies for enrichment and reprocessing have been with us since World War II. In the coming years, some “newcomers” may on their own acquire them. The new guidelines will help these future technology holders define what “restraint” means in decisions on whether to share sensitive know-how. In parallel with the guidelines, the NSG will conduct outreach with emerging suppliers outside the group to help integrate their nuclear programs into the global nuclear export control regime.
