US-Ukraine Conference on Nuclear Trade and Cooperation

Ladies and Gentlemen:

This will be a relatively brief series of remarks, because the activities of my office are less related to business issues and more related to nuclear non-proliferation and to establishing the diplomatic basis for proceeding with peaceful nuclear cooperation.

You see from the program that it refers to a so-called "123 Agreement for Cooperation." Let me just explain briefly where that phrase comes from.

In the period after World War II, US policy was to severely restrict access to any information on nuclear energy. In the early 1950s, however, the United States began to pursue the use of nuclear power to generate electricity. When it became apparent that nuclear energy was a viable option, not just for the United States, our policy on international nuclear cooperation took a dramatically different course.

In 1954, Congress, at the request of President Eisenhower, passed a new version of the Atomic Energy Act, the legislation that underpins our nuclear policy. At that time, the Atomic Energy Act was fundamentally revised to encourage cooperation with other countries in the peaceful uses of nuclear energy, including with respect to nuclear power.

This new version of the Atomic Energy Act envisioned a series of Agreements for Peaceful Nuclear Cooperation which would establish the framework of non-proliferation assurances and controls that would underlie nuclear cooperation.

It was section 123 of the Atomic Energy Act that set out the specific assurances and controls that the Executive Branch was instructed to obtain in every nuclear cooperation agreement.

As it exists today, section 123 requires the following major provisions:

Safeguards on the nuclear equipment and materials that we export. By the way, that particular part of section 123 does not refer to IAEA safeguards. That's because in 1954, there was no IAEA. The US had its own safeguards inspectors. We turned over that inspection role to the IAEA when the IAEA was founded in 1957.

In the ease of non-nuclear weapons states, our legislation requires the acceptance of IAEA safeguards over all peaceful nuclear activities in the recipient country. This is what we refer to as "full-scope safeguards."

>We require a guarantee that nuclear materials and equipment exported by us will be used only for peaceful purposes. The effect of this provision is to exclude all military uses of nuclear energy, including naval nuclear propulsion.

If the cooperating party detonates a nuclear explosive device or violates an IAEA safeguards agreement, we have the right to require the return of whatever we exported, plus the return of any special nuclear material that was produced through the use of what we exported.

We also have to have controls over the retransfer of US-supplied equipment and material to a third country, as well as controls over subsequent enrichment or reprocessing of US-supplied material.

Adequate physical security must be maintained. There are some other provisions I don't need to get into. The ones I named are the most important.

A nuclear cooperation agreement can be a very simple matter. Here, for example is the text of the US/Ukraine agreement. It is 19 pages long, double~spaced.

On the other hand, negotiations can sometimes prove difficult. The US/Japan agreement, because of numerous complexities, took about five years to negotiate and the result fills this book.

I mentioned that an agreement for cooperation establishes the framework of assurances and controls for nuclear commerce. It also does more than that. It also demonstrates that two countries share a common understanding with respect to nuclear non-proliferation.

Because for our part, we would not conclude a nuclear cooperation agreement unless we were sure that our proposed nuclear trading partner felt the same way that we do about non-proliferation issues.

The fact that we have a signed nuclear cooperation agreement is a demonstration of the fact that Ukraine and the United States share a common understanding on the importance of the Nuclear Nun-Proliferation Treaty, the role of the IAEA, and the importance of assuring that nuclear exports are not made to any country that would constitute a proliferation threat.

I might add that, although the agreement is signed, it has not yet entered into force. For our part, the agreement has passed the requisite period of Congressional review and we are ready to bring it into force. Once the Ukraine Government advises us that it has completed its own internal review procedures, we will exchange the diplomatic notes that will bring the agreement into force.

So far, I have focused solely on the diplomatic aspects of the agreement. Not on the trade or business aspects. As you may know, the agreement makes it possible for us legally to export nuclear reactors, nuclear material and major nuclear components to Ukraine. That may or may not prove to be an important opportunity in the near future.

However, there may be many more opportunities for joint ventures or other business arrangements opened up as a result of this conference. The importance of the agreement is simply this: If there had not been an agreement, it might have meant that we did not share a common understanding on nuclear non-proliferation issues, in which case, this meeting would not have been possible.

I do want to say something specific about one potential area of cooperation. One which might be pursued between Ukraine and third countries. And that has to do with nuclear waste management.

I noted from the agenda that this afternoon's session will include a discussion of dry cask spent fuel storage.

Dry cask spent fuel storage is a useful and successful way to store spent fuel in the near to medium term. But at some point, nuclear waste will have to go into some form of geologic disposal facility. This is why the US Secretary of Energy announced at the IAEA General Conference~ that the US would host an international conference in the fall of 1999 on geologic disposal.

In my discussions with nuclear power officials throughout the world, I have found that one of their most serious problems is locating a permanent storage facility. Yet, interestingly, there has been very little joint effort to that end.

Perhaps that is because no one believes that a third country would be willing to host a nuclear waste disposal facility, or no one believes that a country with such a facility would entertain taking waste from another country's nuclear program. But I'm not so sure about that.

Give the number of nuclear programs in central and eastern Europe, all of whom will face increasing public pressure on their nuclear waste disposal efforts, I think that a joint exploration of geologic disposal might ultimately prove valuable. Both from the point of view of public perception, and because it might lead to a joint facility.

With that, let me stop here, and wish you every success with your conference and the business possibilities that may result from your meetings here.