Draft: Legal Infrastructure for Operations in Foreign Economic Activities. Restrictions in Trade with Products and Materials of Nuclear Industry.

Mr. Yaroslav Voytko
Summary of the speech by the representative
on behalf of the Ministry of Foreign Economic Relations
presented to the Conference on Nuclear Trade and Cooperation
(9 - 10 November, Washington DC)

Dear ladies and gentlemen,

It is great honor for me to represent at today's conference the Ministry of Foreign Economic Relations of Ukraine. Using this opportunity I am ready to meet those interested not only in the issues related to the trade of nuclear materials, but also in development of Ukraine’s foreign trade on the whole and related aspects of investment activities.

Coming back to the direct topic of the speech, first of all, I would like to underline that Ukraine is possessed of sufficient amounts of nuclear resources (in particular those of natural uranium, zirconium and hafnium) and a scientific and technical potential in research and development as well as organization of production of nuclear materials. However, development of international cooperation in this area is restricted by lack of a proper agreement basis.

As a state with a developed nuclear potential, Ukraine has been consistent in implementing all necessary measures on the basis of the world’s valid regulations and requirements in relation to the international transfer of nuclear materials, equipment and technologies, as well as required action aimed at accession to international treaties in the nuclear area. I would like to remind you the unprecedented fact in the world history that our state has voluntarily got rid of the nuclear weapons inherited from the Soviet Union, and it steadily adheres to these commitments. It is still more important because two more nuclear states have appeared recently on the world map, whereas Ukraine does continue to demonstrate its good will, for example, in the beginning of 1998, it refused to participate in a multilateral project of cooperation with Iran in the field of nuclear technologies.

Implementation of foreign economic operations concerning products and materials of nuclear industry is regulated by legislation and standards such as:

• The Law "On the Foreign Economic Activity". Pursuing to Article 20 of this law, export and import of nuclear materials (materials in the form of fuel assemblies included), technologies, equipment, plants, special non-nuclear materials and related services, ionizing radiation sources as well as other sorts of products, technologies and services that are used in making weapons and developing military technologies or constitute a state secret, shall be performed exclusively by the subjects of foreign economic activities that shall be authorized by Ukraine.
• Decree by the President of Ukraine # 117/98 of 13 February, 1998 that approved the Provisions for the state export control in Ukraine. It was done with the aim of meeting the international obligations of Ukraine concerning nonproliferation of the weapons of mass destruction and means for its delivery, improvement of the state control over implementation of international transfers of weapons, military and special technologies, certain sorts of raw materials, materials, equipment and technologies that can be used for their creation, as well as to provide for Ukraine’s national security. According to Item 12 of the Provisions, the state export control shall be imposed, in particular, on the products related to nuclear activities and capable of being used to create nuclear weapons.
• Regulation of the Cabinet of the Ministers of Ukraine #1005 of 22 August, 1996 with the list of products that shall be subject to export control.
• Regulation of the Cabinet of the Ministers of Ukraine #838 of 8 June 1998 that approves the Provisions for the order of providing subjects of foreign economic activities with authorities on the right to perform export and import of products for military purposes that are of state secret.
• Regulation of the Cabinet of the Ministries of Ukraine #302 of 12 March, 1996 that approves the Provisions for the order of controlling export and import and transit of products that are related to nuclear activities and can be used in creation of nuclear weapons.

The state export control shall be binding for the products that are related to nuclear activities - nuclear materials, technologies, equipment, plants, special non-nuclear materials, radioactive sources of ionizing radiation (including radioactive wastes) and isotope products, as well as dual-purpose materials and technologies that can be used in activities relating to creation of nuclear weapons, nuclear explosive devices, or in activities relating to the nuclear fuel cycle. There shall also be under control dual-purpose products such as equipment, materials and technologies that can be used in nuclear activities.

The state control of export, import and transit of products related to nuclear activities shall be exerted by specially authorized bodies responsible for issues relating to the state export control - The State Export Control Policy Commission and The State Export Control Department - after consideration of a set of documents from an applicant.

Applications and documents for granting authorities on trade with nuclear materials shall be considered by the State Export Control Department with involvement of the Ministry of the Industrial Policy, Ministry of Economy, Ministry of Foreign Economic Relations, Security Service of Ukraine, Ministry of Defense and, if need arises, of other ministries and departments.

The term of consideration by the State Export Control Department of applications for granting authorities on export/import of products related to nuclear activities shall be up to 45 days.

Based on submitted documents, the State Export Control Department shall twice a year (if needed) draft a corresponding regulation of the Cabinet of the Ministries of Ukraine to set the names of subjects of foreign economic activities and specific products being given authorization. This document shall be submitted for its consideration to the State Export Control Policy Commission.

The Cabinet of the Ministers shall make its decisions concerning granting the authority after agreement of the draft regulation with the corresponding committees of Verkhovna Rada.

Export/import (bringing in) to/from the territory of Ukraine of products relating to nuclear activities shall be performed in accordance with the Provisions for the order of control of export, import and transit of products relating to nuclear activities and capable of being used in creation of nuclear weapons. The said materials include two groups of products such as:

1. nuclear materials, technologies, equipment, special non-nuclear materials, radioactive radiation sources (including radioactive wastes) and isotope products that are of most importance in the nuclear industry;
2. dual-purpose equipment, materials and technologies relating to nuclear activities.

Import (bringing in) to the territory of Ukraine of products set in Item 1, specifically ores and concentrates of uranium and thorium, chemical radioactive elements and isotopes, radioactive materials, isotopes and their compounds, tritium and its mixtures, shall be exerted after permissions from the State Export Control Policy Commission.

Import of products other than said above, included in the List of nuclear materials, technologies, plants, special non-nuclear materials, as well as dual-purpose equipment, materials and technologies, related to nuclear activities, shall be exerted without permissions from the State Export Control Commission.

To be granted permission on import of nuclear materials, the importer shall send to the State Export Control Commission a set of corresponding documents containing the complete information in relation of the import of nuclear materials, including conclusions from the Ministry for Environmental Protection and Nuclear Safety of Ukraine, Sanitary and Epidemics Service, etc.

The term of consideration and making decision concerning the documents submitted to the State Export Control Commission shall be 30 days from the date of submitting the required set of documents.

In case of granting permission on nuclear export/import, the Technical Review Committee within the Cabinet of Ministers of Ukraine shall communicate it to the Ministry for Environmental Protection and Nuclear Safety, while the importing organization must inform the Ministry of the receipt of the specified products.

More detailed information concerning the said issues is available in the texts of the mentioned regulatory documents that can be received from the Trade and Economy Mission of the Embassy of Ukraine in the USA.

Now, let me say a couple of words about how the said legal and regulatory issues can be introduced into practice.

Ukraine aims at developing civilized relations in the nuclear industry with the world countries. As a European state, it pays primary attention to setting-up ties with countries from its region. For instance, one of the provisions in the Agreement on Partnership and Cooperation between Ukraine and the European Union (EU) relating to cooperation in the nuclear area, is Article 23 stating the possibility of trading with nuclear materials on the basis of a special agreement to be concluded between the European Agency for Nuclear Energy (Euroatom) and Ukraine.

The Government of Ukraine propose to award a special mandate to Euroatom on the development and concluding an agreement with our state on trade with nuclear materials. Signing of the said agreement will allow Ukraine’s civilized entering the international market of nuclear materials and receiving an opportunity to make business contacts with companies and organizations from the countries of the European Union. If a positive experience is gained in this area, it can be used in relations with the United States of America.

Ukraine, being a strategic U.S. partner, is ready for cooperation with U.S. colleagues in the area of nuclear energy. Relations in the sphere of trading with products and materials for the nuclear industry have large prospects, and our task is to focus the efforts on the very forms of cooperation that will be of noticeable material benefit for the two parties. The Ministry of Foreign Economic Relations, within its competence, will be contributing to this trade by providing on the state level proper conditions for activities of both Ukrainian and U.S. entities as well as other foreign investors.

Thank you for your attention.