Overcoming
International
Trade and
Nuclear
Liability
Obstacles
By Elina Teplinsky, Pillsbury Winthrop
Shaw Pittman LLP, Sanjay Mullick,
Pillsbury Winthrop Shaw Pittman LLP
and Sanjeev Sachdeva, Luthra & Luthra,
India.
Elina Teplinsky
Elina Teplinsky is a senior associate
in Pillsbury’s Washington, D.C. office.
Her practice focuses on international
nuclear energy matters, including
advising U.S. and foreign clients on a
full spectrum of issues related to nuclear
program development, nuclear cross-
border transactions and benchmarking
efforts, nuclear project financing and
investment and the procurement of
nuclear equipment, fuel and services.
Her areas of expertise include nuclear
export controls, bilateral nuclear
cooperation agreements and nuclear
liability. She regularly secures export
authorizations on behalf of companies
seeking to export of sensitive nuclear
technology and equipment and has
developed nuclear export compliance
programs for many major U.S. and
foreign nuclear utilities, vendors,
engineering and consulting firms.
She is a graduate of the Georgetown
School of Foreign Service and Fordham
University Law School.
Responses to questions by Newal
Agnihotri, Editor of Nuclear Plant
Journal, with respect to the laws and
regulations governing and affecting the
supply of equipment and services to the
Indian nuclear power program.
India, a country with rapidly increas-
ing electricity demand, has an ambitious
plan for the expansion of nuclear power.
The nation, which until 2008 was isolated
from international nuclear trade because
it is not a party to the Nuclear Non-Pro-
liferation Treaty (NPT), has 20 operat-
ing reactors (with another reactor at the
Kudankulam site in Tamil Nadu about
to be commissioned) six reactors under
construction, 18 new units planned and
dozens more proposed. Interest in taking
advantage of opportunities in the Indian
nuclear market, however, is accompanied
by a need to ensure that companies can
comply with the regulatory requirements
governing U.S.-India trade. Further, U.S.
companies have expressed concerns over
potential liability for third party nuclear
damage under India’s newly enacted nu-
clear liability legislation.
1.
What are the laws and regulations in
the United States to export to India?
In 2008, the United States and India
signed an agreement for nuclear coopera-
tion pursuant to section 123 of the Atom-
ic Energy Act of 1954, as amended (“123
Agreement”). The United States was
able to conclude this historic agreement
after the passage of the Henry J. Hyde
United States-India Peaceful Atomic En-
ergy Cooperation Act of 2006 (“Hyde
Act”), which exempted nuclear coopera-
tion with India from some of the Atomic
Energy Act’s requirements, such as the
requirement that the cooperating party be
a member of the NPT.
The 123 Agreement serves as a legal
mechanism for U.S. companies to export
nuclear fuel, nuclear reactors and key
reactor components to India. It is also a
key criterion in the U.S. Government’s
review of U.S. companies’ applications
for authorization to export nuclear
technology and technical services to
India. U.S. nuclear exports to India are
subject to three key sets of export control
regulations: U.S. Department of Energy’s
(DOE’s) foreign assistance regulations
at 10 C.F.R. Part 810 (“Part 810”), U.S.
Nuclear
Regulatory
Commission’s
(NRC’s)
nuclear
import/export
regulations at 10 C.F.R. Part 110 (“Part
110”) and the Export Administration
Regulations (EAR) administered by the
U.S. Department of Commerce’s Bureau
of Industry and Security (BIS).
Under the DOE’s regulations at
Part 810, U.S. companies are required
to obtain a specific authorization (i.e.
license) from the DOE before they can
transfer technology related to the “nuclear
island” of a reactor to Indian companies.
Such specific authorizations are subject
to a rigorous DOE review due to certain
provisions of the Hyde Act, which
require the Secretary of Energy to place
additional requirements on technology
transfers to India, such as approval of all
end users, including subcontractors, and
a review of U.S. company non-disclosure
and Intellectual Property (IP) rights
clauses.
The NRC regulations at Part 110
similarly require U.S. companies to
obtain licenses prior to exporting reactors
and nuclear steam supply system (NSSS)
equipment to India. Finally, under the
EAR, exports of certain balance of plant
components and related technology are
subject to BIS licensing requirements,
though in practice the export of certain
such items on the Commerce Control List
may not actually require a license, if for
India's civil nuclear program. BIS licenses
are required for exports of such items to
entities on the "Entity List", including the
Department of Atomic Energy entities,
the Bhabha Atomic Research Center, the
Indira Gandhi Atomic Research Center,
Indian Rare Earths, and nuclear reactors
not under International Atomic Energy
Agency (IAEA) safeguards.
2.
Have any export reforms been made
by the U.S. government in the past two
years, in regard to export to India?
In early 2011, the U.S. Government
removed certain Indian entities from the
Entity List to signal a general intent to
liberalize strategic trade between the
U.S. and India. Also, with respect to
nuclear trade specifically, more recently
the U.S. Government has taken steps
to create a path for U.S. companies to
apply for and obtain required export
licenses for exports of technology and
components to the Indian civil nuclear
power program. For example, the DOE
has worked with its Indian counterparts
to establish the necessary contractual
and compliance framework for U.S. and
Indian companies in order to enable it to
issue Part 810 specific authorizations for
U.S. technology transfers to India, within
the requirements of the Hyde Act.
26
NuclearPlantJournal.com Nuclear Plant Journal, September-October 2013
