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House Panel Approves Bill to Increase Nuclear Trade Deal Oversight

By Martin Matishak

Global Security Newswire

(Apr. 15) -Then-U.S. President Bush, left, and Indian Prime Minister Manmohan Singh shake hands on March 2, 2006, the day they signed a bilateral civil nuclear trade agreement. A U.S. House of Representatives panel on Thursday overwhelmingly endorsed a bill to strengthen congressional oversight of future similar deals (Raveendran/Getty Images). (Apr. 15) -Then-U.S. President Bush, left, and Indian Prime Minister Manmohan Singh shake hands on March 2, 2006, the day they signed a bilateral civil nuclear trade agreement. A U.S. House of Representatives panel on Thursday overwhelmingly endorsed a bill to strengthen congressional oversight of future similar deals (Raveendran/Getty Images).

WASHINGTON -- The U.S. House Foreign Affairs Committee on Thursday overwhelmingly approved legislation intended to augment congressional oversight of future civil nuclear trade agreements (see GSN, March 25).

With some members absent, the panel voted 34-0 to amend Section 123 of the Atomic Energy Act to include a host of new conditions before a nuclear cooperation deal with a foreign nation can go into effect.

"It's important that Congress act now to put these new protections in place so that cooperation between the U.S. and other countries to promote peaceful nuclear activities can grow without fear that it will be use to undermine our national security and that of the world as a whole," committee Chairwoman Ileana Ros-Lehtinen (R-Fla.), who sponsored the legislation, said in her opening statement.

So-called "123 agreements" allow other nations to purchase U.S. nuclear materials and technology for their civil power programs. Washington has inked such deals with more than two dozen nations around the world, including Australia, Canada, China, India and Russia.

The pacts are submitted to Congress but can enter into force if lawmakers take no action within 90 days of continuous legislative session.

Recent interest by Middle Eastern countries in developing civil nuclear sectors has stirred proliferation concerns about 123 agreements on Capitol Hill about, especially in light of Iran's alleged effort to gear its atomic energy activities toward building a bomb.

"The global expansion of nuclear power really has complicated the task of making sure that, in the end, we don't increase the number of nuclear weapons states," Representative Edward Royce (R-Calif.), who chairs the panel's Terrorism, Nonproliferation and Trade Subcommittee, said during the committee's first markup session of the new Congress. "The central problem is that it can be only a sprint from a civilian to a military nuclear program; it's certainly not a marathon anymore."

Recently lawmakers from both parties, including Royce, have suggested changing the 1954 law so that atomic trade deals could be implemented only after receiving floor-vote approval from both houses of Congress. The newly minted legislation considered on Thursday calls for an up or down vote by both the House and the Senate on any proposal that does not include a laundry list of nonproliferation measures.

Congress also has called for the White House to persuade foreign nations to give up potential nuclear-weapon activities, namely enriching uranium or reprocessing plutonium, if they want U.S. assistance with civil nuclear power. The Obama administration has called that type of commitment to forgo nuclear fuel-cycle operations the "gold standard" for such agreements.

Last year the White House told lawmakers that while the United Arab Emirates made such a pledge in its 2009 trade agreement with the United States, other potential partners such as Jordan and Vietnam might not consent to a pact with the same provisions.

On Thursday, lawmakers indicated that interagency debate continues in Washington over whether a diplomatic effort should be made to seek the gold standard in every new trade deal.

"This continuing split over the gold standard is one reason we're considering a bill today," said ranking Democrat Howard Berman (Calif.). "I urge the president to support a global application of that standard."

Royce said that while the Obama administration continues to debates its policy, the new measure is "an important congressional marker."

Under the amended law, the approval process for atomic agreements would remain the same so long as the pacts meet a number of conditions, including that the foreign nation be in compliance with all United Nations conventions and U.N. Security Council resolutions designed to prevent the proliferation of weapons of mass destruction.

The cooperating country must also demonstrate it is not a "destination of diversion concern" under the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010; is a member state to the international nonproliferation pacts on nuclear, chemical and biological weapons; and has established an effective export control system that would halt the spread of good and materials to illicit nuclear weapons programs, according to the text of the legislation.

In addition, the recipient state must agree to forgo manufacturing nuclear fuel, either by enriching uranium or reprocessing spent plutonium, unless it already possessed that capacity in place at the time it signs a pact.

The measure calls for terminating U.S. assistance to any country that withdraws from the Nuclear Nonproliferation Treaty and prohibits aid to any nation actively engaged in proliferation activities.

The committee also adopted two amendments offered by Representative Brad Sherman (D-Calif.).

The first requires any country with which the United States is considering a nuclear cooperative agreement to put into effect laws and regulations on civil liability protections that would allow U.S. companies to compete for reactor sales.

The California lawmaker noted that last September the Indian parliament passed the Civil Liability for Nuclear Damage Bill, which prevented U.S. companies from bidding on new reactors. The law's passage was required for implementation of the 2008 nuclear cooperation pact with the United States. The measure limits nuclear reactor operator liability following an accident to roughly $320 million and allows lawsuits against suppliers of nuclear materials, services and technology -- which conflicts with the international norm.

The clause could leave U.S. nuclear suppliers vulnerable to large liability payouts in the event of an accident at an Indian atomic site that features their products. Meanwhile, state-operated energy companies such as Areva in France and Rosatom in Russia would not need liability insurance because they could "use the pockets of the central government to finance any liability consequences," Berman asserted.

The protections would be enacted "preferably before the agreement goes into force but in no case less than one year afterward," according to Sherman, the top Democrat on the panel's Terrorism, Nonproliferation and Trade Subcommittee.

The second amendment, which Sherman dubbed a "sense of Congress," is aimed at persuading other nuclear exporter countries to set comparable nonproliferation standards in their cooperative atomic agreements with recipient nations.

Ros-Lehtinen noted that most suppliers do not have similar standards and, as a result, "more and more countries have greater access to ingredients for a nuclear weapons program."

A committee spokesman did not respond to a request for details on when the measure would be scheduled for a vote by the full House.

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