Question8. Is it true that Japan is insisting on a special "regional" safeguards arrangement with the IAEA in which most of the responsibility for accounting and verification would fall on Japanese rather than IAEA personnel? Are there any misgivings within the IAEA about granting Japan this kind of special arrangement? Can you tell us more about the specifics of the safeguards that currently apply in Japan? Answer. Japan has completed an NPT safeguards agreement with the IAEA, and we are not aware of any regional safeguards arrangement that Japan is pursuing. Japan, however, wishes to ensure that other NNWS NPT parties are subject to similar safeguards, and supports the negotiation between IAEA and EURATOM for the application of Agency safeguard to the EC. Question 7. Do Japanese concerns own some part of the ship or shipping company currently engaged in transporting spent, U.S. fuel from Japan to Windscale and La Hague? Answer. We understand that the Japanese utilities own a share of the ships used to transport the spent fuel to APPENDIX 3 LETTERS TO HON. CLEMENT J. ZABLOCKI FROM NELSON F. SIEVERING, JR., DEPUTY ASSISTANT SECRETARY FOR INTERNATIONAL PROGRAMS, DEPARTMENT OF ENERGY In accordance with Section 131 of the Atomic Energy Act of 1954, as amended, 42USC 2160, notice is hereby given of a proposed "subsequent arrangement" under the Agreement for Cooperation between the Government of the United States of America and the European Atomic Energy Community, The subsequent arrangement to be carried out under the above The Windscale Works had processed power reactor fuel assemblies prior to the date of enactment of the Nuclear Non-Proliferation Act of 1978. It has been determined that retransfer and reprocessing of the fuel assemblies referred to above will not be inimical to the common defense and security (Section 131a. (1) of the Act). In connection with Section 131b. (3) of the Act, it is to be noted that the United Kingdcm is a nuclear weapons state. Also, with respect to any use or retransfer of separated plutonium or recovered uranium from the Windscale plant, prior U.S. approval will be required as described in the attachment to this letter. Moreover, the United States has received (120) Honorable Clement J. Zablocki assurances from the United Kingdom that physical security arrangements at the Windscale plant meet standards set by the IAEA. Taking these factors into account, and the factors listed in the analysis, we do not believe that the proposed retransfer will result in a significant increase in the risk of proliferation. This letter of transmittal together with the attached analysis constitutes the report to the Committee on International Relations of the House of Representatives and the Committee on Foreign Relations of the Senate required by Section 131b. (3) of the Act. Sincerely, Enclosure 1. Analysis of Request Nelson F. Sievering/Jr. Deputy Assistant Secretary for Analysis of Request liumber RTD/EU (JA)-20 for Retransfer for Reprocessing Obtained by transferor from USDOE under Contract No. E(49-14)UES/JA/3 Fukushima No. 1 Power Nuclear Station in the province of Fukushima, Proposed Location British Nuclear Fuels Ltd., United Kingdom (EURATOM) Purpose Chemical reprocessing and recovery of uranium and plutonium contained in the irradiated fuels. The disposition of the produced plutonium would be subject to the prior agreement of the United States and the uranium would either be returned as UO, to Japan or sent to the United States in the form of UF for enrichment at a DOE facility. Schedule The proposed retransfer would take place on or about early September 1978. The actual reprocessing will not take place for about 10 years. Consideration It is the current policy of the United States only to approve transfers of this kind on a case by case basis taking into account (a) the same criteria that are applicable to a direct export from the U.S. to the receiving country or group of countries (b) safeguards implementation, (c) the non-proliferation implications of the arrangement, (d) the relationship of the transfer to the energy needs of the cooperating shipping country or countries, and (e) whether there is a physical need for the transfer. Discussion This request falls under the definition of a "subsequent arrangement" in section 131a. (2)B of the Atomic Energy Act of 1954, as amended (Act) and requires the concurrence of the State Department and consultation by DOE with ACDA, NRC, and DOD. ACDA may, if it deems such action necessary, prepare a Nuclear Proliferation Assessment Statement, but has not done so in this case. Interagency procedures also provide for notice to and require comments by the Department of Commerce. The State Department has concurred in approval of this request. ACDA, DOD, and Commerce have been consulted and have raised no objection. Chairman Hendrie and Commissioner Kennedy of NRC have no objections to the proposed retransfer provided it is subject to the conditions contained in this analysis. NRC Commissioners Gilinsky and Bradford have advised against approval since there is a possibility that the reracking effort at the facility will meet the storage needs for another year. Commissioner Ahearne has abstained. Notice of the proposed subsequent arrangement must be given at least 15 days in advance in the Federal Register, together with the written determination of the Secretary of Energy or his delegate that this arrangement will not be inimical to the common defense and security. This determination has been made. The notice for the Federal Register is being forwarded for publication. Under section 131b.(1) of the Act, this retransfer cannot be approved until the Committee on International Relations of the House and the Committee on Foreign Relations of the Senate have been provided with a report containing the reasons for entering into the arrangement and a period of 15 days of continuous session has elapsed; provided that the Secretary of DOE (by delegation from the President under E.0. 12058) can declare an emergency due to unforeseen circumstances and then the period shall be 15 calendar days. Section 131b. (2) of the Act provides that: "(2) the Secretary of Energy may not enter into any |