DECLASSIFIF D Authority JjPEY 2b 1'to D STA TLS AIL CO TROL AXD D15AR n E T AGE CT c C' - 't C' ' o c lS s '_o 4 _ _ 1 o __ __ c _ c - - _c3 A_ _ -- 'EellE' ' e- SECRET ' December 1 1972 lJ-1'P ZO' -'rfJ oJ I Iif f7 MEMORANDUM TO Mr Dwight Porter FROM ACDA GC - Charles N Van Doren SUBJECT ilL Background Materials on US Policy Toward a ROC Reprocessing Plant Attached for your consideration is a lO-page think-piece together with background materials on US policy toward a ROC reprocessing plant which is the subject to be discussed at 7 cember 4 at 9 30 a m l '0 f' CJ - l Attachment As stated i i o '- t' Celo - ' -4 '8SFB' I lw 't3B JAS BIr r 'J'- '-- ' 1 r ooo o o oo _ oo _ __ oo C l GBP ' i '-' i ' C I -- E - r t L ' 7 AV C J ' IT ' J' - - ' - a YEP It J fCGBP i Ii fJ - L ' _ _ _ __ o December 3l 19Q2 December 1 1972 DECLASSIFIE D Authority f b 11 0 SE I i 'l' SUGGESTED POLICY ON ROC REPROCESSING PLANT The ROC is seeking foreign help in building a chemical reprocessing plant in Taiwan The need for clarification of U s policy with respect to such a plant is urgent in view of the following 1 A German firm is seeking and appears to have a letter of intent with respect to a contract to furnish essential parts of such a plant plus engineering services to help construct it I understand that a U s firm has expressed interest in supplying some of the equipment to the Germans for this purpose The Germans have approached both the Canadians and the USG seeking concurrence in their view that a this transaction is not covered by the Zangger Committee consensus on requiring lAEA SiJ ' ' ' '' ' 'o t - chemical reprocessing plant and b the NPT safeguards problem will be taken care of through the right of pursuit of u s and Canadian nuclear materials See Tabs A and B The preliminary reaction of one Canadian official appears to have indicated concern 2 A Belgian firm is apparently anxious to compete with the German offer In this connection a U S citizen formerly employed by AEC has asked permission under Par t 110 of 10 CFR to participate in this activity by furnishing unclassified data with respect to the design of such a plant This request is scheduled to come before the Atomic Energy Commission next week 3 The French and British appear to have decided not to offer assistance See Tab A para 5 a British official confirmed this on November 30 but added that if the project is not successfully squelched the British lIould not want to lose the business For further explanation see Tab D para 1 For further explanation see Tab D para 5 SE9YCP SEeM' ' -2- 4 It is entirely possible that the ROC will seek assistance from a U S firm or that u s firms might be interested in providing chemical reprocessing and fuel fabrication services for the Chinese reactors 5 Chinese atomic energy officials are coming to Washington the first week of December to discuss fuel supply for their proposed third and fourth nuclear power reactors This will present an ideal opportunity to discuss the problem with them Background ROC is a party to the NPT and is thus obligated to place all its peaceful nuclear activities under IAEA safeguards Its efforts to achieve an NPT safeguards agreement o _-- - c have been totally frustrated S1nc o 1 L o UIU O c 'uc clear that the Board of Governors of the IAEA would not approve any further agreements between the Agency and ROC This also means that any further trilateral safeguards agreements lith IAEA will be impossible to obtain as well as any further IAEA-ROC agreements on safeguards Nuclear facilities in existence or currently planned for ROC are indicated at Tab C This does not include some small research reactors supplied by the U S or an additional research reactor that is scheduled to be provided by the U S The IAEA's authority to maintain trilateral safeguards on U S -supplied material stems from DECLASSIFI D AUlhority iN 1 '1 1 La BE9RB'f U' the tous lact that r 5 Mat dMCjJ GEeRS' ' -3our trilateral agreement approved before the UN ouster of ROC covered the then existing bilateral agreement or a new superseding agreement for cooperation as amended Thus when we amended our bilateral early in 1972 it automatically became covered by the trilateral safeguards agreement The lAEA staff has been discreetly carrying out its safeguards responsibility under the trilateral having made an inspection in October 1972 but it is not clear how long it can continue to do so It is quite clear that if the PRC joins the lAEA it will insist upon this activity bain- b tV1 'r'C In t llib C 'IIt ui lJ C l i e9Uards rights under our bilateral agreement would be automatically reinstated Some parties might raise the question whether we could continue our nuclear cooperation with the ROC in these circumstances without violating our NPT obligation not to furnish nuclear materials or equipment to a non-nuclear weapon state unless the nuclear materials involved will be subject to safeguards under an agreement with the lAEA However our internal position has been that since at the time we entered into the bilateral agreement this condition was satisfied and since ROC has done everything possible -orIAS 7228 p 2 TIAS 7364 SBSFtB'f aiel'S _ _ c B J EC I ASS IFI D NIJJ 1tJi'LO --- ------ Authurity o ' JJW tf33QO 'WJPY'f OEC I ASS IFIF O Authurity foJJX1J 110 --------SECRI 'i -4to continue to meet it this would be a case of frustration of the purposes of the parties beyond thier control and that in these circumstances the best available alternative of - bilateral safeguards will satisfy our legal obligations _---- We may nevertheless expect charges of violation The situation with respect to the Canadian research reactor is even less favorable If IAEA safeguards terminated the Canadians would have no bilateral safeguards rights to fall back on And there would be the added difficulty that Canada no longer recognizes the ROC and presumably could not conclude a bil lte al agreement '1ith it There are indications that ROC will want a fifth and sixth power reactor While there are good chances that they would be U S -supplied the possibility cannot be excluded that one or more of these could be of the Canadian type whi h cou1' U UO' ' gu ' O 'U ' ium 0' which would produce approximately twice as much plutonium as a comparable sized U S -type reactor The plutonium produced in a reactor is unusable for nuclear weapons or other purposes until it is reprocessed Thus a chemical reprocessing plant would give the ROC the capability which it does not now have t on it own soil the most 7 U -' IlSiI ASSIAED Nw 'i3'f QO B _ 1I eni eR 3'1' rA- ' k Lk tii 't '- of k A t 04AU f-v- c L tt et 1 C t f - c # - CJv t 0 '- I -u J -f- I fl U-r l EC LASS 1 F l 1l Authurity tJ 1-'o l'to Il3 S SEGRi T - - ---- o 1i8 B -5- essential material for making nuclear weapons When coupled with the fact that there is no apparent economic justification for construction of such a plant at this time see Tab D section 3 questions could be raised as to their int e ntions For further background se SNIE -- Tab D o t A - r ' pos sible Outcomes 1 Reprocessing Plant Not Built in ROC at this Time This is clearly the most desirable outcome if the reprocess i ng needs of the power plants being constructed by the ROC can otherwise be taken care of when needed since a It lould make no economic sense for tho ROC SUe l a p J an until we LJ 1ntO t he L n sus have to and the lead time required to construct it is at most 5 years ROC's first reprocessing needs will be for 1 3 of the initial core of the first power reactor in 1978 another 1 3 of that core together with 1 3 of the initial core of the second power reactor in 1979 etc Such amounts would not justify a reprocessing plant Moreover the output could not contribute to the ROC nuclear power program in the absence of a fuel fabrication plant which ROC does not have d-L #-O- tJ - t iod b It would avoid an indigenous capability the essential ingredient of nuclear weapons lis well as international suspicions that might be Jrous by such a capability fc A' ' 'r c It would avoid the risk that if the PRC should 0- CIJi ' take over Taiwan it would acquire a Va able L_ tre chemical reprocessinq plant hich could substantially o augment its supply of pluton um t- The first four ROC power reactors will produce enough plutonium for over 50 nuclear weapons per year The plutonium would hO lever be inferior to the grade produced specifically for the PRC weapons program and plutonium supply does not seem to be the pacing factor in the PRe weapons program BESRBIJ1 D EC LASS IFI n Authority f firn2 tJrlP - ---- - - - Si CRi 'P DEC' NlSlFIED '# j'3 390 11 '3111 -6- The reprocessing needs of ROC could be taken care of by i reprocessing services in the U S or Europe if in U S we could combine this with fuel fabrication and we could store the PU in the US until needed The only question would be whether the transportation costs would be prohibitive or ii participation in a regional reprocessing pl nt located outside Taiwan which could meet Japanese and Korean needs as well and thus might be economically justifiable 2 Reprocessing Plant with Entire Throughput Subject to Safeguards This is the second best outcome but involves several problems T ' ' li vo 1 t l t AEA will cease to be able to apply its safeguards in ROC thus leaving the Canadian research reactor unsafeguarded and exacerbating the question of non-compliance with NPT safeguards requirements in ROC b The proliferation risks referred to in lIb above c The fact that even bilateral safeguards would cease if the PRcgained control of Taiwan and the PRC would acquire fr of charge not only the valuable plants but alsq Slza increments to its plutonium stockpile - Lt-d '- cc 1'- - c---t f -' 'A- 'Tr j 1d_ The problem of how this outcome c6uld ccomplishJa r j discussed in Tab F o I'A d 3 Reorocessinq Plant Safequarded onl NUclear aterials Involve to Extent US C This would be an unsatisfactory outcome since there would be no assurance that other materials including for example the irradiated fuel from the research reactor supplied by Canada which may become unsafeguarded therein without safeguards 'C''''D'C'm m ght not be processed Q f i DEC LASS IF IE O Au thurity Jjf J21 f 11 0 1'jv- o --tL- J clJ t I - A llt I t ZL-ll' J r l 1 1 - i t 9r ECm 'I' 4- 6 - o -r c r ucf - k i 't--7- Recommendations o 1 r-1 er J-J -w o J w p 7 1 1 U J ' -' Wh -w- 1 cJ dlt v t -L 11 - YV'j -' __ t' e -- 'J- c tR J J i eLt--T wf J4 J cII' ' 'r'U hA' - eN 'I4J' t n That we d1scuss this problem with the Chinese during their visit in the first week of December seeking to persuade them not to proceed at this time with the construction of a 0 l It I reprocessing plant in Taiwan We should stress our vie that it I i would be uneconomical be prepared to tell them about the I comparable study being done by GE on Japan and give them cost lJ- I figures showing that it would be cheaper for them to have such reprocessing and fuel fabrication done in the U S We might also wish to point out that this could avoid unfavorable e o ''''ation in other countries as to ROC r ' ' ' ' -a and avoid adding to the difficulty we may both face in answering charges of non-compliance with the safeguards article of the NPT We could say we would foresee difficulties in making the determination required by Article VIII F of our bilateral agreement that the safeguards provisions of that agreement could be effectively applied on such a plant If they say that their political isolation makes them wish to make their nuclear industry as independent as possible in the interest of reliability we can point out that our reliability as a reprocessor will be no less than as the supplier of the enriched U-235 needed for their reactors We might also mention the possibility of a regional chemical reprocessing plant in the Pacific See Tab E para A 3 SBQaa J V IJ EC LASS IFI D Authurity Jo li5 1 b l Lo BeRE'f -8- 2 That we point out to the Germans that we do not think it makes sense for the ROC to have a chemical reprocessing plant at this time are not inclined to help them to get one and have so advised them that the right of the IAEA to pursue the output from U S and Canadian reactors into the plant does not afford adequate safeguards protection since this right may well be lost with respect to the Canadian reactor if the IAEA should cease to be able to apply its safeguards in the ROC that under our trilateral agreement the right to safeguard such a reprocessing plant would only be while it is containing using fabricating or processing U S origin material that this could not provide the full safeguards covera2e of the plant that we would consider necessary to make f 1 the determination required under Article VIII F of our agreemen for cooperation with ROC that the only way in which we could make the trilateral agreement apply to the entire throughput of the plant would be if it incorporated equipment supplied by the U S and that in view of our conclusion that it would be unwise for the ROC to have such a plant at this time we do not expect to authorize the provision of such equipment We could point out the possible alternative of a German offer to reproc e ss the materials in European facilities If the Germans argue that the Zangger Committee consensus only applied EeRE'f 'a QJ ek _ nSM s eR5'P -9to entire reprocessing plants and not to the transfer of parts thereof or design information we should say that our position was not based on Zangger Committee considerations and that in any event we disagreed with them on this Zangger Committee point since it would involve ignoring the substantive effect of the transaction and would undermine the objective sought to be achieved in making the transfer of reprocessing plants trigger safeguards 3 That in line with the foregoing we do not authorize the U S firm to export equipment for incorporation in such a German-built plant In this connection we should make sure that the Department of Commerce is advised of the types of equipment that might be invol v ed and alert them to this decision 4 That we do not authorize the transmission by the U S citizen of unclassified information on chemical reprocessing in connection with the Belgian bid for this plant basing the decision on our conclusion that satisfactory safeguards arrangements could not be made and hence the objectives of 10 CFR Part 110 could not be met 5 That we promptly contact the Canadians British and Belgians to advise them of our position on this matter and to DECLASSIF t 't AuthoritYJ ty O ---- - - - - 09Beft l'ft I8i' A18n o q o _ _ '1 '1 4 5lEEURIlE'i' -10urge them to act consistently therewith We should also seek verification of the report that the French are not planning to offer assistance 6 That we prepare contingency plans for safeguarding the Canadian research reactor should the lAEA cease to be able to do so 7 That we seek to establish in the Zangger Committee a consultative mechanism to consider unique problems of this sort when they arise Charles N Van Doren ACDA GC December 1 1972 J ECJ ASSIFI O AuthurilyJ tJ52 1bl1 O ------ - 'I t m - IIJAT _ % 15 - c% ' Jr oo 0 TAB A ii k J l ' i r P I ct o - - o Ii 3 F ' Fl - - l 'J 1 It ' I I IHb a ill _ 1 t Department of Sh te o 'i 9ECRET PAGE I1lI IAEA V '8229 726 221016Z - I_ ACTION 10-13 iNFO OCT-01 NSAE-0Q PRS-01 EUR-20 EA_II's19 NSC -10 OST- ' RSC-01 USIA-12 QSR-I II 1125 W CIAE-01'l INR-11l9 L-03 SCI-05 GAC-01 ss-i 105538 ooooooooooooooooooooo R 22 '8 3Z OV 72 FM USMISSION IAEA VIENNA TO SECSTATE WASHOC 21 7 INFO AEC GER ANTOWN AMEMP'ASSY 90 1 1 AMEMSASSY OTTAWA A E 'SASSY TAIPEI c r RET ' JAEA Vi NNA SUBJ NUCLEAR SAFEGUAROS IN ROC I' SUMMARY rRG IS EGOTIATING WITH ROC TO SELL SMALL CHEMICAL REPROCESSING PLANT INSTRUCTIONS BEING SENT TO RG E ASSIE5 WASHIN G TDN ANa OTTAWA TO DUSCUSS WITH USG AND GRC HOW TO 00 T IS WHILE ASSURING CONTINUANCE 0 SA EGUAROS ou ROC NUCLEAR MATERIALS AND ACILITIES END SU MM ARY 2 U ' GE A ERE IFRG RESREP VIENNAr INFORMED ME TODAY IN CON F IDE NCE THAT HE UNDEQ INSTRUCTIO NS DISCUSS WITH IAEA S E C ET IAT HOW TO ASS URE CONTINUEn A PLICATION OF SAFEGUARO ON NUCLEA MATERIALS PROCESSED IN SMALL CHEMICAL REPROCFSSI G PLANT WHICH GERMAN FIRM I U SPFCIFIEO WISHES TO SFLL To ROC SIMILAR INSTRUCTION S GOI NG TO FRG EM ASSIE5 WASHINGTON A D OTTAWA' U NGE E R NCT iNS QUCTED 1ISCUSS MATTER WITH US MISSION v lEN A BUT DiD O ON OW INITIATIVE 3 CHEMICAL REPROCESSING FACILITY WOULD HAVE SMALL CAPACITY DES i GNfO TO PR QCESS FuEL FQOM THE TwO RESEARCH qEGBPCT r S I US AN j AOI'N suPPLIED ON TAI N PLUs THE - - ' 1 oo ' 1 'J ij C LGBP A P i ' Q PLANTS CHINSHMJ t AND 2 lEO' Pti'Cilt'CiI o w f' O u _ 1@ j2 Ar- OI II e S J -' rn D ' A 47 o c'1 l' l ' 'fT - - '-o 11 o I r A1 ' I _ ' ' - ' 0 1 ' Department of Stt te J INB -' -Y 'T - o o Ji l M ' t i ' L L- Jf o i I Y I o l J-'1 8 w Of r- PAQE 02 IAE V 8229 21 16Z U DER CONSTPUCTION SSU ED THAT SINCE ALL NOW UNGERER SAIO GERMAN FIRM FUEL PRESENTLY LOCATED THESE FOUR NUCLEAR INSTALLATIONS OW UNDER IAEA SAFEGUARDS THERE WOULD E NO DIF ICULTY IN CONTINUING SAFEGUaRDS ON T E FUEL OURI G CH MCIAL REpROCESSING HE WAS UNAWARE WHETHER ROC ALSO PL NNED DEVELOP ITS OWN FUEL FABRICATIO A A R ILITY' I SAID PROBLEM WAS NOT A SIMPLE ONE o tANADIAN FUEL SUPPLIEO TO ROC WAS CURRENTLY SAFEGUARDED UNOER UNILATE RAL SUBMISSION AGREEMENT IINFCIRC 1331 AND US-SUPPLIED UEL COVERE C UN ER ROC US 9ILATERAL AND US RCC I AEA TRILATE AL IIN-CIRC 1581 HOWEVE 80TH AGR EME NTS AS -RG KNEW WERE VULNERABLE AND SUBJECT TO ATTACK IF PRC DEClnEO TO PUSH FO ABROGATION OF THE AGREEME TS IN IAEA eOARD CF GOvERNORS SA_EGUARDS IN US CASE EVE IF TRILATERAL ABROGATED COULO THEORETlCAlLVCO NT INUE UNDER ILATERAL AGREEMENT IN ANA IAN rAS 4r W S n e 7 n A rC M E T ICH WOULD A ALl C FALL9 CK TO BILAT RAL SAFEGUARDS IF UNILATERAL SUB IS SIO AGRE MENT wERE NUlLI-IED UNGERER SAID HE UNDFQ I MPRESSION CANADIANS OULO TH N APPLY PILATERAL SAF SUAPDS AS THEV HAn IN C RTAIN OTHER INSTANCES Eid M ST GERMANY' I R rS PO D EO USG UNAWARE 0_ WHETHER CANADA INTEN oED OR FELT POLITICALLY ABLE 00 SO 5' I POINTEO OUT OTHEo PRO BLtMS USG WAS WAQE THAT OC A BE N SHO PPI NG AROU N 00 A CHEMICAL REPROcESSING ACILITY IN wEST DUROPE wE UNDERSTOOD RE N CH HAC DECLI NED TO CONRIDE SUCH I SALF ALTHOUGH TO EEST OUR KN'O' L EJSE T RE HAD BEE NO US a F RENCH DISCUsS O - s OF MATT o UNGEQER AID HE U DFqSTOOD U YAO A ESA E DECI S I G' AS RA CE' HE GAVE IMpRESSION THAT F R E CH ' UK ATTITU E DI OT AF-EeT FOG INTEREST IN S LE TO oDC SO lO NG AS SAFEGUARDS COULD 9E APPLIED CITING i al IA FACT THAT _RG AS CO TRASTED TO OTHER 3Ta GBPS oro NO T AKE ST TE F T RE T IWAN EI G INTEG AL PftR T CHI Ni HE IT RECENTLY ESTA9LISHED DI LO ATIC RELATIO ' S wiTH PE KING u S g ER ADMITTED POS 5 I ILITY THAT IAEA ROC SAFE U OS GREE TS MIGHT BE CHALLENGED AND POSSIBLY f ' l' CO - 0 ' nc o - ti p' '- - C '- 3 _7 'r o Departmel t Of S t te o t 'I Si q' o i ' t rtl '# ' J ' ' 1' l - 10 ''c l 'oJ '1'1 11 of T f ' P f l r 1 ' r k ' 1 b L' oj lV'l l I sEeRET P GE 3 IAEA V 8229 21016Z BRO EO I N FUTURE IAEA BOARD MfG-- PERHAPS EVEN I UPCOMING YEAR HE CONJEcTUREDT AT US ' BILATERAL SAFEGUARD WO ULD BE CO NTINUED I N TAI AN IN ANY CASE A D ' ASSU ED TYAT THIS WOULD BE ADEQUATE MEASURE TO INSURE THAT SAFEGUAQDS WOULD BE APPLIED ON NUCLEAR MATERIAL 10F US nRI I P DCES S Eo IN GERMAN CHEMICAL QEPROCESSING PLA NT I SAl' I HAD NO INSTRUCTIONS BUT THAT IT WAS ILLOGICAL TO ASSUME SG COULD MAKE LONG-TERM COMMI MENTS TO _TH 1RD J 0 l 'HRY 0 '1 CONTINUATION OF BILATERAL SAFEGUARDS IN TAIWA N EVEN IF E WERE oREpARED DO AD ON SWORTTERM RASP ARRArl GE ENTS WOI ILD HAVE TO BE ' ORKED OUT TO PROVIQE AN Appo PRIAT SOLUTION IF AND WHEN glLATERAL SAFE GUARD S WERE TER INATEO THERE WOULD ALSO BE QUE STIO NS OF C05T-S ARI 'I G TO BE SE LED AND QUESTION OF HOW TO SAF GUA D PROCESSED FUEL OF CANADIA N ORIGIN OR FUEL RDM TUjRD-cOUNToY lOR INDIGENOUS SOURCE IF ROC COULD ACQUIR IT C MM E N TI BOVE IS PROVIDrD AS BACKGROUND WHEN FRG MAKE S APPR OACH IN WASHINGTON FACT OF UNGERER'S DIS CUSS ON WITH ME HOULD 'lOT E DISCLOSED MISSiON'S IN TIAL JUDGMENT IS TUAT IT COULD BE POLITICALLY DESIRABLE TO GET FRG INVOLVED IN ROC'S NUCLEAR PROGRAM SINCE FOG M HBERS OF IA A BOARD THIS COULD LEND ADDITI O L V OT I G SUPPOoT TO RETENTION XISTING IAEA SAFEGUARDS AGREF r NTS WITH POC IN EVENT OF ATTACK IN 80A C A S C TA I T WILL UNDOUBTEDLY WISH DIScU S THI S QU -STION WITH MISSION AFTER FRG DEMARCHE WOULD APPOECIATE Q CEIvING GUIDANCE SODNEST oDRTER XGDS- 7 EfR T ' au - 24 j Q 4 ' s 5 cur TL't rO'1 I 4 o l o C ART v ' T or TAB B ST TE 1 1 J o ot rO '1 I'''''' ' '1 o o 1 o o o 1 For 10 30 Mtg Monday 11 27 Mr Brewster's office 11 DAT E Novemb e r 22 191 2 InCjui ry Regarding Safeguards on Ex 'ort of Parts to ROe Reprocessing Plnnt SU3 l T GCHfinn J -' n I 'lT 3 Dr E Ab 3 1 Scientific Counse lor H Daniel Bre ' s te r sell AE Dr Ah l Dcp uty Scientific Attache to th e G l'l' l E 'J S5 ' called l a te 011 i ovc mbcT 20 to i r q uir c -C'sar i r g t e a p lication of A f n cy 5a cgl l' U S to U5-sl pli cd nl C I 'c l equ ipr 1Cnt lnd fu e l on T a i D n H St1 0 ci f i cally o f t e l atest ord J's GBP01' U S pO' Ier Tcac tor s nOe h I exp lained tha U S postllrc on J 1l 1 ' _1g t'n o L L C -t L n do t a' vo l 1 a ' safegu a s ' r T f ' ' V U -J IJ -J' d1C i t h 1 L 'oo -- j was in f o rcc Alt lO gh we recog n iz e d t h at a pot c ntinl hr c et to t h e A c n cv ' ties lj i th th e ROC did e x i st ' ' Je t0 t uS J 1 3S ill the snfc' u rd fiel d to c r ra 'J as ' u st J had ta n in t nct l l e 0 1 n ro u tine i nspect ion or t ho L' '2 'f a i an in Octo er 1 972 Di Ab31 the n r efer red to tile l11estion o f p 05 i blc sll 9Pli ' s of parts ' n cl equipmen t to the existing J1t c l al po' c r plall t s tatin g that he nssum Jd t h s c 1 ' o uld 00 COVeTOc by th e c istin g t r ilat e ra 1@ t H3 th e n T l lt i o l th lt his gove l'n ine nt us con sidorin 0 COl1tract b Ger man f i 'em ' br the G ' li very of E2 t s 1 0 an ROC T rO c es n p 1 ult riot 1 cO F pl e t e plHnt J as as Do co - c r a ct i0 ' d si a r J1d const r 1 cti c n of such a plan t It a3 Li S go vern n t 's vie i that the present snfc un r s co ing ' - I1an dl 'l tnc r 2 t e l'J alS 00 In ' L ite rcprocessJ l1 p l nt ' '0' 1' - be a d ' I u t becaus e these materia ls ' ' ould b c O ' t c r e i by the ex isting US-ROe-Agency Trilaterml or th C2 ada- m e Bi 1 a ter a h'err His g ovc rnm nt had also revicl tcd its Zangger COiil i tt ez co rr mi t 1 nt5 a nd believes that the export of p - t s ' u 1d be cO 'cl'ed Ni thin the spi ri t of t tc c urnmg ' il 5 ' I l Jj U tc r_ I ' j I f t ' O ' ' ' J __ I T ll T I L J L- _ _____ _ ' ' 2 ' ' F 70 __ql1$ 4 8 iFIBEnTIAI 2o I said that I Iwuld have to 'c onsult I ith my collcag l es on this subject before I could give a fir cop sid red reply on this matter Dnd that I would be back in touch with him Distrihut Ion EA ROC - iss IcDonnell r e 1 son EU n C ' 'To 00_ 1 o J i'l en t 10 S r'ACO - 'iT Van Doren USACC - ' r ' lahy lL ' J D Taf ed by H Daniel Brewster SCI AE lml1 11 24 72 ext 22433 ceN II 912HTI iLl A Lt1 SlVJ _ Z 511 December 1 1972 TAB C il ROC NUCLEAR REACTORS First Taiwan Rea arch Reactor 40 HM - Canadian Natural Two 600 HW Liqht Water Sl1ghUy neactor under 1912 US BUateral Two 850 MW Light Water R actor under propoae4 amendment to us Bilataral l'OeGlble FiGBPth and Sixth po taL 'XuUiIngl Operational FUel First Delivery FepGBPcoessiJ' i 1973 lAEA no fallback U Enriched U Slightly tnrichad U early 1976 1974 1978 late 1976 1975 1979 1977 1981 1978 1982 1978 o 1979 Approxi t Sategund IAU U8 fallback lAE US faUback Equivalent in Annual lIuclear Weapon PU Production 10 Per Year tv 1 300 30 ClO 40 Noturlll U J 1 operation of re ctor to produce low PU-240 content which ana - ora fr nt raplac- nt of fuel rodain US type r ctor but 1 o oo o i a r an4 ore difficult to dat ot with canadian type reactors 2 o chenical r eproe ooo ln9 plant 3 willinvn ooo to oo ttl for 1ooo than meat efficient weapona C 8UCCo o o in aaking nuclear weapon trocl plutoft UII o ooObt aiaabla fra SOUth Africa or other NPT DOn-partJ oo 6Nri5i iHiAL 01 December 1 1972 Tab D Additional Background for Non-Experts 1 Article 111 2 of the NPT provides that no NPT party will furnish equipment or material especially designed or prepared for the processing use or production of special fissionable material to a non-nuclear weapon state unless the nuclear materials involved will be subject to safeguards under an agreement with the IAEA OVer the past few years an ad hoc group of representatives of Western nuclear supplier countries the so-called Zangger Committee has tried to reach a consensus on items that would clearly trigger safeguards under this provision and the policy reflected therein Among the items agreed upon were chemical reprocessing plants rrh y ' ' ' o _ i - f riul tion for such plants was not included on the list since the NPT provision involved does not by its terms apply to transfers of information A U S effort to specify essential parts of such a plant was not successful but the Committee concedes that the items on which consensus was reached were not necessarily exhaustive It is the U S position that provision of substantially all the known parts of a chemical reprocessing plant together with design data and engineering assistance should trigger safeguards under Article III 2 2 A chemical reprocessing plant produces somewhat depleted uranium and plutonium After mixing such depleted uranium with more highly enriched uranium the mixture could J 14alii -2- be used in the fabrication of new enriched uranium fuel elements for a reactor if the country had a fuel fabrication plant as ROC does not While the plutonium has a potential recycling use in fuel fabrication this has not yet been reduced to general commerical practice A much more extensive use of plutonium would be made in breeder reactors which may come into commercial use in the 1980s but none of the reactors currently under construction or planned by ROC are of this type Thus the output of a reprocessing plant does not meet any immediately foreseeable needs of the ROC nuclear power program 3 h mir l r prnr p in plants are generally considered uneconomical unless they service a substantial number of large pO ler reactors The U S plant in upper New York State has consistently lost money A study recently conducted by GE concluded that there would be no economic justification for a chemical reprocessing plant for Japan which has a far greater number of large nuclear power reactors then is proposed for ROC until well into the 19808 For this reason the Japanese have been considering the possibility of a regional reprocessing plant Consideration was originally given to siting such a plant in Taiwan but this has become 1 C _ 'b 3 1 g -3- politically unrealistic and the current thinking is that it might be located in South Korea Without such a regional clientale a reprocessing plant in ROC does not make sense if there is any alternative way of obtaining the benefits of reprocessing when it becomes needed 4 Construction of a chemical reporcessing plant might take 4 or 5 years I do not have data on its probable cost nor on the time or cost involved in constructing a fuel fabrication plant 5 The technology for making a chemical reprocessing plant is unclassified but AEC regulations 10 CFR Part 110 nn n nt- perrni t i t s transmission without AEC T ''' ot t o oA that provisions for safeguards on the plant will be adequate It is not kno how practical it would be for ROC to construct such a plant without any foreign assistance but it would clearly be more difficult expensive and time consuming And ROC would still have the legal obligation under the NPT to put such a plan under lAEA safeguards 6 I am aware of no unsafeguarded chemical reprocessing plants in any non-nuclear weapon country except India whose indigenously built plant has been one of the chief sources of concern about proliferation o At present such plants are located 4 -r t t in Belgium a 'India Spain and Argentina- nd a Japanese plant '- is being planned ACDA GC CVanDoren December 1 1972 --'ltd -t 1' '-U Tab E Pertinent Highlights of Applicable Agreements A U S -ROC Agreement for Cooperation TIAS 7364 1 Does not provide for transfer bv USG of chemical reprocessing plan or information relating thereto Articles III and IV 2 Would apparently permit private U S citizens and firms to transfer chemical reprocessing plant parts thereof or information relating thereto if permitted by applicable laws regulations lIcenses and policies Articles II and VI 3 Requires that any reprocessing of anv fuel elewents containinq fuel received from the U S be perfor med in facilities acceptable to both Parties upon a joint determination of t he Parties that the prov isions of Article XI safeguarded may be effectively apolied Article VIII F 4 If any of the nuclear material involved is transferred by the U S by meanc the lessee will take title to the materials resulting from the reprocessing unless otherwise agreed Article VIII G 1 5 Provides for bilateral safeguards - except to the extent suspended by virtue of application of lAEA safeguards - including a right to review design of any equipment the design of which the AEC determines to be relevant to the effective application of safeguards and which i ii is made available under the agreement or is to use fabricate or process any materials made available under the agreement The purpose of this section is to identify pertinent provisions and their general substance Selection paraphrasing and simplification have been used and this section should not be considered a substitute for consulting the actual texts of the agreements DECLAbiti r' cU -2- o w 't'33qO _9 91S - h full safeguards on i ii nuclear materials made available under the agreement nuclear materials utilized in recovered from or produced as a result of the use of any of the follow ng materials equ o- ment or devices made available under the agreement nuclear and moderator materials other material designed by the AEC reactors any other equipment or devices by thp Commission as an item to be made available on the concition that the provisions of this paragraph B 2 will apply des gnated c right to require_ the deposit in storace facilities des natea ov the AEC of anv of the soecial nuclear mater al referred to n b a ove hich is not currently utilized for civil Durposes in the ROC and I-Ihich is not transferred or disposed of in accordance with the agreement Article XI 6 Provides that the bilateral safeguards rights will be suspended during the time and to the extent that the USG agrees that the need to exercise such rights is satisfied by safeguards agreement with IAEA Article XII B 7 If the IAEA safeguards agreement should be terminated before the bilateral agreement and the Parties should fail to agree promptly upon a resumption of lAEA safeguards either Party may by notification terminate the agreement and the USG may require the return of all SNM received pursuant to the Agreement and still in its possession or the possession of persons under its jurisdiction USG will pay for returned material at prevailing prices Article XII C 8 Agreement lasts until the year 2002 unless terminated by mutual consent or as specified in 7 above or for non-compliance with the peaceful uses guarantees or safeguards undertakings in which cases us could require return of material o B -3- o _ i13Jl U S -ROC-IAEA Safeguards Agreement TIAS 7229 1 Applies to the 1955 US-ROC agreement for cooperation as amended or a new sUji'ersedinq agreement for cooperation as amended Section 1 c 2 IAEA safeguards to apply to material equipment and facilities while they are listed in the Inventories Section 4 3 USG agrees that its rights to apply safeguards under the US-ROC agreement for cooperation Till be suspended with respect to material equipment and facilities while they are listed in the Inventories Section 6 Query does this suspend our right to require the storage of SNll not currently being used in storage facilities designated by the AEC See item A-5 c above How does it square with item A-6 above 4 The Inventory for ROC is in substance supposed to include i ii iii iv v equipment facilities and materials transferred under the US-ROC agreement for cooperation special fissionable material produced in ROC in or by use of such materials equipment or facilities or of any facility while it incorporates any such equipment special fissionable material produced in another jurisdiction subject to IAEA safeguards and transferred to ROC under the US-ROC agreement for cooperation other nuclear materials which are processed or used in any of the materials equipment or facilities in i ii or iii any facility a while it incorporates any equipment listed above or b while it is containing using fabricating processing any material listed above There is also right to release particular nuclear materials m safeguards upon substitution of equivalent amounts of such materials not already safeguarded See Sections 9-11 and 12 o o -45 The IAEA may refuse to put items on the Inventory by advising both Governments within 30 days of their notification that it should be included That the Agency is unable to apply safeguards to such items Section 9 d ii 6 Items are automatically removed from the Inventory if the IAEA is relieved of its safeguards undertaking because of non-compliance by another Party or if for any other reason the Board determines that the Agency is unable to ensure such items are not being used for any military purposes Such removal is to last until the Board determines is again able to apply safeguards thereto Section 7 7 There are also a number of other standard provisions for termination of IAEA safeguards Sections 19 and 20 8 The agreement's duration is coextensive with the Agreement for Cooperation unless terminated sooner by any Party upon 6 months notice to the other Parties or as many be otherwise agreed Section 33 November 30 1972 o Tab F r HOW ENTIRE THROUGHPUT COULD BE SUBJECTED TO SAFEGUARDS 1 IAEA Safeguards The only way to be sure the entire throughput would be subject to IAEA safeguards -- and thus meet the literal requirements of the NPT -- would be under the current U S trilateral or the existing IAEA-ROC safeguards agreement applying to the research reactor supplied by Canada It could be brought under the U S trilateral onl y if there were some U S input of the types indicated in Tab E para B 4 which do not include the provision of information 2 Bilateral U S Safequards If IAEA should ceQse to be able to apply safeguards in ROC it would be possible to safeguard the entire throughput of the plant under our bilateral agreement so long a s it incorporated U S materials or equipment of the type specified in Tab E para A S b Again the provision of information by U S firms or nationals would not suffice for this purpose 3 Bilateral Safeguards of Another Supplier If it were still possible to have IAEA safeguards on the plant by the means indicated in I above we could complain that the ROC and the supplier country if it were a party to the NPT was violating NPT obligations by not doing so However once IAEA safeguards had become impossible we wo uld be in a poor position -- in view of the arrangements we would be accepting for the power reactors and fuel we supplied -- to complain if the French Germans Belgians Briti s h or Japanese resorted to their own bilateral safeguards agreements Such arrangements would not however give us very much assura nce and we would have the legal right under our bilateral agreement to reject such arrangements as unsatisfactory See Tab E para A 3 This right of rejection could also be utilizied as a lever to demand higher standards for any such safeguards November 30 1972 2 Tn k w U l'@d31tR This document is from the holdings of The National Security Archive Suite 701 Gelman Library The George Washington University 2130 H Street NW Washington D C 20037 Phone 202 994-7000 Fax 202 994-7005 nsarchiv@gwu edu