The NRC’s Foreign Ownership Policy: Charting a New Course for the 21st Century

In spite of the growing globalization of the nuclear energy industry, the prohibition on foreign ownership, control or domination (FOCD) of U.S. nuclear power plants has substantially hindered foreign investment in new U.S. nuclear plants and ownership of existing plants. Recently, FOCD determinations by the Nuclear Regulatory Commission (NRC) have precluded the issuance of a combined construction and operating license (COL) for proposed new reactors at the South Texas Project and Calvert Cliffs nuclear power stations. However, the NRC’s newly initiated proceeding to reevaluate its FOCD policy may result in new guidelines that could add needed clarity to a Cold War era policy and ultimately remove, or at least reduce, a significant obstacle to foreign investment in U.S. nuclear power stations. Through submission of comments by August 2, 2013, interested persons have a prime opportunity to help guide the NRC’s development of a new or modified policy.

The AEA’s Restriction: An Outmoded Vestige of the Cold War?

The prohibition on foreign ownership, control or domination of U.S. nuclear power plants is embodied in the Atomic Energy Act of 1954, as amended (AEA), and NRC implementing regulations. Section 103d of the AEA prohibits the NRC’s issuance of a license to own or operate a power reactor to “any corporation or other entity if the Commission knows or has reason to believe it is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government.” The NRC’s regulations implement this requirement by providing that “[a]ny person who is a citizen, national, or agent of a foreign country, or any corporation, or other entity which the Commission knows or has reason to believe is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government, shall be ineligible to apply for and obtain a license.” As a result of the Commission’s longstanding interpretation of the AEA’s requirements, all owners of a nuclear power plant – including even owners of a small minority interest – are required to obtain an NRC license to hold such a “possessory” interest. Accordingly, such persons are subject to the FOCD prohibition contained in the AEA and the NRC’s implementing regulations and may not obtain such a license without the NRC’s finding of an absence or sufficient negation of FOCD.

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