Ask the Scholar

{
    "localId": "1554452",
    "label": "Nuclear Policy Review: September 3-6, 1976",
    "core": "doc",
    "dtoType": "document",
    "citationUrl": "https://catalog.archives.gov/id/1554452"
}

{
    "id": "1554452",
    "sourceUrl": "https://catalog.archives.gov/id/1554452",
    "contentType": "document",
    "title": "Nuclear Policy Review: September 3-6, 1976",
    "citationUrl": "https://catalog.archives.gov/id/1554452",
    "collections": [
        "White House Special Files Unit Files",
        "Issue Decision Papers for the President"
    ],
    "subjects": [
        "Nuclear energy",
        "Nuclear nonproliferation",
        "Nuclear weapons"
    ],
    "iiifBase": "https://s3.amazonaws.com/NARAprodstorage/opastorage/live/52/5544/1554452/content/library/document/0010/1554452.pdf",
    "thumbnailUrl": "https://s3.amazonaws.com/NARAprodstorage/opastorage/live/52/5544/1554452/content/library/document/0010/1554452.pdf",
    "largeImageUrl": "https://s3.amazonaws.com/NARAprodstorage/opastorage/live/52/5544/1554452/content/library/document/0010/1554452.pdf",
    "imageCount": 1,
    "hasImages": true,
    "source": "import",
    "hasTranscription": false
}

{
    "url": "https://catalog.archives.gov/id/1554452",
    "naId": 1554452,
    "coverageEndDate": {
        "day": 27,
        "logicalDate": "1976-09-27",
        "month": 9,
        "year": 1976
    },
    "coverageStartDate": {
        "day": 3,
        "logicalDate": "1976-09-03",
        "month": 9,
        "year": 1976
    },
    "levelOfDescription": "fileUnit",
    "recordType": "description",
    "ocrSource": "nara-archive"
}

{
    "seq": 1,
    "pageIndex": 0,
    "type": "document",
    "url": "https://s3.amazonaws.com/NARAprodstorage/opastorage/live/52/5544/1554452/content/library/document/0010/1554452.pdf",
    "mediaId": "5ddcffd11eaddcc8",
    "ocrText": "The original documents are located in Box 5, folder \"Nuclear Policy Review: September 3-\n6, 1976\" of the White House Special Files Unit Files at the Gerald R. Ford Presidential\nLibrary.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nTrudy, per our telecon, here are the\nAgency recommendations for inclusion in the Pres\nreport.\nThanks.\nI\nLore tta\n43723\n9/10 checked with Hlenn\nhe has capies of all of\nthis x\nSoL\nFORU\nDigitized from Box 5 of the White House Special Files Unit Files at the Gerald R. Ford Presidential Library\nCONFIDENTIAL\n4973\nUNITED STATES ARMS CONTROL AND DISARMAMENT AGENCY\nWASHINGTON\nSeptember 3, 1976\nOFFICE OF\nTHE DIRECTOR\nMEMORANDUM TO THE PRESIDENT\nSUBJECT: ACDA Position on Nuclear Policy Review\nI strongly recommend the domestic and international\nOption 2:\n-- defer and discourage reprocessing;\n-- provide for storage of spent fuel; and\n-- vigorously pursue alternative technologies\nfor recovering the energy value in such\nfuel without separating the plutonium.\nYou are well aware of the intense public and\nCongressional concern over reprocessing. A major\nthrust of your Administration's nonproliferation\nefforts has been to head off reprocessing in countries\nsuch as Korea, Pakistan, Israel, Egypt and the Republic\nof China.\nThis is because reprocessing reduces plutonium\nto a form highly vulnerable to theft or seizure and\nquickly usable in nuclear explosives, as we saw in\nIndia. The output of one commercial size reprocessing\nplant would furnish enough nuclear explosive material\nfor several thousand atomic bombs per year. There\nis no reliable way to prevent plutonium from being\ncaptured by a government willing to violate its\nsafeguards agreements, and then being converted into\nnuclear weapons in a time shorter than we could\nprobably react.\nIn these circumstances, a decision now to assist\nand accelerate reprocessing in the United States by\nDECLASGIFIED\nE.O. 12958 Se\nCONFIDENTIAL\nMR 98-16,*11; ALDA letter 1/20/98\nBy let NARA, Date 4/13/98.\nCONFIDENTIAL\n-2-\na $1/2 billion Federal investment to permit operation\nof a reprocessing plant constructed by Allied Chemical,\nGulf, and Royal Dutch Shell, could have obvious domestic\npolitical repercussions. This would be especially true\nsince the current public proceedings by the Nuclear\nRegulatory Commission on whether or not to permit the\nuse of reprocessed plutonium in US reactors will not\nbe concluded for at least another year.\nMore importantly, such a decision would seriously\nundercut our efforts to head off reprocessing in other\ncountries, who look more to what we do than what we say.\nThe option I am recommending would avoid this risk and\ndirectly support our international efforts, including\nour call on the London Suppliers' Group to examine\nalternatives to national reprocessing.\nSuch alternative technologies exist, but require\nfurther development and demonstration. While we are\nworking on them, we can well afford to postpone the\nrecovery of the potential energy value in spent reactor\nfuel. The report makes it clear that the economic\nbenefits to reprocessing -- if any -- are small and\nuncertain. There is no question that we have sufficient\nuranium to fuel all US reactors likely to be built in\nthe next 15-20 years. By providing spent fuel storage\nfacilities (which are considerably less costly than\nreprocessing facilities) we would both be setting an\nexample for other countries and relieving our own\nutilities of their most immediate problem -- the need\nto remove the accumulated spent fuel from their reactor\nsites.\nYou, Mr. President, should be the first to establish\nthe principle of proliferation safety -- that commercial\ntechnologies can and must avoid access to weapons-usable\nmaterial. You can direct our superior technological\ncapabilities to this end and remove a major security\nrisk from the nuclear energy picture. And, with the\nforce of a powerful American example, you can lead the\nworld in the same direction.\nComments on other issues are attached.\nFed C. The\nFred C. Ikle\nCOMPIDENTIAL\nCONFIDENTIAL\nATTACHMENT\nACDA Position on Other Issues and Recommendations\nin Nuclear Policy Review\nIn keeping with our recommendations about reprocessing,\nwe attach very high priority to the recommendation that you\nsupport, through approaches at the highest level of other\nsupplier governments, our efforts to secure a two-year mora-\ntorium by such suppliers on transfers of sensitive technology.\nThe other central issue in the Review is how we should\ntighten our nuclear export controls, which is also the prin-\ncipal subject of the legislative proposals in this field\ncurrently being discussed with Congress. We consider the\nrestraints proposed on page 13 of the Review as desirable,\nexcept that we oppose any formulation that would accelerate\nreprocessing or provide reprocessing services involving the\nreturn of separated plutonium or mixed oxide fuel to third\ncountries, since these products are too readily convertible\nto use in nuclear weapons. We endorse the recommendations\non sanctions, and generally prefer the \"strong initiative on\nretroactivity\" described at pages 17-18 to unilateral insist-\nence on retroactivity, but believe judicious use of licensing\nleverage can also further our objectives.\nWith respect to the incentives discussed at page 22, we\ndisagree with the recommendations which would encourage co-\noperation in establishing early additional reprocessing\nfacilities in Europe or Japan.\nWe are in general accord with the recommendations on\nMaterial Storage (although the stress should be on spent fuel\nstorage, and you might wish to study further the wisdom and\nscope of the suggested U.S. voluntary offer), Safeguards and\nPhysical Security, Sanctions, Waste Management, Other Initia-\ntives, and Next Steps. With respect to the organizational\nrecommendation on organization of Executive Branch supervision\nof nuclear policy matters, we recognize that other arrange-\nments would also be workable, SO long as they gave an appro-\npriate voice to this Agency on matters affecting our non-\nproliferation efforts. We believe the question of whether\nthe UN General Assembly would be a good forum for announcing\nyour international decisions would be highly dependent upon\nDECLASSIFIED\nCONFIDENTRAL\nE.O. 12958 Sec. 3.6\nAlst ALOA letter 1/20/98\nBy ut NARA, Date 4/13/98\nCONFIDENTIAL\n- 2 -\nthe nature of your decisions and the extent to which they\nmay appear coercive and discriminatory rather than cooperative\nand self-restraining.\nFinally, while the report rightly focusses on the partic-\nularly pressing problems of reprocessing and plutonium,\nnuclear weapons can also be made with highly enriched uranium.\nSince most power reactors use only slightly enriched uranium\n(2-3%), the related nonproliferation problem is primarily one\nof controlling the spread of enrichment facilities and tech-\nnology (which could also produce highly enriched uranium),\nand of meeting foreign fuel needs through enrichment services,\ninvolving low enrichment. For this purpose, we well as for\nproviding fresh fuel as an alternative to reprocessing and\navoiding waste of our uranium resources, the prompt expansion\nof uranium enrichment capacity in the United States is indis-\npensable, and we endorse the recommendations on this subject\non page 23. We also recommend a separate review of our policy\non the export of highly enriched uranium itself, and intensified\ndiplomatic efforts to prevent the spread of enrichment technology.\nWe have not commented on the annex to the report, which we\nhave not seen in the final form.\nCONFIDENTIAL\nTHE SECRETARY OF STATE\nWASHINGTON\nCONFIDENTIAL\nSeptember 6, 1976\nEXDIS\nMEMORANDUM FOR: THE PRESIDENT\nFrom:\nHenry A. Kissinger\nF\nSubject:\nNuclear Policy Review and\nNon-Proliferation Initiatives\nI wish to take this opportunity not only to\ntransmit my Department's response to the nuclear\npolicy report, but also to offer my personal\nrecommendations on the international aspects of\nyour policy choices, their public presentation,\nand their diplomatic implementation. The State\nDepartment has participated actively in the\nformulation of the foreign policy elements of this\nstudy. I strongly concur in the review group's\nemphasis on the international basis for your\nnuclear policy, and I believe it of central impor-\ntance both that we maintain consistency between\ntheir expression and execution and that we ensure\nbroad multilateral support for the positions you\ntake.\nAttached are the specific State Department\npositions, which I fully endorse, on the proposals\nand options prepared by your interagency group.\nI concur in the report's recommendations for\neffective diplomatic consultations and action, in\nwhich we played an active role in developing and\nwhich we are prepared to undertake as soon as you\ngive your approval. I need hardly emphasize that\nthe more advance notice of proposed policies and\nstatements we give our nuclear partners and allies,\nthe more likely they will be to provide the support\nso necessary for the success of our non-proliferation\npolicies. Therefore, this memorandum specifically\nseeks your early authorization for proposed diplomatic\napproaches, on the basis of which you could refine\nDECLASSIFIED\nE.O. 12958 Sec. 3.8\nCONFIDENTIAL\nMR 98-17, State Hr.2/11/99\nBy KBH NARA, Date 7/7/00\nCONFIDENTIAL\n- 2 -\nthe international policy elements of your eventual\npublic statement.\nNon-Proliferation Objectives\nIn reviewing and developing further our nuclear\npolicies, it is essential for the US to:\n1. Ensure that our non-proliferation policies\nare cast in the framework of our overall foreign\npolicy interests and close relationships with nuclear\npartners and allies.\n2. Retain multilateral support for our non-\nproliferation policies, without which our political\nrelationships will be set back and our non-proliferation\nefforts will be rendered ineffective.\n3. Develop a policy which marries the restraints\nwhich we require with the incentives we can offer.\n4. Prevent our non-proliferation efforts from\nbeing distorted by international commercial competition.\n5. Make domestic decisions which will effectively\nsupport, rather than undercut, the primary objective\nof deterring nuclear proliferation.\nMeeting Policy Objectives\nThis Administration can justly claim credit for\nthe concerted and productive US efforts to develop\nstrengthened and uniform nuclear safeguards and\ncontrols, through bilateral discussions with such key\nsuppliers and consumers as France and Iran and multi-\nlateral consultations in the London meetings of major\nnuclear suppliers. The US has achieved significant\nnon-proliferation results through high-level,\nconfidential diplomacy, consistent with our broad\nforeign policy interests and relationships. At the\nsame time, we have openly advocated strengthened\nnuclear safeguards and controls, in public statements\nand testimony to the Congress. But domestic pressures\nhave substantially increased for fuller public\nexpressions of what we have pursued privately and for\nvisible improvement and strengthening of our policies.\nCONFIDENTIAL\nCONFIDENTIAL\n- 3 -\nIt therefore continues to be necessary to make\nchoices as to what balance is to be struck between\ndiplomatic imperatives and public perceptions of a\nvigorous, coherent nuclear policy. We should make\nno apologies for past performance, but we should\nalso not hesitate to stake out new territory.\nThe fundamental need to meet the non-proliferation\nobjectives set our above leads, in my view, to the\nfollowing policy choices and presentational require-\nments which are consistent with but often carry further\nthe group's recommendations:\n1. New conditions of nuclear supply, however\ndesirable, should not be imposed by the US unilaterally,\nbut rather pursued and adopted multilaterally. I must\nstress that a unilateral approach will damage us\npolitically, with our allies and partners, and will lead\nthe US to lose both commercially and in non-proliferation\nterms, as other less committed nations pre-empt the\nnuclear market. It should be recognized that if the\nsuppliers, many of whom are also our allies, do not wish\nto follow a US initiative voluntarily, then we will\neither have to coerce them or jeopardize our non-\nproliferation policy. Clearly, we should not select a\nstrategy which could so easily trap us in such a dilemma.\nAt the same time, we should continue to make best\ndiplomatic efforts to make non-proliferation gains, as\nI believe we have in our proposed nuclear agreements\nwith Egypt and Israel and in our current negotiations\nwith Iran. I believe that a strong public statement\ncould be built around the crucial importance of multi-\nlateral consensus in nuclear safeguards and controls,\nthe need for this country not to isolate itself and\nlose its non-proliferation influence, and your\ndetermination to pursue a responsible nuclear export\npolicy while obtaining strong international support for\nour non-proliferation efforts.\n2. It is essential to offer non-proliferation\ninducements in the areas of fuel buy-back and exchange,\nworking in concert with other suppliers. Nuclear\nconsumers, particularly those of proliferation concern\nwho already enjoy less constrained agreements, will\nnot voluntarily accept new restraints unless it is\nCONFIDENTIAL\nINFIDENTIAL\n- 4 -\ndemonstrably in their interest to do so. I therefore\nstrongly endorse the review group's recommendations\nfor assured and equitable front-end fuel services in\nexchange for spent fuel, which is at the heart of our\ncurrent negotiating approach with Iran.\n3. Nuclear consumers will become less disposed\nto relying on the US if we arbitrarily impose more\nstringent conditions on nuclear agreements after their\nterms have been mutually agreed. We must therefore\nensure that the NRC licensing procedures are responsive\nto national policy as executed by the President, within\nlegislative requirements. Nuclear export licenses\nshould not be used as a lever for obtaining new\nconstraints from countries which live up to their\nobligations to us. NRC procedures should be perceived\ninstead as a means of predictably implementing our\npolicies of providing inducements, such as guaranteed\nreactor fuel supply, for countries accepting effective\nnon-proliferation constraints.\n4. We should move to engage other major nuclear\nsuppliers in intensified and multilateral efforts to\nensure that uranium enrichment and reprocessing\nfacilities are located in supplier nations. To achieve\nthis, it is necessary to prevent commercial competition\nfrom leading to proliferation of such sensitive nuclear\nfacilities. While I support the review group's\nimportant recommendations for joint supplier fuel-service\nsupport for reactor sales, I recommend that you set a\nlong-term framework for effective supplier coordination\nof fuel assurances, by calling for an examination by\ninterested nations of an \"international nuclear fuel\nbank\" concept, as described in the second section of\nmy Department's position paper, which would combine fuel\nstorage and supply arrangements under international\nguarantees. With your approval, I will ask my deputies\nto work with Bob Fri in integrating this new element\ninto your nuclear policy statement.\n5. In this essential multilateral context, I\nconclude that a limited domestic reprocessing decision\nwould serve our non-proliferation and foreign policy\nobjectives. In so doing, however, it would be desir-\nable to provide for appropriate foreign participation\nand essential to identify the proposed program as an\nCONFIDENTIAL\nCONFIDENTIAL\n- 5 -\n\"experiment,\" without prejudging its outcome. I can\nsupport the demonstration project associated with the\n\"assist reprocessing option\" presented by the review\ngroup, subject to what I believe are necessary\npresentational and policy precautions elaborated in\nthe attached position paper, designed to reinforce\nour overriding non-proliferation interests.\n6. I agree that you should seize the opportunity\nto press for rapid Congressional approval of the\nNuclear Fuel Assurances Act, as a crucial means for\nexpanding US enriched uranium capacity needed to\nprovide credible non-proliferation inducements. In\naddition to providing greater US enriched uranium\ncapacity to meet foreign needs in the near-term, we\nshould redouble our efforts to develop more efficient\nand controllable forms of enrichment technology which\ncould very substantially reduce the cost of enriched\nuranium and expand available supplies. This would\npermit us to shape an international system which could\noffer a combination of the \"carrot and stick\" required\nto bring about a regime which might dramatically slow\nthe spread of national reprocessing in non-supplier\nstates.\n7. Nuclear policy message and management. Your\nreview group has suggested the UNGA as a possible forum\nfor your nuclear policy statement. I believe that the\nUNGA would be an inappropriate forum for you to discuss\nour new non-proliferation policies which will inevitably\nconvey a tougher approach toward constraints. Even if\ntempered by offers of inducements, such a message would\nlikely be viewed by the majority of your audience as\nrestrictive, discriminatory, and targetted against the\ncountries they represent. Nevertheless, if you choose\nto address the General Assembly on this subject, I\nwould urge that you focus on the cooperative elements\nof these policies, such as the recommended international\nspent fuel and plutonium regime and our interest in\nexploring an international nuclear fuel bank concept.\nI believe that, in any event, you should reserve for a\nreceptive US audience (or in a message to the Congress)\nthe stronger aspects of our policies, as well as any\ndecision to proceed with domestic reprocessing. As a\nsubsidiary consideration, I am not convinced that a new\nbureaucratic layer -- the proposed Nuclear Policy Council\n-- will enhance management effectiveness. You\nCONF IDENTIAL\nCONFIDENTIAL\n- 6 -\nmight consider using instead existing interagency\ncommittees, such as the specially constituted Under\nSecretaries Committee described in the attachment,\nto coordinate US nuclear policies.\nProposed Diplomatic Approaches\nYour review group has identified the important\nneed for diplomatic consultations prior to, and\nactions following, your nuclear policy statements.\nI believe that your statement will afford a signifi-\ncant opportunity to catalyze multilateral support\nfor the safeguards, physical security, restraints,\nincentives and sanctions components of our nuclear\npolicies. Pursuant to the review group's recom-\nmendations for next steps, I propose that you\nauthorize:\n1. Rapid, advance consultations with the IAEA\nand my counterparts in Canada, France, the FRG, Japan,\nUK and USSR on the broad nuclear policy initiatives\nyou desire to announce; and incorporation into your\nnuclear policy message of the results of these advance\nconsultations by the NSC and the Department, working\nwith the Domestic Council.\n2. Exploration of your new nuclear policy\nproposals (including, if you approve, our recommendations\nfor fuel pooling and an international nuclear fuel\nbank concept) with other supplier and consumer states,\nprior to my development of the comprehensive negotiating\nplan suggested by your review group.\n3. Active pursuit of our standing proposals for\nan export moratorium on reprocessing facilities and\ntechnology, use of supplier-based reprocessing services,\nand international plutonium management, in the framework\nof the London nuclear suppliers' meetings, consistent\nwith your nuclear policy decisions.\n4. Accelerated interagency review of technological,\neconomic and commercial alternatives for maximizing\nuse of enriched uranium incentives, under effective\ncontrols, to support policies of greater non-proliferation\nrestraint.\nCONFIDENTIAL\nCONFIDENTIAL\n- 7 -\nRecommendations:\n1. That you authorize the diplomatic approaches\nand follow-on actions proposed above.\nApprove\nDisapprove\n2. That you direct incorporation in the Presidential\nmessage of the international nuclear policy elements I\nhave described above, consistent with your decisions on\nthe recommendations of the nuclear policy review group.\nApprove\nDisapprove\nAttachment:\nState Department Positions on Nuclear Policy Report\nCONFIDENTIAL\nCONFIDENTIAL\nSTATE DEPARTMENT POSITIONS ON\nNUCLEAR POLICY REPORT TO THE PRESIDENT\n1. Non-Proliferation Restraints. The Department\ngenerally supports a firmer policy on restraints in US\nnuclear cooperation which stresses cooperation with NPT\nparties or countries accepting full safeguards and with\ncountries prepared to forego or restructure their re-\nprocessing options. We also support an approach which\nmakes a clear distinction between (1) cooperation under\nnew and amended agreements and (2) cooperation under\nexisting agreements. For both categories of recipients,\nwe would underscore the general need for a multilateral\napproach. US leadership in non-proliferation is important\nand consistent with our past policies and recent\ninitiatives in forming the London Suppliers' Group. But\nexcessively stringent or rigid unilateral US policies\nwill at best have limited benefits, since we no longer\ndominate the international nuclear market and will not be\nable to obtain new restraints without concerted supplier\nactions.\nOn the more specific restraint recommendations:\n-- For negotiating new or amended US nuclear co-\noperation agreements, we strongly support the recom-\nmendation that the US apply these restraints as non-\nbinding criteria for engaging in new or expanded nuclear\ncooperation. We should recognize, however, the importance\nof gaining common supplier policies on these restraints,\nand be prepared to state that we will apply them as\nconditions as soon as other suppliers agree to do the\nsame. The President's public statement would make this\nbasic approach explicit. We support the Review Group's\nconclusion that new restraints should not be mandatory\nrequirements in the absence of multilateral agreement.\n(In this connection, the options on \"retroactive\nsanctions\" must be seen as possible elements of a\nlegislative strategy that must be accomplished in co-\nordination with the Congress.) Even with a Presidential\noverride, such a unilateral policy could impair our\nflexibility in pursuing non-proliferation objectives\nwith specific suppliers and recipients.\n-- For cooperation under existing agreements, we\nstrongly endorse the proposal to use diplomacy and a\nstrategy of inducements to persuade the many key target\nDECLASSIFIED\nCONFIDENTIAL\nE.O. 12958 Sec. 3.6\nMR 98-17, #14 State Hr. 2/11/99\nBy KBH NARA, Date 7/7/00\nCONF IDENTIAL\n- 2 -\ncountries in this category to voluntarily renegotiate\nexisting agreements with new restraints. In addition,\nin connection with our attempts to f:.nd an acceptable\ncompromise with the JCAE on its Nuclear Export Bill, we\nsee merit in the recommendation that NRC use the agreed\nLondon Supplier Guidelines as criteria in granting\nexport licenses under existing agreements. But even\nwith the proposed Presidential overrade, we are concerned\nthat such an approach could be viewed as an attempt by\nthe US to impose these guidelines retroactively, to the\ndetriment of our relations with a number of major allies\nand our overall credibility as a supplier. Finally, we\noppose the imposition of new restraints as a condition\nof further US supply until common supplier agreement is\nachieved on this point. Even then, such a course of\naction would contravene the legal terms of our inter-\nnational agreements, thereby risking adverse legal, foreign\npolicy, and even non-proliferation consequences.\nAs a fundamental point for recipients in both\ncategories, we would emphasize the vital link between\ngaining new restraints and offering attractive inducements\nthrough fuel buy-back and exchange, and possible leasing.\nAll such inducements should be coordinated with other\nsuppliers, since uncoordinated inducements may look to\nother suppliers as a US attempt to preempt a larger share\nof nuclear fuel and realted reactor markets. In parti-\ncular, the more attractive and reliable we make our en-\nriched uranium supply using existing and planned facilities\nwithin the broad framework of the Nuclear Fuel Assurances.\nAct, the more success we will have in obtaining effective\nrestraints on reprocessing. The President's public state-\nment should relate inducements to restraints to the degree\nof specificity judged feasible in light of our ability to\nconsider offering new fuel supply or service arrangements.\nThese issues are discussed further below in the context of\nour recommendations regarding alternatives to national\nreprocessing.\nIn general, nuclear consumers will become less disposed\nto relying on the US if we arbitrarily impose more stringent\nconditions on nuclear agreements after their terms have\nbeen mutually agreed. We must therefore ensure that the\nNRC licensing procedures are responsive to national policy\nas executed by the President, within legislative require-\nments. Nuclear export licenses should not be used as a\nlever for obtaining new constraints from countries which\nCONFIDENTIAL\nCONFIDENTIAL\n- 3 -\nlive up to their obligations to us. NRC procedures\nshould be perceived instead as a means of predictably\nimplementing our policies of providing inducements,\nsuch as guaranteed reactor fuel supply, for countries\naccepting effective non-proliferation constraints.\n2. Alternatives to National Reprocessing. The\nDepartment supports the first option, \"contain the\nspread of national reprocessing.\" We share the Review\nGroup's recognition of the need for strong and specific\nUS initiatives to achieve an international fuel-exchange\nregime based upon:\n-- inducements for recipients, in the form of\nassured and equitable front-end fuel services in exchange\nfor their spent fuel; and\n-- inducements for suppliers, in the form of joint\nfuel-service support for reactor sales in non-nuclear\nweapon states, in exchange for withholding sensitive\nnuclear technology from further spread under national\ncontrol.\nThe Department supports the steps recommended to\nfurther these objectives. However, we further recommend\nthat the President call for the exploration by interested\nnations of an \"international nuclear fuel bank\" concept,\nthrough which the potential benefits of plutonium recycle\nwould be shared under international controls, while the\nreprocessing activities incidental to achieving those\nbenefits would be confined, initially to a few major\nsupplier countries, but eventually include a few carefully\nsited multinational plants. The Department has developed\nfurther proposals for making significant forward movement\nin establishing an effective fuel exchange regime. These\nproposals are consistent with but go further than the\nreview group's recommendations in relating restraint re-\nquirements to fuel inducements. With the President's\napproval, the following approaches would be integrated into\nthe fuel-exchange elements already presented in the nuclear\npolicy report:\n-- As a matter of national policy, the President\nwould express:\nCONFIDENTIAL\nCONF IDENTIAL\n- 4 -\n(i) For recipients accepting our tightest non-\nproliferation restraints, notably no national reprocessing\nand enrichment facilities, US willingress to acquire some\nor all spent fuel of US origin, at the customer's option,\nin exchange for fresh enriched uranium under attractive\nterms (i.e., guaranteed feed and enrichemnt services).\n(ii) For recipients who do not agree to renounce\nnational reprocessing and enrichment facilities but are\nnot constructing such facilities now and are prepared to\nplace all spent fuel under international storage, future\nenrichment guarantees at market rates but repurchase of\nspent fuel only at US option.\n(iii) For recipients unwilling to accept our\nrestraints in new or amended agreements, including\nstorage under international auspices, US insistence on\na purchase or exchange option for US supplied or derived\nspent fuel. All suppliers would be urged to offer such\noptions.\n-- To lend multilateral impetus to the foregoing\narrangements, the President would express publicly US\nreadiness to explore with interested supplier nations\npossible arrangements for pooling fuel-exchange capa-\nbilities through such means as tie-in fuel sales, cross-\ninvestment in enrichment and reprocessing facilities,\njoint enrichment and reprocessing facilities, joint\nenrichment guarantees, spent fuel storage as needed to\nsupport such arrangements, and an eventual international\nfuel bank.\nFinally, the Department supports the Review Group's\nrecommendations for strengthened fuel assurances, in-\ncreased enrichment capacity which could support fuel\nexchange arrangements, and an appeal for passage of the\nNFAA as an essential ingredient in our non-proliferation\nstrategy. It strongly supports strengthened high-level\ndiplomatic approaches to other supplier governments, on\na confidential basis in the first instance, seeking a\none-to-two year moratorium on exports of sensitive\nfacilities and pursuing possible fuel pooling arrange-\nments as a means of minimizing commercial competition\nin fuel cycle services.\nCONFIDENTIAL\nCONFIDENTIAL\n- 5 -\n3. Domestic Reprocessing Options. The Department\nis not in a position to make a comprehensive judgment\non the domestic benefits of the various reprocessing\noptions presented in the report. As the report notes,\nthe economic benefits of domestic reprocessing are\nuncertain and possibly marginal.\nFrom the point of view of our international and non-\nproliferation interests, domestic decisions on reprocessing\nand recycle may have an important impact in two respects:\n-- A perception internationally that the US has taken\na decisive step toward plutonium recycle may make national\nreprocessing appear both more respectable and more\neconomically attractive. We could argue that such a step\nis justified because of the size of the US nuclear program,\nbut it is not clear whether this would overcome such perceptions,\nparticularly when announced as a Presidential initiative.\n-- The possession or lack of a US reprocessing\ncapability may have an important effect on our ability\nto negotiate workable joint fuel-exchange arrangements\nwith other suppliers.\nNegative international perceptions could probably\nbe reduced to an acceptable level if the US were to\nbegin a limited program, but only if its size, sub-\nstance, and rationale were consistent with a larger US\nnon-proliferation program which received general\ninternational credence. In sum, our domestic and inter-\nnational choices must be part of an integrated whole.\nProvided that an international policy along the\nlines we have recommended is also adopted, the Depart-\nment can support adoption of Option 1, to \"assist\nindustry to gain experience with reprocessing, with\ncertain modifications, along the following lines:\n-- The program should be identified from the out-\nset as experimental in nature without prejudging its\noutcome, and its content should justify this description;\nCONFIDENTIAL\nCONFIDENTIAL\n- 6 -\n-- We do not object to a demonstration project as\nproposed, consisting of Government support for the AGNS\nplant plus design of a larger plant with no near-term\ncommitment to construct this second facility;\n-- The possibility of substantial Government involve-\nment in any second plant should, however, be held open;\n-- There should be aggressive pursuit of alternative\ntechnologies to reprocessing and recycle as an element\nof the program;\n-- The program should explicitly allow for financial\nparticipation by other nations (both suppliers and con-\nsumers) and joint exploration of service arrangements,\nbut should specifically exclude service commitments or\ntechnology transfers except as part of agreed arrangements\namong suppliers.\n-- The program should be presented as an integral\npart of our overall strategy, with emphasis upon its\npotential role in improving safeguards, supporting joint\nfuel-exchange arrangements, developing alternative\ntechnologies, and possibly as a future element of an\ninternational fuel bank.\n--- The program should be reviewed at the end of\ntwo years to assess the economic and technological\nbenefits of reprocessing in the light of what has been\nlearned, and the advisability of proceeding with con-\nstruction of a plant beyond AGNS, in the light of pro-\ngress made toward an international fuel-exchange regime.\n4. Strengthened Sanctions. We support a publicly\narticulated sanctions policy along the lines proposed\nas a means of balancing our non-proliferation and over-\nall foreign policy objectives. The proposed approach\nincludes at least automatic cut-off of US nuclear supply\nif our safeguards are clearly breached, reaffirms the\nseriousness with which the US would view any safeguards\nviolations, and stresses the need for consultations\namong suppliers and consumers to determine what collective\nCONFIDENTIAL\nCONF IDENTIAL\n- 7 -\nactions should be taken. We do not believe that a US\npolicy should go further than these steps, either in\nterms of incorporating explicit non-nuclear responses\nor in terms of adopting more rigid unilateral policies.\nThe Department will consult in advance of a public\nstatement with other countries, and in particular seek\nto elicit comparable statements from other key suppliers.\nWe will also pursue diplomatic efforts to gain multi-\nlateral supplier support for IAEA-related initiatives\nin this area and seek supplier agreement to curtail\nnuclear cooperation with any non-nuclear weapons state\nhereafter testing a nuclear device, regardless of whether\nsafeguards obligations are violated (recognizing that\nit is unlikely that France would agree).\n5. IAEA Storage Regime: We support promotion of\nthis concept, with particular near-term emphasis on\nstorage arrangements for spent reactor fuel. A Presi-\ndential statement endorsing this concept and expressing\na willingness of the US to participate, can provide\nimpetus to our on-going diplomatic efforts in the context\nof the London Suppliers' Group and in the IAEA to trans-\nlate the international storage objective into reality.\nWe will consult in advance of such a statement with key\nsuppliers and the IAEA Director General. In both public\nstatements and private consultations, when discussing\nthe role of such a storage regime for separated plutonium,\nwe should be wary of appearing to condone national\nreprocessing.\n6. Strengthened IAEA Safeguards. We support the\nproposed program to sponsor safeguards demonstrations\nfor sensitive facilities, offer an ERDA laboratory to\nsupport development of new techniques, and explore\npossibilities for greater US contributions to improving\nagency capabilities. The Department is prepared to seek\ncooperation from other suppliers and recipients in rein-\nforcing our initiatives, and believes that a public\nstatement surfacing these proposals would be useful in\nthis connection.\nCONFIDENTIAL\nCONFIDENTIAL\n- 8 -\n7. Strengthened Physical Security. We support a\npolicy of strengthening and standardizing physical\nsecurity over nuclear materials. We have made significant\nprogress in establishing physical security guidelines\nfor suppliers to follow as result of the London Suppliers'\nunderstandings. Before going beyond these agreed standards,\nthe US should first seek to bring its own national stan-\ndards up to these levels. The concept of an international\nconvention -- which has been proposed internationally in\n1974 and again in 1975 in the UNGA and explored diplomatically\nwith other suppliers and in the IAEA context -- could be\nmentioned as part of an overall nuclear policy statement.\nBut it should be recognized that the prospects for strong\nmandatory provisions as well as early negotiation of such\na convention are limited.\n8. Waste Management. We support the review group's\nrecommendations on waste management, but further recommend\nthat the US publicly propose the pursuit of international\nR&D initiatives in this field. We also propose that specific\nattention be given to the question of whether the US could\naccept foreign waste, if we ever entered into an inter-\nnational reprocessing service program.\n9. Non-Nuclear Technologies. The Department supports\nthese proposals and will work with ERDA in studying pos-\nsibilities. However, we do not see substantial opportunities\nemerging which could provide an effective near-term deter-\nrent to smaller countries desiring to obtain nuclear power\nplants. In the proper context, on the other hand, initiatives\nin non-nuclear energy cooperation may be helpful in dis-\nsuading certain countries from acquiring sensitive\nnuclear facilities, such as reprocessing plants. In\nformulating and implementing any such program, we should\ndraw upon the efforts we are making in the IEA and in\nCIEC to cooperate with LDCs in the energy field. Of\nparticular importance might be the US proposal for an\nInternational Energy Institute which we are discussing\nwithin the IEA and CIEC, following up the various pro-\nposals we made at the UN Seventh Special Session.\n10. US Safeguards Effectiveness. We support the\nproposals for assuring the effectiveness of US safe-\nguards, with the understanding that upgraded intel-\nligence efforts should be responsive to our broader\nCONFIDENTIAL\nCONFIDENTIAL\n- 9 -\nnon-proliferation policy needs and not injurious to the\nIAEA. We would also seek other supplier support for\nfall-back bilateral safeguards and work with them to\ngain timelier access to IAEA safeguards information.\n11. Public Statement. The Department does not\nbelieve that the UNGA would be an appropriate forum\nto discuss new non-proliferation policies emphasizing\ntougher constraints. While the drama and worldwide\nscope of a Presidential UNGA address are positive\nfactors, such a message would likely be attacked as\nrestrictive and discriminatory by the less developed\ncountries, even if balanced by offers of inducements.\nOn the other hand, a domestic message, perhaps to the\nCongress, would present an opportunity to underline\nboth the safeguards and constraints inherent in our\nnuclear policies and the experimental character of\nany domestic reprocessing program. If the President\nnonetheless selects the UNGA as the forum for a state-\nment on nuclear policy, the Department would recommend\nthat he emphasize the cooperative aspects of our non-\nproliferation policy.\n12. Nuclear Policy Organization. Rather than\nthe proposed Nuclear Policy Council including State,\nERDA and ACDA, we believe that consideration should be\ngiven to continuation of the existing NSC/VPWG mechanism\nor a specially constituted Under Secretaries Committee\nreporting to the President through the NSC and the\nDomestic Council. Instead of establishing another\nbureaucratic layer, the Department favors the option\nof an Under Secretaries Committee as the most flexible\nand coherent means of effectively representing the\ninterests of the domestic and foreign policy agencies.\nWhatever the institutional arrangement, the Department\nof course welcomes the review group's support of its\nlead responsibility (in coordination with other\nrelevant agencies) in the diplomatic and foreign policy\nelements of US nuclear policies.\nSeptember 4, 1976\nCONFIDENTIAL"
}