Narrative
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Protocol

AGREEMENT BETWEEN THE UNITED STATES OF AMERICA AND THE INTERNATIONAL ATOMIC ENERGY AGENCY FOR THE APPLICATION OF SAFEGUARDS IN THE UNITED STATES (AND PROTOCOL THERETO)

The Agreement between the United States and the International Atomic Energy Agency (IAEA) for the Application of Safeguards in the United States and its accompanying protocol stemmed from the Eighteen-Nation Disarmament Committee's (ENDC's) negotiation of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). In 1967, during preliminary NPT negotiations, Japan and the non-nuclear weapons states of the European Community opposed the NPT provision that requires only non-nuclear weapons states party to the Treaty to accept IAEA safeguards in all of their peaceful nuclear activities.

The widespread concern was that the absence of any requirement for IAEA safeguards in nuclear-weapons states would place the non-nuclear weapons states at a commercial and industrial disadvantage in developing nuclear energy for peaceful uses, due to interference of these safeguards with efficient operation of their commercial activities and by compromise of their industrial and trade secrets through IAEA personnel's access to their facilities and records. Efforts to devise acceptable Treaty provisions for IAEA safeguards in nuclear-weapons states were unsuccessful, and by late 1967, the safeguards issue had become a serious obstacle to acceptance of the NPT by major industrialized non-nuclear weapon states.

In an effort to break that impasse and allay the concerns embodied in the impasse, President Johnson on December 2, 1967, stated that the United States was not asking any country to accept safeguards that the United States was unwilling to accept and that . . ." when such safeguards are applied under the Treaty, the United States will permit the International Atomic Energy Agency to apply its safeguards to all nuclear activities in the United States -- excluding only those with direct national security significance." The United Kingdom announced a similar offer on December 4, 1967. These two offers were instrumental in gaining acceptance of the NPT by key industrialized countries, and their importance was emphasized in public statements by the Federal Republic of Germany, Japan, and others. The U.S. offer would be delineated in a separate, formal agreement to be concluded with the IAEA.

Soon after the NPT entered into force in March 1970, a Safeguards Committee established by the IAEA Board of Governors undertook to advise the Board concerning the form and content of the safeguards agreements to be concluded with the non-nuclear weapon states party to the NPT. Nearly 50 governments participated in the Committee's work, which continued until 1971. One of the most difficult matters that the Committee addressed was that of financing the increase in the IAEA's safeguards activities resulting from the entry into force of the NPT. It was recognized that the number of facilities in the United States and the United Kingdom that would be eligible for IAEA safeguards within the terms of these two countries' offers would equal the total number of facilities in all non-nuclear weapon states. Thus, if the IAEA were to apply its safeguards in all of the facilities under the offers, it would require a doubling of its budget for its safeguards activities. Subsequently, a number of non-nuclear weapon states, led by Australia, proposed that the objective of the two offers could be achieved at reasonable cost to the IAEA if the IAEA carried out full inspections of only those facilities in the United States and the United Kingdom that were of advanced design or were sensitive in terms of international competition. Under the proposal endorsed by Italy, Japan, and the Federal Republic of Germany, the IAEA could apply something less than the full regime of inspections to all other eligible facilities not of advanced design or sensitive in terms of international competition in the two offering countries. Australia's proposal to the Committee achieved a balance between the costs of implementing the offers and attainment of the offers' objectives.

By March 1971, the Safeguards Committee completed its formulation of detailed provisions for the individual safeguards agreements. The Board approved the document, and shortly thereafter Austria and Finland negotiated safeguards agreements with the IAEA which became the models for future such agreements. They were also used in the development of the voluntary offer agreements with the United States and the United Kingdom.

In order for the U.S. offer to achieve its purpose, it was essential that the IAEA, in applying its safeguards in a particular type of U.S. facility, use the same procedures it follows in similar facilities in non-nuclear weapon states. Many of the model provisions could therefore be incorporated into the U.S.-IAEA safeguards agreement without change.

However, other provisions required adaptation in light of fundamental differences between the terms of the U.S. offer and the obligations of non-nuclear weapon states party to the NPT. These differences reflect several facts: 1) The U.S. offer excludes activities of direct national security significance and does not contain any limitations on use of nuclear material by the United States. (Therefore, the agreement provides that at any time the United States can remove a facility from the list of those eligible for safeguards should the facility become associated with activities of direct national security significance, and the United States can transfer nuclear material from eligible facilities to any location including non-eligible facilities.) 2) The United States has sole authority to decide which U.S. facilities are eligible for safeguards, and the IAEA has sole authority to decide which eligible facilities will be selected for safeguards (although the IAEA is obliged to take into account the requirement that the U.S. Government avoid discriminatory treatment between U.S. commercial firms similarly situated). 3) The United States had made separate commitments to provide to the IAEA, for safeguards purposes, information on imports and exports of nuclear material.

The U.S.-IAEA agreement itself addresses only the selection of facilities for the application of the full regime of safeguards procedures, including routine inspections. Australia and several other key non-nuclear weapon states had also proposed in the Safeguards Committee that all of the eligible facilities should bear some burden of safeguards. In further consultations it appeared that a satisfactory arrangement would be for the facilities not selected for the application of safeguards to submit design information, permit IAEA inspectors to verify such information in the facility, maintain accounting records, and provide accounting reports to the IAEA. The IAEA, however, was concerned that this would overwhelm its staff. Consequently, the concept of a secondary selection was introduced, whereby complete flexibility was provided to the IAEA, so that any or all of the eligible facilities could be required to submit the specified information, maintain records, etc. For ease of drafting, and to maintain the distinction between "safeguards," which includes routine inspections by the IAEA, and only the submission of information and maintenance of records, the provision dealing with the secondary category of selected facilities are grouped into a protocol to the agreement. The technical provisions in the protocol follow closely the comparable provisions in the agreement itself.

In September 1976, the U.S.-IAEA agreement was submitted to the IAEA Board of Governors for the Board's approval. The Director General informed the Board that in selecting facilities in which the IAEA would apply the full regime of safeguards (including inspections) the IAEA would take into account the need to avoid discrimination among commercial firms in the United States. The IAEA, he stated, would also observe the criteria for selection that had been proposed by Australia and others -- facilities of advanced design and those sensitive in terms of international competition. The Board, acting by consensus, authorized the Director General to conclude the agreement with the United States.

The agreement was submitted to the U.S. Senate on February 9, 1978. Its advice and consent to ratification was given unanimously, with understandings, on July 2, 1980. One of the understandings was that the President establish an appropriate interagency mechanism for dealing with the implementation of the agreement in the United States. The result was the creation of the "Interagency Steering Group for International Safeguards" to deal with policy matters and two subgroups. The first, the "Safeguards Agreement Working Group" was to monitor implementation and take necessary actions relating to implementation, the second, a "Negotiating Team" to negotiate the necessary subsidiary arrangements for implementing the agreement. Each of these three groups was chaired by the Department of State. In 1994 these groups were reformulated as a structure of interagency subcommittees and subgroups organized under the "International Atomic Energy Agency Steering Committee," chaired by the U.S. Ambassador to the IAEA.

The safeguards agreement entered into force on December 9, 1980. At that time the United States submitted to the IAEA a list of the more than 200 eligible facilities, including facilities licensed by the Nuclear Regulatory Commission and eligible license-exempt facilities of the Department of Energy. The IAEA is notified whenever an addition or removal is made to the list.

In early 1981, the IAEA made its initial selection of facilities in which the full regime of safeguards, including inspections, was applied, pursuant to the agreement proper. Two operating commercial reactors and one commercial fuel fabrication facility were selected. The facilities submitted design information, and negotiations were begun regarding each of the detailed "facility attachments," the detailed description of safeguards implementation at that particular facility. While those negotiations proceeded, the IAEA carried out ad hoc inspections in the facilities as permitted by the agreement. These first facility attachments entered into force in early 1982. Also at that time, the IAEA made its first selections under the protocol of two commercial fuel fabrication plants.

From then until 1988 the IAEA followed a practice of selecting for safeguards at approximately two-year intervals a different commercial fuel fabrication plant and two power reactors. Each time new facilities were selected, the current one was removed from selection under the agreement, and the fabrication was removed from selection under the protocol. In August 1981, the IAEA also selected for safeguards a decommissioned government-owned research reactor in which a quantity of plutonium was stored, satisfying an existing obligation of the United States and the IAEA for safeguards on two kilograms of plutonium.

In July 1983, the United States added the Portsmouth Gas Centrifuge Enrichment Plant (GCEP) to the eligible list, and the following August it was selected by the IAEA for safeguards. IAEA safeguards activities were performed at GCEP between August 1983 and July 1985. These activities included limited frequency, unannounced access by IAEA inspectors to the cascade halls. The Department of Energy terminated the gas centrifuge project in June 1985 and following the removal of nuclear material from the facility in July 1985, the facility was removed from the eligible list.

By the end of 1984 all commercial plants fabricating fuel for power reactors had been selected under either the agreement or the protocol.

In September 1993, President Clinton announced that the United States would place material deemed excess to its defense needs under IAEA safeguards. This historic initiative was designed to demonstrate the transparency and irreversibility of the dismantlement process and underscore the U.S. commitment to fulfill its obligations under the Non-Proliferation Treaty. Since that announcement, high-enriched uranium at the Y-12 Plant in Oak Ridge, Tennessee and plutonium at Hanford Site, Washington have been placed under IAEA safeguards. Additional plutonium at Rocky Flats, Colorado will also be placed under IAEA safeguards. The IAEA is also scheduled to conduct verification activities on high-enriched uranium transferred from Kazakstan to the United States in 1994 under "Project Sapphire." Finally, the United States is working to place its gaseous diffusion plants under IAEA safeguards as well. Each of these activities is, in whole or in part, conducted under the authority of the U.S.-IAEA Safeguards Agreement. This agreement, in its flexibility, will continue to be a crucial agreement for shaping U.S. nonproliferation and arms control policy throughout the next century.