Nuclear Commerce:

Additional Actions Needed to Improve DOE's Export Control Process

GAO-15-124: Published: Oct 14, 2014. Publicly Released: Nov 14, 2014.

Additional Materials:

Contact:

David C. Trimble
(202) 512-3841
trimbled@gao.gov

 

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What GAO Found

The Department of Energy (DOE) has consistently missed its 30-day targets for the initial and interagency stages of the Part 810 review process (see table). From 2008 through 2013, DOE missed the target for the initial review stage for 80 of 89 applications processed, and interagency review times missed DOE's 30-day target for 85 applications. DOE has not established a target for the entire final review stage, which had the longest median review times, or for the overall process. DOE has acknowledged exporter concerns that processing times for specific authorizations can impose business risks, and DOE officials have proposed initiatives to reduce processing times.

 

Initial review stage

Interagency review stage

Final review stage

Target review time

30 days

30 days

None

Median Review time

71 days

105 days

125 days

Longest review time

1,035 days

810 days

921 days

Shortest review time

0 daysa

12 days

14 days

Reviews exceeding 30 days

80 of 89

85 of 89

86 of 89

Source: GAO analysis of Department of Energy information. | GAO-15-124

aThe 0-day initial review was for an amended application whose initial review was completed the same date the amended application was submitted.

The scope of Part 810 is unclear, and DOE's inquiry process does not reasonably assure that the regulation is consistently interpreted. For example, it is unclear what marketing activities are covered by Part 810. DOE has not provided written guidance to clarify the regulation's scope, instead directing exporters to inquire with DOE officials. DOE officials said that they do not document all such inquiries or their responses. Without such documentation, DOE can neither reasonably assure that its responses are consistent, nor can it analyze the inquiries to identify parts of the regulation that may need clarification. DOE is taking some steps to clarify Part 810 by defining or refining some key terms. However, DOE's revisions do not address all terms that exporters have identified as unclear, and the time frame of DOE's revisions is unknown.

DOE has taken limited actions to enforce Part 810. DOE's primary method for monitoring compliance with Part 810 is reading reports from exporters, but according to DOE officials, they conduct in-depth analysis on less than 10 percent of reports and do not have a risk-based procedure for selecting reports to analyze. Also, because DOE does not provide guidance for companies to self-identify and self-report possible violations, DOE is missing an opportunity to leverage exporters' role in monitoring their own compliance. DOE has not yet determined whether it has the legal authority to impose civil penalties for violations of Part 810. According to DOE officials, DOE has never taken a formal action for a violation of Part 810, such as revoking an authorization or referring a potential violation to the Department of Justice (DOJ). Furthermore, DOJ officials reported that they are not aware of any prosecutions related to Part 810 violations from 2008-2013, the time frame GAO reviewed.

Why GAO Did This Study

Encouraging U.S. exports of civilian nuclear products, services, and technology while ensuring they are not used for foreign nuclear weapons programs is a fundamental goal of U.S. policy. Exports of U.S. civilian nuclear technology, assistance, and services are regulated by DOE through 10 C.F.R. Part 810. Depending on the importing country and technology, exports can be generally authorized, with no application required, or specifically authorized, in which case the exporter must submit an application to DOE. The Departments of Commerce, Defense, and State, as well as the Nuclear Regulatory Commission, also review the applications, which must finally be approved by the Secretary of Energy.

GAO was asked to examine the Part 810 process. This report examines (1) Part 810 processing times over the last 6 years compared with DOE's targets; (2) the extent to which Part 810's scope is clear and DOE can reasonably assure consistent interpretation; and (3) the extent to which DOE enforces Part 810. GAO analyzed all 89 specific authorizations granted from 2008-2013 and interviewed key agency officials and U.S. nuclear industry representatives.

What GAO Recommends

GAO recommends that the Secretary of Energy take several actions to improve the Part 810 process, such as determine whether DOE has legal authority to impose civil penalties, and establish realistic and achievable targets for each stage of the Part 810 process, as well as the overall process. DOE agreed with the recommendations.

For more information, contact David C.Trimble at (202) 512-3841 or trimbled@gao.gov.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Department of Energy Office of Nonproliferation and Arms Control (NPAC) program staff incorporated into its Process Improvement Program the establishment of realistic and achievable targets for each part of the Part 810 process, based on GAO's recommendation. According to an agency status report, NPAC established such targets in December 2015.

    Recommendation: To better align the Part 810 process with its stated goal of efficient regulation, the Secretary of Energy, working with the Administrator of the National Nuclear Security Administration, should review existing targets for processing Part 810 applications and determine the extent to which they align with DOE's resources and authorities. Based on the results of this review, establish realistic and achievable targets for each stage of the Part 810 process, including the third stage, as well as the overall process.

    Agency Affected: Department of Energy

  2. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To better align the Part 810 process with its stated goal of efficient regulation, as DOE moves forward with the e-licensing system, the Secretary of Energy, working with the Administrator of the National Nuclear Security Administration, should, integrate these targets into the system to monitor agency performance against them to ensure that the targets remain realistic and achievable and that they improve predictability for exporters.

    Agency Affected: Department of Energy

  3. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To promote clarity and consistency in administering Part 810, the Administrator of the National Nuclear Security Administration should ensure that all inquiries about the scope of Part 810, together with NNSA's responses to these inquiries, are documented, in accordance with existing DOE procedures.

    Agency Affected: Department of Energy: National Nuclear Security Administration

  4. Status: Closed - Implemented

    Comments: The National Nuclear Security Administration (NNSA) was advised by Department of Energy (DOE) General Counsel that DOE does not have statutory authority under section 234 of the Atomic Energy Act of 1954, as amended (AEA), to assess civil penalties for violations of AEA section 57b and its implementing regulations at 10 CFR Part 810.

    Recommendation: To facilitate enforcement of Part 810 and encourage compliance, the Secretary of Energy, working with the Administrator of the National Nuclear Security Administration, should determine whether DOE has legal authority to impose civil penalties for violations of the regulation and develop procedures accordingly.

    Agency Affected: Department of Energy: National Nuclear Security Administration

  5. Status: Closed - Implemented

    Comments: NNSA consulted with other regulatory agencies such as the Nuclear Regulatory Commission (NRC) and the Department of Commerce to determine what export compliance policies they have in place for encouraging and rewarding self-disclosure and to evaluate whether such a process(es) could be modified for Part 810 self-reporting. As a result of these consultations, as well as feedback received during NNSA's outreach efforts, the program office has developed an auditing function that encourages exporters to be stringent about their compliance with Part 810. Visits to sites and facilities will be part of this auditing activity. The office performed the first visit, to a utility that had not been in compliance, on November 20, 2015. The DOE Office of Nonproliferation and Arms Control (NPAC) will continue to implement this approach and therefore, this action can be closed.

    Recommendation: To facilitate enforcement of Part 810 and encourage compliance, the Secretary of Energy, working with the Administrator of the National Nuclear Security Administration, should assess the need to establish and articulate export compliance policies that encourage and reward exporters who self-identify, self-report, and correct violations, and provide guidance to exporters on such policies.

    Agency Affected: Department of Energy: National Nuclear Security Administration

  6. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To facilitate enforcement of Part 810 and encourage compliance, the Secretary of Energy, working with the Administrator of the National Nuclear Security Administration, should develop a risk-based procedure for selecting exporters' reports on authorized activities for in-depth analysis.

    Agency Affected: Department of Energy: National Nuclear Security Administration

 

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