Archive for the ‘Energy’ Category

NNSA Amends Assistance to Foreign Atomic Energy Activities

2015/03/30

By: Brooke Driver

For the first time since 1986, the Department of Energy has released a comprehensive update of 10 CFR Part 810, which controls the export of unclassified nuclear technology and assistance by identifying “generally authorized” activities involving nuclear technology and activities that require “specific authorization” from the Secretary.

The DOE states that, while small changes to Part 810 were made in 1993 and 2000, this comprehensive update was necessary in light of the global expansion of the civil nuclear market, especially in China, the Middle East and Eastern Europe. The nuclear industry has also expanded in France, Japan, the Republic of Korea, Russia and Canada.

Posted in Energy, Nonproliferation & Nuclear, USA Regulations

GAO Study Says US Embargo on Iran Is Ineffective

2008/01/25

2008/01/25

By: Danielle McClellan

In 2006, the U.S. National Security Strategy stated that the United States was facing challenges from Iran and its efforts and involvement in international terrorism. The GAO has since reviewed U.S. sanctions against Iran and the impact it has had and reviewed numerous data relating to Iran’s economy and energy sector.

After conducting research, the GAO concluded that Congress should consider requiring the National Security Council and key agencies to:

  1. Assess data on Iran sanctions and complete an overall baseline assessment of sanctions
  2. Develop a framework for ongoing assessments
  3. Periodically report the results to Congress

Officials did report that U.S. sanctions involving Iran has slowed foreign investment in the country’s petroleum sector, however other evidence indicates that the extent of the reported impact. (more…)

Posted in Embargoes, Energy, Finance & Banking, Iran, Terrorism

Reexport of Pipe to Iran Gets $100,000 Fine

2007/11/30

2007/11/30

By: Danielle McClellan

Proclad International Pipelines, Ltd. has been fined $100,000 for export violations. The Scotland-based company manufactures pipes used in the oil and gas, power generation, energy, aerospace, petro-chemical and marine engineering industries world wide.

In 2004 the company attempted to export nickel alloy pipes, which are subject to both the Regulations and the Iranian Transactions Regulations. The pipes must have required authorization to be exported from the United States to Iran through the United Arab Emirates. The pipes were declined by a freight forwarder because there was no evidence that the goods were authorized by the U.S. Government to be shipped to Iran. This act alone caused Proclad to be charged with four violations including conspiracy to violate the regulations.

During March and April of 2004 Proclad was in the course of an investigation subject to the Regulations, they were found to be making false statements and/or representations to the BIS’s Office of Export Enforcement concerning the nickel alloy pipes causing two more charges.

Over the course of the entire investigation Proclad was charged with 10 violations:

  • Causing, Aiding or Abetting a Violation of the Regulations
  • Conspiracy to Violate the Regulations
  • Ordering Nickel Alloy Pipes with knowledge that a violation of the Regulations is Intended to Occur
  • Taking Actions with the Intent of Evading the Regulations
  • Misrepresentation and Concealment of Facts

The company was not only fined the civil penalty of $100,000 but has also been debarred for seven years from any transactions involving any commodity, software or technology exported or to be exported from the United States that is subject to the Regulations. Proclad, its officers, representatives, agents, and employees will be considered “Denied Persons.”

More information:

BIS Order (e2021.pdf) (PDF)

Proclad Website

Posted in Energy, Iran, USA Regulations

Chevron Nailed for Misconduct in Iraq Oil for Food Program

2007/11/14

2007/11/14

By: Danielle McClellan

November 14, 2007 the United States Attorney for the Southern District of New York and the Securities and Exchange Commission announced that an agreement had been reached with the Chevron Corporation involving the company’s alleged misconduct involving the United Nations Oil-for-food Program.The SEC claims that Chevron failed to maintain adequate internal controls when it relied on its trader’s representations and certifications from the third parties. The company also violated the Foreign Corrupt Practices Act when it incorrectly recorded the surcharge payments to Iraq as premiums. These charges arose from allegations that Chevron purchased oil from third parties who paid secret, illegal surcharges to the former government of Iraq. Now whether or not the Chevron Corporation was aware of these undisclosed payments to Iraq is unknown.

(more…)

Posted in Energy, Iraq, Violations & Fines

Sudanese Sanctions Regulations Amended

2007/10/31

2007/10/31

By: Danielle McClellan

On October 31, 2007 the Sudanese Sanctions Regulations were amended to partially lift the prohibitions imposed across the country. The blocking and asset freezing of denied entities will remain in effect and unchanged as will the prohibitions involving petroleum and petrochemical industries throughout all of Sudan.

The following areas have been taken off of the prohibited list:

  • Southern Sudan, Southern Kordofan/Nuba Mountains State
  • Blue Nile State
  • Abyei
  • Darfur
  • 4 official camps for internally displaced persons in Khartoum

This will allow for export/import trade activities involving goods, services and technology to the above mentioned areas without a license. If the transaction involves property or assets held by the government of Sudan or a denied persons, relates to Sudan’s petroleum or petrochemical industry, or involves transshipment through regions of Sudan that are prohibited, a license must be obtained from OFAC.

More information:

OFAC news release

Posted in Energy, OFAC, Sanctions, Sudan

State Department Not Supportive of Bills Aimed at Tougher Sanctions on Iran

2007/03/30

2007/03/30

By: Jill Kincaid

Bills currently being considered in the House and Senate aimed at hitting Iran’s economy are not popular with the State Department. The intent of the bills is to force companies to stop investing in Iran – primarily the oil and gas sector which comprise the country’s biggest source of revenue.

Nicholas Burns, US Undersecretary of State, stated Thursday, March 29th, that the State Department would not support the current legislation being discussed. This legislation would require the enforcement of penalties of companies investing in Iran. Mr. Burns said that the act as it reads currently would “turn the full weight of sanctions not against Iran but against our allies that are instrumental in our coalition against Iran.”

The bills currently under consideration would close loopholes that allow US companies’ foreign subsidiaries to invest in Iran and would require pension funds to name companies in their portfolios which are investing in Iran. US companies known to have interests in Iran include General Electric, Dresser-Rand, Xerox, Overseas Shipholding Group, Inc., and Halliburton among others. There are many companies who manage to do business with Iran and other sanctioned countries through offshore subsidiaries or with Treasury-granted licenses. These companies are getting increased criticism as tensions worsen between the US and Iran. Many of these companies state that they are severing connections, or at least will sever them when current contracts expire. The bills under consideration would ban much of this business unless a special export license was obtained.

The UN Security Council recently passed a second set of Iranian sanctions. These call for countries to be vigilant in restraining their export credit relationship but fall short of requiring a cessation of export credits. The administration continues to encourage international banks to cease transactions with Iran.

Sources:

Posted in Energy, Finance & Banking, Iran, State Dept, USA Regulations

UN Approves New Sanctions Against Iran

2007/03/24

2007/03/24

By: Jill Kincaid

Iran’s refusal to stop its uranium enrichment program has resulted in new sanctions against them being unanimously approved by the UN Security Council. On Saturday, March 24th, the United States, China, Russia, Britain, France and Germany all voted to enact the new sanctions.

Changes include a ban on Iranian arms exports and a freeze on the assets of 28 entities with involvement in Iran’s nuclear programs. Many of these entities are linked to Iran’s Republican Guard.

The new sanctions are considered modest by most standards. The United States and the Europeans favored stronger measures and the Chinese and Russians were in favor of a less stringent approach. The goal is the make it clear to the Iranians that their failure to comply with demands to suspend their enrichment activities will have consequences. Iran defiantly rejected the sanctions and stated that it would not suspend its nuclear programs. Iranian officials maintain that their nuclear activities are solely for the purposes of energy production.

Source:

Posted in Defense Trade Controls, Energy, Iran, Nonproliferation & Nuclear, Sanctions

European Union Adopts Proposal for New Trade Restrictions on Iran

2007/03/14

2007/03/14

By: Jill Kincaid

In mid-March 2007, the European Union adopted a proposal specifying trade restrictions on Iran. The goal is to further the restrictions placed on Iran, with emphasis on those practices which could contribute to Iran’s nuclear program. The proposal includes the following:

  1. Guidelines for consistent implementation of the program
  2. Specifying which goods and technology will be affected. Companies who wish to export such goods will have to apply for proper authorizations from the appropriate member state
  3. Prohibition on providing technical or financial assistance to any parties listed in Annex I or Annex II of the Regulation
  4. Authorization for Member States to override the above prohibition when certain criteria are met:
    1. Confirmation by the UN that transaction will not contribute to Irans’s nuclear program
    2. Appropriate end-use guarantees in contract
    3. Commitment by Iran not to use transaction for nuclear program
  5. A freeze in funds or assets controlled by individuals or entities listed in Annex IV and Annex V

Penalties for violation of the regulations will be set out by individual Member States.

Source:

Posted in Defense Trade Controls, Energy, EU, Finance & Banking, Iran, Nonproliferation & Nuclear

Legislation Passed for Historic Nuclear Cooperation between US and India

2006/12/09

2006/12/09

By: Jill Kincaid

After three decades of attempting to restrain India’s nuclear activities, historic legislation has been passed, and will probably be signed by the President, creating a dramatic initiative on US/India nuclear cooperation. One of the last orders of business of the 109th Congress was to pass the act allowing nuclear cooperation in a civil capacity with India. The final bill, named the “Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006” was passed on December 9, 2006.

The bill will allow the President to waive provisions of the Atomic Energy Act of 1954 assuming that certain conditions are met by India. These conditions include the negotiation and implementation of a nuclear cooperation agreement between the two countries.

The implications could be great for US and other companies who are already in discussions with Indian officials in preparations for the new Indian market. The Indian government anticipates boosting its civil nuclear capacity in the range of 50,000 watts in the coming 20-25 years. This will create opportunities for companies in the nuclear power market worldwide.

The legislation that has hindered India/US cooperation in the past 30 years stemmed from India’s detonation of a nuclear test in 1974 and India’s claims that the Non-Proliferation Treaty was discriminatory. After a multitude of meetings between US and Indian officials over the past several years, the US decided that the time was right to relax the regulations if India agreed to a number of conditions. These include the agreement to not detonate another nuclear weapon. Another “deal-breaker” would be if the US determines that the new cooperation is benefiting India ’s weapons program.

If India meets the conditions set forth by the United States, controls on nuclear-related exports to India will, in all likelihood, be relaxed. The Nuclear Regulatory Commission and the Department of Energy could allow transfers of nuclear reactors, technology, and related equipment to India. The conditions are complex and may take some time to complete so it may be quite a while until nuclear cooperation can actually begin.

Posted in Energy, India, Nonproliferation & Nuclear, NRC, USA Regulations

US to India: No NPT? No problem.

2005/09/15

2005/09/15

By: Scott Gearity

For three and a half decades now under the bargain struck between the Nuclear Non-Proliferation Treaty‘s (NPT) five acknowledged nuclear-weapons states (China, France, Russia, the United Kingdom, and the US) and its non-nuclear-weapon states has gone like this: in exchange for the non-nuclear-weapons states forgoing nuclear weapons, the nuclear weapons states agreed to provide them with peaceful civilian nuclear power technology, subject to safeguards agreements overseen by the International Atomic Energy Agency (IAEA). Since the treaty entered into force in 1970, it has become the most broadly accepted arms control agreement in history. Only three states never acceded to the NPT – India, Israel, and Pakistan. (Former member North Korea withdrew in 2003.) Consistent with its obligations under the NPT, the US has long subjected countries outside the treaty to the most strict nuclear nonproliferation export controls, represented on the Commerce Country Chart (pdf) by an “X” in the NP 2 column.

But when Indian Prime Minister Manmohan Singh bid farewell to Washington this past July after meeting with President Bush, he left with a huge prize. The United States had just committed to essentially rewrite the rules for trade in nuclear technology in favor of India, which of course continues to operate a nuclear weapons program external to the NPT. In his joint statement with Singh, Bush praised India as a “responsible state” with a “strong commitment to prevent WMD proliferation” and asserted that “India should acquire the same benefits and advantages as other such states”. To that end, the American president said he would “also seek agreement from Congress to adjust U.S. laws and policies, and the United States will work with friends and allies to adjust international regimes to enable full civil nuclear energy cooperation and trade with India”. In addition, the US committed “to remove certain Indian organizations from the Department of Commerce’s Entity List”.

The Bush Administration took the first concrete steps to implement its new stance toward India on August 30 when it published a final rule, amending the EAR effective immediately, which eases restrictions on exports and reexports to India of items controlled for unilateral nuclear nonproliferation reasons. The new regulation removes the “X” from beside India in Column NP 2 of the Commerce Country Chart and thereby eliminates several license requirements for exports and reexports to India, including those for the following items:

  • ECCN 1A290: depleted uranium
  • ECCN 1C298: graphite for non-nuclear end-uses
  • ECCNs 2A290, 2A291, 2A292, 2A293, 2B290, 2D290, 2E001, 2E002, 2E290: nuclear plant equipment and related software and technology
  • ECCNs 3A292 and 3E292: certain oscilloscopes and related technology

In addition, the Entity List is now that much shorter with the removal of the following Indian organizations:

  • Indian Space Research Organization (ISRO) Telemetry, Tracking and Command Network (ISTRAC)
  • ISRO Inertial Systems Unit (IISU), Thiruvananthapuram
  • ISRO Space Applications Center (SAC), Ahmadabad
  • Department of Atomic Energy (DAE) Tarapur (TAPS 1 & 2)
  • DAE Rajasthan (RAPS 1 & 2)
  • DAE Kundankulam 1 & 2 (this power plant, still under construction, was never explicitly named to the Entity List, but now that the Indian Government has agreed that it will be placed under IAEA safeguards once work is completed

In removing unilateral nuclear nonproliferation sanctions on India and reducing the number of that country’s organizations subject to the sanctions of the Entity List, the administration has now completed the two major steps toward its goal of a new nuclear relationship with India that it can accomplish entirely within the existing authority of the executive branch. As the Bush-Singh joint statement itself admits, further movement toward greater civilian nuclear cooperation will require the assent of the US Congress and the multilateral Nuclear Suppliers Group. The irony of the US seeking NSG acquiescence to increased nuclear technology transfers to India is especially rich when one considers the origins of that regime.

The NSG is a child of India’s 1974 nuclear test in the Thar Desert of Rajasthan, which spurred governments to take action to stem the export of nuclear materials and equipment to India and other states demonstrating a proliferation risk. In his testimony before the House Committee on International Relations earlier this month, Under Secretary for Arms Control and International Security Robert G. Joseph hinted that some US allies participating in the NSG might be amenable to the US proposals for full peaceful nuclear cooperation with India (he specifically mentioned the UK). Still, the NSG operates by consensus, so it will be interesting to see if a State Department office not recently known for its diplomatic achievements (current US ambassador to the United Nations John Bolton was Joseph’s predecessor) can win one for the home team.

Posted in BIS, Commerce Dept, Defense Trade Controls, EAR, Energy, India, Nonproliferation & Nuclear, NSG

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