Interturbine Aviation Logistics GmbH, Germany Settles Proposed Charges Involving Violations of the Arms Export Control Act and International Traffic in Arms Regulations

Office of the Spokesman

Washington, DC

February 3, 2010

The U.S. Department of State and Interturbine Aviation Logistics Gmbh, Germany and its Texas Branch Office, Interturbine Aviation Logistics GmbH, LLC (Interturbine), have reached an agreement to resolve violations of the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR) committed by Interturbine in August and September of 2004.

Under the Consent Agreement signed this week to settle the case, Interturbine agreed to pay a civil penalty of $1,000,000, of which $900,000 will be suspended. $500,000 will be suspended on the condition that Interturbine has already applied that amount to self-initiated, pre-Consent Agreement remedial compliance measures. $400,000 will be suspended on the condition that Interturbine maintains its self-initiated exclusion from all ITAR regulated activities. If within the two-year term of this Consent Agreement Interturbine decides to become involved in ITAR regulated activities, it will use this $400,000 for additional remedial compliance measures agreed to by the Department. Interturbine will also have an independent audit to ensure that its company-wide automated export control system prevents its involvement in all ITAR regulated activities.

Interturbine has acknowledged the seriousness of its conduct and has cooperated with the Department’s investigation, expressed regret for these activities, and taken steps to improve its compliance programs. Interturbine has also undertaken to make amends by implementing the remedial compliance actions specified in this Consent Agreement. For these reasons, the Department has determined that an administrative debarment of Interturbine is not appropriate at this time.

The Consent Agreement and related documents are available to the public on the website of the Directorate of Defense Trade Controls (www.pmddtc.state.gov).

Addressing the Nuclear Fuel Cycle: Internationalizing Enrichment Services and Solving the Problem of Spent Fuel Storage

Ellen Tauscher
Under Secretary for Arms Control and International Security 

Hoover Institution, Stanford University

Stanford, CA

January 19, 2010

It’s a great pleasure to be back in the Bay Area, and be once again in the company of George Shultz, as he continues to lead us to address the most difficult questions before our nation.

We are grateful for your interest, your hard work, and your patriotism on the issues of energy and nonproliferation that threaten our economic future, our national security, and international stability.

The Obama administration is working on many fronts to solve some of our toughest problems, including health care, the economy, climate change, and terrorism. I was actually pleased not to be a member of Congress last summer, when I would have had to host a town hall meeting or two. Let me say how honored – and relieved – I am to be here today.

As you know, the demand for clean energy is growing. That means nuclear power is likely to be an important part of our low-carbon energy future, at least until my former constituents at Livermore finally deliver on the promise of fusion.

So as nuclear energy expands worldwide, we must address the two challenges that are suggested by the subjects for this session:

• First, we must ensure that the expansion of nuclear energy does not lead to the spread of enrichment and reprocessing technologies that can be used to make nuclear materials for nuclear weapons.
  
  
• And second, we must develop a practical plan for management of used fuel.

These two goals are interrelated in various ways. The connection I want to emphasize today is that cooperation on used fuel management can reduce global demand for indigenous enrichment and reprocessing.

President Obama addressed precisely these issues last spring in Prague when he set forth the ambitious goal of building “a new framework for civil nuclear cooperation …. so that countries can access peaceful power without increasing the risks of proliferation.”

As we at the State Department work to ensure that civil enrichment and reprocessing technologies do not contribute to weapons proliferation, the most direct approach, as is often the case in life, is not the most productive.

The previous administration proposed to ban these technologies for states that do not already posses them. The problem was that all other countries opposed this approach because they viewed it as an infringement on their sovereignty and on their Non-Proliferation Treaty rights to peaceful nuclear technology. Moreover, the very insistence that others not obtain such capabilities increased demand for them by creating the impression that we are seeking to establish a suppliers’ cartel. Instead of reassurance, this had the opposite effect.

As President Obama said in Prague, “no approach will succeed if it’s based on the denial of rights to nations that play by the rules.” So the administration is focusing on creating incentives for states considering nuclear energy to choose not to pursue sensitive fuel cycle technologies.

The primary incentive not to pursue indigenous enrichment capability is the existence of a strong, competitive commercial market. Any state or reactor operator in good standing with its nonproliferation obligations seeking uranium enrichment services may receive four bids – from URENCO, USEC, Areva, and Tenex. Many contract with all four to diversify their supply. The enrichment industry is investing heavily to upgrade technology and expand to meet projected demand. A fifth potential competitor is developing innovative laser technology.

These suppliers, which are international in character, with production facilities in six countries, have a proven track record for producing enriched uranium reliably and economically.

This international enrichment enterprise is fully integrated into a global fuel supply chain, including international providers of uranium, conversion services, and fuel fabrication, with a track record of reliable performance on long-term contracts. This competitive commercial market is the bedrock incentive to forgo costly and complex indigenous enrichment programs.

But for those who seek additional confidence beyond what the market provides, the United States is leading the international community to develop assurances of reliable fuel supply, beginning with fuel banks. As you have noticed, after forty years of discussion, the IAEA Board of Governors approved in November the first enriched uranium reserve, at Angarsk, in large measure due to a cooperative diplomatic effort of the United States and Russia.

If a country in good standing with its nonproliferation obligations encounters a supply problem and is unable to find a commercial solution, it could turn to the IAEA, which in turn could request enriched uranium from the Angarsk reserve. In a manner consistent with its national laws, Russia could transfer the material to the IAEA, which would arrange for fabrication into fuel and delivery to the country in question.

This all sounds straightforward, but there are underlying challenges that need to be reconciled, including:

• First, the IAEA’s perceived need to determine eligibility only on the basis of the record of compliance with safeguards;
  
  
• Second, the laws of supplier countries placing much more stringent conditions on transfers of enriched uranium, including the NSG guidelines;
  
  
• And finally, a feeling on the part of many developing countries that fuel assurances are intended ultimately to preserve a chokehold over nuclear fuel supplies and to deny them their NPT rights to nuclear technology.

The Obama administration worked with Russia and the IAEA to reconcile these divergent considerations in a manner that won the approval of a large majority of the IAEA Board.

We are now using the precedents established by Angarsk to shape the international nuclear fuel bank put forward by the Nuclear Threat Initiative, with the objective of bringing this second and complementary fuel bank proposal to the IAEA Board in the spring.

In addition, the United States is creating a national enriched uranium reserve to support fuel supply assurances by downblending highly enriched uranium no longer needed for national security purposes.

As fuel banks have made the transition from discussion to reality, we are exploring other concepts to assure a reliable fuel supply, in particular backup arrangements between suppliers and consumers such as the enrichment bond. Under a concept put forward by our British friends, supplier governments would commit, under certain conditions, not to prevent their companies from supplying enriched uranium.

These various forms of assurance of reliable supply of nuclear fuel are designed to serve as safety nets, to enhance confidence for countries that rely on the commercial market for nuclear fuel and reduce pressure to pursue indigenous sensitive fuel cycle facilities. The Obama administration strongly supports the creation of these safety nets.

Looking to the future, a more ambitious and controversial approach would be to create internationally-controlled enrichment centers. Proponents envision international control as a way to provide reliable fuel supply services without putting sensitive enrichment technology in the hands of more countries.

But this idea has its own set of problems, including questions concerning how an international organization would manage safety regulation, make export control decisions, raise the immense funding required, gain access to competitive technology, and maintain security of enrichment technology. The disastrous loss of URENCO centrifuge technology, and onward proliferation of that knowhow, illustrates the potential problem of maintaining technology security in multinational organizations.

There are also questions of how to integrate international enrichment centers with the existing commercial market. New international suppliers could add diversity, but we do not want to disrupt the commercial market which is working well today and provides a strong incentive not to pursue indigenous enrichment.

The interrelationship between commercial enrichment enterprises and international centers could become complex if, as seems likely, commercial enterprises provide the technology and operating facilities for international centers, on a black-box basis. Whether internationally-controlled enrichment centers represent a creative idea somewhat ahead of its time remains to be seen.

In parallel with these multilateral efforts, the United States is using bilateral nuclear cooperation to build mutual confidence and to welcome decisions to abstain from indigenous enrichment and reprocessing.

We have signed bilateral Memoranda of Understanding with Jordan, the United Arab Emirates, Saudi Arabia, and Bahrain which express their intention to rely on international markets rather than enrichment and reprocessing on their territories.

As a matter of policy, we will continue to encourage states to take advantage of the international fuel market and to welcome decisions to refrain from enrichment and reprocessing by states that do not have these capabilities.

We believe there is great value in having the U.S. government and U.S. industry deeply involved in the nuclear programs of developing countries, to help create high standards for safety and security and nonproliferation. For exports of U.S. nuclear technology, this requires conclusion of Agreements for Nuclear Cooperation (so-called 123 agreements).

As an example of the importance we attach to these issues, I recently traveled to Amman to work with the government of Jordan to develop a path forward on a 123 agreement.

By law, 123 agreements are sent to Congress for review. It is therefore a joint responsibility of the administration and the Congress to take account of the particular situation of each country and region in developing agreements that enable deep involvement of U.S. industry and not leave the field entirely to others that may not share our nonproliferation standards.

Let me now turn to the second question on the agenda for this session, the disposition of used reactor fuel. In contrast to the front end of the nuclear fuel cycle, where there is a strong competitive commercial market, disposition of spent fuel is an unresolved problem for nearly all countries. This is a challenge and potential opportunity for us to advance our nonproliferation goals.

As many in this room can elaborate, no nation, with the possible exception of Sweden and Finland, has satisfactorily resolved the question of the disposition of used fuel once it is discharged from a power reactor. The United States is putting its best and brightest to work on this problem.

Today’s technology provides two unattractive choices:

• One is isolation in a geological repository for tens of thousands of years. This is politically and technically difficult, and throws away the majority of the potential energy value, which might be needed in the future depending on the scale of expansion of nuclear energy, the availability of uranium resources, and the availability of improved technologies to extract additional energy without increasing proliferation risks, none of which is known today.
  
  
• The other is reprocessing to recover uranium and plutonium, followed by use of the plutonium to produce MOX fuel for light-water reactors. Reprocessing with current technology is uneconomic, as MOX fuel is more expensive than LEU. Reprocessing does not significantly reduce the waste burden, but passes it on in the spent MOX. And reprocessing has resulted in large and growing stocks of separated plutonium – about 250 tons, and growing about 10 tons per year. The growing worldwide stockpiles of separated plutonium as a byproduct of reprocessing used civil reactor fuel represent one of our greatest nonproliferation problems.

So the Obama administration is focusing on research to create better options:

• If fast neutron reactors could produce electricity as reliably and economically as today’s thermal reactors, they would open the way to a new fuel cycle without separation of plutonium. Much of today’s stockpile of separated plutonium was created in anticipation of the advent of fast reactors. Unfortunately, the 60 years of experience with fast reactors has been problematic, and commercial deployment for economical production of electricity is not in sight.
  
  
• High-temperature reactors have potential for high burn-up of uranium and plutonium, and a proliferation-friendly once-through fuel cycle.

These and other concepts are being actively pursued with our international partners in the Generation IV International Forum, for potential deployment in future decades.

Which leads to the question of what we can do today to help countries considering nuclear energy in dealing with the back end of the fuel cycle. If we could offer a way to help relieve nuclear newcomers of the burden of disposition of used fuel, that would be attractive, and could provide an advantage as we seek to achieve our goal of strengthening nonproliferation as nuclear energy expands.

As the sponsors of this conference have presciently anticipated in the title of this session, a key part of the answer is interim storage.

Nuclear power is the only industry I know where the short term is 50 years. So what we are looking for is placement of used fuel in a storage facility for 50 to 100 years with the ability to retrieve it at any time. From a technical point of view, dry cask technology is proven and licensed and available for this purpose.

We will not know for decades the full extent of the demand for nuclear fuel due to expansion of nuclear energy. Nor will we know the availability of the uranium resource that can be recovered at reasonable cost. Nor will we know which technologies will become available to overcome the economic and proliferation drawbacks of reprocessing as practiced today.

Retrievable interim storage would preserve options for future decisions when we have the information necessary to make informed choices on what to do with used fuel.

The question becomes where to store used fuel. Part of the answer is in the same country – usually at the same site – where the fuel was irradiated. The United States and others can assist a country seeking nuclear energy in implementing a safe, secure, and economical system for interim storage on the reactor site, or elsewhere in that country.

The answer could also include international storage. Today, Russia is the only country taking back used fuel, and only from Russian-supplied reactors. There is potential for development of broader application of interim storage in Russia of fuel irradiated in other countries. But Russia has no interest in being the only destination for used fuel, and the corresponding leverage Russia would gain in the sale of fresh fuel would surely distort the market.

One can argue that it would be in the interest of the United States and other suppliers of reactor technology and fuel to take back used fuel for storage. At present, bringing to the United States used fuel irradiated in nuclear power plants abroad requires notification of Congress, which would almost certainly lead to Congressional opposition to such imports. While the odds are against us, we could work with Congress to seek an ability to offer interim storage of used fuel from abroad, for countries that do not have sensitive fuel cycle facilities.

Establishment of regional or international interim storage facilities could make an important contribution to an attractive offer for countries considering nuclear energy. Used fuel could be stored at the reactor site for a period of time, followed by storage at an international facility, followed by a decision on ultimate disposition.

Finding suitable locations that would welcome such a facility would not be easy. Resolving questions of cost, responsibility, and liability are serious challenges. The potential benefits would be substantial, and would justify a major effort.

Our goal is to cooperate with other governments to open the way for the international nuclear industry to offer the same reliable and economical services at the back end of the fuel cycle that they now provide at the front end.

Indeed, comprehensive fuel services including fuel leasing and take-back options – “cradle to grave,” in the words of my friend and colleague Deputy Secretary of Energy Dan Poneman – would be attractive to governments and operators as an alternative to the costs, complexities, and burdens of sensitive fuel cycle facilities.

Through international cooperation, we can achieve the goals President Obama set forth in Prague. Together with our international partners, we can discourage the spread of sensitive technologies, while we support expansion of peaceful nuclear energy, without calling into question the rights of countries that abide by their nonproliferation obligations.

Thank you for inviting me. I look forward to the discussion.

Global Zero Summit

Ellen Tauscher
Under Secretary for Arms Control and International Security 

Paris, France

February 3, 2010

As prepared

Thank you. It’s an honor to be here in Paris at the Global Zero Summit and see so many old friends. Many of you have known and worked with me when I served as a member of Congress from California and it’s an honor to be here today representing the Obama administration.

I want to thank Richard Burt for this invitation and I want to thank all of those who are here today that I have worked with in the past. Thank you for your patriotism and your hard work.

I want to recognize the Student Movement and its leaders who are a part of this conference. Thank you for your passion and engagement.

I know Global Zero has set itself an ambitious goal of wanting to eliminate nuclear weapons during the next 20 years.

The goal is admirable, and I thank you for the time and energy each and every one of you is putting into this effort.

The nuclear arms race that characterized the Cold War cast a shadow over the lives of people everywhere—especially those living in Europe and the United States. But today there is universal agreement that, as Secretary Clinton said last week in this great city, "People everywhere have the right to live free from the fear of nuclear destruction."

And President Obama set forth an ambitious agenda in his speech in Prague last year. The president has embraced the vision of John Kennedy and Ronald Reagan of calling for a world without nuclear weapons.

Those are not just abstract words for him. This issue animates the president, it’s not one of those issues that an aide had to tell him about. He has put his political capital and muscle behind that vision.

But he acknowledged then, just as he did in his statement to you yesterday, that it would not be easy and that it will take a long time. It will likely will exceed twenty years and that it might not happen in his lifetime.

Nuclear disarmament is not the Holy Grail. It’s only worth pursuing in so far as it increases our national security.

I believe that the journey on the road to zero is perhaps more important – than the goal itself.

It’s those concrete steps that we take that will enhance the national security of the United States and make the world a more stable place.

So just don’t look at what we say, look at what we’re going to do over the next few months.

We’re at the end game of negotiating a new arms reduction treaty with Russia. Nobody said this was going to be easy and as someone who has negotiated a few deals in my day, this is one that isn’t very contentious or complicated.

Both sides are working well together and if the measure of a good deal is that both sides are willing to do another deal, then we’re in good shape.

As President Obama said in his statement to you the other day, "this is just a start."

On March 1, the Obama administration will release its Nuclear Posture Review, which will reduce role and number of nuclear weapons in our national security strategy. For the first time, there has been significant State Department participation in the Nuclear Posture Review. We have made sure to fully address all matters relating to our nuclear posture. We also have spent a significant amount of time consulting our allies because it is our goal to strengthen their security as well.

At April's Nuclear Security Summit, the President will bring 44 nations together to advance his goal of securing all vulnerable nuclear materials around the world in four years, so that they never fall into the hands of terrorists.

In May, we will strengthen the Nuclear Nonproliferation Regime at the Review Conference and work with allies and partners to ensure that the rights and responsibilities of every nation are enforced.

We are also working to start negotiations in the Conference on Disarmament on a treaty to halt fissile material production, so that we don’t add to global stockpiles of highly enriched uranium or weapons grade plutonium.

And, when we’re ready, we will ask the United States Senate to ratify the Comprehensive Test Ban Treaty.

Looking back, the United States and, for that matter, Russia, have not gotten enough credit for the steps we have taken to disarm. They have been substantial even though we all know we have a long way to go.

There’s also reason to look up.

More than 180 countries have foresworn nuclear weapons. More countries have given up or been denied nuclear weapons programs than those that have acquired weapons over the past 40 years.

That’s why we cannot let our guard down now. My friends, George Schultz, Bill Perry, Henry Kissinger and Sam Nunn, who some call the Four Horsemen or the Four Wise Men have compared the vision of a world free of nuclear weapons to the summit of a very tall mountain.

It’s hard to see that peak from where we stand today, and so we first must make forward progress that allows us to see that goal as attainable and realistic. We have a long journey ahead of us and it’s a journey that won’t be easy, but with your help and your energy I believe that we can get there.

Thank you very much.

Victoria Nuland Named Special Envoy for Conventional Armed Forces in Europe

Gordon Duguid
Acting Deputy Department Spokesman

Washington, DC

February 2, 2010

Secretary of State Hillary Rodham Clinton is pleased to announce the appointment of Ambassador Victoria Nuland as Special Envoy for Conventional Armed Forces in Europe.

Ambassador Nuland and her staff will work under the daily direction of Under Secretary of State for Arms Control and International Security Ellen Tauscher to develop ideas to modernize our current conventional arms control structures in Europe. She also will consult closely with our NATO Allies and our European partners in conventional arms control, including Russia.

Ambassador Nuland is a 26-year veteran of the Foreign Service with past postings as U.S. Ambassador to NATO and at the U.S. Embassy in Moscow.

The Secretary of State's Speech on European Security

Office of the Spokesman

Washington, DC

January 29, 2010

In a speech today at L’Ecole Militaire in Paris, Secretary of State Hillary Rodham Clinton emphasized that the United States and Europe are essential partners in meeting today’s global challenges, and stressed that we are eager to strengthen cooperation with a Europe that is strong and unified. Today, thanks to the partnership between our nation and many others, Europe is more secure than ever before. But much important work remains unfinished. We welcome the new thinking on European security that is underway on both sides of the Atlantic. As we work with our partners to strengthen and extend security in Europe, we will do so on a firm foundation of core principles. These principles include:

• Dedication to the Sovereignty and Territorial Integrity of all States. The United States must and will remain vigilant in our efforts to oppose any attempt to undermine the right of all countries to pursue their own foreign policies, choose their own allies, and provide for their own defense. The United States strongly objects to any spheres of influence in which one country seeks to control another’s future.
  
• Recognition that Security in Europe Must be Indivisible. The security of all nations is intertwined. We must work together to enhance each other’s security, in part by engaging with each other on new ideas and approaches. We want to work together with Russia to reaffirm the principles of the Helsinki Final Act and the NATO-Russia Founding Act. The United States is proud of what our two countries have accomplished together during the past year. We will continue to build a more substantive and constructive relationship based on our mutual interests.
  
• Unwavering Devotion to the Collective Defense and Security of NATO Allies. This pledge is enshrined in the NATO treaty’s Article 5, wherein an attack on one is an attack on all. The United States is working with our Allies to develop contingency plans for responding to new and evolving threats. We are engaged in productive discussions with European allies about their potential participation in the new missile defense architecture. We are also exploring ways to cooperate with Russia in ways that enhance the security of all of Europe, including Russia.
  
• Commitment to Practicing Transparency in Our Dealings with Europe. To keep Europe safe, we must keep the channels of communication open by being forthright about our policies and approaches. The United States supports a more open exchange of military data, including visits to military sites. The Conventional Armed Forces in Europe Treaty also needs our attention. Our goal should be a modern security framework that strengthens the principles of territorial integrity, non-first use of force, transparency, and the right of host countries to approve the stationing of troops in their territory.
  
• Belief that People Everywhere Have the Right to Live Free from the Fear of Nuclear Destruction. President Obama has declared a goal of ridding the world of nuclear weapons. As long as nuclear weapons exist, we will retain a safe, secure, and effective deterrent to protect us and our allies. The United States and Russia are close to concluding a new START treaty to reduce our strategic nuclear arsenals. The United States will also chart the future of its nuclear forces in the Nuclear Posture Review, host a Nuclear Security Summit to address the risk of unsecured nuclear material, seek to strengthen the Nuclear Nonproliferation Treaty, pursue negotiations on a Fissile Material Cutoff Treaty, and move toward ratifying the Comprehensive Test Ban Treaty.
  
• Recognition that True Security Entails Not Only Peaceful Relations among States, but Opportunities and Rights for the Individuals Who Live Within Them. Governments must promote and defend the human rights of their citizens so that all can live in dignity, free from fear of violence or oppression. The United States and Europe are acting together to expand opportunity, advance democracy, and protect human dignity around the world. The United States seeks to partner with and strengthen institutions to broaden the respect for human rights, to end the scourge of human trafficking across Europe, and to reach out to marginalized groups.

A transcript of Secretary Clinton’s remarks is available online at www.state.gov.

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