nuclear trade decisions is particularly troublesome today, when a number of countries, on the brink of confrontation, might well seek to acquire nuclear explosive materials to make nuclear

weapons.

SEC. 15 provides a specific role for the Secretary of Defense in nuclear non-proliferation matters. The Secretary of Defense must find that proposed agreements for cooperation are not inimical to the common defense and security of the U.S.; he must so advise the NRC, through the Secretary of State, in connection with export licenses; and he must sign off on subsequent arrangements under section 131 of the Atomic Energy Act.

Section 16

Department of Commere (DOC) export licenses for

nuclear-related commodities are not now subject to restrictions comparable to those governing NRC export licenses. As a result, items on the Commerce Nuclear Referral List, which include commodities which have direct application for nuclear weapons production, may be sent to a country that does not accept full scope safeguards or provide other assurances. Most recently, the export of two powerful computers applicable to nuclear weapons design was approved to South Africa, despite South Africa's refusal to accept full-scope safeguards. DOC also approved the export by an American company of a powerful computer, via Belguim

and Switzerland, for use in an Argentine heavy water plant, even though Argentine likewise has refused to accept safeguards on all its nuclear activities.

SEC 16 imposes upon DOC the same obligations that are

imposed upon the NRC and DOE. In other words, before a validated license can be issued under the Export Administration Act for goods or technology which are to be used in a production or utilization facility, or for goods or technology which are likely to be applied to such use, there must be an agreement for cooperation in place and the country in question must have full-scope safeguards and otherwise adhere to the criteria set forth in sections 127 and 128 of the Atomic Energy Act.

The concurrence of the Department of Defense, DOE and the NRC is required in connection with findings of likelihood that particular goods or materials will be used in nuclear facilities. Presidential authorization is again provided for, subject to Congressional review and override procedures, if the export criteria are not met.

Section 17

One of the anomalies in current law is that component exports by the NRC are not subject to the same stringent licensing requirements as "facilities". The NRC has broad discretion to

decide what does and what does not constitute a "facility", and, under current regulations, numerous, critical components are excluded from the full panoply of licensing procedures and requirements.

Consequently, exports may be allowed to countries which do not have full scope safeguards or an agreement for nuclear cooperation with the United States.

SEC. 17 makes component exports by the NRC subject to the same licensing requirements as production and utilization

facilities.

Section 18

Another anomaly in existing law related to sales and transfers which may be made by affiliates of U.S. corporations. The Westinghouse Electric Co., for example, at one point appeared near to circumventing U.S. nuclear export controls by offering a $1.1 billion, 900 megawatt nuclear power reactor to Pakistan through affiliated companies in Spain. Although direct export of nuclear powerplant to Pakistan is prohibited by U.S. law, because Pakistan has neither accepted full-scope safeguards nor entered into an agreement for peaceful nuclear cooperation with the United States, such indirect transactions appear to fall through a major loophole in our nonproliferation legislation.

SEC. 18 asserts control over foreign affiliates of U.S.

firms, so that transfers via foreign affiliates will be controlled as if they were transfers by U.S.-based firms.

Section 19

Prohibitions have little meaning if they are not enforced. Under the existing law, even if non-proliferation requirements are violated by nations receiving nuclear assistance from the U.S., there is no automatic cut-off of nuclear exports. Potential viclators can thus afford to take greater risks in pursuing policies and programs contrary to U.S. nonproliferation objectives.

SEC. 12 provides for an automatic cut-off of nuclear exports to nations in violation of section 129 criteria, unless the President determines, and Congress agrees by concurrent

resolution, that exports should continue.

APPENDIX 6

TEXT OF BALTIMORE SUN ARTICLE OF SEPTEMBER 17, 1983

ARGENTINE NUCLEAR POTENTIAL STIRS CONCERN

SOME FEAR BOMB MAY BE NEAR

WASHINGTON.-Intelligence specialists and nuclear experts are increasingly concerned that Argentina is developing the ability to build nuclear weapons and may actually be planning to build a nuclear bomb.

An intelligence report now circulating among key officials of the Reagan administration contends that Argentine nuclear officials have a "secret plan" to divert a ton of uranium from under the noses of international inspectors and use the material to make nuclear-fuel elements.

Such fuel elements could presumably be irradiated, through further clandestine steps, to produce plutonium for an atomic weapon, or they could presumably be stockpiled and saved to build a bigger arsenal at some future time. The intelligence report does not spell out the possibilities.

Many nuclear experts consider the intelligence estimate implausible and doubt Argentina is really planning such a secret and illegal diversion. But they, too, express concern over what they see as an even greater danger: Argentina's progress in building, openly and legally, a range of nuclear installations that are not subject to international inspections and safeguards. These installations could eventually be used to produce bomb materials without violating a single international law or treaty, should Argentina so desire.

"Argentina is probably closer than anybody else in the world today to completing an un-safeguarded nuclear fuel cycle," says Sherman Hinson, a State Department official with long experience in issues dealing with the spread of nuclear weapons. "And there's nothing secret about it. That's the truly disturbing thing."

Argentina has refused to sign the Nuclear Non-Proliferation Treaty, under which nations agree not to build nuclear arms. And while it has reluctantly agreed to allow some of its nuclear installations to be inspected and monitored by the International Atomic Energy Agency, it has steadfastly refused to allow all of them to be monitored.

Many specialists believe that the U.S. government, particularly the Reagan administration, has been lax in allowing nuclear-related materials to be transferred to Argentina without demanding that Argentina place all of its nuclear installations under safeguards.

Last year the Reagan administration approved the sale of a computer-control system to Argentina as part of a plant to produce heavy water for use in the nuclear-fuel cycle. And in early August the administration announced it had approved the sale of 143 tons of heavy water, originally made in the United States, from West Germany to Argentina. The heavy water, though not bomb material itself, is essential to the operation of Argentina's nuclear reactors.

Paul Leventhal, president of the Nuclear Control Institute, an organization concerned about the spread of nuclear weapons, calls the transfer "disturbing" because of “the regular reports we hear of intelligence assessments that Argentina is pursuing the bomb and because Argentina has said it intends to pursue a nuclear-explosion program and develop a fully independent fuel cycle with no restrictions on how the materials are used."

But Mr. Hinson, who is also concerned about Argentina's ability to produce nuclear weapons, considers the heavy water transfer of no great significance. A confidential letter written last month by George P. Bradley, Jr., a deputy assistant secretary of state, argues that the Argentines are unlikely, for practical and legal reasons, to use the heavy water except in reactors that are subject to safeguards.

By all accounts, Argentina has one of the most advanced nuclear-energy programs among the nations that have not yet exploded nuclear weapons and has become the major nuclear exporter in the developing world.