21. Exemptions from safeguards application: The Agency permits the exemption from safeguards 22. Suspension of safeguards: Safeguards may be suspended while nuclear material 23. Termination of safeguards: Safeguards will be terminated on nuclear material -24 The Euratom safeguards system does not em- Similar to Euratom Treaty obligations.. Euratom Treaty safeguards terminate when do. IAEA safeguards 24. Transfer of material out of State: No safeguarded nuclear material shall be transferred outside the jurisdiction of the State in which it is being safeguarded unless: (a) the material is being returned to the State that originally supplied it; or (b) the material is being transferred subject to substitution provisions; or (c) the material will be subject to Agency safeguards in the State to which it is being transferred; or (d) the material was not subject to safeguards pursuant to a project agreement and will be subject to other safeguards acceptable to the Agency in the State to which it is being transferred. (See INFCIRC/66, par. 28.) Euratom Treaty EURATOM safeguards Euratom safeguards follow all material trans- Euratom-U.S. bilateral "No such material will be transferred to unau- Appendix 8. Institute of Nuclear Materials Management Program for the Safeguarding of Special Nuclear Materials The prevention of proliferation of special nuclear materials for unauthorized uses may be broadly divided into two general problem areas: (1) prevention against diversion, and (2) detection of diversion. Prevention is concerned primarily with physical security of special nuclear materials, while detection concerns accounting systems for special nuclear material, technical measurement systems for such material, inspection and audit systems, as well as intelligence activities. The Institute has surveyed both the areas of prevention and detection of diversion of special nuclear materials for unauthorized uses with the objective of arriving at a safeguards program for the Institute, the results of which would contribute to the overall safeguards program of the United States. The Institute believes that physical security, while important, will not deter the well trained agent. While some improvements in physical security protection are possible and desirable, the Institute believes that the more dependable means of detecting (and, by threat of detection, deterring) the diversion of special nuclear materials is through accurate material balances. The Institute will direct a major portion of its activities toward improving material balance techniques. The Institute has concluded that its major contributions can be made in the area of systems for detection of diversion as opposed to the general subject of prevention of diversion. To this end, the Institute contemplates the following program: (1) The Institute will prepare a series of standard (or recommended) systems for accounting for strategic special nuclear materials. It is recognized that details of systems of accounting for nuclear materials will vary with the type of operation and therefore it is proposed to prepare a separate standard system of accounting for: (a) Enrichment plants (b) Conversion plants (c) Fuel Fabrication plants (d) Reactors (e) Reprocessing plants (f) Shipments (2) The Institute will develop a series of standard measurement systems for use in the activities listed in (1) above to establish the quantities of special nuclear materials involved, such that complete and accurate material balances around each of these activities can be accomplished. These measurement systems will involve both weight/volume determinations as well as sampling and analysis. (3) The Institute will prepare standard systems for the inventorying of special nuclear materials in the various types of activities outlined in (1). (4) The Institute will establish standard inspection and audit systems for policing the above described accounting, measurement and inventory systems. (5) The Institute will revise its procedures for the certification of nuclear materials managers to incorporate a comprehensive written test concerning special nuclear material measurements, inventory techniques, accounting techniques, inspection and audit techniques, the economic significance of loss of special nuclear material, and the national security significance of the loss of special nuclear material. (6) The Institute will undertake to establish what constitutes a reasonable loss of special nuclear material in the various operations set forth in (1). This reasonable loss should be established in the light of what is economically practical for a given production operation and an estimate should be made of the expense involved in reducing such loss. The Institute does not envision the above standards preparation effort as being purely original work at the outset. The establishment of the standards as described in (1)-(4), above, will be directed towards getting down on paper, techniques which are being used presently which reflect the best practice of the industry, suitably modified to take into consideration the safeguards objectives. The Standards Committee of the Institute will establish the format for these standards and assign each of the tasks to individuals from prompt development of an initial draft. COMMENTS In addition to the safeguards program recommended, the Institute recommends that the government consider establishing the following requirements as deterrents against proliferation of special nuclear materials: (1) All persons handling or processing significant quantities of special nuclear materials, or having access to accountability records or reports, or having any responsibility in connection therewith should possess AEC "L" Clearances as a minimum. (2) All plants and facilities in which significant quantities of special nuclear material are handled or processed should have posted at all accesses to such facilities the legal penalties for diversion of special nuclear material for unauthorized uses. All employees of such facilities should be required to read and have explained to them these penalties and should sign an acknowledgment of their understanding of such penalties. (3) All unattended storage facilities of significant quantities of special nuclear material should be kept locked and should be equipped with a suitable alarm system. A record should be kept of all persons entering and leaving these facilities. (4) All facilities in which significant quantities of special nuclear material are stored, handled, or processed should have 24-hour armed guard surveillance or suitable alarm system. Appendix 9. Excerpts From Report of the Committee on Auditing Procedures, American Institute of Certified Public Accountants The views of the Committee on the basic characteristics of a satisfactory system of internal control are set forth in the following excerpts: "The characteristics of a satisfactory system of internal control would include: a. A plan of organization which provides appropriate segregation of functional responsibilities, b. A system of authorization and record procedures adequate to provide reasonable accounting control over assets, liabilities, revenues and expenses, c. Sound practices to be followed in performance of duties and functions of each of the organizational departments, and d. Personnel of a quality commensurate with responsibilities. "These elements, as important as each is in its own right, are all so basic to adequate internal control that serious deficiencies in any one normally would preclude successful operation of the system. For example, no system of authorization and record procedures for accounting control may be considered adequate without personnel capable of performing the procedures designed to make such a system work. While each element is discussed separately in the following sections, the interrelationship of all elements must be borne in mind. . . .” "A satisfactory system must include media: first, for the records control of the operations and transactions (source data and its flow) and, second, for the classification of data within a formal structure of accounts (a chart of accounts). A carefully prepared chart of accounts facilitates preparation of financial statements. If the chart of accounts is supplemented by an account manual which clearly defines the accounts and the entries to be made therein, greater uniformity can be achieved in recording accounting transactions." "Media for the original records control of the operations and transactions are created through the designing of appropriate records and forms and through planning the logical flow of the recordkeeping and approval procedures. Such forms, and the instructions regarding the flow of recording and approval procedures, are often incorporated in procedure manuals." General Bibliography 1. "Special Nuclear Material Distribution Regulation," Document AEC 784/2, March 30, 1955 (Official Use Only). 2. Lumb, Ralph F., et al., Management of Nuclear Materials, Van Nostrand, 1960 (Unclassified). 3. Slaton, William H., "Study of Problems at Mixed Facilities," Report to the General Manager, AEC, September 29, 1960 (Unclassified). 4. "Amending the Atomic Energy Act of 1954 to Provide for Private Ownership of Special Nuclear Materials," Senate Report No. 1325, August 5, 1964 (Unclassified). 5. "Safeguards Against Diversion of Nuclear Materials from Peaceful to Military Purposes," Report on a Forum Seminar, Atomic Industrial Forum, Inc., New York, New York, September, 1965 (Unclassified). 6. JCAE letter of December 3, 1965 and AEC reply of January 25, 1966 relating to AEC's regulations, requirements and procedures to guard against loss or diversion of special nuclear material possessed by licensees (Unclassified). 7. Draft Report on Procedures Relating to Accountability and Safeguard of SNM, Discussion Paper. Document AEC-213/107, February 28, 1966 (Official Use Only). 8. "Non-proliferation of Nuclear Weapons," Hearings before the JCAE on Senate Resolution 179, February 23 and March 1 and 7, 1966 (Unclassified). 9. Address by Dr. Glenn T. Seaborg at Atomic Industrial Forum Meeting, March 1, 1966. 10. "Statistical and Inventory Procedures Applied to Nuclear Materials Management," Prepared for AEC by Stanford Research Institute, Menlo Park, California, Document SRIA-115P49–1, April, 1966 (Unclassified). 11. a. "Evaluation of Special Nuclear Material Losses-Coordination of NMM Surveys with Division of Compliance Inspections," Memo to AEC Managers from Director, Division of Nuclear Materials Management, June 8, 1966 (Unclassified). b. "Coordination of Compliance Inspections of Special Nuclear Material Licensees with Nuclear Materials Management Surveys," Memo to Compliance Region Directors from Director, Division of Compliance, June 8, 1966 (Unclassified). 12. Talk by Mr. John Conway, Executive Director, Joint Committee on Atomic Energy, Institute of Nuclear Materials Management, "The Role of Nuclear Materials Management in Policing a Non-Proliferation Agreement," Document AEC-675/31, July 8, 1966 (Unclassified). 13. "Procedure for Implementing and Administering the Commission's Domestic Safeguards Program for Lisenced Special Nuclear Material," Working Agreement between AEC General Manager and Director of Regulation, August 1, 1966 (Unclassified). 14. "Application of Safeguards to Nuclear Fuel Processing Plants" and "A Model Safeguards Laboratory." AEC Report prepared by Battelle-Northwest, Documents BNWL-301 and BNWL-301 APP, September, 1966 (Unclassified). 15. "Study of Strategic Importance of Nuclear Mataerials," prepared by AEC December 5, 1966 (Secret R/D). 16. "Considerataion of the Use of Resident Inspection in the Domestic Safeguards System," Document AEC 213/119, January 16, 1967 (Official Use Only). 17. "Safeguards Control and Iventory Management of Nuclear Materials," A guide prepared by the Division of Nuclear Materials Management (Undated) (Unclassified). 18. "Commission Policy on the Control of Special Nuclear Materials 1946-1964," (Undated) (Confidential). Regulatory 19. "Proposed Amendments to 10 CFR Parts 50, 70, 115 and 140 to Implement the Private Ownership Amendments to the Atomic Energy Act," Document AEC-R 213. August 24, 1965 (Official Use Only). 20. "Proposed Revisions of Reporting Requirements for Commission and Agreement State SNM Licensees," Document AEC-R_123/1, February 15, 1966 (Official Use Only). 21. "Amendments to 10 CFR 70-Safeguarding Special Nuclear Material," Document AEC-R 38/11, May 3, 1966 (Official Use Only). 22. "Independent Audits of Licensed Special Nuclear Material," Report prepared by AEC Staff, October 26, 1966 (Unclassified). 23. "Amendment to 10 CFR 70, 'Safeguarding Special Nuclear Material,'" Document AEC-R 38/13, January 16, 1967 (Official Use Only). 24. "Surveys of Physical Protection of Special Nuclear Material at Licensee Facilities," Report by the Division of Compliance, January 18, 1967 (Unclassified). |