B 779,951 AGREEMENT FOR COOPERATION - WITH EURATOM # ; , ; ; ; ; * * ill. 9699 | º HEARINGS BEFORE THE º SUBCOMMITTEE ON *— AGREEMENTS FOR COOPERATION JOINT COMMITTEE ON ATOMIC ENERGY CONGRESS OF THE UNITED STATES re EIGHTY-SIXTH CONGRESS FIRST SESSION | ON THE AGREEMENT FOR COOPERATION WITH EURATOM JANUARY 21 AND 22, 1959 Printed for the use of the Joint Committee on Atomic Energy UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON : 1959 *UNIVERSITY OF MICHIGAN LIBRARIES JOINT COMMITTEE ON ATOMIC ENERGY CARL T. DUREIAM, North Carolina, Chairman CLINTON P. ANDERSON, New Mexico, Vice Chairman CHET HOLIFIELD, California MELVIN PRICE, Illinois |PAUL J. KILDAY, Texas WAYNE N. ASPINALL, Colorado JAMES E. VAN ZANDT, Pennsylvania CRAIG HOSMER, California WILLIAM H. BATES, Massachusetts JACK WESTIAND, Washington RICHARD B. RUSSELL, Georgia JOHN O. PASTORE, Rhode Island ALBERT GORE, Tennessee HENRY M. JACKSON, Washington BOUR KE B. HICKENTO OPER, Iowa HENRY C. DWORSHAK, Idaho GEORGE D, AIKEN, Vermont WALLACE F. BENNETT, Utah JAMES T. RAMEY, Erecutive Director DAVID R. TOLL, Staff Counsel G. EDWIN BROWN, Jr., Professional Staff Member EDWARD J. BAUSER, Staff Technical Adviser SUBCOMMITTEE ON AGREEMENTS FOR COOPERATION JOHN O. PASTORE, Rhode Island, Chairman CLINTON P. ANDERSON, New Mexico BOUR KE B. HICKENLOOPER, Iowa WALLACE F. BENNETT, Utah II CARL T. DURHAM, North Carolina MELVIN PRICE, Illinois JAMES E. VAN ZANDT, Pennsylvania Letters from— C O N T E N T S Hearing dates: Wednesday, January 21, 1958–––––––––––––––––––––––––––––––––––––– Thursday, January 22, 1958––––––––––––––––––––––––––––––––––––––– Statement Of- Dillon, Hon. C. Douglas, Under Secretary of State for Economic Af- fairs, Department of State------------------------------------- Floberg, Hon. John F., member, Atomic Energy Commission--------- Hartman, Arthur, Office of European Regional Affairs, Department Of State –––––––––––––––––––––––––––––––––––––––––––––---------- Metzger, Stanley, Office of Legal Adviser, Department of State------ Schaetzel, J. Robert, Office of Special Assistant to the Secretary for Disarmament and Atomic Energy, Department of State------------ Additional information supplied for the record : Agreement between the United Kingdom and Euratom for COOpera- tion in the peaceful uses of atomic energy––––––––––––––––––––––– Agreement for cooperation between the Government of the United States of America and the European Atomic Energy Community (Euratom) concerning peaceful uses of atomic energy–––––––––––– Invitation for proposals regarding United States-Euratom joint nu- Clear power program - - - Guarantees applicable to fuel elements––––––––––––––––––––––––– Fact sheet on proposals for participation in power reactor pro- — — — — — — — - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - " - " " " - T * * * * Invitation re proposals for research and development from USAEC and Euratom––––––––––––––––––––––––––––––––––––––––––––––––––– Modification in text of the Agreement for COOperation Between the Government of the United States of America and the European Atomic Energy Community (Euratom) –––––––––––––––––––––––––– Table showing Euratom treaty tariff as of January 1, 1959–––––––––– Text of draft and changes inviting proposals regarding United States- Euratom joint nuclear power program - *- - - - - - - - - - - - - - - - - - - - - - - - - - Butterworth, Hon. W. Walton, Ambassador to the COmmunities, to Louis Armand, President, Euratom, dated October 3, 1959, trans- mitting a copy of Euratom Cooperation Act of 1958––––––––––––––– Dillon, Hon. Douglas, Under Secretary of State for Economic Affairs, to Hon. John O. Pastore, dated January 30, 1959, re health and safety standards adopted by Euratom Commission--------------- Dillon, Hon. C. Douglas, Under Secretary Of State for Economic Af- fairs, to Hon. John O. Pastore, dated January 29, 1959, discussing the word “Europe” in the Euratom Agreement___ - Eisenhower, Hon. Dwight, to Hon. John A. McCone, dated November 6, 1958, approving the proposed United States-Euratom Agreement- Floberg, John F., for the Chairman, AEC, to Hon. Carl T. Durham, dated January 20, 1959, concerning progress On United States-Eur- atom nuclear power program ––––––––––––––––––––––––––––––––––– Floberg, Hon. John, AEC Commissioner, to Hon. John O. Pastore, dated January 29, 1959, pertaining to section 4, paragraph C, of the Euratom COOperation Act of 1958–––––––––––––––––––––––––––– McCone, Hon. John A., Chairman, AEC, to Hon. Carl T. Durham, dated January 14, 1959, concerning United States-Euratom Agree- ment— - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - McCOne, Hon. John A., Chairman, AEC, to Hon. Carl T. Durham, dated January 20, 1959, with enclosure from Hon. P. De Groote to Hon. John F. Floberg, dated January 9, 1959, concerning terms of the Euratom Cooperation Act-------------------------------- (III) 93 61 93 93 93 110 21 41 23 20 11 100 21 17 90 IV CONTENTS Letters from-Continued Sassen, Emanuel, to Hon. W. Walton Butterworth, dated October 3, 1959, acknowledging receipt of Euratom Cooperation Act of 1958–– Schaetzel, J. Robert, Special Assistant to the Secretary of State, to James Ramey, dated April 15, 1959, pertaining to local taxes that apply to reactors under United States-Euratom program---------- Vance, Hon. Harold S., Acting Chairman, AEC, to President Eisen- hower, dated November 3, 1958, concerning submission of the terms Of Euratom-United States Agreement for his approval------------ Appendix—Draft Euratom directive on health and safety standards---- Page 18 105 14 121 * 4. AGREEMENT FOR COOPERATION WITH EURATOM WEDNESDAY, JANUARY 21, 1959 CoNGRESS OF THE UNITED STATES, SUBCOMMITTEE ON AGREEMENTS FOR COOPERATION, Joint CoMMITTEE ON ATOMIC ENERGY, Washington, D.C. The subcommittee met at 2 p.m., pursuant to notice, in the old Supreme Court chamber of the Capitol, Senator John O. Pastore (chairman of the subcommittee) presiding. Present: Senators Pastore (presiding), Anderson, Gore, and Dworshak; and Representatives Durham, Holifield, Aspinall, Bates, and Westland. Also present: James T. Ramey, executive director; David T. Toll, staff counsel ; G. Edwin Brown, Jr., professional staff member; and Edward J. Bauser, staff technical adviser, Joint Committee on Atomic Energy. Senator PASTORE. The hearing will please come to order. The subcommittee is meeting today to consider the proposed agree- ment for cooperation between the United States and the nations of the Euratom Community. This proposed agreement, signed in Brussels on November 8, 1958, was formally submitted to the Joint Committee on January 14, 1959, pursuant to section 123c. of the Atomic Energy Act of 1954. Section 123c. of the act requires that all agreements for coopera- tion with individual nations, or groups of nations, must lie before the Joint Committee for 30 days for review prior to the time they go into effect. I believe most of us here today are aware of the aims of the joint cooperative program with Euratom. It is hoped, through our co- operative efforts, that the Euratom nations will be able to achieve 1 million kilowatts installed electrical capacity sometime in the 1963–65 period utilizing reactors manufactured by U.S. equipment firms. An accompanying research and development program jointly undertaken by the United States and the Euratom nations would seek to improve the fuel cycles of these reactors with a view to ultimate achievement of economic nuclear power. This program would serve as a valuable supplement to a vigorous domestic program of nuclear power development here in the United States and would at the same time provide our European allies with a source of additional power to meet mounting power requirements during the next decade. Detailed discussions were conducted by the full committee last Summer on the enabling legislation to permit the United States to participate in the proposed joint program of nuclear power develop- ment with the Euratom nations. At that time, the committee recom- mended, and the Congress approved, a concurrent resolution to meet 1. 2 AGREEMENT FOR COOPERATION WITH EURATOM the requirements of section 124 of the act and legislation which came to be known as the Euratom Cooperation Act of iQ58. In addition to committee consideration of the enabling legislation last session, members of the committee met with the Euratom Com- missioners and their staff last September in Brussels and had a use- ful exchange of views on problems and prospects for the proposed program of cooperation. With the enabling legislation as a basis for U.S. participation in the joint program, the executive branch has proceeded to negotiate and sign an agreement with the Euratom Community which is now before us for review. The present document incorporates a number of changes which were made in an earlier draft of the agreement to reflect applicable provisions of the Euratom Cooperation Act and cer- tain questions raised during the committee's consideration of the Euratom legislation last session. The Atomic Energy Commission has prepared an analysis of these modifications in the proposed agreement. Without objection, I would like to insert a copy of the proposed agreement and the analysis of these changes in the record at the conclusion of my opening remarks, together with associated correspondence. I would like also to include in the record a letter received from the Commission yesterday, transmitting several documents for the com- mittee's information, covering in detail the workings of the proposed research and development program, the selection of reactor projects, and guarantees by the United States on performance of fuel elements provided by American manufacturers. As noted in the letter of transmittal, the first of these documents, an invitation pertaining to roposals for research and development, has been completed and was issued jointly by the AEC and Euratom on December 23, 1958. The invitation and accompanying “fact sheet” for power reactor pro- posals, included as enclosure B, are still in draft form and will be published after the agreement for cooperation comes into effect. The “fact sheet” accompanying the reactor invitation covers the criteria and conditions for project selection. It also contains Several appendixes outlining different aspects of the program, including the technical, financial, and economic information to be submitted with proposals, together with the terms that will govern the fuel cycle guarantee. º e Before we begin I would like to express, on behalf of the committee, our appreciation for the excellent cooperation which the committee staff has received from the staffs of the Atomic Energy Commission and the State Department in the preparations for this hearing. This spirit of cooperation has been helpful to the committee and its staff and has assisted measurably in giving us a better understanding of a program which is admittedly complex in many of its aspects. (The documents referred to follow :) U.S. ATOMIC ENERGY COMMISSION, Washington, D.C., January 14, 1959. Hon. CARL T. DUREIAM, Chairman, Joint Committee on Atomic Energy, Congress of the United States. DEAR Mr. DURHAM ; Pursuant to section 123C of the Atomic Energy Act of 1954, as amended, there is submitted with this letter— 1. Three copies of an agreement for cooperation with the European Atomic Energy Community (Euratom) which was signed on November 8, 1958. AGREEMENT FOR COOPERATION WITH EURATOM 3 2. Three copies of a letter from the Commission to the President, recom- mending approval of the agreement. • * 3. Three copies of a letter from the President to the Commission approV. ing the agreement, containing his determination that it, Will promote and will not constitute an unreasonable risk to the common defense and Security; and his authorization to execute the proposed agreement. 4. Three copies of letters that were exchanged between the representa- tive of the Community and the United States in which the Community's attention was called to the provisions of the Euratom Cooperation Act of 195S (Public Law S.5–846). As you will recall, the Commission transmitted to the Joint Committee On June 23, 195S, a series of documents relating to the proposed joint nuclear DOWer program with Euratom with the understanding that the agreement for COOp- eration would be resubmitted to the committee in the usual manner in accordance with the provisions of section 123 of the Atomic Energy Act, after the inter- national agreement required by sections 11(1) and 124 of the act was approved by Congress. You will recall that the Congress approved the International Agreement on August 20, 1958, and that the Euratom Cooperation Act of 1958 (Public Law 85–846) was approved by the President on August 28, 1958. Subsequent to these actions, the draft agreement for cooperation was jointly reviewed with Euratom and revised in several particulars, prior to Signing, to reflect applicable provisions of the Euratom Cooperation Act or its legislative history. The authorities of Euratom are fully appreciative of the fact that the participateion of the United States in the program is governed by the terms of the Euratom Cooperation Act. An analysis of the Specific changes between the original and modified text has been provided to members of your staff. Representatives of the Atomic Energy Commission and the Department of State will be pleased to meet with the committee at your convenience to discuss the agreement as well as any questions the committee might have concerning the Status of the joint program. As we advised you earlier, a joint invitation by the Commission and Euratom regarding proposals under the research and development program has been issued. An invitation and accompanying “fact sheet” on the reactor phase of the program have been jointly developed with Euratom. These documents are being forwarded to you under separate cover together With some additional information relating to the program. Sincerely yours, JOHN A. MCCONE, Chairmam. AGREEMENT FOR COOPERATION BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE EUROPEAN ATOMIC ENERGY COMMUNITY (EURATOM) CONCERNING PEACEFUL USES OF ATOMIC ENERGY Whereas the Government of the United States of America and the European Atomic Energy Community (Euratom) on May 29 and June 18, 1958 signed an agreement which provides a basis for cooperation in programs for the ad- Vancement Of the peaceful applications of atomic energy ; Whereas the Government of the United States of America and the European Atomic Energy Community (Euratom) recognize that it would be to their mutual benefit to Cooperate by establishing a joint program : (a) To bring into Operation within the European Atomic Community (Euratom) large-scale power plants using nuclear reactors of types on which research and development have been carried to an advanced stage in the United States, having a total installed capacity of approximately one million kilowatts of electricity by December 31, 1963 (except that two reactors may be Selected to be in Operation by December 31, 1965), and under conditions which would approach the competitive range of con- ventional energy costs in Europe; (b) To initiate immediately a joint research and development program centered On these types of reactors; The Parties agree as follows: ARTICLE I A. Under the joint program, reactor projects may be proposed, constructed and operated by private or governmental organizations in the Community en- gaged in the power industry or in the nuclear energy field. Such projects will 4 AGREEMENT FOR COOPERATION WITH EURATOM be selected in accordance with technical standards, criteria (including those relating to radiation protection and reactor safety), and procedures developed by the United States Atomic Energy Commission (hereinafter referred to as the “United States Commission”) and the Commission of the European Atomic Energy Community (hereinafter referred to as the “Euratom Commission”). In the evaluation and selection of such reactor projects, the technical and eco- nomic features will be considered and approved jointly by the United States Commission and the Euratom Commission. Other features of such reactor projects will be considered and approved by the Euratom Commission. Reactors In OW being planned Or constructed in Member States of the Community will be eligible for, and will receive, early consideration under the criteria estab- lished pursuant to this paragraph. B. The total capital cost, exclusive of the fuel inventory, of the nuclear pOWer plants With an installed Capacity of approximately one million kilowatts of electricity to be constructed under the program is estimated not to exceed the equivalent of $350,000,000 to be financed as follows: 1. Approximately $215,000,000 to be provided by the participating utilities and Other European sources of capital, such financing to be arranged with the appropriate assistance Of the Community ; and 2. Up to $135,000,000 to be provided by the Government of the United States of America to the Community in the form of a long-term line of Credit On terms and Conditions to be agreed, including terms and Condi- tions satisfactory to the Parties regarding security for such loan, such funds to be re-lent by the Community for the construction of facilities under this program. C. The United States Commission and the Euratom Conn mission will enter into special arrangements with respect to the fuel Cycle of reactors to be constructed and Operated under the joint program according to the prin- Ciples set forth in Annex “A” to this Agreement. ARTICLE II A. The United States Commission and the Eura tonn Commission under mutually agreed arrangements intend to initiate a program of research and de- velopment to the conducted both in the United States and in Europe. On the types of reactors to be constructed under the joint program. This research and development program will be aimed primarily at the improvement of the performance of these reactors, and at lowering fuel cycle costs. It will also deal with plutonium recycling and Other problems relevant to these reactors. B. The research and development program will be established for a ten (10) year period. During the first five (5) years the financial contribution of the Government of the United States of America and the Community will amount to about $50,000,000 each. Prior to the completion of the first five-year period the Parties will determine the financial requirements for the remaining five- year period and will undertake to procure funds necessary to carry out the program. Funds for the second five-year period may be in the same order Of magnitude. C. The administration Of this program Will be Conducted under arrangements to be mutually agreed. ARTICLE III A. The United States Commission will sell to the Community uranium en- riched in the isotope U* for use in projects designated by the Parties pursuant to the joint program up to a net amount of thirty thousand (30,000) kilograms of contained U* in uranium. This net amount shall be the gross quantity of contained U* in uranium sold to the Community less the quantity of contained U* in recoverable uranium which has been resold or otherwise returned to the Government of the United States of America or transferred to any other nation Or international Organization with the approval Of the Government of the United States of America. The United States Commission will also from time to time sell to the Community Such quantities Of special nuclear material, in addition to the quantities of enriched uranium set forth above, as may be agreed. B. Contracts for the sale of special nuclear materials will specify the quanti- ties to be supplied, composition of material, compensation for material, delivery schedules and other necessary terms and conditions. Such contracts for the sale of enriched uranium for fueling power reactors under the joint program AGREEMENT FOR COOPERATION WITH EURATOM 5 may also provide, under terms and conditions to be agreed, that payment for such enriched uranium may be made on a deferred basis. Such terms and conditions will include an obligation that the Community return to the United States Commission enriched uranium to the extent that there is default in payment. The Community will grant no rights to third parties that may be inconsistent with such obligation. The uranium supplied hereunder for use in reactors designed for production of electric power may be enriched up to twenty percent (20%) by weight in the isotope U". The United States Commission, however, may, upon request and in its discretion, make a portion of the fore- going enriched uranium available as material enriched up to ninety percent (90%) for use in materials testing reactors and research reactors, each capable of operating with a fuel load not to exceed eight (8) kilograms of contained U235 in uranium, and as highly enriched material for use for research purposes. C. It is agreed that the Community may distribute special nuclear material to authorized users in the Community ; the Community will retain, pursuant to the Treaty establishing the European Atomic Energy Community, title to any special nuclear material which is purchased from the United States Commission. D. The United States Commission is prepared to perform while such services are available from the Commission to its licensees in the United States, and On terms and conditions to be agreed, chemical reprocessing services with respect to any source or special nuclear material received by the Community from the United States under this program. It is agreed that such reprocessing will be performed at established United States domestic prices in effect upon delivery of such material. It is understood, except as may be otherwise agreed, that the form and content of any irradiated fuel elements shall not be altered after their removal from reactors and prior to delivery to the United States Commission or to Other facilities. Special nuclear material and Other material recoverable from material returned to the United States for reprocessing will be returned to the Community unless otherwise agreed. It is anticipated that any withdrawal by the United States Commission of chemical reprocessing services will be based upon the availability of commercial facilities to meet requirements for such Services at reasonable prices, including the requirements of projects in the joint program. The United States Commission will give written notice to the Com- munity of non-availability of its chemical reprocessing services twelve (12) months prior to such non-availability. E. With respect to any special nuclear material produced in reactors fueled With materials obtained from the United States under this Agreement which is in eXcess of the need of the Community for such material for the peaceful uses of atomic energy, the International Atomic Energy Agency is granted the right of first option to purchase such material at the announced fuel value price in effect in the United States at the time of purchase. In the event this option is not exercised by the International Atomic Energy Agency, the Government of the United States of America is prepared to purchase such material at the United States announced fuel value price in effect at the time of purchase. However, With respect to plutonium produced in any reactor constructed under the joint program, no purchase commitment shall extend for a period beyond ten (10) years of operation of such reactor, or December 31, 1973 (or December 31, 1975, for not more than two reactors selected under Article I, A ), whichever is earlier. Extension of such period will be the subject of negotiation on the request of either Party. ARTICLE IV The United States Commission will assist the Euratom Commission in ob- taining reactor materials other than special nuclear material from private Organ- izations located in the United States if the Euratom Commission desires such assistance. If no commercial sources are available, specific arrangements may be made by the Parties, from time to time, under terms and conditions to be agreed, for the transfer of such materials. ARTICLE V Persons under the jurisdiction of the Government of the United States of America or within the Community will be permitted to make arrangements to transfer and export material, including equipment and devices, to, and perform Services for, the other Party and such persons under the jurisdiction of the Government of the United States of America or within the Community (as the case may be) as are authorized by the appropriate Party to receive and DOSSes S 6 AGREEMENT FOR COOPERATION WITH EURATOM Such material and utilize such services, subject to applicable laws, directives, regulations and license requirements of the Government of the United States of America, the Community and the Member States of the Community. ARTICLE VI A. 1. Under mutually agreed arrangements, all non-patentable information de- Veloped in connection with the joint program of research and development, and all non-patentable information developed in connection with the selected projects, concerning designs, plans and specifications, construction costs, op- erations and economics, will be delivered currently to the Parties as devel- Oped and may be used, disseminated, or published by each Party for any and all purposes as it sees fit without further obligation or payment. There Will be no discrimination in the dissemination or use of such information for the reason that the proposed recipient or user is a national of the United States or of any Member State of the Community. 2. Both Parties shall have access to the records of the participating con- tractors pertaining to their participation in research and development proj- ects under the joint research and development program, or pertaining to the performance of fuel elements that are the subjects of United States guaran- tees. B. The United States Commission and the Euratom Commission shall also ex- change other unclassified information in fields related to the peaceful uses of atomic energy to further the joint program. Such exchange of information shall include technical advice in the design and construction of future reprocessing plants which the Community may decide to design and construct or sponsor. C. The Parties will expedite prompt exchange of information through sym- posia, exchange of personnel, setting up of combined teams, and Other methods as may be mutually agreed. D. Except as otherwise agreed, the application or use of any information (in- cluding designs, drawings and Specifications) and any material, equipment, and devices, exchanged or transferred between the Parties under this Agreement, shall be the responsibility of the Party receiving it, and the Other Party does not warrant the accuracy or completeness of such information, nor the Suitability Of such information, materials, equipment, and devices for any particular use Or application. ARTICLE VII A. As to any invention made or conceived in the course of Or under the joint program of research and development: 1. The Government Of the United States Of America shall without further obligation or payment be entitled to assignment of the title and rights in and to the invention and the patents in the United States subject to a non- exclusive, irrevocable, and royalty-free license, with the right to grant sub- licenses, to the Community for all purposes. 2. The Community shall without further obligation or payment to be en- titled to assignment of the title and rights in and to the invention and the patents in the Community subject to a non-exclusive, irrevocable, and royalty-free license, with the right to grant sublicenses, to the Government of the United States Of America for all purposes. 3. With respect to title and rights in and to the invention and patents in third COuntries : a. The Government of the United States Of America, if the invention is made or conceived within the United States, or the Community, if the invention is made or conceived within the Community, shall be entitled to assignment of such title and rights, subject to a non-exclu- sive, irrevocable, and royalty-free license, with the right to grant sub- licenses, to the other Party for all purposes. b. If the invention is made Or G.Onceived elsewhere, the Party COn- tracting for the work shall be entitled to assignment of such title and rights, subject to a non-exclusive, irrevocable, and royalty-free license, with the right to grant sublicenses, to the other Party for all purposes. B. As to inventions and patents under paragraph A of this Article neither Party shall discriminate in the granting of any license or sublicense for the reason that the proposed licensee or sublicensee is a national of the United States or of any Member State of the Community. •; AGREEMENT FOR COOPERATION WITH EURATOM 7 * C. As to patents used in the work of the joint program, Other than those under paragraph A, which the Government of the United States of America owns or as to which it has the right to grant licenses or sublicenses, the GOV- ernment of the United States of America will agree to grant licenses, or Sub- licenses, covering use either in or outside the joint program, On a non-discrim- inatory basis to a Member State and to industry of a Member State, if the Member State has agreed to grant licenses or sublicenses as to patents used in the work of the joint program which it owns or as to which it has the right to grant licenses or sublicenses, on a non-discriminatory basis to the GOVern- ment of the United States of America and to industry of the United States, COvering use either in Or Outside the joint program. D. The respective contractual arrangerments of the Parties with third parties shall contain provisions that will enable each Party to effectuate the proVisions Of paragraphs A and B of this Article as to patentable information. E. It is recognized that detailed procedures shall be jointly established to effectuate the foregoing provisions and that all situations not covered shall be settled by mutual agreeinent governed by the basic principle Of equivalent benefits to both Parties. ARTICLE VIII The United States Commission and the Euratom Commission will WOrk closely together to develop training programs to satisfy requirements Of the joint program. The Parties may under mutually agreeable terms and COndi- tions make available their facilities for use by the other, including facilities to satisfy training needs. ARTICLE IX The Government of the United States of America and the Community recog- nize that adequate measures to protect equipment manufacturers and Other suppliers as Well as the participating utilities against now uninsurable risks are necessary to the implementation Of the joint program. The Euratom Com- mission will seek to develop and to secure the adoption, by the earliest prac- ticable date, Of Suitable measures which will provide adequate financial protec- tion against third party liability. Such measures could involve suitable in- demnification guarantees, natoinal legislation, international Convention, Or a COmbination Of Such measures. ARTICLE X The Euratom Commission will take all action Open to it under the Treaty establishing the European Atomic Energy Community to minimize the impact of customs duties On goods and products imported under the joint program. ARTICLE XI The Community guarantees that : 1. NO material, including equipment and devices, transferred pursuant to this Agreement to the Community or to persons within the Community, Will be used for atomic Weapons, or for research on Or development of atomic Weapons, Or for any Other military purpose ; 2. No such material will be transferred to unauthorized persons or beyond the COntrol Of the Community, except as the Government of the United States Of America may agree to such transfer and then only if the transfer Of the material is within the scope of an Agreement for Cooperation be- tween the GOVernment of the United States of America and another nation Or group Of nations; 3. No Source of special nuclear material utilized in, recovered from, or produced as a result Of the use of materials, equipment or devices trans- ferred pursuant to this Agreement to the Community or to persons within the Community will be used for atomic weapons, or for research on or development of atomic Weapons, or for any other military purpose ; 4. The Community will establish and maintain a mutually satisfactory system of safeguards and control as provided in Article XII, to be applied to materials, equipment and devices subject to the guarantees set forth in paragraphs 1 through 3 of this Article. 8 AGREEMENT FOR COOPERATION WITH EURATOM ARTICLE XII A. The Community undertakes the responsibility for establishing and imple- menting a safeguards and control system designed to give maximum assurance that any material, equipment or devices made available pursuant to this Agree- ment and any source or special nuclear material derived from the use of such material, equipment and devices, shall be utilized solely for peaceful purposes. In establishing and implementing its safeguards and control system, the Com- munity is prepared to consult with and exchange experiences with the Inter- national Atomic Energy Agency with the objective of establishing a system reasonably compatible with that of the International Atomic Energy Agency. The GOVernment of the United States of America and the Community agree that the principles which will govern the establishment and operation by the Com- munity of a mutually satisfactory safeguards and control system under this Agreement are those which are set forth in Annex “B” to this Agreement. The Community shall be responsible for establishing and maintaining a mutually Satisfactory and effective safeguards and control system which is in accord with the principles set forth in Annex “B” to this Agreement. B. As has been requested by the Community, the Government of the United States of America will provide assistance in establishing the Community’s safe- guards and control system, and will provide continuing assistance in the opera- tion of the system. C. The Parties agree that there will be frequent consultations and exchanges Of Visits between the Parties to give assurance to both Parties that the Com- munity’s safeguards and control system effectively meets the responsibility and principles stated in paragraph A of this Article and that the standards of the materials accountability systems of the Government of the United States Of America and the Community are kept reasonably comparable. D. In recognition of the importance of the International Atomic Energy Agency, the Government of the United States of America and the Community will Consult with each Other from time to time to determine whether there are any areas of responsibility with regard to safeguards and control and matters relating to health and Safety in which the Agency might be asked to aSSist. E. It is understood by the Parties that a continuation of the cooperative program between the Government of the United States of America and the Community will be contingent upon the Community’s establishing and main- taining a mutually satisfactory and effective safeguards and control system which is in accord with the principles set forth in Annex “B” to this Agreement. ARTICLE XIII The Government of the United States of America and the Community re- affirms their common interest in fostering the peaceful applications of atomic energy through the International Atomic Energy Agency and intend that the results of the joint program will benefit the Agency and the nations partici- pating in it. ARTICLE XIV A. The Parties anticipate that from time to time they may enter into further agreements providing for cooperation in the peaceful aspects of atomic energy. B. Article 106 of the Treaty establishing the European Atomic Energy Com- munity contemplates that Member States which before the date of entry into force of that Treaty have concluded agreements with third countries for co- operation in the field of nuclear energy shall jointly with the Euratom Com- mission enter into the necessary negotiations with third COuntries in Order as far as possible to cause the rights and obligations arising out of such agree- ments to be assumed by the Community. The GOvernment Of the United States of America is prepared to enter into such negotiations with reference to any agreement to which it is a party. C. Existing agreements for cooperation in the field of nuclear energy be- tween Member States and the Government Of the United States Of America are not modified by the joint program. Modifications may be made as neces- sary by mutual agreement between the Member States concerned and the United States to permit transfers of reactor projects now contemplated under existing agreements that qualify for and are accepted under the joint program. AGREEMENT FOR COOPERATION WITH EURATOM 9 y ARTICLE XV For the purposes Of this Agreement: (a) “Person” means any individual, enterprise, corporation, partnership, firm, association, trust, estate, public or private institution, grOup, gov- ernment agency, or government corporation, but does not include the Parties to this Agreement. (b) “Special nuclear material” means (1) plutonium, uranium enriched in the isotope 233 or in the isotope 235, and any other material which either Party determines to be special nuclear material ; Or (2) any material artificially enriched by any of the foregoing. (c) “Source material” means (1) uranium, thorium, Or any Other mate- rial which is determined by either Party to be source material ; Or (2) Ores containing one or more of the foregoing materials, in such concentration as either Party may determine from time to time. (d) “Parties” means the Government Of the United States Of America, including the United States Atomic Energy Commission. On behalf of the Government Of the United States Of America, and the European Atomic Energy Community (Euratom), acting through its Commission. “Party” means One Of the Parties. ARTICLE XVI A. The Parties agree that the establishment and initiation of the joint program and the undertakings Of the Parties under this Agreement are subject to appro- priate statutory steps, including authorization by competent bodies of the Govern- ment of the United States of America and the Community, and the provisions of applicable laws, regulations and license requirements in effect in the United States and in the COmmunity and Within the Member States. B. This Agreement shall enter into force On the day On which each Party shall have received from the other Party Written notification that it has complied with all statutory and Constitutional requirements for the entry into force of such Agreement and shall remain in force for a period of twenty-five (25) years. In witness whereof, the underSigned representatives duly authorized thereto have signed this Agreement. Done at Brussels this Sth day Of November, 1958 in duplicate, in the English, French, German, Italian, and Netherlands languages, each language being equally authentic. ANNEX “A” With the Objective Of assuring the Success Of the joint program, the United States Commission will offer guarantees designed to limit certain financial risks aSSOciated With the fuel Cycle. These guarantees Will be extended in the form of maximum charges for fabri- Cation Of the fuel elements and minimum integrity Of the fuel elements under irradiation. They will be offered only to the extent that equivalent or better guarantees are not available commercially. The liability of the United States Commission under these guarantees will be limited to meeting guaranteed maximum charges for fabricated fuel elements and to the adjustment of charges for fabrication, chemical reprocessing, and transportation of fuel elements when required by failure to meet guaranteed integrity. The guarantees Will provide for equitable sharing of decreases in costs realized through fuel performance in excess of guaranteed levels, the United States share not to exceed COStS eXperienced by the United States Commission under these guaranteeS. The guarantees provided by the United States Commission will be applicable to all loadings made in reactors under the joint program during ten (10) years Of Operation or prior to December 31, 1973 (or December 31, 1975, for not more than two reactors selected under Article I, A, of this Agreement for Cooperation), whichever is earlier. 10 AGREEMENT FOR COOPERATION WITH EURATOM ANNEX “B” PRINCIPLES FOB ESTABLISHING THE SAFEGUARDs AND ContROL SYSTEM UNDER THIS AGREEMENT The principles which will govern the establishment and operation of the Safeguards and control system are as follows: The Euratom Commisison will : 1. Examine the design of equipment, devices and facilities, including nuclear reactors, and approve it for the purpose of assuring that it will not further any military purpose and that it will permit the effective application of Safeguards, if such equipment, devices and facilities: (a) are made available pursuant to this Agreement; or (b) use, process or fabricate any of the following materials received from the United States: source or special nuclear material, moderator material Or any other material relevant to the effective application of Safeguards ; Or (C) use any Special nuclear material produced as the result of the use of equipment or material referred to in subparagraphs (a) and (b). 2. Require the maintenance and production of operating records to assure accountability for source or special nuclear material made available, or Source Or Special nuclear material used, recovered, or produced as a result Of the use of Source or Special nuclear material, moderator material or any Other material relevant to the effective application of safeguards or as a result of equipment, devices and facilities made available pursuant to this Agreement. 3. Require that progress reports be prepared and delivered to the Euratom Commisison with respect to projects utilizing material, equipment, devices and facilities referred to in paragraph 2 of this Annex. 4. Establish and require the deposit and storage, under Continuing safe- guards, in Euratom facilities Of any Special nuclear material referred to in paragraph 2 Of this Annex which is not currently being utilized for peace- ful purposes in the Community or otherwise transferred as provided in the Agreement for Cooperation between the Government of the United States Of America and the Community. 5. Establish an inspection organization which will have access at all times : (a) to all places and data, and (b) to any person who by reason of his occupation deals with mate- rials, equipment, devices or facilities safeguarded under this Agreement, necessary to assure accounting for source or special nuclear material subject to paragraph 2 of this Annex and to determine whether there is compliance with the guarantees of the Community. The inspection organization will also be in a position to make and will make Such independent measurements as are necessary to assure compliance with the provisions Of this Annex and the Agreement for COOperation. It is the understanding of the Parties that the above principles applicable to the establishment of the Community's inspection and Control System are Com- patible with and are based on Article XII of the Statute of the International Atomic Energy Agency, Chapter VII of Title Two of the Treaty establishing the European Atomic Energy Community, and those adopted by the Government of the United States of America in its comprehensive Agreements for COOperation. For the Government of the United States Of America : /s/ W. W. BUTTERworTH /s/ JOHN A. McCONE For the European Atomic Energy Community (Euratom) : /s/ LOUIS ARMAND /s/ ENRICO MEDI /s/ PAUL DE GROOTE /s/ HEINz L. KREKELER /s/ EMANUEL SASSEN [NotE.-Mr. Etienne Hirsch, former Director of Economic Plan- ning in France, was named President of the Euratom Commission on February 2, 1959, following the resignation of Mr. Louis Ar- mand.—Ed.] AGREEMENT FOR COOPERATION WITH EURATOM 11 - MoDIFICATION IN TEXT OF THE AGREEMENT FOR COOPERATION BETWEEN THE Gover NMENT OF THE UNITED STATEs of AMERICA AND THE EUROPEAN ATOMIC ENERGY COMMUNITY (EURATOM) (Analysis Prepared by the Atomic Energy Commission) Original teast as contained in Agree- ment Appended to Letter to Joint Committee of June 23, 1958 (a) “To bring into operation by 1963, within the European Atomic En- ergy Community (Euratom), large- scale power plants using nuclear reac- tors of proven types on which research and development have been carried to an advanced stage in the United States, having a total installed CapaC- ity of approximately one million kilo- watts of electricity and under Condi- tions which would approach the COm- petitive range of conventional energy costs in Europe.” Modified teact (a) “To bring into operation within the European Atomic Energy Commu- nity (Euratom) large-scale power plants using nuclear reactors of types on which research and development have been carried to an advanced Stage in the United States, having a total in- stalled capacity of approximately One million kilowatts of electricity by De- cember 31, 1963 (eaccept that two reac- tors may be selected to be in operation by December 31, 1905), and under Con- ditions which would approach the COIn- petitive range of conventional energy costs in Europe.” Discussion.—As noted above, the preamble in the Original text referred to a “1963” date and used the term “proven types” of reactors. In the Course of the hearings before the Joint Committee it was clear that a number of members of the committee as well as representaives from industry equated the term “proven types” with water reactors or only with reactors that presently are capable of large-scale, reliable, operation. The committee believed that an interpretation of the words along these lines might hinder the program by pre- cluding the incorporation of more advanced concepts that may prove to be eligible in time to meet the desired objectives. Accordingly, the Joint Com- mittee deleted the word “proven” from before the word “types” in SubSection 2 (c) of the “Euratom Cooperation Act” to stress the fact that other types of reactors may be considered as the program develops. The Committee similarly indicated that, in its judgment, the program would be more valuable if the goal of installing 1 million kilowatts of electricity by 1963 were made more flexible. The definition of the joint program in the Euratom Cooperation Act accord- ingly was changed to provide that two reactors could be selected to come into operation by December 31, 1965. (It was intended that this extension of the goal for two reactors would be permissive only, and not mandatory). The changes shown above in the preamble of the Agreement have been made to reflect these ChangeS. B. CAPITAL LOAN Article I, Section B 2. Up to $135,000,000 to be provided by the Government Of the United States Of America to the Community in the form of a long-term line Of Credit on terms and conditions to be agreed, such funds to be re-lent by the Community for the COnstruction of facilities under this program. Article I, Section B 2. Up to $135,000,000 to be provided by the Government of the United States Of America to the Community in the form of a long-term line Of Credit On terms and Conditions to be agreed, including terms a ma Conditions satis- factory to the Parties regarding security for Such loam, such funds to be re-lent by the Community for the Construction of facilities under this program. Discussion.—During the congressional hearings on the program several mem- bers Of the Joint Committee also stressed the point that the United States Should receive adequate security to protect its financial interest in the Capital loan to be made to euratom. The foregoing italicized phrase has been added to Section B of article I so as to make it quite Clear that adequate security will have to be provided before the loan Can be consummated. 12 AGREEMENT FOR COOPERATION WITH EURATOM C. DEFERRED SALE AGREEMENT Article III, Section B B. Contracts for the sale of special nuclear materials will specify the Quantities to be Supplied, composition Of material, COmpensation for material, delivery schedules and Other neces- Sary terms and COnditions. Such Con- tracts for the sale of enriched ura- nium for fueling power reactors under the joint program may also provide, under terms and conditions to be agreed, that payment for such en- riched uranium may be made On a de- ferred basis. The uranium supplied hereunder for use in reactors designed for production of electric power may be enriched up to twenty percent (20%) by Weight in the isotope U*. The United States Commission, how- eVer, may, upon request and in its dis- Cretion, make a portion of the fore- going enriched uranium available as material enriched up to ninety percent (90%) for use in materials testing re- actors and research reactors, each ca- pable Of Operating with a fuel load not to exceed eight (8) kilograms of contained U* in uranium, and as highly enriched material for use for research purposes. Article III, section B B. Contracts for the sale of Special nuclear materials will Specify the Quantities to be supplied, composition Of material, compensation for material, delivery schedules and Other necessary terms and conditions. Such contracts for the Sale Of enriched uranium for fueling power reactors under the joint program may also provide, under terms and conditions to be agreed, that pay- ment for Such enriched uranium may be made on a deferred basis. Such terms and Conditions will include an obligation that the Community return to the United States COm mission en- Triched uranium, to the eastent that there is default in payment. The Com- munity will grant mo rights to third parties that may be inconsistent with Such obligations. The uranium Sup- plied hereunder for use in reactors de- signed for production of electric power may be enriched up to twenty percent (20%) by weight in the isotope U* The United States Commission, how- ever, may upon request and in its dis- Cretion, make a portion Of the forego- ing enriched uranium available as ma- terial enriched up to ninety percent (90%) for use in materials testing re- actors and research reactOrS, each capable Of Operating With a fuel load not to exceed eight (8) kilograms of contained U* in uranium, and as highly enriched material for use for research purposes. Discussion.—Under the terms of the joint program it is anticipated that the United States will sell the initial operating inventory (Which is estimated to amount to approximately 9,000 kilograms) to the Community On a deferred payment basis. The proposed changes in the text are designed to make it clear that the Atomic Energy Commission will retain Such rights in the material as are appropriate to secure the payment of the debt due under the Sales agree- ment. Pursuant to section 5 of the Euratom Cooperation Act the Government of the United States will be obliged to obtain the equivalent of a first lien on any such material for which payment is not made in full at the time Of transfer. D. PROVISION OF REPROCESSING SERVICES Article III, section D D. The United States Commission is prepared to perform on terms and Con- ditions to be agreed chemical reproC- essing services with respect to any source or special nuclear material re- ceived by the Community from the United States under this program. It is agreed that such reprocessing Will be performed at established United States Domestic prices in effect upon delivery of such material. It is under- stood, except as may be Otherwise agreed, that the form and content Of any irradiated fuel elements shall not Article III, Section D D. The United States Commission is prepared to perform while Such Serv- ices are available from the Commission to its licem sees in the United States, and On terms and conditions to be agreed chemical reprocessing Services with respect to any source or special nuclear material received by the COm- munity from the United States under this program. It is agreed that such reprocessing will be performed at es- tablished United States domestic prices in effect upon delivery of such mate- rial. It is understood, except as may AGREEMENT FOR COOPERATION WITH EURATOM 13 Article III, section D be altered after their removal from reactors and prior to delivery to the United States Commission or to Other facilities. Special nuclear material and other material recoverable from mate- rial returned to the United States for reprocessing will be returned to the Community unless otherwise agreed. Article III, Section D be otherwise agreed, that the form and content of any irradiated fuel elements shall not be altered after their re- moval from reactors and prior to de- livery to the United States Commission Or to other facilities. Special nuclear material and Other material recoVer- able from material returned to the United States for reprocessing will be returned to the Community unless otherwise agreed. It is anticipated that any withdrawal by the United States Commission. Of Chemical reproC- essing services will be based upon the availability of commercial facilities to meet requirements for such Services at reasonable prices, including the require- ments of projects in the joint program. The United States Commission will give written notice to the Community Of nort- availability of its chemical reprocessing Services 12 months prior to Su Ch mon- availability. Discussion.—Section D of article III in the original Agreement was Written before the passage of Public Law 85–6S1 and it provided that the AEC WOuld be prepared to perform, on terms and conditions to be agreed, chemical repro- cessing services with respect to any source or special nuclear 111aterial received from the United States under the joint program. The permissive authority for the Commission to enter into such contracts on a long-term basis With foreign Countries is contained in Section 7 (u) of Public Law S5–681. Section 7 (u) provides that the Commission will provide such services while comparable Serv- ices are available to persons licensed in this country pursuant to Section 103 or 104 of the Atomic Energy Act. The additional language inserted in article III Of the revised agreement is designed to make the agreement COInsistent With the new legislation. It also makes it clear that the withdrawal of COm- mission Services will be based upon the availability Of Commercial facilities at reasonable prices and that the Commission will give the Community a year's notice before withdrawing its Services. These changes indicate that reprocessing services will not be Offered to Euratom by the Commission on terms more favorable than those offered to U.S. industry. E. PURCHASE OF PLUTONIUM Article III, Section. E E. With respect to any special nuclear material produced in reactors fueled with materials obtained from the United States under this Agreement Which is in excess of the need of the Community for such material for the peaceful uses of Atomic energy, the International Atomic Energy Agency is granted the right of first Option to purchase such material at the announced fuel value price in effect in the United States at the time of purchase. In the event this Option is not exercised by the Interna- tional Atomic Energy Agency, the Gov- ernment of the United States Of Anner- ica is prepared to purchase such mate- rial at the United States announced fuel price in effect at the time of purchase. 36636–59 2 Article III, Section E E. With respect to any special nu- clear material produced in reactors fueled With materials obtained from the United States under this Agreement Which is in excess of, the need of the Community for Such material for the peaceful uses of atomic energy, the International Atomic Energy Agency is granted the right of first Option to pur- Chase Such material at the announced fuel value price in effect in the United States at the time of purchase. In the event this option is not exercised by the International Atomic Energy Agency, the Government of the United States of America is prepared to purchase such material at the United States an- nounced fuel price in effect at the time of purchase. However, with respect to plutonium produced in any reactor con- 14 AGREEMENT FOR COOPERATION WITH EURATOM Article III, section E - 1rticle III, section E Structed under the joint program, no purchase commitment shall cattend for a pcriod beyond ten years of Operation of such reactor, or December 31, 1973 (or December 31, 1975, for not more than 2 reactors selected under Article I, A ), which ever is Carlier, E.ptemSion of such period will be the subject of megotiation on the request of either Party. Discussion.—Under the terms of article III paragraph E of the Agreement for COOperation as it was originally written, and presented to the Joint Committee, the Government of the United States would have agreed to purchase any and all special nuclear material produced in reactors fueled by the United States under the program Which WOuld be in excess of Euratom's need for Such ma- terial for peaceful purposes and which would not be acquired by the Interna- tional Atomic Energy Agency under the Option accorded to it. In the judg- ment of the Atomic Energy Commission this language appeared to impose a broader Obligation On the United States to acquire such material than would appear to be permitted under the terms of the Euratom Cooperation Act, since the Obligation might be construed to last for the term of the agreement. Sec- tion 6 (b) of the COOperation Act, provides that the Commission may not enter into any contract for the acquisition of plutonium produced in any reactor constructed under the joint program, which is longer in term than 10 years of operation of such reactors or December 31, 1973 (or December 31, 1975, for not more than two reactors selected under the program), whichever is earlier. The proposed modification to the agreement is designed to make the Agreement for Cooperation consistent on its face with the Euratom Cooperation Act. Un- der the terms of the COOperation Act the Atomic Energy Commission is author- ized to acquire from the Community, pursuant to the Agreement for Cooperation, up to 4,100 kilograms of plutonium for use only for peaceful purposes. F. ANNEX “A” A mºnea, “A” The guarantees provided by the United States Commission will be appli- (FUEL CYCLE GUARANTEES) Amned: “A.” The guarantees provided by the United States Commission will be ap- cable to all loadings made in reactors under the joint program during ten years of operation or prior to December plicable to all loadings made in reactors under the joint program during ten years of operation or prior to December 31, 1973, whichever is earlier. 31, 1973 (or December 31, 1975, for mot 'm Ore than tº CO reactors Selected under Article I. A. Of this Agreement for Co- Operation) whichever is earlier. This change was made in the annex to clearly reflect the permissive author- ity regarding two referred projects as contained in the Euratom Cooperation Act. U.S. ATOMIC ENERGY COMMISSION, Washington, D.C., November 3, 1958. The PRESIDENT, The White HO'use. DEAR.MR. PRESIDENT: Attached to the letter to you of June 12, 1958, concerning the joint nuclear power program proposed between the European Atomic Energy Community (Euratom) and the United States of America, from the Secretary of State and the then Chairman of the Atomic Energy Commission, Was a draft Agreement for Cooperation between the United States and the European Atomic Energy Community. This agreement was forwarded at the time for your infor- mation with the understanding that it would be resubmitted for your approval in the usual manner in accordance with the provisions Of Section 123 of the Atomic Energy Act, after the international agreement required by Sections 11 (1) and 124 of the act was approved by Congress. On August 20, 1958, the Congress approved the international agreement. AGREEMENT FOR COOPERATION WITH EURATOM 15 The “Euratom Cooperation Act of 1958” (Public Law 85–846), containing certain necessary legislative authorizations, was approved by you on August 28, 1958. The Agreement for Cooperation submitted with the letter of June 12 has been revised in several particulars in order specifically to reflect applicable provisions of the Euratom Cooperation Act and its legislative history. A schedule showing the specific changes between the original and modified text is attached as appendix A. The revised agreement, entitled “Agreement for Cooperation Between the Government of the United States of America and the European Atomic Energy Community (Euratom) Concerning Peaceful Uses Of Atomic Energy,” is enclosed as appendix B. The Atomic Energy Commission recommends that you approve the enclosed proposed agreement and authorize its execution. The Department of State supports the Commission's recommendation. The Community fully understands that the undertakings of the United States under the agreement Will be Subject to the provisions of the Euratom Cooperation Act of 1958, as well as Other applicable laws. Letters to this effect have been exchanged. The aim of the joint program will be to bring into Operation in the Community large-scale powerplants using nuclear reactors Of types on which research and development have been carried to an advanced Stage in the United States, having a total installed capacity of approximately 1 million kilowatts of electricity. This goal is to be achieved by December 31, 1963, except that two reactors may be selected to be in Operation by December 31, 1965. The United States and Euratom also will initiate immediately a joint research and development program centered On these types of reactors. The agreement provides that the projects to be supported will be jointly selected according to criteria to be developed by the U.S. Atomic Energy Com- mission and the Commission Of the European Atomic Energy Community. It is estimated that the total capital cost of the plants to be constructed (exclusive Of fuel) will not exceed $350 million. Approximately $215 million of this amount will be provided by European sources of capital and up to $135 million will be provided by the United States in the form of a long-term line of credit under terms to be agreed. Under the terms of annex A to the agreement the United States agrees to guarantee ceiling costs for the fabrication of fuel elements re- Quired under the program as well as a fixed life for these elements. These guarantees will be applicable to all loadings made in reactors under the joint program during 10 years of Operation or prior to December 31, 1973 (or December 31, 1975, for not more than two reactors selected), whichever is earlier. Article II of the agreement outlines the nature of the joint research and development program. This program is expected to be centered on improvement in the performance of the reactors involved in the program, and the lowering of fuel Cycle COsts. The U.S. Atomic Energy Commission, in accordance with the provisions of article III, will sell to the Community up to a net quantity of 30,000 kilograms of contained U" in uranium to cover the fueling and other requirements of the program over the term of the agreement. The United States also will provide the Community with chemical-reprocessing services, under terms to be agreed, With respect to any source or special nuclear material received by Euratom from this country under the joint program. In recognition of the important responsibilities of the International Atomic Energy Agency, article III grants to the Agency the right of first option to pur- chase Special nuclear materials that are produced in reactors fueled with ma- terials obtained from the United States under the joint program that are in excess of the Community's need for material for peaceful purposes. If this Option is not exercised the United States will be prepared to purchase such material, except that no purchase commitment with regard to plutonium will extend for more than 10 years of operation or December 31, 1973 (or December 31, 1975, for not more than two reactors), whichever is earlier. One of the major purposes of the program is to provide industry in the Com- munity, and the United States with important engineering experience and data on Capital and operating costs. Article VI accordingly provides that defined technological and economic data developed under the joint program will be exchanged under provisions designed to permit widespread dissemination of information developed in the course of the program. Patent provisions designed to facilitate this purpose appear in article VII. - . The Community undertakes, by the earliest practicable date, to secure the adop- tion of Suitable measures which will provide equipment manufacturers and Other 16 AGREEMENT FOR COOPERATION WITH EURATOM Suppliers under the program with adequate financial protection against third- party liability (art. IX). The Community also will take all action open to it under the Euratom Treaty to minimize the impact of customs duties on products imported under the program (art. X). Under the terms of article XI, the Community has made all the guarantees required by the Atomic Energy Act. Article XII contains additional provisions designed to assure that materials involved in the program will be used solely for peaceful purposes. The Secretary of State and I regard this agreement as an important and major first Step in establishing cooperation with the European Atomic Energy Com- munity. Its execution will facilitate one of the most notable advances in the atoms-for-peace program since the program’s inception. Following your ap- proval, the agreement Will be formally executed by the appropriate authorities of the European Atomic Energy Community and the Government of the United States of America and will be placed before the Joint Committee on Atomic Energy in compliance with section 123c of the Atomic Energy Act of 1954, as amended, upon the reconvening of the Congress. Respectfully, HAROLD S. VANCE, Acting Chairman. THE WHITE HOUSE, Washington, November 6, 1958. The Honorable JoBN A. McCoME, Chairman, Atomic Energy Commission, Washington, D.C. DEAR MR. CHAIRMAN : Under date of November 3, 1958, the Atomic Energy COImmission has recommended, and has noted that the Department Of State Supports such recommendation, that I approve the proposed agreement entitled “Agreement for COOperation Between the Government of the United States of America and the European Atomic Energy Community (Euratom) Concerning Peaceful Uses of Atomic Energy,” and authorize its execution. This agreement Would permit the execution of the program of COOperation with Euratom which I approved under a letter dated June 17, 1958, to you and the Secretary of State, and which I Strongly recommended to the Congress On June 23, 1958. The aim Of the joint program will be to bring into Operation in the Commu- nity large-Scale powerplants using nuclear reactors Of types On which research and development have been carried to an advanced Stage in the United States, having a total installed capacity of approximately 1 million kilowatts of elec- tricity. This goal is to be achieved by December 31, 1963, except that two reactors may be selected to be in Operation by December 31, 1965. The United States and Euratom also Will initiate immediately a joint research and develop- ment program Centered On these types Of reactorS. The agreement provides that the projects to be supported Will be jointly Selected according to criteria to be developed by the U.S. Atomic Energy Commission and the Commission of the European Atomic Energy Community. It is estimated that the total Capital cost Of the plants to be COnStructed (exclu- sive of fuel) will not exceed $350 million. Approximately $135 million of this amount will be provided by the United States in the form of a long-term line of credit under terms to be agreed. Under the terms of annex A to the agreement, the United States agrees to guarantee ceiling costs for the fabrication of fuel elements required under the program, as well as a fixed life for these elements. These guarantees will be applicable to all loadings made in reactors under the joint program during 10 years of operation or prior to December 31, 1973 (or December 31, 1975, for not more than two reactors selected), whichever is earlier. Article II of the agreement outlines the nature of the joint research and develop- ment program. This program is expected to be centered on improvement in the performance of the reactors involved in the program and the lowering of fuel Cycle costs. The U.S. Atomic Energy Commission, in accordance With the provisions Of article III, will sell to the Community up to a net quantity of 30,000 kilograms of contained U* in uranium to cover the fueling and Other requirements Of the program over the term of the agreement. The United States also will pro- vide the Community with chemical reprocessing Services, under terms to be agreed, with respect to any source or special nuclear material received by Eura- tom from this country under the joint program. AGREEMENT FOR COOPERATION WITH EURATOM 17 In recognition of the important responsibilities of the International Atomic Energy Agency, article III grants to the Agency the right Of first Option to pur- chase Special nuclear materials that are produced in reactors fueled with mate- rials Obtained from the United States under the joint program that are in ex- CeSS Of the Community’s need for material for peaceful purposes. If this Option is not exercised the United States will be prepared to purchase Such material, except that no purchase commitment with regard to plutonium will extend for more than ten years of Operation or December 31, 1973 (or December 31, 1975, for not more than two reactors), whichever is earlier. One Of the major purposes of the program is to provide industry in the COm- munity and the United States with important engineering experience and data On capital and Operating costs. Article VI accordingly provides that defined technological and economic data developed under the joint program will be ex- Changed under provisions designed to permit widespread dissemination Of in- formation developed in the course of the program. Patent provisions designed to facilitate this purpose appear in article VII. The Community undertakes, by the earliest practicable date, to Secure the adoption of suitable measures which will provide equipment manufacturers and Other Suppliers under the program with adequate financial protection against third party liability (art. IX). The Community also will take all action Open to it under the Euratom Treaty to minimize the impact Of Customs duties On products imported under the program (art. X). Under the terms of article XI, the Community has made all the guarantees required by the Atomic Energy Act. Article XII contains additional provisions designed to assure that materials involved in the program Will be used Solely for peaceful purposes. The execution Of this agreement will facilitate One Of the most notable ad- Vances in the atoms-for-peace program since the program’s inception. Pursuant to the provisions of section 123 of the Atomic Energy Act of 1954, as amended, and upon the recommendation Of the Atomic Energy Commission, Supported by the Department Of State, I hereby— (1) Determine that the performance Of the proposed agreement will pro- mote and Will not constitute an unreasonable risk to the COmmon defense and Security Of the United States ; and (2) Approve the proposed Agreement for COOperation between the Gov- ernment Of the United States Of America and the European Atomic Energy Community (Euratom) enclosed with your letter ; and (3) Authorize the execution. Of the proposed Agreement for the Govern- ment Of the United States of America by appropriate authorities of the |United States Atomic Energy Commission and the Department of State. Sincerely, DWIGHT EISENHOWER. 27 BOULEVARD DU REGENT, BRUSSELS, October 3, 195S. His Excellency LOUIS ARMAND, 51–53 rue Bolliard, Brussels. DEAR MR. PRESIDENT: I take pleasure in transmitting here with a copy of the Euratom Cooperation Act of 1958 (Public Law S5–846, 85th Cong., approved Aug. 28, 1958). This act provides certain of the legislative authorizations needed for implementing the joint program contemplated by the proposed agreement for COOperation. As you know, article XVI of the proposed agreement for cooperation specifies, among other things, that the undertakings of the parties are subject to the provisions of law in effect in the United States, the Community, and the member States. In accordance with that article, the undertakings of this Government under the agreement will be subject to the provisions of the Euratom Cooperation Act of 195S as well as other applicable laws. For example, because of the re- quirement in Section 5 of the act that this Government obtain the equivalent of a first lien in deferred payment sales, the individual agreements in the case Of each reactor project will have to define the rights of the United States in Considerably more detail than does article 3.B of the agreement for cooperation. We recognize the differences in the lien concept as it exists under U.S. law and Security devices that exist under the laws of the several member states, but 18 AGREEMENT FOR COOPERATION WITH EURATOM it will be incumbent upon us because of section 5 to resolve these differences SO that the rights of the United States to repossession of material in case of any default Will Satisfy the requirements of section 5. Somewhat in the same category is the limitation in section 6 (A) of the act upon the purchase of plutonium pursuant to article 3.E of the agreement for COOperation ; the 4,100-kilogram limitation, which we agree limits the obligation Of the United States to purchase, will have to be apportioned pursuant to the detailed implementing agreements as seems suitable. You Will note also the requirements of section 7 of the act with respect to the liability of this Government. This section, and any other requirements of the act that are applicable, will be implemented in the Atomic Energy Com- mission's detailed arrangements under the joint program. I should further like to point out that the Atomic Energy Commission has thus far obtained an initial authorization for fiscal year 1959 of $3 million for the research and development program, and subsequent expenditures will need further legislative authorization. It will also be necessary to obtain additional authorization with respect to the Commission’s fuel cycle guarantee arrange- ments. Authorization and funds for the research and development program and fuel Cycle guarantees will be sought as needed. Sincerely yours, W. WALTON BUTTERworth, Ambassador (to the Communities). [Copyl 51–53 RUE BALLIARD, BRUSSELS, October 3, 1958. The Honorable W. WALTON BUTTERWORTH, 27 Boulevard du Regent, Brussels. DEAR MR. AMBASSADOR : This will acknowledge receipt of your letter of today’s date, enclosing a copy of the Euratom Cooperation Act of 1958, which provides certain of the legislative authorizations needed for U.S. implementation Of the joint program Contemplated by the proposed agreement for COOperation. We understand fully and agree that by virtue of article XVI of the proposed agreement the undertakings Of the United States under the agreement will be subject to the provisions Of the Euratom COOperation Act of 1958, including those relating to deferred payment sales and to the 4,100 kilogram limitation On the Obligation of the United States to purchase plutonium, as well as Other applicable laws. We also understand that it will be necessary for the Atomic Energy Commission to obtain additional authorization and funds for the re- Search and development program and for fuel Cycle guarantees, and that you will seek authorization and funds as needed. Sincerely yours, EMANUEL SASSEN. U.S. ATOMIC ENERGY COMMISSION, Washington, D.C., January 20, 1959. HOn CARL T. DURHAM, Chairman, Joint Committee on Atomic Energy, Congress of the United States, Washington, D.C. DEAR MR. DURHAM : On January 14, 1959, the Commission transmitted to you copies of the Agreement for Cooperation with the European Atomic Energy Community (Euratom), which was signed on November 8, 1958. It is our un- derstanding that the committee at this time, would like to review the progress that has been made to date in developing the procedures for implementing the joint U.S.-Euratom nuclear power program. For the past several months representatives of the Atomic Energy Commis- sion and Euratom have been jointly formulating the policies, criteria, and pro- cedures to govern the administration of the program. After consultation with representatives of industry as well as members of your staff, two basic docu- ments have been prepared. These documents are an invitation for research and development proposals and an invitation and accompanying “fact sheet” relating to proposals to be received under the power-reactor phase of the program. The invitation pertaining to proposals for research and development has been completed and was issued jointly by the AEC and Euratom on December 23, AGREEMENT FOR COOPERATION WITH EURATOM 19 1958. A copy of this document, which was sent to the committee previously, is attached as enclosure A to this letter. The Commission and Euratom expect to receive a number of responses to this invitation within the next few weeks. It is our intention, however, not to obligate any funds or enter into any Con- tracts until after the Agreement for Cooperation comes into effect. Euratom has informed the Atomic Energy Commission that the Council of Members and the European Parliamentary Assembly have approved a budget which contains an amount which is equivalent to the $3 million available to the AEC in fiscal year 1959 for use in the joint research and development program. The invitation and accompanying “fact sheet” for power-reactor proposals (enclosure B) are in the final stages of preparation and it is not expected that they will be subject to major changes hereafter. It is planned that these docu- ments will be published after the Agreement for Cooperation comes into effect. You will note that the “fact sheet” accompanying the reactor invitation COVers the criteria and conditions for project selection. It also contains a number of appendixes outlining the terms of different aspects of the program in greater detail. Appendixes B and C in particular outline the technical, financial, and economic information to be submitted with proposals as Well as the terms that will govern the fuel cycle guarantees. A representative of the EXport-Import Bank participated in the preparation of the financial requirements. The appendix on fuel cycle guarantees incorporates all the principles contained in section 4 of the Euratom COOperation Act. I believe a few major points in the “fact sheet” deserve your particular attention : The closing date for the receipt of reactor proposals is September 1, 1959. This will allow for their evaluation in time for the Commission to seek appro- priate congressional authorization for fuel cycle guarantee contracts early in 1960 after which 45 months will be available for project completion. This Schedule should allow time for project Completion. It should be noted, however, that proposals may be submitted prior to September 1, 1959, and such proposals may provide an Opportunity for the consideration during this spring or summer of some already well-developed projects. The Commission, accordingly, may be required to seek Some appro- priate authorization from Congress during this session if a number of such projects materialize. In this regard, your attention is invited to paragraph 6 of the “fact sheet,” entitled “Eligibility of Existing Projects,” which indicates that projects well along in planning or under construction may qualify provided they meet the established Criteria. Any Such proposal, however, must include a statement that none of the arrangements proposed Will relieve the manufacturers Or Sup- pliers involved from commitments already made. This section was carefully drafted in the light Of the concern expressed by members of the Committee, a concern with which we heartily concur, that the program should not be employed to “bail Out” existing projects. The Commission believes that a considerable degree Of momentum could be imparted to the Euratom program if one or more projects well along in planning could be speedily incorporated in the program, provided they meet all the criteria. We are in complete agreement, however, that the program must not permit manufacturers to modify previously existing Commitments if such modifications would have the effect of increasing the possible liability Of the United States. The language incorporated in the “fact sheet” minimizes this possibility and in our view it is an equitable solution to the problem. As you will recall, various provisions of the Euratom Cooperation Act of 1958 Were specifically drafted by the Joint Committee to permit the possible deferral of two reactor projects for completion in 1965. The Agreement for Cooperation was revised to recognize this possibility. The “fact sheet” to the reactor invitation contemplates that the Commission and Euratom will determine whether such a deferral is desirable after all the pro- posals for 1963 as well as expressions of interest in 1965 projects have been received and evaluated. It should be noted that a special appendix E to the “fact sheet” outlines the information that should be provided by parties who Wish to Submit proposals for plants to be completed by December 31, 1965. In conclusion, it should be noted that, during the course of the forthcoming hearings on the program, representatives of the Commission and the Depart- 20 AGREEMENT FOR COOPERATION WITH EURATOM ment of State Will be pleased to provide the Joint Committee with a general review of the progress that has been made in a number of other areas of interest to the program. Sincerely yours, JOHN F. FLOBERG (For the Chairman). * (Enclosures: (a) Invitation re proposals for research and development; (b) invitation and “fact sheet” for power reactor proposals.) U.S. ATOMIC ENERGY COMMISSION Washington, D.C. (Tuesday, December 23, 195S) USA.EC AND EURATOM INVITE JOINT RESEARCH AND DEVELOPMENT PROGRAMI PROPOSALS The U.S. Atomic Energy Commission and the Commission of the European Atomic Energy Community announced today that they are prepared to receive proposals for research and development centered on nuclear power reactors to be built under the joint United States-Euratom program. This research and development program is an integral part of the joint program contemplated by the Agreement for Cooperation between the United States and Euratom signed in Brussels on November S, 195S. The Overall in- dustrial Objective is the installation within the next 5 to 7 years in the Euratom Community of U.S. type power reactors having a total electrical generating CapaCity Of approximately 1 million kilowatts. While the agreement will enter into force only upon completion of statutory requirements in the United States and Euratom, proposals are being solicited at this time in Order to expedite the process of review and evaluation so that the research and development program can be initiated promptly upon the effective date of the agreement. It is hoped that the agreement will become effective early in 1959. AS Stated in the Agreement for COOperation, “this research and development program will be aimed 'primarily at the improvement of the performance of the reactors to be constructed under the joint program and at lowering fuel Cycle costs. It will also deal with plutonium recycling and Other problems relevant to these reactors.” This research and development effort is to be carried Out Over a 10-year period and Will be financed by equal Contributions from the AEC and Euratom. For the first 5-year period the total funds available are expected to amount to about $100 million ; funds for the second period may be in the same Order Of magnitude. It is planned that roughly half the funds will be spent in the United States and half in Europe for research and development contracts and for experimentation On the reactors to be built under the U.S.-Euratom agreement. Proposals may be submitted by any person, institution, corporation, or group in the United States or in the Euratom COuntries, or by groups including both U.S. and Euratom representation, including reactor manufacturers and Con- structors and suppliers of fuel elements. The association of European and American personnel in the research and development projects is encouraged. Proposals may cover work in any field which the proposer considers relevant to the objectives of the joint program. Financial support for acceptable proposals may take the form Of complete Or partial payment for the cost of research and development work performed. To implement the research and development program, the AEC and Euratom have created a Joint Research and Development Board. Among the functions of the Joint Board are the receipt, evaluation, and selection of proposals, and Over- all technical guidance of the Work contracted for. Proposals may be submitted at any time and will be evaluated upon receipt by the Joint Board in accordance with specified criteria. These include potential contribution of the proposed work to the program and the technical competence of the proposing organization. Among other factors to be considered will be the cost of the proposed work and the willingness of the proposer to participate in the exchange of technical personnel. All proposals must indicate willingness to AGREEMENT FOR COOPERATION WITH EURATOM 21 comply with information, reporting, patent, and other requirements specified by the Board. Submission of proposals at the earliest possible time is encouraged. The Board will determine which proposals are acceptable as a basis for COIn- tract negotiations, and reserves the right to reject any Or all proposals at its discretion. Acceptable proposals will be assigned to appropriate Organizational units of the USAFC or Euratom for negotiation and conclusion of appropriate Contracts, and for subsequent Contract administration. Further details concerning the joint research and development program may be obtained by writing to— Euratom-U.S. Joint Research and Development Board, 51 Rue Belliard, Brussels, Belgium OI’ Director, Division of International Affairs, U.S. Atomic Energy Commission, Washington 25, D.C. (U.S.A.) IDRAFTI INVITATION FOR PROPOSALS REGARDING UNITED STATES- EURATOM JOINT NUCLEAR IPOWER PROGRAM (NOTE.-The approved text, as issued on February 18, 1959, contains a num- ber of changes to the original draft as submitted to the committee at the time of the hearings. The parts enclosed in black brackets are those which have been deleted from the Original draft, and the parts in italics are the text which has been added.) The Commission of the European Atomic Energy Community (Euratom) is prepared to receive proposals from private or governmental organizations Within the Community engaged or willing to engage in power production who wish to participate in the joint nuclear power program that recently was reflected in the Agreement for Cooperation Between the United States and Euratom Con- cerning Peaceful Uses of Atomic Energy. This Agreement was signed on November 8, 1958, and came into effect on February 18, 1959. The program has as its primary objective the bringing into Operation by De- cember 31, 1963, within the European Atomic Energy Community of large-scale powerplant using nuclear reactors of types on which research and develop- ment have been carried to an advanced stage in the United States, having a total installed capacity of approximately One million kilowatts Of electricity, except that two reactors may be selected to be in Operation by December 31, 1965. It is expected that the reactors involved will be brought into Operation under condi- tions approaching the Competitive range of Conventional energy costs in Europe. The nuclear powerplants under the program will be built, owned, and Operated by enterprises in the Community. IEuratom will retain such title as it acquires to Special nuclear material employed in the program and will retain control over the special nuclear material.1: Title to and control over the special nuclear material employed in the program will be retained by Euratom. Under the terms of the joint program the project selected for participa- tion will be eligible to receive several special benefits. These will include finan- Cial guarantees for a 10-year Operating period With respect to the fabrication Cost and integrity Of the fuel elements required ; long-term assurance of an ade- Quate nuclear fuel Supply at prices that are comparable to those offered to in- dustry within the United States ; assurance for a 10-year period of a defined market for the plutonium recovered from the reactors : long-term capital loans to cover a portion of the costs associated with plant construction ; and a long- erm assurance by the United States Government that chemical reprocessing Services will be available under terms comparable to those offered to reactor operators in the United States. It should be noted that specific ceilings have been placed on the total amount of nuclear fuel to be provided, the extent of the fuel guarantees, the amount of the capital loans, and the quantity of plutonium to be purchased. These ceilings apply to the entire program, and, accordingly, projects will be evaluated as to the extent to which they draw on these re- SOUll’CéS. 22 AGREEMENT FOR COOPERATION WITH EURATOM The Droposals for participation under the program will be jointly reviewed and projects Will be selected by the Commission of the European Atomic Energy Community and the United States Atomic Energy Commission. In order for a project reactor to be acceptable there must be reasonable as- Surance that the plant involved can be brought into operation by December 31, 1963, and thereafter operated for 10 years as a source of safe and reliable power. Criteria for acceptance of proposals will include (1) the eXtent to Which the nuclear powerplant involved is expected to approach conventional competitive POWer costs at the time of its completion, and its potential for improvement; (2) the extent to which the project draws on the funds, materials, and services avail- able for the joint program ; (3) the extent to which the proposal contributes to the advancement of the technology of nuclear power, one of the considerations being a reasonable diversity of plant types and designs; and, (4) the extent to Which the project contributes to a strong and competitive atomic manufacturing equipment industry in the United States and in the Community. In addition to these Criteria, Furatom will consider the need to arrive at a reasonable geo- graphic distribution of projects within the Community. Each project must, of course, be in compliance with applicable regulatory requirements of the country in Which it is to be located. Inasmuch as one of the purposes of the program will be to provide industry in IEuropel the Community and the United States with important experience and Certain data on Capital and Operating costs special steps will be taken by the Commission of the European Atomic Energy Community and the United States Atomic Energy Commission to assure the prompt exchange and dissemination of the information developed. In return for the benefits received the participants in the program Will be required to make available information developed on designs, plans and Specifications, construction and operating costs, operations and economics. Enterprises will not be obliged under the program to engage in any exchanges Of manufacturing “know-how” or techniques. Exchanges of this kind are expected to be the subject of licensing and other normal commercial arrange- Inellts. As an associated objective to the installation of the plants themselves, and in Order to Obtain a further decrease in Costs, the Commission of the European Atomic Energy Community and the United States Atomic Energy Commission also have established a joint 10-year research and development program centered on the reactors included in the program. This program will be aimed primarily at improving the performance of the types of reactors included in the pro- gram and at lowering fuel Cycle costs. The information developed will be made available for the benefit Of the respective industries in Europe and the United States. Proposals for participation in the reactor program may be submitted to the Commission of the European Atomic Energy Community at any time up to Sep- tember 1, 1959. The Euratom Commission will refer these proposals, when re- Ceived, for joint Consideratilon by Euratom and the United States. Those who intend to submit proposals are requested to give notice to the Euratom Com- mission of their interest by D------------ (I. 45 days from days of invitationI).I. The United States and Euratom direct the attention of proposers to the Pre- amble of the Agreement for Cooperation [and to Section 2, U.S. Public Law 85–846,1 which opens the possibility that two projects may [authorizes two projects to] be deferred so that their completion date may be as late as Decem- ber 31, 1965. The purpose of Ithese provisions] this provision was to enable the United States and Euratom, should they believe such a deferral to be prudent in the Overall interest Of the joint program, to COnsider proposals depending On reactor designs other than those contemplated in projects which must be completed before December 31, 1963. It is the intention of the United States and Euratom that deferral of two projects be given serious consideration, although they recognize the significance to the Euratom Community of meeting the One million kilowatt objective by December 31, 1963. All parties, including those proposing projects for completion by December 31, 1963, who would be interested in bringing power plants into operation under the program by December 31, 1965 instead of December 31, 1963 are requested so to advise the Euratom Commission in writing by October 1, 1959. Follow- ing this date the Euratom Commission and the United States Atomic Energy AGREEMENT FOR COOPERATION WITH EURATOM 23 Commission will jointly indicate whether they intend to defer any projects. If a decision is made to defer any project, proposals for these deferred projects will be solicited separately and at an appropriate time. The details regarding the type of information desired in proposals, the types of assistance to be provided, the terms and conditions expected to govern par- ticipants in the program, and the Criteria and prerequisites for consideration are set forth in the attached fact sheet. It should be noted that the Euratom Com- Imission and the Uinted States Atomic Energy Commission reserve the right to reject any or all proposals at their discretion. In addition the terms of this invitation may be modified at any time. Prospective proposers may discuss their ideas with the staff of the Euratom Commission and the United States Atomic Energy Commission before submitting their proposals, and they are encouraged to do so. FACT SHEET ON PROPOSALS FOR PARTICIPATION IN THE JOINT EURATOM CoMMIssion- UNITED STATES POWER REACTOR PROGRAM A. PURPOSE OF INVITATION The purpose of this invitation is to elicit proposals which will have as their Objective the bringing into operation by December 31, 1963, within the European Atomic Energy Community, of large scale powerplants using nuclear reactors Of types on which research and development have been carried to an advanced Stage in the United States, having a total installed capacity of approximately One million kilowatts of electricity. B. SUBMISSION OF PROPOSALS 1. Who May Submit Proposals Proposals may be submitted by any person or enterprise in the Community engaged Or Willing to engage in power production. 2. Submission, Date Proposals may be submitted at any time but in no case later than September 1, 1959. 3. Anticipated Acceptance Date The Euratom Commission and the United States Atomic Energy Commission plan to COImplete their review of the proposals received so as to reach a decision by December 31, 1959. However, the Euratom Commission and the United States Atomic Energy Commission will be prepared to make decisions prior to December 31, 1959 if any proposals received indicate the desirability for moving ahead on a more accelerated basis. It will be necessary for the United States Atomic Energy Commission to seek authority prior to entering into Contracts for fuel Cycle guarantees. 4. Notification of Intent to Submit Proposals All parties intending to submit a proposal are requested to inform the Euratom Commission, in writing, by (45 days from issuance of invitation) and to provide the information set forth in Appendix A. All such parties will automatically receive any additional information released in connection with this program. 5. Alternate Proposals Proposers, if they so desire, may submit alternate proposals for the same proj- ect that involve different manufacturers and suppliers. 6. Eligibility of Earisting Projects Power reactor projects now being planned Or Constructed in the Community as a result of bids which already have been evaluated and accepted or for which contracts, either contingent Or firm, have been entered into prior to the date Of this invitation, are eligible for COnsideration under the conditions and Criteria established for the program. Any proposal for such a project should include a Statement that none of the arrangements proposed for participation under the joint program would relieve the manufacturers or principal suppliers from any commitments regarding financial matters, plan Specifications or construction schedules that already had been entered into. 24 AGREEMENT FOR COOPERATION WITH EURATOM C. BASIS CONDITIONS 1. LOCation of Proposed Power Reactor Proposals should indicate the planned location of the reactor. The location must be within the Community. 2. Type of Proposed Power Reactor The proposed nuclear reactor must be of a type on which research and devel- Opment has been carried to an advanced stage in the United States and there must be reasonable assurance that such a reactor will be reliable and safe in Operation. The reactor Inust be designed to permit Operation in accordance with Sound Operating utility practice, particularly insofar as the permissible load variation rates, the minimum level of practical sustained power output and the total dura- tion of stops for normal maintenance and reloading of the core are concerned. Any Special fissionable or fertile material may be used, and the reactor core may consist of several regions of differing composition. 3. Size of Proposed Power Reactor Ordinarily, preference will be given to proposals for reactor plants having a nuclear capacity (that is, exclusive of the power contributed by any superheater using conventional fuel) of approximately 150 MWE net, or more. Consideration will, however, be given to plants of somewhat smaller size [where special justification can be made for smaller sizel if such plants promise to Sup- ply power at costs that are comparable to those that can be obtained from a muclear plant of 150 MWE capacity. While favorable weight will be given to plant capacity greater than 150 MWE, it is emphasized that the increased requirements of a project for materials and funds from the joint program that are occasioned by its very large size, will be a counterbalancing consideration. Accordingly, enterprises considering Such projects may wish to give consideration to a proposal for more limited participa- tion in the benefits of the program. 4. Date of Operation of Proposed Power Reactor The proposal must provide that the plant will be brought into operation by December 31, 1963. As a general rule, it is anticipated that the final COntractual arrangements with enterprises selected to participate in the program will be entered into by April 1, 1960; accordingly, the construction schedules contained in proposals Submitted may be based on that date. As noted in paragraph B.3, there may be exceptions to this schedule and projects may move ahead on a more accelerated Schedule. 5. Method of Obtaining Proposal In order for a proposal to qualify for consideration, One or more U.S. manu- facturers and One or more manufacturers from the Community must participate in important roles in the construction of the project, and the project proposed for participation will have to be based on arrangements resulting from the solicita- tion, from within the Community and the United States, on an Open, nonre- strictive basis, of competitive tenders for a nuclear reactor of the size desired by the enterprise. D. TYPES OF ASSISTANCE THAT MAY BE REQUESTED 1. Fuel Cycle Guarantees The United States Atomic Energy Commission will offer guarantees designed to limit certain financial risks associated with fuel Cycles. (See Appendix “C” for details.”) These guarantees will provide that fabrication charges to a reactor operator will not exceed a level specified by the AEC and/or that the fuel elements under irradiation will achieve an AEC Specified minimum integrity level. They will be offered only to the extent that equivalent or better guarantees are not available commercially. In addition, apart from the joint consideration of the proposal, commercial guarantees on the performance of the reactor and fuel must be con- sidered acceptable to the United States Atomic Energy Commission in its special capacity as guarantor of the integrity life and initial cost of the the fuel elements. 1 This Appendix to be made available upon request. AGREEMENT FOR COOPERATION WITH EURATOM 25 The liability of the United States Atomic Energy Commission will be limited to meeting guaranteed maximum charges for fabricated fuel elements and to the adjustment of charges for fabrication, chemical reprocessing, and transpor- tation of fuel elements when required by failure to meet the guaranteed in- tegrity. ºss otherwise agreed, the guarantees provided by the United States Atomic Energy Commission will be applicable to all loadings, meeting the specifications and conditions of Appendix C, made in a reactor under the joint program during the first ten years of its operation or prior to December 31, 1973 (or December 31, 1975, for not more than two reactors selected under the program), whichever is earlier. 2. Capital Loans Under the terms of the program the reactor projects selected will be eligible for special assistance in the financing of the Capital costs. I(Further information will be available at a later date.)] Subject to the conclusion of formal megotiations, now well under way, and to the approval by the Council of Ministers of the terms and conditions, the Ewport- Import Bank would be prepared to open a line of credit in favor of Euratom for the purpose of assisting in the financing of nuclear power reactor projects, selected under the joint program. Features of the Credit would be: 1. Annount: $135 million 2. Term:Approacimately 20 years 3. Interest rate : 4% percent 4. Period of grace: Approa;imately 5 years 5. Madeinum financing under Earimbank credit: 40 percent of estimated cost of each project sclected 6. Items eligible for financing: (i) Equipment, materials and services for the design and construction of nuclear power reactors of types developed in the U.S.4. (ii) Engineering and technical Services (iii) Fabrication of initial fuel elements (iv) Interest during construction. 3. Provision. Of Fuel Under the terms of the Agreement for Cooperation in existence between the European Atomic Energy Community and the United States, the United States has agreed to sell to the Community a net amount of up to thirty thousand (30,000) kilograms of contained U* in uranium for use in agreed upon projects in the joint program. Payment for special nuclear material fuel in- ventory may be made on a deferred basis. The United States is required under its legislation to retain the equivalent of what, under United States law, is described as a first lien on any such material sold to Euratom for which pay- ment is not made in full at the time of transfer. Euratom will acquire and retain [such] title [as it acquires] to special nuclear material so purchased and employed in the program and will retain control over the Ispecial nuclearl material. It is expected that the participants under the program Will enter into long- term contracts with the Euratom Supply Agency, which Will provide them. With an adequate assurance as to the availability of such material for their projects. This material will be made available to the users by the Supply Agency. On terms and conditions to be published as soon as possible. [The United States is required by statute to retain the equivalent of a first lien on any such ma- terial sold to Euratom for which payment is not made in full at the time of transfer.] It should be noted that the uranium supplied may be enriched up to 20 percent by weight in the isotope U*. The Supply Agency will charge the user With a percentage of the stated value of the material. For the first ten (10) years of operation this percentage will be 4% per annum * plus adminis- trative and handling costs.” The fuel contract also will provide that user Shall pay for burnup and losses on a current basis and shall provide for periodic * This percentage is based on the interest rate to be incorporated in the arrangement for deferred payment by the Euratom Supply Agency to the USAEC to be executed pursuant to Article III of the Agreement for Cooperation. *Suitable arrangements will be made between the Supply Agency and the users to provide for payment by the users, after the initial ten-year period of the debt incurred for the fuel inventory. 26 AGREEMENT FOR COOPERATION WITH EURATOM Settlements for the consumption of fuel subject to final settlement upon the I'eprocessing Of the material returned. 4. Purchase of Plutoniuſ in Under terms and conditions to be agreed, the Euratom Supply Agency will be prepared to enter into long-term contracts with reactor operators under this program, under Which it will compensate these operators for the plutonium re- COWered from the reactors involved. These contracts ordinarily will be for ten (10) years of Operation of such reactors or until December 31, 1973 (or until December 31, 1975 for not more than two reactors selected under the program) whichever is earlier. 5. Chemical Reprocessing Pending the coming into being of facilities in the Community or the United States to process fuel irradiated under the program, the utilities and reactor Operators involved Will receive a long-term assurance that adequate facilities will be available to process their fuel. The United States Atomic Energy Com- mission, accordingly, Will be prepared to perform, on terms and conditions to be agreed, reprocessing Services with respect to any source or special nuclear material received by the European Atomic Energy Community from the United States under this program. Such reprocessing services will be available under terms Comparable to those Offered to reactor Operators in the United States and will be performed at established domestic prices in effect in the United States upon delivery of such material. It is anticipated that any withdrawal by the United States Commission of chemical reprocessing services will be based upon the availability Of commercial facilities to meet requirements for such Services at reasonable prices, including the requirements of projects in the joint program. The United States Atomic Energy Commission will give written notice of the non-availability of its chemical reprocessing services 12 months prior to such non-availability. E. CONDITIONS FOR CONSIDERATION OF PROPOSALS In Order to be eligible for consideration the proposal must meet the basic conditions Set forth in Section C and the Euratom Commission and the United States Atomic Energy Commission must determine that there is reasonable assurance that (1) the reactor can be brought into operation by December 31, 1963, (2) the reactor can serve as a source of safe and reliable power, and (3) the proposer and his principal contractors are technically and finan- cially competent to meet the responsibilities entailed in the proposal. In addition, the proposals must— (1) Contain, where applicable, the technical, safety, financial and other information in the form and degree of detail specified in Appendix B. (This Appendix will be furnished on request.) (2) Contain a firm undertaking by the utility that a specified nuclear power plant will be built if the proposal is accepted. This should be evi- denced by, among other things, a binding commitment by a manufacturer or manufacturers, contingent Only upon the receipt of necessary Statutory licenses and permits and the availability of financial protection against third party liability. (3) Not be contingent on the award of any research and development contract under the program or the Successful Outcome of any experimental program related to the proposal. (4) Contain assurance that the proposers will undertake to obtain all necessary licenses and permits and will comply With all pertinent laws, regulations and orders of appropriate authorities. (5) Indicate an agreement on the part of the proposer and his principal contractors to comply with the reporting requirements Outlined in Ap- nClix D. * Indicate an agreement that representatives of Euratom and the United States Atomic Energy Commission will be entitled to access, at all reason- able times, to the nuclear power plant and its associated facilities in order to obtain technical and economic data related to the Construction and operation of the plant. AGREEMENT FOR COOPERATION WITH EURATOM 27 (7) Indicate the terms and conditions under which the proposer Will be willing to make the plant available for research and development studies and for training purposes. It is anticipated that any such research and development work will be primarily Oriented towards improving the eCO- nomics Of the plant involved. (8) Evidence the solicitation of competitive tenders by providing a list of the principal suppliers consulted and a summary of the tenders received. (9) Contain all information in clear and concise accounts on the SCOpe Of the guarantees and warranties on the performance of the plant including the fuel that have been agreed to by the prospective Suppliers. (10) Contain, to the extent possible, a preliminary endorsement Or a formal approval Of the competent national Or regional authority regarding the selection Of the site. (11) Indicate whether the proposer desires to receive any Of the fuel ele- ment guarantees Offered under the joint program and if SO, provide the information requested in Appendix “C”. (12) Set forth any patents, pending patents, Or Other restrictions On con- sumable material such as fuel elements, that might affect the Supply and cost Of Subsequent loadings, and (13) Include a schedule of the estimated project requirements for U* for a 20 year period as well as Of the anticipated plutonium that will be pro- duced Over this Same periOd. F. CRITERIA FOR EVALUATION OF PROPOSALS The Euratom Commission and the United States Atomic Energy Commission will jointly evaluate the proposals received against the following Criteria : 1. The extent to which the nuclear power plant is expected to approach COnventional competitive power COsts at the time Of its completion, and its potential for improvement, including the plans Of the Operator to take advantage Of this improvement. 2. The extent to which the plant meets the desired minimum size of 150 MWE or promises to supply power at costs that are comparable to those that can be Obtained from a plant Of Such a size. 3. The extent to which the project is likely to contribute to a strong and COmpetitive atomic equipment industry in the United States and in the Community. 4. The extent to which the project may draw on the funds, materials, and services available for the joint program. 5. The extent to Which the project Contributes to the advancement of technology Of nuclear power, One Of the considerations being a reasonable Cliversity Of plant types and designs. In addition to those Criteria, Euratom Will consider the need to arrive at a reasonable geographic distribution of projects within the Community. G. SECURITY FOR CONSTRUCTION AND OPERATION OF THE POWER PLANT Successful proposers will be expected to undertake the obligation to build the plant by December 31, 1963, and to Operate it for a period of ten years from the date of completion of Construction. The Euratom Commission and the United States Atomic Energy Commission may require security (e.g., a perform- ance bond) that the Commitment to build the plant be fulfilled. If a proposer is a subsidiary of a company or a member of an affiliate group, the principal Or the group, as the case may be, may be required, jointly and Severally, to guarantee fully performance of the undertaking set forth in the proposal. H. POSSIBLE DEFERRAL OF TWO PROJECTS UNDER THE PROGRAM The United States and Euratom direct the attention of proposers to the Preamble of the Agreement for Cooperation [and to Section 2, U.S. Public Law 85–846,1 which [authorizes two projects toll opens the possibility that two projects may be deferred so that their completion date may be as late as December 31, 1965. The purpose of [these provisions] this provision was to enable the United States and Euratom, should they believe such a deferral to be prudent in the 28 AGREEMENT FOR COOPERATION WITH EURATOM OVer-all interest of the joint program, to consider proposals depending on reactor designs other than those contemplated in projects which must be completed before December 31, 1963. It is the intention of the United States and Euratom that deferral of two projects be given serious consideration, although they rec- ognize the significance [to the Euratom Community] of meeting the one million kilowatt objective by December 31, 1963. All parties, including those proposing projects for completion by December 31, 1963, who would be interested in bringing power reactors into operation under the program by December 31, 1965, instead of December 31, 1963, are requested SO to advise the Euratom Commission in writing by October 1, 1959, and to provide the information set forth in Appendix E. Following this date the United States and Euratom will indicate whether they intend to defer any projects. If a decision is made to defer any projects, proposals for these de- ferred projects will be solicited separately and at an appropriate time. It is presently contemplated that such a solicitation, if made, would not take place prior to January 1, 1961. I. REJECTION OF PROPOSALS The Euratom Commission and the United States Atomic Energy Commission reserve the right to reject any Or all proposals at their discretion. J. MODIFICATION OF INVITATION This invitation may be modified after its release and additional information may be requested from proposers in the course of the review of proposals. K. APPLICABILITY OF EURATOM TREATY, AGREEMENT FOR COOPERATION, AND LAWS AND REGULATIONS This invitation and all activities in Connection with the joint program are Subject to the Treaty constituting the European Atomic Energy Community, the Agreement for Cooperation between Euratom and the United States signed at Brussels On November 8, 1958, and the provisions Of applicable laws, regula- tions, and other legal requirements in effect in the United States, the COm- munity and member States. L. LIABILITY The Government of the United States shall not be liable for any damages Or third party liability arising out of or resulting from the joint program. M. TO WIHOM PROPOSALS MUST BE SUBMITTED TTen] Twenty copies of each proposal should be addressed to— Euratom Commission 51 Rue Belliard Brussels, Belgium and marked : “Proposal Submitted for Euratom-United States Joint Program.” Proposals may be submitted in one of the four languages of the Community Or in the English language. N. PARTICIPATION IN JOINT RESEARCH AND DEVELOPMENT PROGRAM It is recognized that enterprises may also wish to participate in the joint Euratom-U.S. research and development program which is to be centered On the types of reactors to be constructed under the program. Further details regard- ing this program may be found in the “Guide for Submission of Research and Development Proposals Under Joint Euratom-U.S. Program” which Will be made available upon request. - APPENDIX A I. Identity Of Proposer : Name Business Address Seat (Legal Address) Legal Status II. Most recent Financial Statement: Annual Report Palance Sheet Profit and LOSS Statement LAccount's] Accountant's Report (if available) AGREEMENT FOR COOPERATION WITH ElJRATOM 29 III. Financial and/or other Relationship Between Proposer and Operator of Project, if these are different persons IV. Brief Description of the Project Including: LOCation Size of Plant (Net Electrical Capacity) V. Details on How the Project May be Financed VI. Plans for the Distribution of the Electricity to be Generated APPENDIX B I. Introduction : A. Official Application B. Engagement C. Presentation of Technical and Other Information D. Classification of Data, II. Technical Information : Summary ReactOr Primary Circuit and Steam Generating Units . Radiation Considerations . Turbine Generator and Steam Cycle . Electrical System Plant Instrumentation and COntrol . Civil WOrkS General Services . Other III. Reactor Hazards and Related Considerations: A. General B. Site Data C. Release of Contaminants to Environment VI. Materials Requirements: A. Schedule V. Financial and ECOnomic Data : The Proposer (s) . Economic Justification of Proposed Increase The Project (Atomic Power Plant) . Estimated Capital Cost of Project . Financing of Capital Costs of the Project and Commitment to Oper- ate Project for Ten Years . Ability to Repay Euratom Loan . Expension Program of Utility Companies IOwning the Facilities Which Will Use Power Generated by ProjectI Which Will Own and Operate the Projects H. Proposed Method of Financing Cost of Research and Development Program I. Estimated Operating Cost Data of Proposed Nuclear Power Plant (7,000 hrs./year at full power) VI. Miscellaneous : . Guarantees and Warranties . Insurance and Third Party Liability . Experimental Program . Research Program . Training Program . Overall Project Schedule J . ; I. INTRODUCTION A. Official Application An Official application from the Proposer to the Community must be submitted for acceptance Of the proposed power plant project under the terms of the Euratom-U.S. Agreement. The proposing party will undertake to abide by the clauses and conditions of the Agreement as well as by those of the present invitation. 36636–59—3 30 AGREEMENT FOR CooperaTION witH EURATOM B. Engagement There must be submitted a confirmation of the formal engagement of the tendering party to construct the power plant within the stipulated time and to Operate it for a period of at least ten years from the date of its entry into service in case of acceptance of the project under the terms of the Agreement. C. Presentation of Technical and Other Information An Outline of the technical and other portions of the bid, containing specific information desired by Euratom-U.S. is presented herein. It is suggested that the bidder follow the form indicated by this outline. The bidder should Supply as much as possible Of the information requested, as well as any additional in- formation he deems necessary, in order to have his bid properly evaluated. D. Classification of Data All information submitted by the proposer shall be treated as Confidential data and withheld from public or other disclosure insofar as the information has not been made public according to national practice or legislation. II. TECHNICAL INFORMATION A. Summary 1. A brief general description of the plant including site layout. 2. Tabulation of Plant Data ; a. Type of reactor. b. Power level (MW) : (1) Thermal (nuclear). (2) Thermal (conventional, if any). (3) Gross electric. (4) Net electric. Number of loops. . Number Of turbines. Fuel elements : (1) Type. (2) Composition. (3) Enrichment. (4) Dimensions. (5) Density. (6) Cladding Material. (7) Cladding thickness. (8) Lattice pitch. f. MOClerator : (1) Material. (2) Temperature and pressure. (3) Volume ratio (liquid to fuel). g. Core (by regions) : (1) Number of assemblies. (2) Number of rods or plates per assembly. (3) Active height. (4) Effective diameter. (5) Weights of material in IXgs. h. Control rods : (1) Number and type. (2) Type of drive mechanisms and location. i. Pressure vessel : (1) Material. (2) Dimensions. j. Containment shell: (1) Shape and dimensions. k. COOlant : (1) Material. (2) Temperatures and pressures. (3) Flow. 1. Turbine inlet conditions: (1) Pressures and temperatures. (2) Flow. AGREEMENT FOR COOPERATION WITH EURATOM 31 m. Heat transfer conditions: Il, O. (1) Surface area. (2) Heat fluxes. (3) Heat flux ratios max/avg. (4) Power density. (5) Specific power. Fuel burn-up : (1) MWD/T avg. (2) MWD/T max. Neutron fluxes : (1) Thermal. (2) Fast. p. Neutron balance: (1) Initial K-eff. (2) Absorption distribution. (3) Initial conversion ratio. B. Reactor 1. Reactor vessel and internal parts : 8. Description giving general arrangement, dimensions, design and Op- erating stresses, and weights. b. Discussion of design codes utilized and factors of safety employed. 2. Fuel Elements : 8. : Detailed description with drawings giving all important dimensions, Characteristics, COefficients, etc. . General method of fabrication, quality control and inspection. . Burn-up data, design and guaranteed for all cores. . Discussion of fuel element failures, their detection and handling. . Fuel element cycling procedures. . Material composition of the fuel elements after irradiation. g. Special preparation of the element for shipping, if any. 3. Reactivity Control System and Characteristics: à. b. C. d. Detailed description of control rods, their drive mechanisms, opera- tion and characteristics. Description of methods of flux-flattening. DeScription Of Other safety systems. Control characteristics information, including : (1) initial and maximum excess reactivity. (2) Control rod worth. (3) auxiliary control Worth. (4) shutdown reactivity. (5) pressure reactivity. (6) temperature reactivity. (7) effect Of xenon and samarium. (8) Xenon formation on shut-down and power variation. (9) void coefficient of reactivity. (10) effect of burn-up on reactivity. (11) Spatial distribution of power. 4. Reactor Physics Data : a. Detailed discussion of the reactor physics associated with : (1) COre size. (2) moderator. (3) COOlant. (4) fuel and cladding. (5) Other structural material. b. Total mass of fissile material, fertile material, initial enrichment, final enrichment. 5. Heat Transfer and Fluid Flow : a. Discussion of all pertinent heat transfer and fluid flow characteristics Of the design. b. Coolant flow pattern and design philosophy. C. Discussion of core conditions limiting pOWer Output. 32 AGREEMENT FOR COOPERATION WITH EURATOM O. Primary Circuit, Steam Generating Umits, Aua'iliaries 1 * 1. Primary circuit: a. Detailed description with drawings showing all major equipment in the primary circuit and giving approximate locations, sizes, and types of principal instruments, valves, pumps, piping, etc. 2. Steam Generating Units: a. Detailed description with drawings showing Steam generating equipment, designs, operating characteristics, etc. . Main blowers Or pumps. Emergency blower drives and pumps. . Pressurizer. . Primary and Secondary coolant systems. . Emergency Power Systems. . Emergency Cooling Systems. . Fuel and COntrol Rod Handling Systems. i D. Radiation Considerations 1. Biological Shielding : a. General description with Overall design, layout and dimensions. b. Design basis, accessibility, Special provisions for COOling. 2. Provisions for Containment : a. Overall design and dimensions. b. Design basis. C. Integrity, Closures, Ventilation, COOling Spray Systems, missile pro- tection, etc. 3. DeContamination : a. Provisions for decontamination Of primary Systems. b. Provisions for decontamination of Secondary and auxiliary Systems. E]. Turbine Generator and Steam Cycle 1. Turbine : a. General description and principal characteristics. b. Auxiliary equipment and instrumentation. C. Weights and dimensions. 2. Generator : a. General description and principal characteristics. b. Auxiliary equipment and instrumentation. c. Weights and dimensions. 3. Steam Condensing Plant : a. General description and principal characteristics. b. Auxiliary equipment and instrumentation. c. Detailed operating characteristics. 4. Turbine Cycle : a. Flow diagram. b. Description and characteristics of auxiliary equipment. c. Specification of chemical quality required for steam and water. F. Electrical System 1. Plant layout and power requirements: a. Plant electrical diagram. b. Details of plant power consumption. 2. Emergency Supply System : a. Description and principal characteristics. 3. Auxiliary Transformers, Switchgear, and Cables: a. Description and Characteristics. 4. Protective Equipment: a. Description and characteristics. 5. Lighting System : a. Description of normal and emergency system. G. Plant Instrumentation and Control 1. Overall Plant Control : a. General description and layout. . . . 2. Reactor Control and Instrumentation System : a. Detailed description of : (1) Reactivity control. . . . (2) Neutron detection system. (3) Mechanical and thermal detectors. (4) Neutron sources. (5) Measurement of flux distribution. (6) Ruptured fuel element detection. (7) Radioactivity detection. AGREEMENT FOR COOPERATION WITH EURATOM 33 3. Primary and Secondary Loop Control and Instrumentation : . . . a. Measurement and control devices. - . . . . . . . . . b. Detection of impurities. c. Other monitoring devices. 4. Electrical System : a. Detailed description of measurement, control and protective devices. . . . . H. Civil Works - - 1. Site Layout: a. Pertinent site information not otherwise presented in section III-B of this appendiX. - 2. Design : a. General description of the Overall design. b. Plan and elevation drawings for all civil Work. 3. Special Construction Equipment Required. I. General Services . Fire System : a. Description. Communication System : a. Description. . Ventilating and Air Conditioning: a. Description. . Laboratory: a. General description including equipment supplied. Workshop : a. General description including equipment supplied. Lifting and Transport: a. Description of equipment supplied. . Spare Parts: a. Detailed list of spare parts Supplied. J. Other 1. Future Potential of the Plant: • . a. Discussion of the possibility of increasing the reactor power and/or reducing the unit power cost after the first loading. b. Excess capacity (if any) provided in the various Sections Of the - installation and/or possibility of adding additional units to take advantage of any future increase in the reactor heat output. - 2. Functioning of the Installation : a. Analysis of over-all system with reference to dynamic stability. b. Start-up procedure. c. Full power operation. d. Normal and emergency shutdown. 3. Number and Types of Operating Personnel Required. 4. Plant Heat Balance. i III. REACTOR HAZARDS AND RELATED CONSIDERATIONS A. General 1. General description of over-all project with particular emphasis on safety features, such as use of containment, missile protection, shielding, provisions for unfavorable Seismological Conditions, etc. 2. Description of reactor plant with particular emphasis on Safety aspects such as inherent safety design characteristics, use of closed loops, controls and instrumentation, shielding, blast protection, failsafe features, Waste dipOSal facilities, etc. B. Site Data 1. Justification for the choice Of the site. 2. Plan Or plans Showing the boundaries and dimensions of the Site, the location of the Various parts of the plant, topographical features on and near the site, and nearby facilities either existing or anticipated, Such as roads, railroads, factories, residential areas, Schools, hospitals, etc. 3. Population density including its variation and land usage within 50 kilometers Of the site; both numerical information and a map showing urban 3LT631. 4. Natural environments of locality on general qualitative basis : a. Meteorology—Wind Velocities, directions and frequencies; amounts and frequency of precipitation ; frequency and persistence of expected worst conditions, topographic features which might affect wind flow. b. Hydrology—flow rates of nearby stream and sea currents, and use of public, location and use of wells, depth to ground water ; sources of public drinking water in surrounding areas. 34 AGREEMENT FOR COOPERATION WITH EURATOM c. Natural Radioactivity—maximum and minimum levels, Source and distribution within or adjacent to the site. d. Geology—the existence of formations which might affect the escape of contaminants to surface or subsurface water bodies. Soil con- ditions and nearby test borings if available. e. Seismology—history of earthquakes and their intensities in that region Of the country; existence of geological features which might indicate the possibility of serious tremors. 5. Explanation of present and intended future use of land upon which reactor is to be located ; also, the land in the nearby vicinity. The proposer should indicate what impact, if any, his project might have on other economic and/or SOcial projects located nearby. O. Release of Oontaminants to Environment 1. Estimate of the amounts and source of gaseous, liquid and solid radioactive Waste which are expected to be routinely released to the environment together with estimates of effects on the environment and procedures to monitor, dilute and control these releases. 2. Types of accidents considered credible, and preliminary estimate of fre- Quency and consequences. Special features of reactor design to prevent these accidents. 3. Preliminary estimate of the maximum credible accident including amount and character of fission products released to containment vessels. Also, esti- mate of the potential doses from gamma Shine and leakage of fission products in- cluding fallout at the site boundary and at nearby communities under adverse Weather conditions. Assumptions and references used in these calculations are to be stated. 4. Possibility and safeguards against contamination of nearby Streams or other water supplies from the fission products retained in the plant container Or released following the maximum credible accident. IV. MATERLALS REQUIREMENTS A. Schedule The following form should be used to present a complete material balance for each source, special nuclear, and/or other material (such as D’O) used in the project. AGREEMENT FOR COOPERATION WITH EURATOM 35 gear at full power) [TABLE THAT APPEARED IN ORIGINAL DRAFT) I. Estimated operating cost data of proposed nuclear power plant (7,000 hours per [Cost for first 10 years of Operation Each year (A) Total (B) Annual steady- State COStS (C) Cost of generating power by a Con- ventional System ACCOunt (D) Amount (E) Revenue: Sale of power (No. of KWH or BTU’s) Other (show source such as irradiation Services, isotopes, etc.)-------------------------------- Total revenues - - - - - - - - - - - - - - - - - - - - - - - - - - - * * * * * - * * * * * * * * * Operations: Fuel cost: I Fuel fabrication and assembly--------------- Material loSSeS Burnup (exclusive of fuel fabrication and as- Sembly costs) Transportation of spent fuel elements Reprocessing of spent fuel elements---------- Waste Storage Use charges Credit for plutonium, U*, etc.--------------- * - - - - * - - - - - - - - * * - - - sº. - - - as sº * - *-* * *m. - - - - - - - - - - - - - as amº - - - sº tº Net fuel costs------------------------------ - * - - - - - - - - - - - - - - - - as ºn Operation labor, reactor and associated Systems ”- Other expenses (list major items such as Inainte- nance, health and safety, etc. by major ele- ments of costs such as labor, materials, etc.)---- Depreciation *----------------------------------- Insurance 3 Property taxes 3 Interest on borrowed capital * - = - - - - - - - - - - - - - * * * - * * * * * * * * * * * * * * * *-* * * * - - - - - - - - - - - - - - - m * * * * * s m * * * * * * * * * * - * * * * * * * * * * * * * * * * * * Total reactor and steam generator expense----- Mills per KWH or BTU’s)--------------- - - - - - - - - - - * E * - - - * * - - Conventional system (turbogenerator) (Show costs by major account classifications, includ- ing depreciation, property taxes, insur- ance, etc.)----------------------------------- Total turbogenerator expense (Mills per KWH or BTU’s) Total generator expense (Mills per KWH or BTU’s) Transmission expenses 4 (show costs by major account classifications, including depreciation, roperty taxes, etc.)--------------------------- HDistribution expenses (show costs by major account classifications)" Other expenses (detail by major account classi- fications, such as administration, income taxes, etc.)--------------------------------- - Total expenses--------------------------------- Net revenue Other income (detail) Net income (loss) Debt retirement----------------------------- Dividends - - - - - - - - - - - - - - s - - - - - - - - - - - - - - - - - - - - - * * - - - m - - - - sº sm- " - - - - - - sº sº - - - - - - - - - - - - - - - - * * - - - - - - - - 1*Show details of calculation. * Indicate basis of labor estimate (number of people, etc.). 3. Indicate basis for costs. “...Show only expenses applicable to those facilities constructed specifically for operation of nuclear reactor. NOTES Column A–Show costs for each year of operation. Column B–Show total costs for first 10 years of operation. Column C–Show annual “steady-state” Operating costs. Column D–Show cost categories for conventional type steaIn plants and turbogenerator system having same capacity as nuclear plant including insurance, taxes, depreciation, etc. Column E–Show amounts at “steady-state.”I 36 AGREEMENT FOR COOPERATION WITH EURATOM I. Estimated operating cost data of proposed nuclear power plant (7.000 hrs./year at full power) [CORRECTED TABLE] Cost of first 10 gears of Cost of generat- Opération Annual img power by 8teady- a conventional State system 1 C08ts Each Total gear (A) (B) (C) (D) (E) 1. Revenue: 1.1. Sale of power (No. of KWH)------------------------|--------|--------|--------|-------- 1.8. Other (Show source such as irradiation services, iso- *P*, *)----------------------------------------|--------|--------|--------|--------|-------- Total (1) 8. Expenses: 8.1. Reactor and Steam generating system----------------- 3.1.1. Fuel COSt: 3 .1.1.1. Fuel fabrication and assembly----------|--------|-------- . Material losses------------------------- . Burnup (erclusive of fuel fabrication and assembly costs)------------------|--------|-------- Transportation of 8pent fuel elements---|--------|--------|-------- . Reprocessing of spent fuel elements.-----|--------|--------|-------- • Waste storage--------------------------|--------|-------- . Use charges----------------------------|--------|--------|--------|--------|-------- . Credit for plutonium, U*, etc.---------|--------|--------|-------- Total (3,1,1)------------------------|---------------- - - - - - - - - - - - - - - - - - - - * * *- - - * = a- - - - - - - - - - * * - - - * * * - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - am - * * - - - - - - - - - - - - - - - - - - - - - ºr * *- - - - ºm º º - - - -º ºr - - - - - - * * - - - - - - - - - - - - - - - - - - - - - - - - | | 3.1.2. operatino labor—Reactor and associated sys- t * * = - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - * * : * * * * * * - - - - * * * * * * *- : * * * * * * * * : * * * * * * * * €7728 2.1.3. Other erpenses (List major items such as mainte- rvance, health and safety, etc. by major elements of costs such as labor, materials, etc.) ---------|--------|--------|--------|-------- 8.1.4. Depreciation *---------------------------------|--------|--------|--------|--------|-------- 8.1.6. Insurance “-----------------------------------|--------|---------------- 3.1.6. 3.1.7. - - - - - - - - - - * - - - - * * Property tares "-------------------------------|--------|--------|-------- Interest on borrowed capital *------------------|--------|--------|-------- - - - - - - - - - H - - - - - - - - Total (8.1) (mills per kwh)------------------|--------|--------|--------|-------- 8.8 Conventional system (turbo generator) (Show costs by major account classifications, including depreciation, property tares, insurance, etc.)---------------------|--------|--------|-------- - - - - - - - - - * * *- - - - - - - * = - - - - - - * - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - I - * * * * * * * I m. * * * * * * - I • * * * * * * * I • * * * * * * * * * * * * * * * * 2.8. Transmission expenses * (Show costs by major account classifications, including depreciation, property tares, etc.) ----------------------------------------|--------|-------- 8.4. Distribution erpenses (Show costs by major account classifications) *-----------------------------------|--------|--------|-------- 8.5. Other expenses (Detail by major account classifications, - 8wch as administration, etc.)------------------------|--------|--------|--------|-------- Total (?)---------------------------------------|--------|--------|--------|--------|-------- 3. Net Revenue: Total (1–3).-----------------------------------|--------|--------|--------|--------|-------- 4. Other Income: Total (3+4)----------------------------------|--------|--------|-------- 6. Income Tares-----------------------------------------------|--------|-------- 6. Net Income: Total (4–6)------------------------------|--------|-------- 7. Debt Retirement------------------------------------------------------------- 8. Dividends--------------------------------------------------- 9. Balance: Total (6-7-8).------------------------------|--------|--------|-------- 1 To be completed by participants possessing such data or presently engaged with production of power. Column A–Shows costs for each year of Operation. Column B–Show total costs for first ten years of operation. Column. C-Show ammual “steady-state” generating costs. Column D–Show cost categories for conventional type 8team plant and turbo generator system having 80 me. capacity as nuclear plant including insurance, taxes, depreciation, etc. Column E–Show amounts at steady state. 2 Show details of calculation. 8 Indicate basis of labor estimate (No. of people, etc.) 4 Indicate basis for costs. ** * * * - - & Show only expenses applicable to those facilities constructed specifically for operation of nuclear reactor. AGREEMENT FOR COOPERATION WITH EURATOM 37 Material requirements schedule Quantity (in Kg8 for each 6-month period from initial withdrawal wntil - equilibrium) 1. Material------------------------------------ 2. Withdrawals: (a) Enrichment 3. Returns : (a) Enrichment - - - º- - (b) Pu - ºs - (c) U"------------------------------ - 4. Inventory : (a) Storage------------------ (b) Fabrication_____ - - -º (c) Processing - - (d) Transit * * - sº- (e) In reactor---------------- W. FINANCIAL AND ECONOMIC DATA A. The Proposers 1. If the project is to be owned and operated by an existing company now in Operation : a. Name of proposer. . Detailed description of properties and operations, including maps, etc. . Principal ownership (major Stockholding interests). . History. . Charter, . GOVernment regulation and franchises. . Financial information : (1) Detailed annual balance sheets and profit and loss statements for the last five years (accompanied by accountants and fl- nancial reports. (2) Stockholders or other public reports for last five years. (3) Legal and financial links with financial or industrial groups Or with the Government. (4) Working capital from latest financial statement: a. Current Assets. b. Current Liabilities. Working capital. (a-b) Ratio. (percent of a to b) (5) Plant and equipment from latest financial statement: Gross depreciable assets. ACCumulated depreciation. Net book Value. Insured value of assets. Annual depreciation charged to income (current year). Statement of depreciation policy and methods. (6) Long-term and intermediate-term debt from latest financial statement.” : Maturity Interest Repayment ISSue Amount Date Rate Security Rank Schedule Describe any mortgage or other lien on the assets of the company. (7) Equity from latest financial statement: TOtal Assets. Total Liabilities. Equity. (8) Dividends paid in last five years and brief statement of divi- dend policy. (9) Describe restrictions on dividends, borrowing, additional stock issuances, etc., in indentures, charter, etc. - (10) List significant financing through sales issues of stock, bonds, etc., in recent years. * Intermediate debt – 2–5 years. Long-term debt = over 5 years. 38 AGREEMENT FOR COOPERATION WITH EURATOM h. Operations: For each of last five years state : (1) Maximum system demand (kw), energy (kWh) generated, purchased, interchanged. (2) Number of customers by type. (3) Energy sold by type of customers. (4) Revenues by type of customers. (5) Typical daily load curve. (6) Operating expenses by major classifications. (Segregate between generation, transmission and distribution.) i. Technical experience in nuclear energy field. 2. If the project is to be owned and operated by a new company now formed Or planned, furnish for each company or institution participating in the new company the information listed for each item under 1. Show participation in project of each participant in amount and in percent of total participation. B. Economic Justification of Proposed Increase in Capacity 1. Detailed economic justification of proposed increase in capacity including the following information : a. Description of the supply and demand for electricity in the region which is presently supplied by the power system with which the projected atomic power station will be connected, including output Statistics for the last five years. Reference may be made to A 1 (h) and A 2 (h). . Projected maximum demand (kw), system input (kwh), and sales (kWh) curves for the next ten years. Probable trend of power supply in the region for the next ten years. . Transmission facilities with network production diagram. . Description of the generating costs and rates prevailing in the region. Description of public authority regulation regarding rates. 3. Rºhip of rates to changes in price level (past and estimated uture). O. The Project (Atomic Power Plant) 1. Summary description of project. This should include: a. Statement as to Organizations which are proposed to undertake the different portions of the overall project, such as research and devel- opment, construction of the plant, fabrication of fuel elements, and Operation of the plant. b. Contracting methods (e. g. cost-type, lump-sum, etc.). 2. For each major contractor, including reactor design agent and/or construc- tion agent (including fuel fabricator) : a. History of company, including summary of major construction jobs Carried Out. . Legal Organization. . Description of research and development and production facilities. . Description of existing contractual obligations in nuclear energy field. . Technical experience in nuclear energy field. . Description of project organization and personnel assigned to project. . Most recent statement of financial postion and earnings. . License arrangements relating to the project. D. Estimated Capital Cost of Project 1. Generation facilities: “ b : i A mottºn't by years and total * a. Land and land rights- b. Buildings and structures c. Nuclear System : (1) Reactor and associated equipment - - (2) Initial fuel fabrication (exclude cost of nuclear fuel) -- ------------ (3) Other d. Superheater - A- e. Turbo generators *-*. f. Other (specify) -- g. Total generation facilites a- h. Cost per installed kW - a- - - - * * = = * * * * * * * * a Show major types and units of building and equipment. & Show amounts applicable to each year of construction. AGREEMENT FOR COOPERATION WITH EURATOM 39 2. Transmission facilities (show principal items of plant required to tie in With existing system) : a. Total transmission facilites. 3. Engineering, design and services. 4. Total of item \, 2, and 3. . Startup costs. . Contingencies. . Escalation. . Interest during construction (how determined). . Total estimated cost of project. a. Cost per installed kw. E. Financing of Capital Costs of the Project and Commitment to Operate Project for Ten Years 1. If the project is to be owned and operated by an existing company now in operation : a. Statement showing how available funds are to be used in construction of project in accordance with construction schedule and for working Capital. b. Statement showing how funds will be raised from : (1) Own funds. (2) Euratom. (3) Direct and indirect government assistance. (4) Other borrowings (show details). c. State guarantees and security which proposer is willing to offer to obtain financial assistance. Furnish information as to financial standing Of guarantors, if any. d. Statement of methods by which proposer intends to meet his commit- ment to operate the project for ten years. e. Statement of action taken to meet any existing monetary exchange regulations. 2. If the project is to be owned and operated by a new company now formed or planned, furnish the following information : a. Statement showing how available funds are to be used in construction of project in accordance with construction schedule and for working Capital. b. Statement showing how funds and amount will be raised from— (1) Each participant forming new company. State participation and limits of liability of each participating party, together with commitments made by each participant in excess of stated initial liability. Specify if these commitments or guarantees are expressed in Writing. (2) Euratom. (3) Direct and indirect government assistance. (4) Other borrowings. c. State guarantees and security which participants are willing to offer to obtain financial assistance. Furnish information as to financial standing of guarantors, if any. d. Statement of methods by which participants intend to meet their Com- mitment to operate the project for ten years. e. Statement of action taken to meet any existing monetary exchange regulations. i grº- F. Ability to Repay Euratom Loam T1. If the project is to be owned and operated by an existing company now in operation : a. An estimated earnings statement for the first year beginning a year after the project is in Operation setting forth : Revenues (from power) ---- Other income (detail by types) * * * * Zººm. Total Operating expenses by principal classifications Taxes (income taxes and other taxes) ------------------- sº. Depreciation (explain basis) ----------------------- ** Operating income Debt service (interest and amortization by issued) -- *E= Dividends___ * * * Balance –– 40 AGREEMENT FOR COOPERATION WITH EURATOM State clearly all assumptions made in preparing this estimate. 2. If the project is to be owned and operated by a new company now formed Or planned, furnish for the new company and for each company or institution participating in the new company the information listed under 1 above. Furnish under revenue as to the new company the amount of revenue expected to be Obtained from each participant. IG. Earpansion Program of Companies Owning the Facilities Which Will Use Power Generated by ProjectI G. Earpansion Program of Utility Companies Which Will Own and Operate the Projects 1. If the project is to be owned and operated by an existing company now in Operation : a. Description and estimated cost of expansion (construction) Of com- pany for next five years, by years and by major classifications, such as generating plants, transmission lines, substations, distribution, etc. b. Proposed method of financing the above program by : (1) Own funds. (2) Direct or indirect government assistance. (3) Borrowings: If borrowings are expected to be secured by mortgage, etc., explain. 2. If the project is to be owned and operated by a new company now formed Or planned, furnish for each company or institution participating in the new company the information listed under I. a. and b. H. Proposed Method of Financing Cost of Research and Development Programs Amounts to be Financed by— Joint Program Proposer Total 1. Research and Development costs in conection with : a. Reactor design and Construction : (1) Design (describe and list specific Research and Development programs). (2) Construction (describe and list specific Research and De- velopment programs)." b. Operations (describe and list specific items of an experimental nature for which Euratom assistance is required). c. Fuel cycle. - VI. MISCELLANEOUS A. Guarantees and Warranties All of the components and/or characteristics of the plant which are guaranteed or for which the performance is warranted should be presented in a separate section of the proposal. Complete details of the scope and conditions of each Of the guarantees and warranties Should be included. B. Insurance and Third Party Liability A separate section of the proposal should address itself to this subject. The presentation should include a detailed account of existing policies, the status of current negotiations for new policies, and a Statement of the situation Con- cerning existing, pending, or needed legislation affecting these subjects. O. Eacperimental Program This section of the proposal should contain a general description of the pro- posed testing program for the plant, including all pre-critical, critical, low power, full power and acceptance tests. . D. Research Program. An Outline Of all research and development programs proposed for the project Should be presented in a separate section. For research and development work which is included in the bid price for the reactor, a detailed description of the work, the schedule, and cost should be presented. Ifor R&D programs which are suggested for inclusion in the joint R&D program there should be a detailed description of the work, the Schedule, cost, and a discussion of the benefits to be derived from its performance. The cost information should be presented in accordance with section V–H–1.1 . . . . . . º Show amounts applicable to each year. Details of R&D programs are to be given in accordance with section VI—E of this Appendix. AGREEMENT FOR COOPERATION WITH EURATOM 41 E. Training Program Any personnel training programs proposed, contemplated or desired by the proposer and/or constructors should be discussed in this section. F. Overall Project Schedule A complete schedule for the project, including design, procurement of major components, physical construction, acceptance testing, critiality, start-up testing, and full power Operation. The schedule should be presented in Such a manner to indicate the relative timing for the principal components of the project such as civil Works, containment shell, reactor, Sub-station, etc. APPENDIx C GUARANTEEs APPLICABLE TO FUEL ELEMENTS I. Background II. Definitions III. Types of Guarantees Offered IV. Types of Fuel Elements Covered V. Type A Guarantee (Processing, Transportation) VI. Type B Guarantee (Fabrication, Processing, Transportation) VII. Conditions and Methods of Application VIII. Computation of the Guarantee IX. General Terms and Conditions Annex 1. Determination of Minimum Integrity Life and Maximum Fuel Element Fabrication Cost Guaranteed Under Type B Arrangement Annex 2. Determination of Minimum Integrity Life Guaranteed Under Type A Arrangement Annex 3. Determination of Compliance With Minimum Standards Annex 4. Determination of Guarantees for Nominal Loadings Consisting of Fuel Elements Containing Uranium of Different Enrichments I. BACKGROUND 1. The “Euratom Cooperation Act of 1958” (PL 85–846, 8/28/58) authorized the United States Atomic Energy Commission (hereinafter designated the USC) to make guarantee contracts which shall in the aggregate not exceed a total contingent liability of $90,000,000 designed to assure that the charges to an operator of a reactor constructed under the joint program for fabricating, proc- essing, and transporting fuel will be no greater than would result under the fuel fabricating cost and fuel life guarantees which the USC shall establish for such reactOr. 2. Within the limits of such amounts as may be authorized to be appro- priated in accordance with Section 261 (a)(2) of the Atomic Energy Act of 1954, as amended, the Commission is authorized to make guarantee contracts for such periods of time as it determines to be necessary; provided, however, that no such contracts may extend for a period longer than that necessary to cover fuel loaded into a reactor constructed under the joint program during the first ten years of reactor operation or prior to December 31, 1973 (or Decem- ber 31, 1975, for not more than two reactors which may be selected under the joint program to be in Operation by December 31, 1965), whichever is earlier. The benefits of the USC guarantees set forth in this appendix are offered to Operators Of reactors constructed under the Joint Euratom-United States program On a project by project basis, and will be available, unless otherwise agreed, for all loadings of nuclear fuel made in these reactors during the applicable above-stated period of time. II. DEFINITIONS 3. For purposes of any USC guarantee made under this program, the following definitions apply: a. Fabrication cost is the total charge made by the fuel element Illa Ill]- facturer to the reactor operator for clean, unirradiated fuel elements F.O.B. the manufacturer's plant. It includes all costs of fabricating, han- dling, packaging, uranium use charge, and the cost of Converting the UF's to metal or other forms necessary to meet specifications. It also include: all costs incurred in assembling the fuel element. It does not include the cost of appurtenances where the design and/or the intent is to use such 42 AGREEMENT FOR COOPERATION WITH EURATOM appurtenances With Subsequent loadings. Fabrication costs also exclude the COSt Of uranium contained in the finished element but will include the cost of any such material lost in the process of fabrication as well as the cost of recovering any scrap material generated during fabrication. b. Fuel element is any integral fabricated structure containing fuel for the reactor Which is normally handled and loaded into the reactor as a Single unit. c. Nominal fuel loading.—The first nominal loading is the weight of uranium in the fuel elements needed as an initial charge to the reactor to permit Operation Of the reactor at its rated power for its intended purpose plus the uranium contained in any additional elements which have re- placed elements of the same manufacturer in the initial loading which have failed to meet the manufacturer’s guaranteed performance. For any sub- sequent loading, the nominal loading shall consist of the weight of uranium in fuel elements which at the guaranted life would provide heat equal to the heat generated in the reactor during 292 full days of rated power operation, unless Some Other period of time is mutually agreed to, plus the uranium COntained in any additional elements supplied by the same manufacturer to replace elements in that loading failing to meet the manufacturer's guaran- teed integrity life performance. d. Core.—In each reactor accepted under the program, the USC and pro- poser shall agree upon the quantity of uranium needed in the reactor to permit that reactor to reach its rated power for its intended purpose. A core shall consist of the total quantity of uranium supplied under the mini- mum integral number of contracts entered into to supply the above agreed quantity of uranium. e. The average irradiation level of a nominal loading is the sum of the megawatt days of heat generated in fuel elements of that nominal loading which are judged to have failed for integrity reasons, plus either: (a) the sum of the megawatt days of heat generated in all other elements in that nominal loading ; Or (b) the megawatt days of heat guaranteed by the USC for the other elements, whichever is greater, divided by the weight in metric tons of the uranium in the nominal fuel loading. f. Fuel element integrity.—The types of integrity failures and the appro- priate procedures and tests for determining whether a fuel element has failed for these integrity reasons will be as agreed between the parties to the USC guarantee contract. These agreed types of integrity failures will generally coincide with, but may vary from, those specified in the commer- cial guarantee extended to the reactor operator. It is the intent of the USC that integrity failure will include such actual or anticipated alteration of shape or size of fuel elements as would prevent further safe or economic operation (assuming for the latter determination that no guarantees were in force) as well as breech of the cladding material. For purposes of this paragraph, economic operation is defined as the condition under which re- placement of fuel elements would be to the substantial economic advantage of the operator, assuming that no guarantees were in force. g. Transportation cost for irradiated fuel to be used for prorating under USC guarantees are only those costs for transporting irradiated fuels from a European port of Shipment agreed upon by the USC and the reactor Oper- ator, to a point in the U.S. designated by the USC. The latter usually will be the site of the chemical processing plant. h. Standard fuel cycle cost is the computed fuel cycle cost using the Standard guarantees given in Paragraph 9. III. TYPES OF GUARANTEES OFFERED 4. Two types of guarantees are offered by the USC. The first, called Type A (Processing–Transportation), provides for limiting costs of irradiated fuel processing and/or transportation, to the operator, in the event the fuel elements, for certain specified reasons, do not meet an average irradiation level guaranteed by the USC. The second, called Type B (Fabrication—Processing–Transporta- tion), provides for adjustment of fuel fabrication costs as well as the limitation of irradiated fuel processing and/or transportation costs. These guarantees will be extended in the form of a specified fuel element minimum integrity life and/or maximum fabrication cost. Guarantees which are offered by the USC on maxi- AGREEMENT FOR COOPERATION WITH EURATOM 43 mum fabrication costs and minimum integrity life will be determined in accord- ance with the procedure described in paragraphs 11 and 18 and Annexes 1 and 2 below. 5. The USC guarantees supplement the manufacturers' guarantees and are not in lieu thereof or in support thereof. In order to qualify for a USC guaran- tee a manufacturer must offer certain minimum guarantees on cost and integrity life of fuel elements meeting, among other things, the requirements Of para- graphs 27 and 34. 6. The Type A guarantee will usually be extended directly from the USC to the reactor Operator. The Type B guarantee, insofar as fabrication costs are concerned, will generally be extended from the USC to the reactor Operator through the commercial guarantor; with respect to processing and transporta- tion costs the guarantee may be extended directly to the reactor operator or, if the commercial guarantee encompasses such costs, this portion of the USC guarantee may be extended to the reactor Operator through the commercial guarantOr. 7. Proposals from reactor operators which will involve USC guarantees shall include the calculations Of Standard and Computed fuel Cycle Costs, guarantees, etc. specified in this appendix, based on data supplied by the commercial guar- antor with sufficient back-up information to permit independent verification by the USC of the calculations. Copies of the commercial guarantees Obtained by the reactor Operator should also be included. 8. For purposes of computing guarantees and limiting costs, calculations shall be based on the escalated USC fabrication cost guarantee (see Paragraph 9) in effect at the time the USC extends the guarantee and the firm price Offered by the commercial fuel guarantor exclusive Of any escalation provisions he may have included in his Offer. IV. TYPES OF FUEL ELEMENTS COWERED 9. Guarantees are offered at this time for the following nuclear fuel elements purchased from manufacturers who qualify according to the provisions of Para- graph 28 for use in the types of reactors indicated : a. Elements made of uranium dioxide having a U239 isotopic concentra- tion no greater than 3 percent by weight, diameter (not including cladding) between 0.25 and 0.50 inches, and clad with stainless Steel for use in light water COOled Or Organic COOled reactors: Standard guarantee.—The integrity Of these elements is guaranteed to an average irradiation level of 10,000 MWD per metric ton of Contained uranium and the charge for fabrication of fuel elements starting with uranium hexa- floride is guaranteed not to exceed $100 * per Kg of contained uranium. For elements having a U23° isotopic concentration greater than 3 percent, but not exceeding 5 percent, by Weight, the fabrication charge guarantee shall be linearly increased $8 per kilogram per percent enrichment above 3 percent. b. Elements similar to those specified in paragraph (a) but clad with zir- COnium for use in light Water COOled reactors : Standard guarantee.—The integrity of these elements is guaranteed to an average irradiation level of 10,000 MWD per metric ton of contained uranium and the charge for fabrication of fuel elements starting with uranium hexa- fluoride is guaranted not to exceed $140° per Kg of contained uranium. For elements having a U* isotopic concentration greater than 3 percent, but not exceeding 5 percent, by Weight, the fabrication charge guarantee shall be linearly increased $8 per kilogram per percent enrichment above 3 percent. 10. Manufacturers may request at any time that fuel elements of a type not included in the above list be eligible for USC standard guarantees. However, if guarantees are desired. On non-included elements in the initial Submission for a project which is scheduled for completion by December 31, 1963, data on the ele- ments must be furnished to the USC not later than 45 days from the issuance date of this invitation. The 45 day period is established in order to permit all manufacturers annple Opportunity to take advantage of any new USC guarantees which may be offered. [This condition is not meant to preclude a reactor opera- tor from requesting USC guarantees on fuel elements, other than those in his 7 Subject to escalation in accordance with the provisions of Paragraph 29. 8 Subject to escalation in accordance with the provisions of Paragraph 29. 44 AGREEMENT FOR COOPERATION WITH EURATOM initial Submission, subsequent to the acceptance of his project. It is suggested that U.S. fuel manufacturers seeking such guarantees contact the USC as soon as practicable so that prompt consideration can be given to these requests. Euratom country manufacturers, who qualify according to the provisions of Paragraph 2S, may contact the USC through the USC Brussels Office. No sub- mission date is specified at this time for guarantee requests for fuel elements for the reactors which may be deferred until December 31, 1965, and for subsequent loadings for all reactors. All requests should be accompanied by supporting technical data and information substantiating the proposed guarantee.1. This Condition is not meant to preclude a reactor operator from requesting USC guar- antees On fuel elements which may be other than those in his initial submission, 8wbsequent to the acceptance of his project. It is suggested that requests from fuel manufacturers who are seeking guarantees and who qualify according to provisions of paragraph 28 reach the USC as soon as practicable so that prompt COm Sideration Cam be given these requests. All requests should be accompanied by Supporting technical data and information substantiating the proposed guaran- tee. No 8 ubmission date is specified at this time for guarantee requests for fuel elements for the reactors which may be deferred until December 31, 1965, and for Subsequent loadings for all reactors. V. TYPE A GUARANTEE (PROCESSING, TRANSPORTATION) 11. The Type A guarantee, which provides for limiting costs of processing and/or transportation, is available under the joint program when the reactor Operator is able to acquire fuel elements under an arrangement whereby the Operator's computed fuel cycle cost, using the manufacturer's guaranteed in- tegrity life and fabrication price, is at least as good as the computed fuel cycle COst using the USC standard guarantees (i.e., the standard fuel cycle cost), but, in the case of failure before the irradiation level guaranteed by the manu- facturer the remedies under the manufacturer's arrangement to supply fuel elements are not sufficient to cover the extra costs of reprocessing and trans- porting irradiated fuel elements and still meet the standard fuel cycle cost. The Type A guarantee may also be available if the manufacturer's guarantees are not as good as those offered by the USC, but the reactor operator elects to accept them instead of the Type B guarantee described below. 12. The Type A guarantee limits the reprocessing and/or transportation costs alone. Under it the USC will supplement the manufacturer's guarantee by guaranteeing a specified average irradiation level for integrity of the fuel ele- ments included in the arrangement, which irradiation level in Combination with the guarantee offered by the manufacturer will result in a computed fuel cycle cost equal to the standard fuel cycle cost. The irradiation level to be guaran- teed by the USC will be established by the method given in Annex 2. 13. In the event of failure of fuel elements, due to a loss of integrity, to achieve the average irradiation level specified by the USC, the USC will adjust the charges for chemical reprocessing and transportation to the level that would have been incurred had the USC guaranteed iradiation level been achieved. 14. Holders of Type A guarantees must agree that if the average actual at- tained irradiation level of the fuel elements COvered by the guarantee is greater than the irradiation level guaranteed by the USC, One-half of the resulting Sav- ings in costs of reprocessing and/or transporting irradiated fuel will be credited to the USC up to the sum of the previous payments made at anytime by the USC under Type A guarantees for the particular reactor concerned. The savings are defined as the total cost of reprocessing and/or transportation to the user at the irradiation level obtained multiplied by the ratio of the incre- mental level obtained to the guaranteed level. VI. TYPE B GUARANTEE (FABRICATION, REPROCESSING, TRANSPORTATION) 15. A Type B guarantee, which provides for adjustment of fuel fabrication costs as well as the limitation of processing and/Or transportation CostS, may be requested if guarantees offered by commercial sources supplying fuel ele- ments would not allow the Operator to meet the standard fuel cycle costs. Eli- gibility for consideration for a Type B guarantee will be determined by a com- parison of the USC and manufacturer guarantees for the fuel elements under consideration. The applicant is eligible for consideration for a Type B guarantee AGREEMENT FOR COOPERATION WITH EURATOM 45 if the standard fuel cycle cost, using the USC standard guarantee, is less than the computed fuel cycle cost, using the manufacturer's guarantee. Under the Type B guarantee the USC as a supplement to the manufacturer's guarantee Will guaran- tee a maximum fuel element fabrication cost and/or a minimum average in- tegrity irradiation level which will enable the computed fuel Cycle COst to equal the standard fuel cycle cost. If the average iradiation level does not meet that guaranteed by the USC, the USC will adjust the charges for fabrication, chemical reprocessing, and transportation to the level that would have been incurred had the guarantee been met, taking into account the manufacturers guarantee. VII. CONDITIONS AND METHODS OF APPLICATION 16. Listed below are descriptions of the conditions and the methods by which the USC will determine the applicability and extent of a Type B guarantee. Sample calculations are given in Annex 1. A. The average irradiation, level integrity guarantee and fabrication cost guarantee eastended by the fuel element manufacturer to the reactor Operator are equal to or superior to those established by the USC for acceptable fuel elements of the type proposed. No Type B guarantee will be extended by the USC. Only a Type A guar- antee may be available under this COndition. B. The fabrication cost guarantee eastended by the fuel element manufa C- turer to the reactor operator is equal to or less than that established by the USC for acceptable fuel elements of the type proposed, but the average irradiation level integrity guaranteed by the manufacturer is inferior. Fabrication costs will not be guaranteed by the USC. Using the manufac- turer's fabrication cost guarantee figure, the USC will compute, in accord- ance with the procedure described in Annex 1 the average irradiation level required to result in the “Standard Fuel Cycle Cost.” If this computed irradiation level proves to be equal to or less than that guaranteed by the manufacturer, no Type B guarantee of average irradiation level will be extended by the USC. If the computed irradiation level is greater than that guaranteed by the manufacturer, the USC, as a supplement to the manufac- turer's guarantee, will guarantee an irradiation level equal to the computed Value. C. The fabrication cost guarantee eartended by the fuel element manufac- turer to the reactor operator is higher than that established by the USC for acceptable fuel elements of the type proposed, but the average irradiation level integrity guarantee eartended by the manufacturer is equal to or higher than the USC standard. Using the manufacturer's guaranteed average irradiation level, the USC Will Compute, in accordance with the procedure described in Annex 1, the fuel element fabrication cost required to result in the standard fuel Cycle cost. If the computed fabrication cost is less than the manufacturer's quo- tation, the USC or a supplement to the manufacturer's guarantee will extend a Type B guarantee based on fabrication costs equal to the computed value. If the Computed fabrication cost is equal to or greater than the manufac- turer's guaranteed cost, no Type B guarantee will be extended by the USC. D. The fabrication cost guarantee and the average irradiation level integ- rity guarantee eartended by the fuel element manufacturer are inferior to those established by the USC for acceptable fuel elements of the type proposed. The USC will extend a Type B guarantee. Since the fabrication cost and irradiation levels are both inferior to the “standard” guarantees given in Section IV, the “standard” guarantees for the particular type of element proposed will be extended by the USC to supplement the manufacturer’s guarantee. 17. If, under a Type B arrangement the USC guarantees integrity life beyond that guaranteed by the manufacturer, the reactor operator must agree that when the average irradiation level attained exceeds that guaranteed by the USC, one- half of the resulting savings in fabrication cost per unit reactor output, such as megawatt days, will be credited to the USC, up to the cost of payments by the USC for fabrication charges for the particular core (as defined in Paragraph 3d) COncerned. The Savings are defined as the total fabrication cost for that core multiplied by the ratio of the incremental life obtained to the guaranteed life. 3663.6—59—4 46 AGREEMENT FOR COOPERATION WITH EURATOM VIII. COMPUTATIONS OF THE GUARANTEE 18. The USC guaranteed integrity life and fuel element fabrication cost will be the standard guarantees for elements of that type and Specification unless the manufacturer offers lower fabrication costs or higher guaranteed minimum in- tegrity life. In the latter case if the manufacturer's guarantee does not result in as low a computed total fuel cycle cost as under the USC Standard guarantee, the USC will supplement the manufacturer's guarantee to provide a computed fuel cycle cost matching that under the standard guarantee. Fuel Cycle costs to determine the USC guarantee shall be computed as described in Annex 1. 19. The fuel cycle costs include all charges for fuel element fabrication, inven- tory, burnup, chemical reprocessing and transportation from reactor to process- ing plant less credit for plutonium. Consequently, since they will be affected by the U* content of the fresh fuel as well as the U* and plutonium content of the spent fuel, they must be computed by each proposer for his fuel elements using his estimates for these quantities. In calculating fuel cycle costs it is estimated that, as a rough rule, an increase in fabrication cost of about $14 per kilogram for stainless steel clad elements will be compensated by an increase in integrity life of 1,000 megawatt days per metric ton. For zirconium clad ele- ments, the corresponding figure would be about $18 for each 1,000 megawatt days per metric ton. 20. The calculated values obtained in accordance with the instructions of Annex 1, are to be rounded off as follows: (a) Round up the calculated fuel element fabrication cost to the nearest dOllar. (b) Round down the calculated irradiation level to the nearest 100 MWD per metric ton. IX. GENERAL TERMS AND CONDITIONS 21. Each Type A or B guarantee contract when entered into will contain the conditions limiting that guarantee. These conditions will generally, but not necessarily, coincide with those contained in the commercial guarantee. The USC conditions will be determined separately for each guarantee contract and will be based upon information furnished by the reactor Operator and his major suppliers. The principles to be applied in prescribing USC guarantee limits will include the following : a. The USC guarantee to the reactor operator will not apply if failure is caused by non-observance of defined Operating conditions; unless other- wise agreed, these Operating conditions shall at least be those expected to permit the fuel element integrity life to reach the manufacturer's guaran- teed integrity life at the designed operation level and intended purpose of the reactOr. e º e Ib. No USC guarantee will apply if integrity failure is the result of the fabricator's non-compliance with the fuel element Specifications for the par- ticular reactor loading concerned. º c. No USC guarantee will apply if failure of integrity is caused by mistakes in accuracy of fuel element design Specifications. d. No USC guarantee will apply if failure of integrity is caused by any condition generally attributed to “force majeure”, e.g., Strike, lockout, trade dispute, war, fire, flood, confiscation, Act of God, and such other conditions as may be specified in the USC guarantee contract. e. No USC guarantee will apply if failure is caused by improper Opera- tion of the reactor or associated equipment, or by accidents occurring Out- side of the guaranteed fuel element itself. Examples of these will be specified in the individual contracts.] b. Fºtel elements in loadings proposed for COverage by a USC guarantee shall be subject to acceptance tests which must be agreeable both to the USC and the reactor operator. The USC reserves the right to Comduct and/or to participate in these test8. e & - • * * - c. No Uso guarantee will apply if failure of integrity is caused by mis- takes in accuracy of fuel element specifications (a8 distinguished from •rors in the desigm ComCept). €7 º gº shall be reserved for the benefit of the USC against the fuel element supplier to recover guarantee payments (other than chemical reprocessing or transportation payments, which are specifi- AGREEMENT FOR COOPERATION WITH EURATOM 47 cally provided for below) resulting from integrity failure of fuel elements at any point below the USC guarantee level for the particular reactor load- ing concerned, due to mom-compliance with fuel element Specifications. c. The reactor operator shall endeavor to secure contractual right8 against the frtel element supplier to reimbursement for the increased earpen 86 of transporting fuel elements to a chemical reprocessing plant and the increased reprocessing costs incurred as a consequence of integrity failure of the fuel elements at any point below the USC guarantee level for the particular reactor Soading concerned, due to mon-compliance with 8pecifica- tion8; the reactor Operator will pass on to the USC Such rights as are Secured. f. No USC guarantee will apply if failure of integrity is caused by any Comdition generally attributed to “force majeure,” e.g., Strike, lockout, trade dispute, war, fire, flood, confiscation, Act of God, and such other condition& as may be specified in the USC guarantee contract. (g.) No USC guarantee will apply if failure is caused by improper opera- tion of the reactor or associated equipment, or by accidents occurring out- side of the guaranteed fuel element itself. If..I. h. Unless the USC is notified of planned and actual withdrawal of fuel elements Within a time, to be agreed upon in the Contract, the guarantee Will not apply. Ig.I. i. The operator must notify the USC of his intent to present a claim under the USC guarantee within a period of time, to be agreed upon in the contract, after the withdrawal of the fuel elements; Otherwise the guarantee will not be applicable. Th.L. j. Each USC guarantee contract will contain an expiration date on the guarantee therein. 22. USC guarantee contracts shall be assignable only with the consent of, and upon the conditions prescribed by, the USC. 23. The USC guarantee contracts will provide, and (or uniformity, the manu- facturers' Commercial guarantees should provide, that they shall be construed in accordance with the governed by the law applicable in the Federal Courts of the United States in cases where the United States Government is a party, i.e., “Federal Law”. 24. Except as otherwise specifically provided in a USC guarantee contract, all disputes Concerning guestions of fact which may arise under the contract, and which are not disposed of by mutual agreement, shall be referred to arbitration by a board composed of three competent arbitrators. One of such arbitrators shall be appointed by the USC, one shall be appointed by the other party to the guarantee contract, and the third arbitrator shall be selected by the first two. In the event that the first two arbitrators so selected are unable to agree On a third arbitrator then each of the parties shall designate another person to act as an arbitrator in lieu of the person previously appointed by such party, which two new arbitrators shall agree upon the third arbitrator. The decision of a majority of the arbitrators so selected shall be final and binding. Allocation of the costs of arbitration shall be as determined by the board of arbitrators; provided, however, that no party shall be obliged to pay the costs of the other party's arbitrator. To avoid inconsistent liability determinations under the USC and commercial guarantee Contracts and to Safeguard the interested parties, it is desirable that the USC be a participant in determinations under the commercial guarantee contract which may result in or have bearing on a claim under the USC guarantee by either the reactor operator or the commercial guarantor. Accordingly, the disputes proVision contained in the commercial guarantee contract must contain a disputes clause, agreeable to the USC, whereby the USC may participate in, and adopt, determinations reached under the commercial guarantee contract Which may result in or have bearing on a claim against the USC under the USC guarantee. 25. Normally a Type A or a Type B guarantee contract will be issued only for the total number of fuel elements purchased from a single manufacturer which Will Comprise One nominal fuel loading necessary to operate the reactor for its intended purpose during the estimated average integrity life of that fuel load- ing. The USC will make appropriate provisions for interim payments, Dending final Settlements of amounts due and owing to a reactor operator under a USČ guarantee COIntract. 48 AGREEMENT FOR COOPERATION WITH EURATOM 26. Provisions will be made in the USC guarantee contracts with respect to the effect, on the commercial guarantee, of the use of experimental fuel elements, Or partial loadings of such elements, developed under the joint R & D program. Normally, costs incurred as a result of using these experimental elements, Will be covered by separate agreements made under that program. 27. As a condition to obtaining either a Type A or a Type B USC guarantee, the commercial guarantor must provide the USC with assurance that the integrity guarantee and fabrication price he has extended to the reactor purchaser are : (a) in the case of the initial nominal loading for reactors selected to be in Operation by December 31, 1963, as favorable as any other guarantee and price Offered by him for any comparable fuel element within the period from January 1, 1959 to December 31, 1959,” and (b) in the case of Subsequent nominal loadings (excluding replacements for elements which have failed) for the above reactors as favorable as any Other guarantee and price offered by him for any comparable fuel element offered for delivery within the period of time commencing 60 days prior to, and terminating 60 days after, the final delivery date specified in the con- tract for the USC guaranteed fuel elements. The commercial guarantor, must also agree that if he offers a more favorable. guarantee and price to anyone else within the applicable period for a comparable fuel element, he will amend the guarantee and price Offered to the reactor pur- Chaser to embody Such more favorable terms. The USC guarantees will be adjusted accordingly. Fuel elements comparable to those supplied to a reactor under this program. are defined as those meeting specifications of either paragraphs 9 (a) or (b) of Section IV, for which elements the USC provides the same standard guarantee as: given in the applicable paragraph, which reasonably could be used in that re- actor for the same intended power level and purpose and which would be de- livered within the period specified in either paragraph 27 (a) or (b) above, as appropriate. 28. In order to qualify for a guarantee by the USC, fuel elements must be fabricated by a U.S. manufacturer or by a manufacturer in a Euratom country under agreement with a United States firm or firms. Evidence of such an agreement must be submitted with the proposal unless a U.S. manufacturer is supplying the fuel elements. A U.S. manufacturer is defined as a company organized under the laws of the United States or one of its states, and operating therein, 50% or more of the ultimate ownership of which is held by U.S. citizens. [29. Escalator will be provided for in computing the USC guarantee to be offered for any particular loading. However, once a fabrication cost is com- puted it will remain in effect during the term of the contract. In applying this escalation, the fabrication COSt figure will be increased or decreased percent whenever the (U.S. index to be selected) increases or decreases by percent.T. 29. Escalation will be provided for in computing the USC guarantee to be offered for any particular nominal loading. However, once a fabrication cost is computed, it will remain in effect during the term of the guarantee contract. The U.S. Bureau of Labor Statistics “Wholesale Price Indea!—All Commodities (Other than Farm and Food)" will be escalated. I'm applying this escalation, the November 1958 indea of 126.8 is used as the initial base. If the May in dea, of any year is greater or less than the base in dea, by 5 points or more, the U.S. guaranteed fabrication cost will be subject to change to the following July 1. Similarly, if the November indea of any year is greater or less than the base inder by 5 points or more, the U.S. guaarmteed fabrication cost will be subject to change to the following January 1. The U.S. fabrication cost guarantec will be adjusted by the point change which has appeared in the indea, the adjusted cost being computed to the nearest dollar. 30. The average irradiation level calculation to be used in USC guarantees will be based on a weight of fuel equivalent to the nominal fuel loading of the reactor. The proposal and request for guarantee shall indicate any pref- * A time period for these purposes will be subsequently announced for such reactors as may be selected to be in operation by December 31, 1965. AGREEMENT FOR COOPERATION WITH EURATOM 49 erences for measurement methods to be used in calculating average irradiation levels for the nominal fuel loading, it being understood that the measurement method actually adopted will be such as is mutually agreed between the USC and the other parties affected. Although the reactor Operator has the right to discharge elements at any time, in determining whether a guaranteed average irradiation level has been attained, account will be taken only of all elements discharged because of actual failure of integrity, and all elements discharged at the same time, which, in the joint opinion of the Euratom Commission, the USC and the fabricator involved, was required for purposes of safe Opera- tion or economic Operation (assuming for the latter determination that no guarantees were in force). For purposes of this paragraph, economic Operation is defined as the condition under which replacement of fuel elements WOuld be to the substantial economic advantage of the Operator, assuming that Ino guarantees were in force. 31. The manufacturer of fuel elements to be guaranteed by the USC under a Type A or a Type B arrangement must separately agree with the USC that the United States shall obtain a royalty-free, non-exclusive, irrevocable license, for governmental purposes, to any patents Or inventions Or discoveries made Or conceived by the manufacturer in the course of development or fabrication of fuel elements [during the period covered by the USC guarantee.], in accordance with, and subject to the Conditions prescribed by U.S. law. 32. The offer of the USC to make guarantees of either Types A or B beyond those On the initial core loading of a reactor is Contingent upon a showing by the Operator of the reactor that he has obtained Or attempted to Obtain Com- petitive bids to supply his needs for such subsequent loadings from three Or more manufacturers qualified under paragraph 28. In the event the Operator requests a USC guarantee On Other than the bid which would impose the least Contingent liability on the USC, the USC reserves the right to reduce the li- ability it Would otherwise assume under its guarantee unless the reactor Opera- tor demonstrates to the satisfaction of the USC that the bid proposed is to the OVerall economic advantage of his Operation. 33. Whenever the USC extends a Type B guarantee, the manufacturer must agree that the USC may inspect his facilities, processes and products, and make appropriate tests to determine that he is meeting adequate performance standards. If a European firm is doing the work, the USC will consult with and may request the assistance of Euratom in performing these activities. In the event that it is determined by the USC, that the fabricator is not meeting such performance standards, and the fabricator will not, after notification thereof, meet those standards, other contractual arrangements will be made for sup- plying fuel elements under the guarantee. Other contractual arrangements also will be made for supplying fuel elements under the guarantee if it is mutually de- termined between the USC and the fabricator that a more advantageous source is available. In the event other contractual arrangements are made pursuant to the foregoing, the fabricator must agree to pay any excess cost to the USC or the reactor operator occasioned by such transfer of work. The reactor operator, as part of the guarantee extended by the USC, must agree to accept fuel ele- ments from the new supplier to the extent required to fulfill the quantities COWered by the guarantee, or may, of course, continue to procure his elements from the original manufacturer without benefit of the USC guarantee. 34. Since the total contingent liability that may be assumed by the USC under this joint program must not exceed $90,000,000, the guarantees offered by Commercial guarantors must prescribe a maximum fabrication cost and minimum integrity life in Order to receive consideration by the USC and be eligible for participation under the fuel element guarantee program. Recog- nizing the Wide variation in the range and extent of guarantees which may be offered, and the desirability of providing maximum flexibility in the establish- ment of the minimum levels of commercial guarantees, the USC will apply, as a criterion for determining eligibility for participation, the principal of pro- rata Sharing. Each proposer must show, on the bases specified in this para- graph, that the Cost to the USC in providing guarantees under his proposal would not exceed a pro-rata share of the $90,000,000, determined by multiplying the $90,000,000 by the ratio of the reactor net electrical power to the 1,000 megaWatt goal, and the ratio of the commercial guaranteed core life to the 10- 50 AGREEMENT FOR COOPERATION WITH EURATOM year period of the program. In the situation where options are offered for Subsequent cores in which the guarantees are different from those on the initial core, the total calculated USC cost shall not exceed the sum of the pro- rata Shares for the cores offered. The USC cost shall be computed in accordance with the equation given in Annex 3. A sample calculation is also given as an example. Proposals not meeting the above criterion may be accepted under the program if in the judgment of the USC, the advantages of such a proposal outweigh the disadvantages of increased liability within the $90,000,000 limit on the part Of the USC. 35. For all guarantees involving cost of reprocessing irradiated fuels, the USC reserves the right to have such fuels reprocessed in U.S. Ifacilities.I facili- ties, if terms and conditions more favorable to the USC are not available in the Community. 36. Proposals seeking guarantees on reactor fuel elements, for loading in re- giOms Scheduled for lower burnups (determined in advance by commercial guar- antors for reactivity considerations), or of different claddings, diameters, en- richment levels, etc., intended to be placed in one fuel loading will be con- Sidered. However, the USC in each case will determine what the guarantees On Such a fuel loading will be, whether separate guarantees for separate ZOnes Or One for the entire COre. Those desiring to explore such a situation and having complete data in hand, and who intend to build a reactor utilizing Such a fuel loading in the immediate future, are invited to communicate with the USC as soon as practicable. 37. Although a reactivity lifetime guarantee is a matter between the reactor operator and manufacturer, anyone seeking USC guarantees for fuel elements must make satisfactory evidence available to show that the fuel loading, in the reactor for which intended, will contain, under design operating conditions, sufficient reactivity to permit that loading to achieve the average irradiation level guaranteed for integrity purposes by the USC. ANNEx 1 DETERMINATION OF MINIMUM INTEGRITY LIFE AND MAXIMUM FUEL ELEMENT FABRICATION COST GUARANTEED UNDER TYPE B ARRANGEMENT The guaranteed integrity life and fuel element fabrication cost Offered by the USC to supplement the manufacturer's guarantees will be the standard guaran- tees Specified in Section IV, paragraph 9 of Appendix C unless the manufacturer Offers lower fabrication costs and/or greater guaranteed integrity life. If the manufacturer's guaranteed life and cost are both at least as good as the USC Standard gauarntees but the remedies under the manufacturer's arrangement to supply fuel elements are not sufficient to cover the extra costs of reprocessing and transporting irradiated fuel elements to meet the standard fuel cycle cost, the USC Will make available a type A guarantee at an integrity life determined by the procedure given in Annex 2. If neither the guaranteed integrity life nor fabrication cost Offered by the manufacturer are equal or superior to the stand- ard guarantee, the USC Will make available a type B guarantee for the stand- ard guaranteed fabrication cost and minimum integrity life. If only the life Or Only the cost guaranteed by the manufacturer is superior to the USC stand- ard guarantee, then the possible Supplementary guarantee by the USC is de- termined on the basis that, at that guarantee, the fuel cycle cost computed by the following formula is equal to the fuel cycle cost computed using the stand- ard USC guarantee. If the USC guarantee thus computed is superior to that offered by the manufacturer, the USC will make available a type B guarantee at the computed cost Or life. If the computed guarantee is no better than the manufacturer's guarantee, the USC will make available a type A guarantee at an integrity life determined according to Annex 2 provided the remedies under the manufacturer's arrangement to supply fuel elements are not sufficient to cover the extra costs of reprocessing and transporting irradiated fuel elements to meet the standard fuel Cycle cost. AGREEMENT FOR COOPERATION WITH EURATOM 51 The computed fuel cycle cost is the sum of the annual cost of all charges for fuel element fabrication, inventory, burnup, chemical reprocessing and transporta- tion less credit for plutonium. The formula for the computed annual fuel cycle cost at the standard guarantee is F's = Ts: Cs+ (1+0.00757) Up – (0.99) (f)[(Us — Co) + (A–B) Ps]+ T-H for] * Rs Up + 100 where F's = annual fuel cycle costs for the standard guarantee fuel element integrity life and fabrication cost, dollars per year Ts= annual throughput of uranium at the standard guaranteed fuel element integrity life for elements of the type and specification under considera- tion, kg uranium per year. T's is computed using the formula _292,000 PT ––Pi— + D Ts PT = reactor rated nuclear thermal power, megawatts Is=standard guaranteed fuel element integrity life for elements of the type and specification under consideration, megawatt days per metric ton of contained uranium Cs=standard guaranteed fuel element fabrication cost, dollars per kg of contained uranium i = Euratom Commission (EC) annual use charge for enriched uranium, ercent per year U, Łó charge for uranium hexafluoride of the assay of the uranium in the fresh fuel elements estimated to provide an integrity and reactivity life equal to the standard guaranteed integrity life, dollars per kg of con- tained uranium - f=|ratio of weight of uranium in a spent fuel element providing the standard guaranteed life to the weight of the uranium in the fresh element esti- mated to provide that life Us=EC credit for uranium hexafluoride of the assay of the uranium in the spent fuel elements discharged at the standard guaranteed life, dollar per kg of uranium Co- USC charge for the conversion of UNH to uranium hexafluoride, dollar per kg of uranium A = EC fuel value purchase price for plutonium metal, dollar per gram of plutonium metal B = USC charge for the conversion of plutonium nitrate to plutonium metal, dollar per gram of plutonium Ps= plutonium content of the uranium in the fuel elements discharged at the standard guaranteed life, grams plutonium per kilogram of uranium contained in discharged fuel elements T=transportation cost for spent fuel elements, dollar per kg of uranium contained in fresh fuel elements (commercial charges or if such are not available, assume $20 per kilogram plus estimated transportation costs from the reactor to the European port of shipment) CR = USC domestic charge from chemical reprocessing, dollar per kg of uranium (exclusive of charge for turnaround time) Rs=uranium in reactor required to permit reactor to reach design power level for its intended purpose for elements meeting integrity and reactivity life of standard guaranteed integrity life, kg D=USC domestic charge for turnaround time for chemical reprocessing on the basis of processing one batch of spent fuel per year 52 AGREEMENT FOR COOPERATION WITH EURATOM On the same cost basis, the formula for the computed fuel cycle cost at the Computed guarantee is Fo-To C+ (1+0.0075i) Uc–0.99g (Uo-Co) + (A–B) Po-LT+g Ca * Ro Uc 100 —H· D + where FC = annual fuel cycle cost for the computed guaranteed fuel element integrity life and fabrication cost, dollars per year Tc= annual throughput of uranium at the computed guaranteed fuel element OOO integrity life, kg per yº, ºn P. C PT = as above Ic-computed guaranteed fuel element integrity life, megawatt days per metric ton of contained uranium C= computed guaranteed fuel element fabrication cost, dollars per kilogram Of contained uranium * = as above Oc=EC charges for uranium hexafluoride of the assay of the uranium in the fresh fuel elements providing an integrity and reactivity life equal to the computed guaranteed integrity life, dollars per kg of uranium g = ratio of weight of uranium in a spent fuel element estimated to provide computed guaranteed life to the weight of uranium in a fresh element Ug=EC credit for uranium hexafluoride of the assay of the uranium hexa- fluoride of the assay of the uranium in the spent fuel elements discharged at the computed guaranteed life, dollars per kg of uranium Co = as above - CR = as above A= as above B= as above Pa = plutonium content of the uranium in the fuel discharged at the computed guaranteed life, grams plutonium per kg of uranium contained in discharged fuel elements T= as above R6– uranium in reactor required to permit reactor to reach reactor design power level for its intended purpose for elements meeting integrity and reactivity life of computed guaranteed integrity life, kg D= as above In the formula for the annual fuel cycle cost at the standard guaranteed all quantities will be known to the proposer from USC and EC announcements and reactor design information. Similarly, the data required to compute the annual fuel cycle cost at the manufacturer's guarantee will be known to the proposer. If the computed fuel cycle cost using the manufacturer's guarantees exceeds the standard fuel cycle cost, then the USC will make available a type B guarantee. In such cases, the USC guarantee is determined so that the computed fuel cycle cost is equal to the standard fuel cycle cost. If the manufacturer's guaranteed minimum integrity life is greater than the USC standard, then the manufacturer's guaranteed integrity life is used for integrity life in the computation of the annual fuel cycle costs. At the manu- facturer's guaranteed integrity life, reactor design data together with USC and EC announcements will determine all quantities in the above formula for the annual computed fuel cycle cost except fuel element fabrication cost. Consequently, a fuel element fabrication cost can be selected so that the computed fuel cycle cost will equal the standard fuel cycle cost. This fuel element fabrication cost is then the computed guaranteed maximum fuel element fabrication cost. Alternatively, if the manufacturer’s guarantee maximum fuel element fab- rication charge is less than the USC standard guaranteed for elements Of that type and specification, then the manufacturer's fuel element fabrication charge is used to determine the annual computed fuel Cycle costs. If an integrity life is assumed, the reactor design information together with USC and EC an- nouncements will permit the determination Of all quantities in the formula for the computed annual fuel cycle cost. Integrity lives are assumed and the an- nual fuel cycle cost computed until the integrity life for which the computed annual fuel cycle cost vuuals the annual fuel Cycle cost for the stalldard integrity AGREEMENT FOR COOPERATION WITH EURATOM 53. life and fabrication cost is found. This integrity life is the computed guaran- teed minimum integrity life. The example below is given to illustrate the method used to determine the USC computed guarantee. The quantities used in the examples in this Annex and in Annexes 2 and 3 are assumed solely for purposes of illus- trating the methods of computation and do not necessarily represent the per- formance to be expected in any actual reactor. In all the examples the USC charges for uranium hexafluoride for fresh fuel elements and credits for uranium hexafluoride from spent fuel elements and plutonium metal have been used Since the corresponding EC charges and credits have not yet been announced. All the examples assume either stainless steel or zirconium clad elements meeting the Specifications Of paragraph 9 (a) Or (b). Eacample For zirconium clad elements, the manufacturer guarantees an integrity life Of 11,000 megawatt days per metric ton and a fabrication cost of $170 per kilogram of contained uranium. The manufacturer's guaranteed life is superior to the standard guarantee, but the fabrication cost is inferior to the standard guarantee. Consequently, the possible USC guarantee is computed using the manufacturer's guaranteed life. It is assumed here that reactor design information for this case is the following : 10, 000 11, 000 For Integrity Life of.-------------------------- MWD/tonne MWD/tonne Reactor Thermal Power, Megawatts -- - - - - - - - - - - - 600 600 S— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 54,000 ------------ G– — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 54,000 Initial Enrichment, wt % U%*------------------- 1. 50 1. 52 Enrichment of spent fuel element, wt % U*_ _ _ _ _ _ _ 755 725 * - - sº * * - - * * - - - * * - - - * * - - - am * - - * * * - - - * * - - - - * 9855 ------------ 9- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 98.44 Ps--------------------------------------- 4. 480 ------------ Po--------------------------------------------------- 4. 598 Using above data, - 292,000 -* - T-(#) (600) = 17,520 kilograms per year T-(#) (600) = 15,930 kilograms per year From the preceding data and that from USC announcements, the following quantities are determined. From an Integrity Life of.-------------------- 10,000 11,000 - MWD/tonne MWD/tonne Ur ($/kg)------------------------------- 145. 50 ------------ Us ($/kg)------------------------------- 44. 56 --------... * * * * Uc ($/kg)------------------------------- ------------ 148. 48 Ug ($/kg)------------------------------- ------------ 41. 06 A ($/gm Pu metal) --------------------- 12 12 B ($/gm Pu)--------------------------- 1. 50 1. 50. T ($/kg U)---------------------------- 2–1–18+= 20 2–H 18*= 20 t O / — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 4 4 Ce ($/kg U)---------------------------- 5. 60 5. 60 CR ($/kg U)---------------------------- 15. 30 15. 30. *Based on assumed commercial contracts of $2/kg for transportation from reactor to designated European port and $18 from European port to designated point in United States. From these data Fs = (17,520) {140+ (1 + 10.0075) (4)] 145.50 — (0.99) (0.9855) [(44.56–5.60) + (12–1.5) (4.48)] +20+ (0.9855) (15.30)} + (4) (54,000) (145.50) 100 + D F's = 4,537,500+ D 54 AGREEMENT FOR COOPERATION WITH EURATOM Similarly, we have Fo- (15,930) { C+ (1+10.0075) (4)] (148.48) — (0.99) (0.9844) [(41.06—5.60) + (12– 1.5) (4.598)] +20+ (0.9844) (15.30)} +(4)(54,000) (14848), p 100 + Fo- 15,930 C-H 2,015,500+ D Setting the standard and the computed fuel cycle costs equal gives the relationship 15,930 C+2,015,500 = 4,537,500 10 From this relation, C= 158.35 per kilogram of contained uranium, so that using the rounding C rule stated in paragraph 20, = $159 This computed fabrication price is less than the manufacturer's offer, therefore, the USC will make available a type B guarantee. Under this guarantee the guaranteed-maximum fabrication cost would be $159 per kilogram of contained Ulrahl Ulm, ANNEX 2 DETERMINATION OF MINIMUM INTEGRITY LIFE GUARANTEED UNDER TYPE A ARRANGEMENT If the computed fuel cycle cost using the manufacturer's guarantees and deter- mined in accordance with Annex 1 is no greater than the standard fuel cycle cost, and, if the remedies under the manufacturer's arrangement to supply fuel elements are not sufficient to cover the extra costs of reprocessing and transporting irradi- ated fuel elements and still meet the standard fuel cycle cost, the USC will supple- ment the manufacturer's guarantee by guaranteeing an average integrity life which, in combination with the guarantees offered by the manufacturer, will result in a computed fuel cycle cost equal to the standard fuel cycle cost. The guaranteed average integrity life which is necessary to assure that the computed fuel cycle cost will equal the standard fuel cycle cost will depend upon the arrangement offered by the manufacturer. Treated below is the case that the manufacturer provides no guarantee on chemical processing or transportation charges. For details on other arrangements, interested parties are invited to con- sult the USC on the specific arrangements. The computed fuel cycle cost for any average integrity life using the manufac- turer’s guarantee on fabrication cost and integrity life is given by the equation FM = TMCM + Tr(1 + 0.0075i) UM — (0.99) (h) [(UI — Co) + (A – B) Pr]+ T-H hCR , i RM UM +=#4-D where FM = computed fuel cycle cost taking into account manufacturer's guarantee of fabrication cost and integrity life, dollars/year where i, Co, A, B, CR, T, and D as defined in Annex 1 Tu – annual throughput of uranium at integrity life guaranteed by the manu- facturer, kg/year ( 292,000 P.) TM = −t- IM 10 Note that this relationship is the same regardless of the value of D used to compute the Standard and computed fuel cycle costs. Consequently, the computed guarantee does not depend on the value of D used. AGREEMENT FOR COOPERATION WITH EURATOM 55 PT as in Annex 1 IM = average integrity life guaranteed by the manufacturer, megawatt days per metric ton of contained uranium CM = fuel element fabrication cost offered by manufacturer, dollars per kg of contained uranium T = annual throughput of uranium at average integrity life I, kg/year I = average integrity life, megawatt days per metric ton of contained uranium h = ratio of weight of uranium contained in a fuel element discharged after a life I to the weight of uranium contained in the fresh element guaran- teed by the manufacturer Ur = EC credit for uranium hexafluoride of the assay of fuel elements dis- charged after a life I, dollars per kg of contained uranium Pi = plutonium content of the uranium in the fuel discharged after an average life of I, grams plutonium per kg of uranium contained in the discharged fuel elements UM = EC charge for uranium hexafluoride of the assay of the uranium in the fresh fuel elements guaranteed by the manufacturer, dollars per kg of contained uranium RM = uranium contained in elements guaranteed by manufacturer required to permit reactor to reach design power level for its intended purpose, kg Using the above equation, the fuel cycle costs for assumed average integrity lives are computed and compared with the standard fuel cycle cost computed according to Annex 1. The average integrity life in the above formula which results in a computed fuel cycle cost equal to the standard fuel cycle cost is the average integrity life which the USC will guarantee under the type A arrangement. To illustrate the use of the above equation, assume that for stainless steel clad elements the manufacturer guarantees an integrity life of 12,000 megawatt days and a fabrication cost of $100 per kg. The data required to determine the stand- ard fuel cycle cost are: _ (292,000) (515) - 10,000 PT = 515 megawatts Is= 10,000 megawatt-days per metric ton of contained uranium Ts = 15,000 kg/year Cs=$100 t = 4 percent per year UP = $375.50 f=0.985 Us=$220.00 Co- $5.60 A = $12.00 B = $1.50 Ps=5 grams/kilogram = $20 CR = $15.30 Rs=25,000 kg Using the equation for the standard fuel cycle cost in Annex 1 gives F's= (15,000) 100 + (1.03) (375.50) — (0.99) (0.985)[(220–5.60) +(12–15)5]+20+(0.985)(15.304% º + D = 4,300,000+ D The data required to determine the computed fuel cycle cost taking into account the manufacturer's guarantees depend upon the average integrity life assumed to be achieved. Trials suggest that assuming an average integrity life of 7,335 megawatt days per metric ton of contained uranium would give a fuel cycle cost equalling the standard fuel cycle cost of $4,300,000. The data for an average in- 56 AGREEMENT FOR COOPERATION WITH EURATOM tegrity life of 7,335 megawatt days per metric ton of contained uranium are the following: - - 292 - T.-(* = 12,500 kg/year 12,000 PT=515 megawatts IM = 12,000 megawatt days per metric ton _(292,000) (515) TI =20,500 kg/year 7,335 UM = $391.40 h = 0.989 Ur=$276.75 Co- $5.60 A =$12 B = $1.50 PR=4.20 grams/kilogram T = $20 CR =$15.30 RM =25,000 kg Using the equation given in this Annex for the computed fuel cycle cost gives FM = (12,500) (100) + (20,500)[(1.03) (391.40) — (0.99) (0.989) [(276.75–5.60) + (4.20) (10.50)]+20+ (0.989) (15.30)] (*)-D-4,300,000+D Thus, for an integrity life of 7,335 megawatt days per metric ton of contained uranium, the computed fuel cycle cost taking into account the manufacturer's guarantees is equal to the standard fuel cycle cost. Consequently, based upon the rounding rule the USC would make available a type A guarantee at an integrity life of 7,300 megawatt days per metric ton. + ANNEX 3 DETERMINATION OF COMPLIANCE WITH MINIMUM STANDARDS The USC cost used in paragraph 34 is computed according to the following formula: USC cost= (292,000 pºſer tºº Co-H S + CR + g IM Ig where Pr= the reactor thermal power, megawatts Cat=fuel element fabrication cost offered by manufacturer, $/kilogram of contained uranium S = commercial charge for transportation of spent fuel elements from agreed European port of shipment to designated point in the U.S., $/kg of contained uranium. If commercial charges not available, assume $20/kg. CR = as in Annex 1 Co- as in Annex 1 IM = fuel element integrity life guaranteed by manufacturer, megawatt days per metric ton of contained uranium Co-fuel element fabrication cost guaranteed by USC, $/kg Id=fuel element integrity life guaranteed by USC, megawatt days per metric ton of contained uranium L= life of core at manufacturer's guaranteed integrity life, years l For purposes of illustration, assume that a proposal for a core consisting of stainless steel clad fuel elements as specified in 9(a) above is submitted on the basis of a manufacturer's fabrication cost of $120 per kilogram of contained uranium and a guaranteed integrity life of 9,000 MWD per metric ton. At the guaranteed irradiation this core will have a life of two years in a reactor with a AGREEMENT FOR COOPERATION WITH EURATOM 57 thermal power of 550 megawatts. For this case, the U.S. guarantee would be an integrity life of 10,000 megawatt days per metric ton and a fabrication cost of $100 per kilogram of contained uranium. Using S=$20.00 per kilogram of contained uranium CR = $15.30 per kilogram of uranium 'o - $5.60 per kilogram of uranium, the above formula gives 120+ 40.90 100+40.90 — (292 2 - USC cost–292,000(550(2)| 9,000 10,000 The pro rata share based upon delivering 150 megawatts of electric power from nuclearly generated heat is |-si,220,000 150 2 * { } {\ {\ { _ Q (T) 7 (#) (i) ($90,000,000) = $2,700,000 Thus, the proposal would meet the criterion of paragraph 34. ANNEX 4 DETERMINATION OF GUARANTEES FOR NOMINAL LOADINGS CONSISTING OF FUEL ELEMENTS CONTAINING URANIUM OF DIFFERENT ENRICHMENTS IThe purpose of this annex is to describe the application of the formulae de- veloped in the previous annexes to nominal loadings consisting of fuel elements which contain uranium of different enrichments. The principle used is that in determining the USC guarantees for such nominal loadings the appropriate fuel cycle cost is determined by averaging, according to the heat generation, the appropriate fuel cycle costs for fuel elements containing uranium of each enrichment comprising the nominal loading as specified in the previous an- nexes. In calculations requiring the adjustment of the manufacturer's guaram- teed integrity lives (e.g., standard fuel cycle cost if the manufacturer’s aver- age guaranteed integrity life is different from the standard guaranteed integ- rity life), the manufacturer's guaranteed integrity lives for elements containing uranium of different enrichments shall be changed proportionately. IThe computed fuel cycle cost is the sum of the weighted computed fuel cycle cost for all different fuel enrichments element comprising the nominal loading. The weighted computed fuel cycle cost for a particular enrichment of fuel is the product of the computed fuel cycle cost for that enrichment determined according to the equation on page 24 of Annex 1 and the computed weighting factor for that kind of element. The computed weighting factor for each enrichment is the ratio of the heat generated in elements containing uranium Of that enrichment to the total heat generated in the nominal loading. In Calculating the Com- puted weighting factor, the heat generation is based On the manufacturer's guar- anteed integrity lives. TThe standard fuel cycle cost is the sum of the weighted standard fuel cycle COst for all different enrichments comprising the nominal loading. The weighted standard fuel cycle cost for a particular enrichment is the product of the standard fuel cycle cost for that enrichment determined according to the equa- tion on page 22 of Annex 1 and the computed weighting factor for that enrich- ment. The standard fuel cycle cost for each enrichment is computed at an in- tegrity life equal to the product of the manufacturer's integrity life for that enrichment and the ratio of the standard guaranteed life to the manufacturer's average guaranteed life. IIf the computed fuel cycle cost is no greater than the standard fuel cycle cost, only a Type A guarantee will be made available. If the computed fuel cycle cost exceeds the standard fuel cycle cost, the USC will make available a Type B arrangement. IIn cases where the Type B arrangement is made available, the USC extension of the manufacturer's guarantees shall be determined as follows: I(1) If the manufacturer's offered average fabrication cost (ratio of manu- facturer's total fabrication cost for a nominal loading to the kilograms of Com- tained uranium in that nominal loading) is less than the average standard guaranteed fabrication cost, the USC guaranteed integrity life shall be deter- 58 AGREEMENT FOR COOPERATION WITH EURATOM mined so that the sum of the weighted guaranteed fuel Cycle costs for all dif- ferent enrichments comprising the nominal loading shall be equal to the Standard fuel Cycle cost. The weighted guaranteed fuel cycle cost for each en- richment is the product of the fuel cycle cost for that particular enrichment de- termined according to the equation on page 22 of Annex 1 and the computed weighting factor for that enrichment. The fuel cycle cost for each enrichment shall be determined at an integrity life equal to the product of the guaranteed in- tegrity life and the ratio of the manufacturer's guarantee of fuel of that en- richment and the manufacturer’s guaranteed average integrity life. The USC guarantee will apply to the average integrity life achieved by the nominal loading. In Computing the average integrity life achieved, the life Of elements which have not failed for integrity reasons shall be considered to be the greater of the life achieved or the product of the USC guaranteed integ- rity life and the ratio of the manufacturer’s guaranteed life for fuel of that enrichment and the manufacturer's average guaranteed integrity life. I(2) If the manufacturer's average fuel element fabrication cost is greater than the average guaranteed fabrication Cost, but the manufacturer's average guaranteed integrity life exceeds the standard guaranteed integrity life, then the USC will guarantee a fabrication cost for fuel elements containing uranium Of each different enrichment. The USC guaranteed fabrication cost for fuel elements containing uranium of not more than 3 percent enrichment shall be a guaranteed base costs determined as specified below. The USC guaranteed fabrication cost for fuel elements containing uranium of enrichment greater than 3 percent shall be the sum of the guaranteed base fabrication cost and the adjustment in the standard guaranteed fabrication cost as Specified on page 7 Of Appendix C. The guranteed base fuel element fabrication cost shall be determined so that the sum of the weighted fuel Cycle cost for all enrich- ments comprising the nominal loading shall equal the standard fuel cycle cost. The weighted fuel cycle cost for each enrichment is the product of the computed weighting factor for that enrichment and the fuel Cycle cost computed accord- ing to page 24 of Annex 1 except that the fuel element fabrication cost shall be the base charge plus any adjustment for enrichment as specified on page 7 Of Appendix C instead Of the manufacturer's fuel element fabrication cost. In Computing the achieved average integrity life, the integrity life of elements Containing uranium of a particular enrichment Which have not failed for integrity reasons shall be the greater of the actual life achieved or the manu- facturer's guaranteed integrity life for elements containing uranium of that enrichment. I(3) In all other cases, the USC will make available the standard guaranteed integrity life and fabrication cost for the types of elements under consideration. The USC guaranteed integrity life will apply to the average integrity achieved by the nominal loading. In computing the achieved average integrity life, the integrity life of elements which have not failed for integrity reasons shall be the greater of the actual life achieved or the product of the USC guaranteed integrity life and the ratio of the manufacturer's guarantee for elements con- taining uranium of that enrichment and the manufacturer's guaranteed average integrity life. IUnder a Type A arrangement, the USC guaranteed integrity life for a nominal loading shall be determined so that the sum of the weighted guaranteed fuel cycle costs for all different enrichments comprising the nominal loading shall be equal to the standard fuel cycle cost for the nominal loading computed as described above. The weighted guaranteed fuel cycle Cost for each enrich- ment is the product of the fuel cycle cost computed in accordance with page 29 of Annex 2 and the computed weighting factor. In Computing this fuel cycle cost, the integrity life used for a particular enrichment shall be the product of the USC guaranteed integrity life and the ratio of the manufacturer's guar- anteed integrity life for that enrichment to the manufacturer's average guar- anteed integrity life. [The USC guarantee will apply to the average integrity life achieved by the nominal loading. In computing the average integrity life achieved, the life of elements which have not failed for integrity reasons shall be considered to be the greater of the life achieved or the product of the USC guaranteed integrity life and the ratio of the manufacturer's guaranteed life for elements containing uranium of that enrichment and the manufacturer's average guaranteed integrity life.] AGREEMENT FOR COOPERATION WITH EURATOM 59. APPENDIX D The purpose of this amnea is to describe the application of the formulae developed in the previous amneases to nominal loadings consisting of fuel ele- ments which contain uranium of different enrichments. The principle used is that in determining the USC guarantee8 for 8 uch nominal loadings the appropri- ate fuel Cycle cost is determined by averaging according to the heat generation, the appropriate fuel Cycle costs for fuel elements containing uranium of each enrichment Comprising the nominal loading. In Calculations requiring the ad- justment of the manufacturer's guaranteed integrity lives (e.g., standard fuel Cycle cost if the manufacturer's average guaranteed integrity life is different from the standard guaranteed integrity life), these lives shall be changed in proportion to the average guarantees. The USC guarantee will apply to the average integrity life achieved by the nominal loading, however, in computing the average integrity life achieved, the life of elements which have not failed for integrity reasons shall be considered to be the greater of the actual life achieved or the proportional integrity life, mentiomed above, for fuel of that enrichment. The computed fuel cycle cost is the sum of the weighted Computed fuel cycle cost for all different enrichments comprising the mom imal loading. The weighted computed fuel cycle cost for a particular enrichment of fuel is the product of the computed fuel cycle cost for that enrichment determined according to the equation on page 24 of Amnea 1 and the computed weighting factor for that kind of element The computed weighting factor for each enrichment is the ratio of the heat generated in elements containing uranium of that enrichment to the total heat generated in the nominal loading. In Calculating the computed weighting factor, the heat generation is based on the manufacturer's guaranteed integrity lives. The standard fuel cycle cost is calculated in a Similar mammer but according to the equation on page 22 of Annea: 1. In this case, the integrity life used is the product of the manufacturer's integrity life for each enrich memt and the ratio of the standard guaranteed life to the manufacturer's average guaramfeed life. If the computed fuel cycle cost is no greater than the standard fuel cycle cost, only a Type A guarant co will be made a railable. If the computed fuel cycle cost eacceeds the standard fuel cycle cost, the USC will make a vailable a Type B arrangement. In cases where the Type B arrang C ment is made a railu bl6, the dºt crimination of the USC Castension of the manufacturer's guarantec is made in a manner- Similar to the methods used in 4 m nea: 1. These arc: (1) If the manufacturer’s Offered a vºcrage fabrication, cost (this is the ration of the total fabrication cost to the weight of uranium in a m (; in imal loading ) is less than the average standard guarantecd fabrication cost, then this cost (the manufacturer's ) is what the USC will guarantee and appro- priate Calculations are made using the equation on page 22 of 4 m n c.f. 1 to determine the USC guaranteed integrity life. (2) If both the manufacturer's average fabrication cost and average integrity life eaceed the USC guarantee, them the manufacturer's integrity life will be used in the equation on page 24 of Amnca. 1 to determine the USC guaranteed fabrication cost for elements of each enrich ment. In performing these calculations, provision must be made to include the adjust- ments specified on page 7 of Appendia C for enrich ments greater than 3%. (3) In all other cases, the USC will make available the standard guaran- teed integrity life and fabrication cost for the types of elements under consideration. U nder a T'l/p6 A arrangement, the USC guaranteed integrity life for a nominal loading shall be determined so that the sum of the weighted guaranteed fuel Cycle cost 8 for all different enrichments comprising the nominal loading shall be equal to the standard fuel cycle cost for the nominal loading computed as described above. The weighted guaranteed fuel cycle cost for each enrichment is the product of the fuel cycle cost computed in accordance with page 29 of Amnea 2 and the computed weighting factor. In computing this fuel Cycle cost, the integrity life used for a particular enrichment shall be the product of the Use guaranteed integrity life and the ratio of the manufacturer's guaranteed integrity life for that enrichment to the manufacturer's average guaranteed integrity life. 60 AGREEMENT FOR COOPERATION WITH EURATOM REPORTING REQUIREMENTS Since one of the major purposes of the U.S.-Euratom Joint Nuclear Power Program is to provide European and American industry with information con- Cerning the design, construction, operation and economics of nuclear power plants, Special steps will be taken by the Euratom Commission and the United States Atomic Energy Commission to assure the prompt exchange and dis- Semination of such information developed under the program. Among the obli- gations assumed the participants in the program will be required to provide the Euratom Commission and the United States Atomic Energy Commission with periodic reports which will be specified later. [Thesel. To the eatent re- quired these reports also will serve the needs of the Export-Import Bank in COn- nection with any capital loans provided by Euratom under the line of credit from the Export-Import Bank. Participants under the program will not be Obliged to report or engage in any exchanges of manufacturing “know-how” or techniqueS. Exchanges Of this kind will continue to be the Subject of licensing and Other normal Commercial arrangements. Although the detailed require- ments will be developed in the future it is anticipated that the reports re- quested will include the following : (a) Designs, plans, and Specifications Participants will be required to provide Euratom and the USAEC with copies of the descriptive brochures, Operating manuals, designs, plans, and Specifica- tions received from their respective contractors. This requirement will be limited to the information received by the selected enterprises in the course of their normal business dealings with their contractors. (b) Construction progress report Upon initiation of detailed design and construction, enterprises will be re- quired to furnish a quarterly construction progress and cost report the format of which will be developed with each participant. A suitable final report Will be required upon the completion of construction. (c) Operations Starting with the initial operation, periodic progress as well as Summary COSt reports will be required. The Lprograms] progress reports will be quarterly and Will briefly include such things as: the plant operating efficiency during the report period including data on power levels and the percentage of time the plant is in Operation ; a report On shutdowns and/or reduction in power output due to hazards considerations with a description of the causes; total fuel Cycle activities including: loading and unloading, fuel element operating experience, including the exposure levels and the number of failures encountered; experience gained with the monitoring and control system, the reactivity balance of the reactor over the reporting period; and other items of particular interest to the joint program. The operating COSt report, to be submitted on a semi-annual basis, will be designed to obtain Com- parable cost data from the plants included in the program. (d) Other Other specialized reports may be requested by Euratom and the USAEC from time to time. However, an effort will be made to keep Such additional require- ments to a minimum consistent with the requirements of the joint program: LPrereporting] The reporting requirements associated with any research and development contracts entered into by Euratom and the United States with the enterprises operating the plants will be agreed to when these contracts are negotiated. APPENDIX E I. Identity of Proposer: Name. Business Address. Seat (Legal Address). Legal Status. - II. Financial and/or other Relationship Between Proposer and Operator of - Project, if these are different persons. AGREEMENT FOR COOPERATION WITH EURATOM 61 III. Brief Description of the Project, Including— Location. - Size of Plant (Net Electrical Capacity). Discussion of possible benefit to be gained by the proposer and the i., §§ program if project were selected for operation by December 31, 1965. Among other things, the discussion should cover the extent to which such a project would represent an advancement in technology over reactors considered available for operation by December 31, 1963. º IV. Plans for the Distribution of the Electricity to be Generated. Senator PASTORE. We begin this afternoon's session by receiving a brief summary presentation from the representatives of the Com- mission. e Commissioner Floberg, I understand you will make the presenta: tion for the Commission and that principal members of your staff who have been working on the Euratom program are also present to answer any detailed questions which may arise. e Mr. Floberg, it is always a pleasure to have you before this com- mittee, and I invite you to proceed in any fashion you like. STATEMENT OF HON, JOHN F. FLOBERG, A MEMBER OF THE |U.S. ATOMIC ENERGY COMMISSION Mr. FLOBERG. Thank you, sir. I have a prepared statement that I would like to proceed to read, and I would suggest that members of the committee interrupt me at any time that they choose and ask *ions as we go along, although it is up to you to run this as you WISI). -- Senator PASTORE. I think it is a good suggestion, and that is the way we have always done it. Mr., FLOBERG., I am pleased to be here today, Mr. Chairman, to provide you with a brief report on the progress that has been made to date in developing the joint nuclear power program with Euratom Since we last met on this subject in August. I am accompanied by the key members of the staff, as your statement observed, who have been principally concerned with mapping out the various details. As you will recall, on June 23, 1958, the President transmitted a proposed international agreement with Euratom to Congress for ap- proval pursuant to sections 11(1) and 124 of the Atomic Energy Act of 1954, as amended. On the same day the Commission transmitted * Series of documents relating to the program, including proposed legislation to carry out the projects, and a draft agreement for co- Operation. This agreement was forwarded unofficially to the com- mittee at the time with the understanding that it would be resub- mitted in the usual manner in accordance with the provisions of sec- tion 123 of the Atomic Energy Act after the general international agreement Was approved. The Congress approved this international #ºment on August 20, 1958, and it became effective on August 27, In addition, after hearings before this committee in J uly and August, the Euratom Cooperation Act of 1958 (Public Law 85–846) was enacted and approved by the President on August 28, 1958. The prompt and sympathetic consideration which was given by the Joint 36636—59—5 62 AGREEMENT FOR COOPERATION WITH EURATOM Committee to the submissions by the executive branch contributed immeasurably to the momentum and overall objectives of the program and enabled the representatives of Euratom and the United States to proceed with a confidence that they otherwise might not have had in Subsequently formulating the details. Following the enactment of the Euratom Cooperation Act we and Euratom jointly reviewed the draft agreement for cooperation to see whether any changes were indicated in the light of the act and the hearings. We concluded that a number of changes in the agreement should be made. An analysis of the specific changes has been made available to the staff of the committee, and as you observed in your statement, Senator, you are going to include it in the record. In brief, it should be noted that the revised agreement no longer talks about “proven type” reactors, and also specifically reflects the permissive authority contained in the Euratom Cooperation Act which would enable the AEC and Euratom to defer two reactors for comple- tion by December 31, 1965, instead of by December 31, 1963. You will recall that the Joint Committee felt that changes along these lines in the definition and objectives of the program would be a desirable liberalization. In addition, other changes have been made in the text of the agreement for cooperation to make it clear that the Commission will have the right to recover enriched uranium from Euratom to the extent that there is a default in payment for the material sold on a deferred-payment basis, to make it clear that the chemical reprocessing Services offered by the AEC to Euratom will be provided under terms analogous to those offered to U.S. industry, and to reflect more clearly the provision of section 6 of the Euratom Cooperation Act which relate to future purchase by the United States of plutonium produced under the joint program. The revised agreement which is now before you was signed in Brus- sels on November 8, 1958. Prior to signature, letters were exchanged between U.S. and Euratom representatives in which Euratom clearly recognized that the terms of U.S. participation would be governed by the Euratom Cooperation Act of 1958. With your permission I now would like to say a few words about the progress that has been made to date in implementing the program. Over the past few months representatives of the AEC and Euratom have been developing the policies and procedures relative to the joint program. Two basic documents have been in preparation. There are an invitation and guide for research and development proposals, and an invitation and accompanying fact sheet for power reactor proposals. These documents have been prepared after continuous and extensive consultation with representatives of industry and the staff of this committee. Steps also have been taken to organize the AEC personnel who will handle this program. Dr. Bishop, for example, who has been serving in Paris as the Commission’s Scientific representative in Europe, has been transferred to Brussels to assist Ambassador Butter- worth on a full-time basis. - You will recall that the memorandum of understanding which was signed last summer, and the agreement for cooperation, contemplated that the parties will “initiate immediately a joint research and develop- ment program” which will be centered on the types of reactors to be included in the program. This program is to be aimed primarily AGREEMENT FOR COOPERATION WITH EURATOM 63 at the improvement of the performance of the reactors to be built under the joint program, and at lowering fuel cycle costs. . It will also deal with the plutonium recycle and other problems related to these reactors. © - “Tº e In order to permit the prompt initiation of this program, $3 million was authorized—and subsequently appropriated—to the Commission under section 3 of the Euratom Cooperation Act, with the understand- ing that Euratom would have to authorize an equivalent amount for use in the program before any contracts could be executed. We have received formal notification from Euratom that the Council of Min- isters and the Parliamentary Assembly, have approved a budget which contains an amount equivalent to the $3 million available to the AEC for this program and which require only the promulgation of certain financial standards to permit expenditure. Senator PASTORE. Does that mean that $3 million is available? Mr. FLOBERG. It is in their possession, but they cannot disburse it until certain regulations that are in a draft stage now have been finalized. This is a new organization, and their procedures and accounting and expenditure regulations have not yet been put in a final stage. So they are in a position of having the money in their possession but not being able to spend it yet. But we assume that this is going to be solved very quickly, and we are so informed by them. This is not a difficult problem, as it is a matter of administration and of untangling their own procedures. Senator PASTORE. At any rate, none of our $3 million is available until theirs is available. Mr. FLOBERG. That is right, and I will elaborate on that point a little further. On the basis of the favorable action taken by Congress last August, the Commission and Euratom have formulated and agreed to a series of principles that will govern the selection and administration of research and development projects under the program. These are reflected in a working paper which already has been made available to the committee staff. . It should be noted that it is anticipated that the projects will be jointly selected through the use of a Euratom- U.S. Research and Development Board to be located provisionally at Brussels. The negotiation and administration of contracts will be handled by appropriate organizational units of the USAEC or Euratom. The invitation and guide for research and development proposals have been completed and were issued jointly by the AEC and Euratom on December 23, 1958. This document closely follows principles fol. lowed by the AEC in selecting proposals for similar work in the past. Proposals will be received and evaluated and negotiations entered into, but no contracts will be signed until the agreement for coopera- tion comes into effect. Until such time as the actual reactor projects have been selected we expect that the work to be supported will be of a Somewhat general nature but still related to the types of reactors that are expected to be selected under the joint program. In our judgment a good deal of useful work within this general category can be per- formed prior to the actual selection of projects. 64 AGREEMENT FOR COOPERATION WITH EURATOM The invitation and accompanying fact sheet for power reactor pro- posals are substantially complete, and we do not expect other than minor modifications. These documents have been prepared in a man- ner designed to provide prospective participants with as much speci- ficity ahead of time as is now possible regarding the details of the E. We plan to publish them promptly after the agreement or cooperation comes into effect. You will note that the accompanying fact sheet covers the criteria and conditions for project selection. It also contains a number of appendixes outlining the terms of different aspects of the program in eater detail. Appendix B, in particular, outlines the technical, nancial, and economic information to be submitted, and appendix C, of which a few provisions are still being reviewed, outlines the terms that will govern the fuel cycle guarantees. I believe a few major points in these documents deserve your par- ticular attention. First, with regard to timing, it will be provided that proposals must be received no later that September 1, 1959. Representative DURHAM. Is that time mentioned in the agreement, September 1, 1959% Mr. FLOBERG. This is in the fact sheet, and it is one of the specifi- cations on the submissions of proposals, Mr. Durham, and we expect between now and September to have the proposals submitted. This is a deadline date for that submission. Senator PASTORE. In other words, these are the criteria or standards of criteria set up by Euratom with reference to these proposals. Mr. FLOBERG. By Euratom and us. We have said that in order to meet the deadline date on the construction which the act provides with regard to the contemplated total less two of the reactors, we would have to have the proposals in hand by September 1 of this year to adiudicate them. enator PASTORE. Now give us an idea of what the negotiations will be. From whom will these proposals come, and how will they origin- ate and what process will they follow before they culminate into a selection being made. Give it to us step by step. Mr. FLOBERG. As soon as the agreement for cooperation becomes effective— Senator PASTORE. First of all, who starts this in motion and how is it started in motion? Mr. FLOBERG. Well, the joint Euratom-U.S. Board will request the submission of proposals, or invitations will be issued in accordance with the documents that you have before you. These documents will be widely publicized, these criteria that you have seen, and as soon as the agreement for cooperation is effective people will begin to make their individual plans. Senator PASTORE. I want to take it from the point of beginning so any layman can understand the procedure that is involved here. First of all I would suppose that Euratom would make the publication that you are talking about. What does it mean? I suppose a public utility company in one of the six countries will offer proposals. To whom? To its government or to Euratom ? How does this thing work? You should get that into the record so we can all understand what the steps are before we get to a selection. AGREEMENT FOR COOPERATION WITH EURATOM 65 Mr. FLOBERG. The present status of the program is well known in Europe, of course, and lots of people have been looking at the Euratom programs. Interested utilities have been looking at the Euratom program, so that general planning has been taking place; The fact that the agreement for cooperation must be approved be- fore anything specific can be done is also well known in Eurºpe, so everybody is anticipating the effective date of active work to be im- mediately after the effective date of the agreement for cooperation. In addition to the general work that has already been done, as Soon as the criteria have been published, a utility in a particular country or a particular location will, if it is desirous of participating in the pro- gram, begin to º its planning in detail. That is, site selection, and competition for the reactor project itself, and all of the other incidents of collecting a power station project will be undertaken by a particular utility, public or private. & © hen this proposal will be submitted to the joint Euratom-U.S. Board in Brussels. Representative DURHAM. Who is this Board composed of? Would you give us their names for the record? Mr. FLOBERG. I can give you the names of the U.S. people, and I will see if we have the names of the Euratom people on that Board. (The Board members referred to follow :) The interim U.S. members designated for the first Joint Research and De- velopment Board Meeting On April 29, 1959, are as follows: Full member : Dr. Amasa Bishop, Acting Deputy for Euratom Affairs. ASSOCiates members: *Nelson Sievering, Division of Reactor Development, AEC. *Jarvis Schwennesen, Idaho Operations Office, AEC. John Ryan, Division of Finance, AEC. Marcus Rawden, Office of General Counsel, AEC. (NotE.—The names of the Euratom members of the Board were not available at the time of printing.) Actually the Board has not yet been organized, Mr. Durham, I can say, because its organization will follow the effective date of the agreement for cooperation. But this Board is meant to be organized and will be a “one vote Euratom” and “one vote United States” type of Board. Representative DURHAM. Do we not have authority under the Euratom agreement to go ahead and point the Board, so that it can officially act? Mr. FLOBERG. This is not retarding anything at the present time, the fact that the Board is not formally organized. That is no hin- drance to the progress that is taking place at the moment. Representative DURHAM. I was thinking about the timing. You set up a date here, September 1, 1959, and you don’t have the Board appointed yet to act on the proposals, officially, I mean. Mr. FLOBERG. But the proposals won’t come in until some time this Summer, I assume. But anyhow, we will have this Board appointed just as quickly as the agreement for cooperation becomes effective, º that is not going to be our problem, that of meeting the deadline ate. *Permanently assigned to Brussels Office. 66 AGREEMENT FOR COOPERATION WITH EURATOM Representative DURHAM. It seems to me you have to have someone to act officially. Mr. RAMEY. When the proposals come before you, the utility will have already gone through the process of Selecting a reactor equip- ment manufacturer that will build the reactor for them? Mr. FLOBERG. They will have arrived at the stage of closing their deal. That is the idea. Representative DURHAM. It operates very much as we do. Mr. FLOBERG. It is not unlike it. Representative DURHAM. And that is slowly. Mr. FLOBERG. It is a big undertaking to get a proposal organized be- tween now and September 1, and this is a very tight schedule actually. Senator PASTORE. When all of these proposals are before the Board sometime on or before September 1, 1959, then the two joint boards proceed to approve these projects? Mr. FLOBERG. The Joint Board will either approve or disapprove or will select the projects, and they will not necessary wait until September 1. It is conceivable that they will select one prior to that date. But this is at least the deadline date for submission, and then the selections will take place in the consequent months. I am skipping a step here. After the joint Board has approved a certain proposal, it will then be referred to the Commission who must, under the terms of the act, if any guarantee question is involved, present it to this committee for specific authorization. We would hope if the September 1, 1959, date is a realistic one and is met as we anticipate it will be, a year from now to have these proposals ready for presentation to this committee. Representative DURHAM. That does not apply to the $3 million; does it? Mr. FLOBERG. Oh, no. The research and development program can proceed independent of any such procedural steps. That program can proceed just as Soon as these financial regulations of Euratom have been finalized on their side of the water. That program can proceed without any further delay. Senator PASTORE. Let me get this straight. This originates through the efforts being made by a local public utility company in any one of these six countries who are members of the community of Euratom. Their proposal almost gets up to the bid stage before it is submitted to Euratom, that is, before the joint Board passes upon whether or not this project is acceptable. Mr. FLOBERG. It will be past the bid stage, and they will have their bids, and they will know exactly what the proposal is. Senator PASTORE. From American manufacturers? Mr. FLOBERG. Yes, sir. Senator PASTORE. Then you say you come before this Joint Com- mittee. You come before the Joint Committee to discuss what? Is that the guarantee on fuel performance? Mr. FLOBERG. Yes, sir; if the guarantee on fuel performance is involved in any way. Senator PASTORE. If the manufacturer goes the maximum on guar- antee, there is no question before us for authorization? AGREEMENT FOR COOPERATION WITH EURATOM 67 Mr. FLOBERG. That is true, but it needs an explanation, Senator. Senator PASTORE. That is what I want to get in the record. Mr. FLOBERG. The papers that are before you on the fuel-cycle guarantee point out in detail the problem we discussed last summer in connection with the transportation expense and reprocessing expense of fuel elements which fail prior to the guarantee time. Now let us take a specific case. Suppose that utility A submits its proposal, and the manufacturer with whom it is doing business has in fact guaranteed the fuel ele- ments for the 10,000 megawatt-days that we talked about, and at the purchase price we talked about, so that that is no part of the problem. These documents point out that the guarantee would not be appli- cable to the price or performance part of that fuel element. But suppose in fact one of those fuel elements failed at the end of 5,000 instead of 10,000, half of its anticipated life? Now, as far as the question of replacing the fuel element is con- cerned, that cat is on the manufacturer's back, because he guaranteed the complete performance and the particular fuel element did not perform. But the thing that the manufacturer has not guaranteed is that the utility in this case now has to pay earlier than it otherwise would have the transportation expense to the reprocessing station, and the reproc- essing expense on that particular fuel element. They pay it in half of the time they thought they were going to have to pay it, and presum- ing that another one fails, they are paying twice as much for transpor- tation and for reprocessing as they would have if it were serving the full 10,000 period we were guaranteeing. Now, as we pointed out last summer, although this item of expense is not expected to be great, it is an expense that the fuel element manu- facturer is in no position himself to pick up, or might not be, at least. So the guarantees on the fuel elements that we have described as type A and type B guarantees, distinguish the cases where the manufacturer has not guaranteed price and performance to the extent that we provide in the agreements from the case where he has. It might be necessary or it would be necessary if the utility were going to seek protection against this additional transportation and reprocessing expense, for us to come before this committee and request authorization to be pre- pared to cover that particular kind of expense. So even if the guarantee of price and performance had been met by the manufacturer, if this other element of the guarantee is involved We must come to this committee. The only case where we must not is when nothing of that kind is involved at all. Senator PASTORE. Now, I think it is reasonable for us to assume that our country will embark on a more spirited program of reactor con- struction and research and development ourselves. Now, you have this new burden of determining the difference in fuel performance so as to establish this level of guarantee under the terms of the agreement. Now, are we sufficiently and adequately manned in the AEC to meet this new responsibility, or what will our responsibility be in that regard? 68 AGREEMENT FOR COOPERATION WITH EURATOM Are you going to need any staff to make all of these determinations, and are you presently equipped to do it? Can you meet this responsi- bility, or are we crossing the bridge too soon before we get to it? Mr. FLOBERG. I don’t believe we are crossing the bridge too soon. I believe that the work that you and I have been talking about here and that I have just described is capable of absorption within the pres- ent headquarters staff without any additional personnel. We have no plans for adding to the staff for this particular purpose anyhow. Senator PASTORE. This is quite a responsibility on the part of the Board to make these determinations and to come before this committee and give us a pretty clear-cut presentation as to what our responsibility will be under these various contracts and these guarantees. That is a very, very responsible thing. Mr. FLOBERG. We recognize the responsibility, and we recognize the workload, but I believe we are capable of absorbing this. Senator PASTORE. And you think you can absorb it? Mr. FLOBERG. I believe so. Mr. RAMEY. You are under a freeze now on technical personnel, and wont you have to reduce some personnel in reactor development? Mr. FLOBERG. The head of the Reactor Development Division re- ports to me that he has managed to satisfy his personnel ceilings with- out the sacrifice of any technical personnel. Mr. RAMEY. By attrition? Mr. FLOBERG. A few trainees have been liberated, and reduction of nontechnical personnel has satisfied the rest of the requirement. Mr. RAMEY. Of course, you will need not only technical personnel, but administrative personnel as well, figuring your financial arrange- ments and all of that. Mr. FLOBERG. Let me say this: If it turns out I am wrong on my prophecy, we propose to handle this project properly. If it takes more personnel, we will have to face up to that matter. We do not propose to do a botched-up job for the sake of something artificial like a personnel ceiling. Senator PASTORE. We hope that you are right, and we were merely curious to know if you felt you had it within your capability to meet these challenges and this new responsibility. Your answer is, as you see it now with the likelihood there might be some troubles, you can meet this responsibility within your present staff structure. Mr. FLOBERG. That is my present opinion, sir. Senator PASTORE. All right. Mr. FLOBERG. As I say, with regard to timing, it will be provided that proposals must be received no later than September 1, 1959. Sub- missions, however, may be made prior to that date. This schedule, in general, should allow for evaluation and submis- sion of projects involving guarantees and should permit congressional authorization in time for the appropriate contracts to be awarded in the spring of 1960. You will recall that under section 4 of the Euratom Cooperation Act the Commission was “authorized” only to proceed with plans to enter into the fuel cycle guarantee contracts. Such contracts cannot be entered into until necessary authorization is obtained from Con- greSS. AGREEMENT FOR COOPERATION WITH EURATOM 69 If one assumes a contracting date of April 1, 1960, 45 months will be available for project completion. This is considered tight but sufficient, for it is close to that established for reactors within the United States that are likely to be comparable to the reactors included in the joint program. Mr. RAMEY. Is the construction schedule on current reactors less than 4 years? Mr. FLOBERG. It is about that. Mr. RAMEY. Some of them are more than that? Mr. FLOBERG. Some are more, and I am informed some are less. It is our view that this is a tight fit, but we can make it. e - © Mr. RAMEY. Is this not likely to tend to favor a big organization that has just built a reactor like this, rather than one who needs a little more time to get his organization together? © Mr. FLOBERG. We are thoroughly conscious of that problem, and it is our determination not to let our selections be pressured or biased by that fact. This presents a bit of administration to us, but we are thoroughly aware of this hazard and thoroughly aware of the Joint Committee's views on it, and so we are going to have this very high in Our minds. I might add that the Joint Committee's views on that subject are no different from the Commission’s. Senator PASTORE. You may proceed. Senator DworshAK. Mr. Floberg, you referred to the fact that this is a tight Schedule, and you say it is close to that established for reactors within the United States that are likely to be comparable to the reactors included in the joint program. Well, if that is true, then what advantage or advantages or benefits will accrue on research and development through the subsidizing of these reactors abroad if we are building comparable reactors in the United States? Mr. FLOBERG. “Comparable” means generally comparable, Senator. These projects will all represent improvement over anything that has been done up to now. The mere fact that these proposals will be sub- mitted in September of this year means that there is automatically a period of many months since the last reactor project was finalized, and there will be design improvements during that period of months. As you will readily perceive, however, under the general timetable, no ground will be broken until the summer of 1960. While this does not necessarily cause us concern, both we and Euratom believe a con- siderable amount of momentum and benefit could accrue to the pro- gram if a limited number of well-conceived projects could be accepted On a more accelerated basis. It is for this reason that we believe we must be prepared to receive proposals prior to next September, and, if necessary, to seek whatever congressional authorization may prove necessary during this session. . In this regard, as you will recall, during the hearings and congres- Sional floor debate on the program last summer, some members of the committee expressed their concern that the program should not be employed to “bail out” any so-called existing projects. We therefore gave rather careful and extensive consideration to the manner in which Projects well along in the planning or contractual stage and meeting the criteria and objectives of the program should be handled. 70 AGREEMENT FOR COOPERATION WITH EURATOM Our discussions with Euratom led us to conclude that it would not be equitable, or in the interest of the program, automatically to exclude all such projects. We found ourselves in complete agreement, however, with what we have construed to be the basic point made last summer by representa- tives of this committee that the program must not permit manufac- turers to modify previously existing commitments to any utilities if such modifications would have the effect of increasing the potential liability of the United States. Senator ANDERSON. Since I raised that question originally, maybe you had better analyze that a little for me. I was trying to be sure that we did not “bail out any so-called ex- isting projects,” and you say that “our discussions led us to conclude that it would not be equitable automatically to exclude all such projects.” If we did automatically exclude them one time, why do we now bring them back in again? You are taking the Edison-Volta project and SENN project back in. Mr. FLOBERG. No, sir; that is not correct. Senator ANDERSON. What are you doing? Mr. FLOBERG. Let me explain what that sentence is meant to mean there. First of all, the Edison-Volta project is not eligible for any con- siderations whatever, so I do not think we have to talk about that one at all. Senator ANDERSON. Do we automatically exclude that? Mr. FLOBERG. That is automatically excluded because it does not satisfy the criteria. Senator ANDERSON. Well, you say: Our discussions led us to conclude it would not be equitable automatically to exclude all such projects. Mr. FLOBERG. The sentence before that says “meeting the criteria and objectives of the program,” and the Edison-Volta project does not meet it. Mr. RAMEy. Why is that? Mr. FLOBERG. There are several criteria, but the particular one is that there was no competitive bidding. This was a negotiated trans- action and the criteria required competitive bidding on each project, so that is automatically excluded, but on a different basis, so I do not believe it requires any further discussion, really. That is out. Senator ANDERSON. Edison-Volta is out? Mr. FLOBERG. That is automatically excluded. Senator ANDERSON. Now tell me about SENN. Is SENN still in the picture? Mr. FLOBERG. SENN is the particular case that we must direct our attention to here. The SENN case is a case in which a contract has been signed, I understand, although I have never seen it, and I do not know whether it satisfies the criteria or not because I have not seen the contract, and to my knowledge it has not been compared in detail with it. Senator ANDERSON. Well, it satisfied the competitive bidding re- quirement, did it? ſº Mr. FLOBERG. That particular One. AGREEMENT FOR COOPERATION WITH EURATOM 71 Senator ANDERSON. But there was a lot of information there about how long these units were to last, and we thought it was indefinite, but it is pretty good from that standpoint. * . & e Mr. FioreRG. Let us assume it satisfies all of the criteria. . If it does satisfy all of the criteria, our interpretation and the meaning of this sentence or intention of this sentence is that it should not be auto- matically excluded but it should be considered along with other proj- ects at the appropriate time. * Senator ANDERson. I do not want to try to commit any other mem- ber of the committee, but I do frankly say to you that I think that is a good thing and it should not automatically exclude the SENN project, because there was competitive bidding and there was an effort to set it up on a good basis. I am not sure that I want to bring it in, but I certainly do not want automatically to exclude it. If that is what you mean by this lan- guage, then I find myself in agreement with it. Mr. FLOBERG. One of the further standards that must be satisfied, Senator, is that nothing in that proposal can be altered so as to affect adversely any exposure of the United States. I am speaking specifi- cally about fuel element guarantees or anything else like that. If it does or if it is so altered, it is kaput. Senator ANDERSON. They ... certain guarantees and we gave them, and I thought they were low compared to what we were finally going to be able to guarantee. But I think the manufacturer has given some guarantees, and I do not want the Government to come in now and underwrite those guarantees. Is that involved in this? Mr. FLOBERG. There is no change being made, to my knowledge, in the manufacturer's guarantees that affects the underwriting of the Federal Government, the U.S. Government. This is my understand- ing, Senator, and certainly it is a standard that must be applied. enator PASTORE. In other words, with relation to these contracts or proposals that are not automatically excluded, once an agreement has been reached on any issue, that agreement stands as made and there can be no review in respect to it. That remains true even though if that agreement were brought within the purview of an arrange- ment with Euratom better concessions might be obtained. The agree- ment stands, and its conditions stand although they may be much more Severe than if the agreement had been negotiated with Euratom. Mr. FLOBERG. That is correct. Senator PASTORE. But if there is any existing issue between the parties that has not been resolved, then it can be resolved under Euratom as it might be resolved with any other proposal submitted to Euratom. Mr. FLOBERG. That is correct. Senator ANDERSON. I think that is very helpful, Mr. Floberg. Mr. FLOBERG. Thank you. Paragraph 6 of the fact sheet, accordingly, indicates that projects well along in planning or under construction may qualify for con- sideration under the program, provided they meet the established criteria and include a statement that none of the arrangements pro- posed will relieve the manufacturers or suppliers involved from com- mitments already made. In our view, this formula provides an equi- table solution to the so-called bail-out problem. 72 AGREEMENT FOR COOPERATION WITH EURATOM As I already have mentioned, the agreement for cooperation signed on November 8 was modified from the earlier draft to reflect the possible deferral of two reactor projects for completion in 1965. The prospect of such a deferral also is reflected in the invitation and fact sheet. It will be recalled that the committee report which accom- panied the text of the proposed Euratom Cooperation Act indicated that it was intended that this extension of the goal for two reactors “would be permissive only, and that the Commission and the Com- munity might, if in their combined judgments such action was advis- able, proceed so as to have all 1 million kilowatts installed and in operation by December 31, 1963.” We have considered this question carefully with Euratom and have agreed that it would be best for us not to prejudge the question at this time of whether a deferral is desirable or not. This decision, rather, will be made after all the proposals for 1963 as well as expressions of interest in projects for 1965 have been received and evaluated. You may be assured that in the course of our review we will give very serious consideration to the committee's interest in seeing that the program, to the extent practicable, fosters advancements in the technology. In particular, the Commission would not look favorably upon proceeding with a proposal oriented to the 1963 completion date if the project proposed did not involve a reasonable diversity of plant types, was essentially a design duplicate or represented an undue con- centration of business. Senator ANDERSON. In other words, by leaving a little leeway on the time, we may be able to have some projects that do represent in- teresting theories and ideas, whereas if we just held strictly to the 1963 date we would be pretty well tied to present concepts that might be duplicates? Mr. FLOBERG. When we talked about this last summer, Senator, and I want to say you are correct, we all agreed there are three types of reactors most immediately available for construction. They are boil- ing water, pressurized water, and organic moderated. This is what we proposed as a definition of “proven type” when this language was in the agreement. It was in the draft agreement and other documents that came up. There were several members of the committee who had serious reservations about this, and this was modified in the course of our discussions last summer and it was modified in the law. This was done specifically to open up the field to these other types to which you have referred, and I cannot tell you what type it might be. Con- ceivably it will not be any other type, but it is also conceivable it may be one or two types which, given this 2-year time advantage, will be able to compete effectively with the types that are already in the more advanced stage. Senator ANDERSON. The committee had some discussions about heavy water and natural uranium and various other things, and also gas- cooled. You are trying to say that if something very unusual de- velops in these next 2 years, we ought to be able to take advantage of it? Mr. FLOBERG. That is correct. Senator ANDERSON. The British are building an advanced gas- cooled type and we have been talking to the Canadians about some AGREEMENT FOR COOPERATION WITH EURATOM 73 modifications of their heavy water program, and so forth. You Want to be free to take advantage of all of those things? © Mr. Flopera. That is correct, Senator. It might be even something that no one has suggested so far. Senator ANDERson. It was not too long ago that people were try; ing to say to us: “The only thing you have tested is a pressurized water reactor,” and somebody else comes along and says, “The boiling water reactor is much better.” I do not know whether it is or is not. I only say that in 2 or 3 more years we might have some new and better ideas. * . * We wanted to be sure that you were in a position to make use of this, or the Euratom program was. I think it is fine that you have left it open. • * > Senator PASTORE. I quite agree with that thinking, but from a practical point of view, are we all saying the same thing? You said that our proposals have to be in before September 1, 1959, before you can adjudicate them, and to be in time for the authorizations which you are requiring of the Congress on each type. Now you are shoot- ing for 1 million kilowatt-hours in 1963. This is quite indefinite. What do you expect to arise within the next 24 months that will make all of these changes necessary that we are talking about? Mr. FLOBERG. At the rate at which this art is progressing, I think that there is a real chance that there would be something within 24 months that might surprise us. Senator PASTORE. You mean by 1963 we may go beyond these three proven types that you have just talked about? Mr. FLOBERG. I do not mean that necessarily at all. I think it is perfectly possible that any of these types that have been referred to may have made sufficient progress within the next 24 months to com- pete effectively with these other now more advanced types. Senator PASTORE. Is it fair for me to assume that before September 1, 1959, about the only project we will have before us will be the SENN project Mr. FLOBERG. I do not think that that is a correct inference. We hope to have an abundance of projects from which to select the best proposals by September 1, 1959. Now I think the answer to your question is that if a series of pro- posals oriented to the 1963 completion date came in by September 1, 1959, and if no proposal came in by September 1, 1959, oriented to- ward a later completion date, the fact that the former group was made up of design duplicates would tend to disqualify at least some of them. I would not think that the 1 million kilowatt goal was so Sacred we were going to come in here with a series of projects that were virtually identical. That does not appeal to me at all. I do not think that we are going to be in that position. Senator PASTORE. We have more or less fastened ourselves to these dates of 1963 and 1965, with the exception that between 1963 and 1965 we are possibly reserving two reactors. Mr. FLOBERG. That is correct. Senator PASTORE. So that you are assuming we might build six— because it is fair to assume that, knowing politics as we know them. If you have six nations in Euratom each is going to get one or there 74 AGREEMENT FOR COOPERATION WITH EURATOM is going to be a squabble. Then at the best you are going to build 6 or 12, You have to keep within those proportions. Now if you are reserving two, it would mean by 1963 you have to talk about three or four. When do you expect to be deciding those, as a practical proposition? Mr. FLOBERG. I think in the first place I do not believe we have to consider this in increments of six. I do not agree with that, Sen- ator. I believe these things will be considered on their individual merits. Now geographical distribution is desirable, but I offered to make a bet with Senator Anderson that one reactor would not be installed in Luxembourg, and that reduces it to increments of five, . if we accept that. I do not think that is a correct inference elther. What I am saying is that I believe that by September 1, 1959, some 8% months from now, when these proposals come in we will be able to scrutinize them and evaluate them and compare the proposals for actual reactor constructions with the expressions of interest for the deferred reactors. This expression of interest will obviously not be in the detail that a proposal for construction will be, but there will be enough, we think, to evaluate it as compared to the desirability of proceeding with one of the definitive proposals that have been submitted. Senator PASTORE. Does this go to a common grid for the same six nations, or is there any common grid Ž Mr. FLOBERG. It is not only not a common grid for the six Euratom ºries but in some of the countries there are a great number of TICIS. g Representative DURHAM. It can cross borders? Mr. FLOBERG. Some of the grids do cross borders, that is correct. Mr. RAMEY. You get these advanced interest letters on October 1, and is it not possible you might make up your mind between Sep- tember 1 and October 1 and then these fellows are out in the cold that want to build these later models? Mr. FLOBERG. I wish we were nimble enough to make that a real practical problem. But I think that the answer to your question, a serious answer, is not to worry about that because these are going to be carefully and deliberately evaluated. We understand the views of the Joint Committee, and there is no mystery about what your in- tention is, and we intend to comply with it. Senator ANDERSON. Let me ask you a specific question about reactor types. *}. British are starting to build their advanced gas cooled reac- tor, and I do not know when it is going to be finished, I think in 1961 or so. At least they are in the construction stage. At the same time the British—I can’t quite read the reports—but it looks as if they are making some plans toward the high temperature gas cooled reactor, which is the most interesting design. Now, the so-called General Dynamics-Philadelphia Electric pro- posal is for the high temperature reactor, whereas the law that was passed by the Congress would have required the Atomic Energy Com- mission to build the so-called Kaiser-ACF Industries proposal, which is the advanced Calder Hall type of gas-cooled reactor. If somebody had to submit a proposal by September of 1959 that proposal might be either pressurized water, boiling water, or organic AGREEMENT FOR COOPERATION WITH EURATOM 75 moderated, but if we could merely write some sort of a letter of inter- est, could we keep the gate open on the advanced Calder Hall type in Europe, and also on the high temperature reactor which we have been proposing to build in this country, both of which we have been pro- posing to build in this country? In other words, are they still eligible as the matter now stands? Mr. FLOBERG. The answer is “yes,” Senator, and they could be considered. Now of course their expression of interest would have to be evaluated along with the others, but they would be so evaluated. Senator ANDERSON. We have to recognize that the evaluating people might just say it is not far enough along to pay any attention to, but it is far enough along so they can ask the American Government to put $20 million in one and $40 million in the other, which is not just casual interest. Mr. FLOBERG. This is our responsibility to adjudicate these, and we recognize it. Senator ANDERSON. The gates are open on both of those types which might be regarded as very promising? Mr. FLOBERG. That is correct. Senator ANDERSON. Certainly the technique on the advanced Calder Hall is as well understood as the organic moderated third type we mentioned a minute ago. Mr. FLOBERG. I would think that the technique was, but I am not sure it is in this country. Representative DURHAM. I doubt if it would be acceptable by that date. Senator ANDERSON. I want to make sure that this thing is somewhat open so if they wanted to make use of the advanced Calder Hall type, or the high temperature gas cooled reactor General Dynamics is pro- posing, that they are not barred from the European program. Mr. FLOBERG. That is a correct statement. Representative HOLIFIELD. Assume the September 1 deadline covers four of the reactors, and assume there is a possibility of the other two being advanced 2 additional years. Then assume you get only two offers which are worthwhile before September 1, 1959. If you do not get the full four proposals which would stand up under scrutiny, does this mean that the overall program would be curtailed or does it mean that there would be an extension of time in which to take up additional proposals? Mr. FLOBERG. Well, I hope that won’t become a real problem. Representative HollFIELD. I hope it won't be. If you do not want to answer the question at this time it is perfectly all right. Mr. FLOBERG. I can give you an answer that would cover my judg- ment in that. If we didn’t have four good proposals, assuming that is the total number and we are using that as an index number Representative HolſFIELD. Just as an example. Mr. FLQBERG. But assuming we did not get four good proposals, I do not see why, we should go ahead with it. What the consequences of that would be, I do not know. That would mean that the initial re- quest for proposals had been a failure in the sense it did not develop enough to get a nucleus of or foothold on this program. In the event that that solicitation of proposals had proved to be such a failure, what would the remedial action be? My suggestion 76 AGREEMENT FOR COOPERATION WITH EURATOM would be that we would have to reevaluate the deadlines for one thing, and I would think that we would have to undertake a new request for proposals and we would have to reorient our thinking in some way so as to guarantee it would not be a failure. But as far as I am concerned, I do not see myself trying to persuade this committee to undertake a project just to satisfy an arithmetical total when there is no other appeal. Representative Hol.1FIELD. I think you are taking the right posi- tion on that, because I think we have to be guided by the realities of the situation between now and September 1, 1959. Senator PASTORE. At any rate, in all probability each of these pro- posals would come before the Joint Committee on the question of authorization anyway. Mr. FLOBERG. Yes, sir. If any of the elements of guarantee are in- volved, this committee gets a crack at it. Senator PASTORE. And the purpose, as I understand your purpose here, and as I understand basically your answer is this: This is the objective of achieving the 1 million kilowatts by 1963, and it is to improve the art by types of reactors by that time, if possible. Mr. FLOBERG. Both are important objectives but they must be com- pared with each other as regards any particular proposal. Representative HolſFIELD. From your negotiations to date, do you anticipate that there will be a number of proposals? Mr. FLOBERG. From the expressions of interest, Mr. Holifield, I sus- pect there are going to be a good many proposals, and we are going to be able to select the best ones. This has been more in the nature of interest being expressed than in the nature of any definitive pro- posal, but I have every hope that by September 1 we are going to be able to get four or five very attractive proposals. Conditions may change here in the course of the next few months, and the prophecy may turn out to be poor, but that is the way I read the cards at the moment. I think that I might add, and it is a little off the point, this is also going to be true of the research and development program. Although we have not taken any further steps other than the ones described in the statement, there have been a good many expressions of interest and some very good ideas presented in a tentative way for inclusion within the research and development program in this country. I believe that we are going to be able to get a pretty productive re- search and development program going on very short Order. It is a little different from your point, but I think it has some relevancy. I would like to say a few words now as to how the proposed papers have taken into account some of the other principles which were con- sidered to be particularly important to this committee in formulating the Euratom Cooperation Act. As you will recall, under the terms of section 4 of the act, which ertains to the fuel cycle guarantees, the Commission was asked to oster competition and diversified Sources of Supply under the pro- gram, establish minimum guarantee standards that manufacturers would have to meet, to make sure that guarantees offered by a private manufacturer under the program were as favorable as any others he might offer for a comparable fuel element within a reasonable AGREEMENT FOR COOPERATION WITH EURATOM 77 period, and to obtain appropriate patent rights under the guarantees. You will also recall that in sº to qualify for guarantees, the fuel elements must be manufactured by a U.S. manufacturer or by a manufacturer in Euratom countries under agreement with a U.S. firm or firms. I believe that the papers that have been developed satisfactorily reflect the spirit and intent of the principles that were formulated by this committee. If I may, I would like to call the application of the two principles to your attention. As I have mentioned, section 4 of the Cooperation Act provides that the Commission shall establish and publish minimum levels of fuel element costs and life to be guaranteed by the manufacturer as a basis for inviting and evaluating proposals. (NOTE.-For a more detailed description of this procedure, see letter dated January 29, 1959, p. 90.) Mr. FLOBERG. Your committee considered alternative provisions, in- cluding an arbitrary level, but decided, and I believe wisely so, that flexibility was necessary and desirable. It also was felt that this minimum level should not be established in such a way as to make impossible participation by smaller U.S. manufacturers. The way we propose to handle this matter is out- lined in paragraph 34 of the appendix to the invitation dealing with the guarantees. You will note that we have related these levels to the $90 million ceiling established in section 4 and have adopted the principle that each proposer must show, that the cost to the Com- mission would not exceed a computed pro rata share of the $90 million. A particular proposal not meeting this criterion may, however, be accepted if the advantages outweigh the disadvantages associated with any increased liability due to a desire to receive a dispropor- tionate share. Senator ANDERSON. What do you mean by that? Can you reduce it to language we can understand here? I do not know what you mean by You will note that we have related these levels to the $90 million ceiling estab- lished in section 4 and have adopted the principle that each proposer must show, that the cost to the Commission Would not exceed a computed pro rata share of the $90 million. Mr. FLOBERG. What that means is this: Let us take the figure of four again, that being the number of reactors that are being seriously considered. Suppose on two of the reactors proposals the manufacturers have themselves offered guarantees that more than satisfy the levels that we have been discussing in connection with these papers. Senator ANDERSON. We were told when we discussed this authoriza- tion bill that if that was to be so, none of the $90 million was to be used, the $90 million did not mean anything, you might not spend anything. So as far as those two are concerned there would be no liability on the $90 million. Mr. FLOBERG. No liability so far as the cost of the fuel element is concerned, no liability so far as the performance is concerned because by hypothesis the manufacturer exceeded the limits established last SULIQIYIOI’. 3663.6—59—6 78 AGREEMENT FOR COOPERATION WITH EURATOM Supposing on the other two the proposed guarantees do not equal the levels we talked about, the $100 per contained kilogram or 10,000 megawatt-days. That does not mean that the part not taken up by the first two can be applied automatically to the second two. Senator ANDERSON. Do I understand this to mean that if you have $90 million in total to build six reactors, that in no case can any one reactor involve any more than $15 million? Mr. FLOBERG. That is correct, except we are not pinning ourselves to that ceiling. What we are saying is that there might be a particular case where it might pay us to go to 16 or 17 million. We are not going to rule out that ceiling. We don’t want to accumulate this. We are not taking it from one pocket and putting it in the other. We would have it available, but we would be pretty stingy in applying one fellow’s credit to another fellow’s debit. Representative Holl FIELD. I think this does need clarification. I hope what you are saying is that there must be flexibility in this, that it cannot be evaluated rigidly on a mathematical basis, but you must consider the desirability of advancing the technology in a particular reactor. If it runs $14 million on one, or nothing on another, you would take into consideration other things which were of advantage and not de- cide it on a mathematical basis. That is right. Senator PASTORE. In other words, unlike our indemnity law where you have $500 million for each incident, you don’t propose to utilize this $90 million for any one reactor, but consider the philosophy of prorating as to the number of reactors and try to live within that area, whether it is up or down. Mr. FLOBERG. That is right. Senator PASTORE. At any rate, you have to come back to the com- mittee any time this is decided upon. This is one of the matters that has come to the Joint Committee to decide what the obligation will be with reference to any one particular reactor. Mr. FLOBERG. That is correct. Suppose all the reactors except one satisfied the guarantee levels and on this one we proposed to use the whole $90 million. I can tell you one thing: I am not going to be the witness that comes before this committee and presents it. Senator PASTORE. Mr. Anderson is raising this question. I think we had better get this clear in our minds. This is not an authorization of $90 million; this is only an expression to show the overall possible responsibility. This is only an expression of intention on the part of Congress. But anything within the $90 million that will obligate us will have to be passed on later by the Joint Committee. Is that clear? Mr. FLOBERG. That is understood. Mr. RAMEY. Were not these minimum guarantees on a technical basis, that you ought to tie it up with what you think is the minimum technical performance of that type of reactor that the manufacturer ought to guarantee? Instead of 10,000 megawatt-days per ton the minimum technical guarantee should be 6,000 or 7,000, or something AGREEMENT FOR COOPERATION WITH EURATOM 79 Tike that, tying it up to a technical basis and not to a matter of divid- ing up the $90 million ? r. FLOBERG. I think we want to preserve flexibility in regard to the technical floors of performance, too. That is one of the considerations that certainly should be resorted to in the evaluation of any proposal or any candidate for guarantee. Mr. RAMEY. It sounds more like on the basis of a pro rata share of a total contingent liability. Mr. FLOBERG. What I am trying to say is that the pro rata share of the contingent liability is an important consideration, we don’t think it should get lopsided financially. On the other hand, I don’t think it should just accumulate financially either. This is one of the indices Mr. RAMEY. It sounds like you are not going to specify minimum technical levels of performance, that the manufacturer is supposed to meet? Mr. FLOBERG. I don’t quite understand your question perhaps. We are not specifying in these criteria. When the proposal is submitted we will evaluate the proposal and see whether the standards that the manufacturer has said he is going to meet are acceptable from the jºint of our undertaking any guarantee obligation with respect to them. Suppose he only guaranteed for 100 hours, then we have no interest in that proposal obviously. Mr. RAMEY. Should he not know these things? I thought the purpose of setting these up was to give the manufacturer in advance something to shoot at. In other words, he ought to know what your minimum level is so that we can put in a guarantee there and thereby minimize the Gov- ernment's responsibility. Mr. FLOBERG. I think the standard of the trade is pretty well known and competition is going to control him on the standards. Representative Hoºp, f do not agree with Mr. Ramey's con- ception at all. I think each manufacturer coming before you with a proposal must justify that overall proposal and part of that overall proposal is this length of fuel life. Considering that, I do not think we have a minimum. We do not know in advance what they are going to say. In principle the minimum should be at least high enough so it would not affect the economics of the whole thing to the point where it made it completely objectionable. I think it has to be in the ball park, in other words. I do not see how any of these men can know at this time, except the possibility of General Electric or one or two of these others who have already arrived at maybe 3,000 megawatt- days of life for fuel. They may have arrived at a point where they will not have to draw on this at all. Now, there may be another type of reactor still in the process of being worked out the manufacturer of which should not be held to a rigid minimum because it would vary with the different types of reactors. But in evaluating it, you can very easily say you do not come up to the point of efficiency which will justify the economics 80 AGREEMENT FOR COOPERATION WITH EURATOM of the whole reactor. This is where I think the flexibility has to be. Each case has to be judged on its merits. Mr. FLOBERG. I think that is correct. That is the point I am trying to make. I believe it is also true that there might be a case where we accept a greater exposure on the guarantee on the fuel element in return for Some other advantage that supervenes that. Senator ANDERSON. What could it be? We have said that we were going to hit at least toward 10,000 megawatt-days. One man comes in and says, “I will guarantee you a thousand”; the other fellow says, “I will guarantee you 10,000.” Are you saying that the Atomic Energy Commission will say there is some other quality in the reactor that supervenes the Government taking a loss? Mr. FLOBERG. You put an extreme case. I am saying one fellow comes in and guarantees 7,000, and the other fellow guarantees 7,500. Senator ANDERSON. Then you would have a chance for the exercise of judgment. That is not going to require you to partition this $90 million guarantee to him because that is very close to what we expect. Mr. FLOBERG. Somewhere here we are going to have to find a line, which is pretty hard to identify at this point, where the considera- tions on one side outweigh those on the other and the amount of ex- posure on the fuel element guarantee is one of the considerations and the share of the potential $90 million which this particular project consumes is a consideration on the value of that project. Senator ANDERSON. I know Admiral Rickover has made a study of the life of some of these cores, and I think his study is still classified, but it certainly indicates a terrific change for the better in the life of the cores and by another 2 or 3 years their life ought to be well beyond anything that is going to be called on to be guaranteed. Are we then going to say, “Here is a brandnew idea some fellow has got,” in order to protect what you call this small business idea, new business? Are we going to say, “Well, we will then take a chance on this absolutely unheard of thing” and assign him $50 million, or the whole $90 million ? Mr. FLOBERG. No. As I said before, if there is any project that will take in itself $90 million, I am not going to be the witness com- ing up here trying to convince you to authorize it. Senator ANDERSON. That is a very sensible position to take. Senator PASTORE. If I may make an observation they would not ever get away with it as long as Senator Anderson is on the Joint Committee. I think we are kicking a dead horse around. Mr. FLOBERG. On the assumption that during fiscal year 1960 there will be at least four acceptable projects under which the AEC is committed under the memorandum of understanding to provide guar- antees of certain elements of the fuel cycle costs to the proposer for a period of 10 years, it is contemplated that $60 million will be included in the AEC’s authorization bill for fiscal year 1960. All of these con- tracts will, of course, be submitted for your review prior to the time they are consummated by the AEC. Senator ANDERSON. Putting the whole amount in, if all six were built, we might face the possibility of $90 million and so if four of AGREEMENT FOR COOPERATION WITH EURATOM 81 them were going to be built, you will put the whole $60 million and ask authorization for it without submitting the individual plans. Mr. FLOBERG. That is the point, the individual project will be sub- mitted, before any conclusions are drawn, to this committee for its approval. Senator ANDERSON. I do not know how it can be ready. The au- thorization for fiscal year 1960 is going to come to us pretty quickly, is it not, in the next few months? Mr. FLOBERG. Yes, sir. Senator ANDERSON. You want to put the whole $60 million, not knowing what it is going to me? Mr. FLOBERG. Not knowing what it is going to be, but with the commitment to the committee that there will be no contracts sub- mitted, no contracts concluded, until they have been submitted to this committee and this committee has specifically approved our undertaking the guarantee obligation with respect to them, with respect to any one or more of them. Representative BATEs. That is after legislation is passed? Mr. FLOBERG. After legislation is passed; that is true. Representative BATEs. It is review authority such as we have on military projects? Mr. FLOBERG. It is analogous to that. Senator ANDERSON. It is a little different. These are not going to be built for several years. If you find out in fiscal year 1960 that you are going to need in fiscal 1962, $10 million, or $20 million, you can come in then and ask for it. I do not know why you would ask for $60 million in advance. One or the other fact must be true; you must not have much faith in the manufacturer or you must not have much faith in the Congress. Mr. FLOBERG. We don’t know what the problem will be. Senator ANDERSON. That is why I do not understand how you are going to come in and ask for the maximum without knowing how badly you have been hurt. Mr. FLOBERG. We still will have to come back after we have been hurt to have the money appropriated. Senator ANDERSON. That is the time, after you have found out. If the bid of the manufacturer says “I can only guarantee 7,000 megawatt-days,” and therefore you may have a $2 million liability, you can then come in and ask the Congress for that, but to ask the Congress to give you $60 million in advance, not knowing what your liability is going to be, I think is a little dangerous. I do not want to argue with you. Senator PASTORE. I think we ought to get this straightened out. I think we are getting a little confused at this point. If I understand you correctly, Mr. Floberg—and I tell you very frankly if you do not mean this I do not see how you can mean other- Wise, because that would be a different situation—for you to come here and ask for a $60 million authorization at any time we would expect that you would come up here with all of your contracts, ex- plaining each one as to what the responsibility would be under that º before you would ask for any amount of money for authori- Z8, UlOI). 82 AGREEMENT FOR COOPERATION WITH EURATOM Am I right or wrong on that? You cannot be stabbing in the dark. Mr. FLOBERG. I think you are right; Senator Anderson, is right, too. Senator PASTORE. I am not saying the same thing as Senator An- derson is saying. Senator Anderson has been saying this: that you Would come up here and ask for $60 million authorization under the 1960 authorization bill. Mr. FLOBERG. That is right. Senator PASTORE. In contemplation of what your arrangements Were going to be under a proposed contract? Mr. FLOBERG. That is right. Senator PASTORE. Not under a consummated contract. Mr. FLOBERG. That is right. Senator PASTORE. Is that what you mean? Mr. FLOBERG. That is what I said. Senator PASTORE. At the time that we wrote this into the law was it not clearly understood that you would come before our committee with a contract and explain to us all the arrangements that had been made and say, “This is our responsibility, now we want authorization”? Mr. FLOBERG. I think you are right. Senator PASTORE. Therefore, you would have every contract with you when you came here. Mr. FLOBERG. We would have proposals, yes, and I think that is correct. We cannot do that prior to the 1960 authorization. Senator PASTORE. This is not asking for anything in advance. We would know exactly what our obligation would be under each indi- vidual proposed contract. Senator ANDERSON. I do not want to get into an argument with Senator Pastore when he says you are not going to ask for anything in advance. You say you are going to ask for the year 1960 which starts July 1, 1959. If that is not asking for it in advance, I do not know what advance is. We say in the report, the third principle which shall guide the Commission in establishing criteria for the selection and in entering into such guarantee contract authority is set forth in (c) of section 4 providing that the Commission shall establish and publish minimum levels of fuel element cost and life to be guaranteed by the manu- facturer as a basis for inviting and evaluating proposals. - You are going to invite these in September? Mr. FLOBERG. Prior to September. Senator ANDERSON. And if you are going to invite them on the basis that the minimum life guarantee will be 7,000 megawatt-days, then you have to come to us and say how many dollars that costs. We told the Congress not to worry about this $90 million. We did not think the program would use much of it, it was a maximum if it had to, but the increased life of cores that we are experiencing in operations which Admiral Rickover has referred to would indicate that probably not very much of the $90 million will be used. I am happy about that because it makes your Euratom proposal a lot better. But if you are going to come in here before, you will have to come in May or April, because we will have the authorization bill before AGREEMENT FOR COOPERATION WITH EURATOM 83 Congress shortly. If you are going to come in and ask for this for fiscal 1960, you had better have some figures to show where you are going to need $60 million. Until you have asked for the proposals and the manufacturers have submitted them, you do not know whether you are going to need $6 million, $60 million, or $600 million. I think that is a dangerous ground to be on. We have some re- sponsibility to the rest of the Congress. We try to say that this group stands as guarantors that certain things are all right. I do not see your asking for $60 million when you do not have the faintest idea whether you are going to need $1 million, $5 million, or $500 million. Senator PASTORE. I agree with you implicitly. That is the point I am trying to establish because that is the point we made at the time we passed the international arrangement. We made that very, very clear that we would know what the responsibility and the liability of the Government would be on each individual contract before we granted the authorization. Now you have to know what the responsibility is on each contract before you come up at any time. If you have them all done in time for the 1960 authorization, all well and good, but you cannot come up here in 1960 and say, “Authorize $60 million because next month we are going to begin to talk on a new contract and our liability must be thus and so.” We have to know what the verbiage is of that proposed contract and the guarantee before we can grant any authorization. That is the reason we wrote the law that way. I think we ought to get that clear on the record, that that is the understanding of the Commission. Mr. FLOBERG. I agree with that. I will make it unanimous. Representative HolſFELD. I am in accord with the chairman on that. It would be altogether impossible. Senator PASTORE. We are kicking a second dead horse. Mr. FLOBERG. The committee also was particularly concerned that the program should be administered so as to encourage a strong and competitive atomic equipment manufacturing industry in the United States designed to provide diversified sources of supply for reactor parts and reactor fuel elements under the joint program. In this regard your attention is called to paragraph C–5 of the fact sheet which makes competitive bidding for the nuclear reactor a precondition for selection, to the criteria for the comparative evalu- ation of proposals outlined in paragraph F which indicates that projects will be evaluated as to the extent to which they are likely to contribute to a strong and competitive American and European equip- ment industry, and to a diversity of plant types and designs, and to paragraph 32 of the fuel cycle appendix which indicates the reactor operator must obtain his fuel on a competitive basis. All of these should serve to support the desired objective of avoid- ing a concentration of the business in one or two firms. In conclusion, I should like to mention that progress also is being made in a number of vital areas of interest to the program. I under- stand Mr. Dillon will outline the progress that the communities are 84 AGREEMENT FOR COOPERATION WITH El JRATOM making with regard to such financial problems as tariffs and the loan agreement. As to the third party liability problem affording adequate protec- tion to suppliers under the joint program, it has been a matter of primary concern to the Commission and Euratom. As stated in article IX of the agreement for cooperation, both parties recognize that adequate measures to protect suppliers, as well as the utilities, against now insurable risks are necessary to imple- mentation of the program. Euratom has undertaken to seek the development and adoption of suitable measures to provide adequate financial protection against third-party liability. We are advised that a draft Euratom convention has been prepared which, if adopted, would afford the protection required. The pro- posed convention would increase maximum public liability substan- tially over the level of $15 million per accident, which was established by the latest draft of the OEEC convention. This potential liability would be covered by a combination of com- pulsory financial protection in the form of private insurance, and an indemnity arrangement. This convention has been reviewed by financial experts of the six countries and is being reviewed by the Euratom Commission. We expect to receive further word on the details momentarily. We still have every confidence that the momentum of the joint program will further contribute as it has already contributed to the pressure to resolve this problem. Section 5 of the Cooperation Act provides that the United States is to obtain the equivalent of a first lien on any material sold to the Community for which payment is not made at the time of transfer. This provision, of course, is designed to afford the United States a nondefeasible security interest in the property until full payment is made. Under continental law the concept of a first lien on personal property to protect a seller who has not been fully paid for goods, but who has transferred to the buyer title and possession, apparently does not exist. Accordingly, although we are obviously going to comply with the provisions of section 5 of the act, we still have a problem of deter- mining exactly how to do so. The Commission has notified Euratom of those elements of a first lien which must be present in order to satisfy the statutory require- ments in case of a deferred payment on our sale of uranium. The provisions in article III-B of the agreement for cooperation, which include an obligation to return material to the extent that there is a default in payment and the promise to grant no rights to third parties that are inconsistent with the obligation, go a long way toward ful- filling the attributes of a first lien. o e Additional protection is needed, particularly against general cred- itors, or those who might deal with the property, without knowledge of our interest. Both Euratom and the Commission are presently considering the practical means available under the laws of the Com- munity nations to effect the desired protection. As the committee can see, a good deal of progress has been made, but a lot of hard work still needs to be done. We have made every AGREEMENT FOR COOPERATION WITH EURATOM 85 effort to operate so far within the spirit that this committee set for the Commission last summer, and I believe we have done so, but certainly would welcome any comments you may have as to how accurate you regard my analysis. That concludes my prepared statement, Mr. Chairman, but I am ready for any further questions. Senator PASTORE. Are there any questions? Senator Anderson. Senator ANDERSON. I am just worried a little bit about this question of title. Under their law we will have some trouble if we transfer title to them, giving them a first lien. Why will not the simple solution be not to give them title? Mr. FLOBERG. That is the solution. These people understand if there is to be a transfer of title the statute must be complied with. If the statute cannot be complied with there is no transfer of title. That ls easy. Senator ANDERSON. That suits me. Representative DURHAM. It is a problem under section 5 of the act. I do not think you can settle it. Mr. FLOBERG. Is this the lien problem you are speaking about? Representative DURHAM. Yes. Mr. FLOBERG. I hesitate to predict a date for resolving that problem. I know we have been working on it, ourselves. I know we have given some attention to it. We have corresponded with Euratom people and a copy of a letter from the Euratom people has been forwarded to the Joint Committee pointing out the difficulties they have under their legal system of this concept. Representative DURHAM. Are you proposing to send your ideas to the Euratom people? Mr. FLOBERG. We have sent some of our ideas to them. I have conferred, myself, with the Euratom people on this subject, pointing out the fact that this law is an obligation on us, and we must satisfy it. They are well aware of this. This is a knotty one—to try to put two different legal systems together. Representative DURHAM. That is why I questioned you on the fact of Setting a time limit. There are a lot of things to come up shortly and a lot of things to do. I think this will have to be settled. Mr. FLOBERG. It will have to be settled, Mr. Durham, but I can’t imagine that something that could be described as a legal technicality is going to stand in the way of the progress of the program. We will have to meet this one somehow. Senator PASTORE. We have two letters, one addressed to Mr. Dur- ham by Mr. McCone, and another addressed to Mr. Floberg by Mr. De Groote on this point. I think they ought to be made a part of the record. (The letters referred to follow :) U.S. ATOMIC ENERGY COMMISSION, - Washington, D.C., January 20, 1959. Hon. CARL T. DURHAM, Chairman, Joint Committee on Atomic Energy, Congress of the United States, Washington, D.C. DEAR MR. DURHAM : As you will recall, section 5 of the Euratom Coopera- tion Act provides that the Government of the United States shall be Obligated to obtain the “equivalent of a first lien” on any special nuclear material sold to the Community for which payment is not made in full at the time of transfer. 86 AGREEMENT FOR COOPERATION WITH EURATOM By letter dated October 3 the Commission specifically called the Community’s attention to the terms of the Euratom Cooperation Act, including this provision. In further recognition of this point, specific language was inserted in article III Of the revised Agreement for Cooperation stating that the Community would be Obliged to return to the U.S. Commission enriched uranium to the extent there is a default in payment. The Community also has indicated that it will grant no rights to third parties that may be inconsistent with such an obligation. In recent weeks we have asked Euratom to inform us whether the Com- munity Would be in a clear position to accord the United States an “equivalent Of a first lien.” Our most recent communication regarding this subject is a letter from Mr. De Groote to Mr. Floberg dated January 9, 1959, which is attached. We are now studying this matter and you may be assured that it is our inten- tion to make sure the conditions of our law will be observed before the actual Sales agreement is entered into. Sincerely yours, JOHN A. MCCONE, Chairman. Enclosure : Letter from Mr. De Groote. EURATOM LE COMMISSATRE EUROPEAN Brussels, Jamuary 9, 1959. Hon. JoBIN F. FLOBERG, Commissioner, U.S. Atomic Energy Commission, Washington, D.C. DEAR MR. FLOBERG : As you are aware, section 5 of the Euratom Cooperation Act of 195S contains a provision to the effect that the Government of the United States must obtain from the Community “the equivalent of a first lien” on any material sold to the Community pursuant to section 5 of the act for which pay- Iment is not made in full at the time Of transfer. I should like to take this occasion to confirm that the concept of the “first lien” does not exist in the European legal system and that the Community, therefore, would be unable to enter into a Commitment of this nature. The Community has, On the Other hand, given, in article III B of the Agreement for COOperation, the following assurance to meet the requirements of the U.S. Government : As to any special nuclear material, sold to the Community by the Government of the United States pursuant to section 5 of the Euratom Cooperation Act of 1958, for which payment is not made in full at the time of transfer, the Com- Imunity would hold itself responsible— (1) to keep such material, until fully paid for, free of any obligations or encumbrances which would have priority Over the rights of the U.S. Government ; (2) to take such steps as may be necessary to return unencumbered to the U.S. Government such material at the time and to the extent that there is default in payment for such material. Sincerely yours, P. DE GROOTE, Europeam. Commissioner. Senator PASTORE. I think the legal difficulty is this: that the lien law gives notice to third party creditors as to prior right. Interna- tionally, no such lien is known that would not be binding on third party creditors who would not have notice of this arrangement. I think, myself, that that raises a legal question that will have to be worked out. I quite agree with you it is a minor point and you cannot write law internationally just to fit our own concept of law and it does raise a problem. Once you put a lien on from the start that is notice to every one of a prior right, if you do not recognize the lien law internationally, I suppose this would not run against third party creditors who would claim the same right, who ran in there and picked it up first, got possession of it. e & © That is what they are agreeing to do, to allow us to go in, in case of default in payment, and replevin; is that right? Mr. FLOBERG. That is in effect right. AGREEMENT FOR COOPERATION WITH EURATOM 87 Senator PASTORE. It will be very interesting to see how you work it out, but I do not think it is such an important question. * Mr. FLOBERG. No, because one of the problems you are considering is who is going to go bankrupt. That does not seem like a practical question, either. Representative DURHAM. In my opinion it may cause a lot of trouble later on, running this with Euratom. There will be more or less of a misunderstanding. Mr. FLOBERG. In Euratom there is no misunderstanding on this. When we talked with them last year they understood the language of the law governs our authority to transfer this material to them. They are well aware of this fact. This is one of the problems that led to the exchange of letters to which I referred in my prepared statement in which they acknowl- edged the fact that all operations in this program come under the terms of the Euratom Cooperation Act. This is one of the specific things we had in mind at that time. There is no misunderstanding between us and Euratom. Representative DURHAM. I think it is good not to get ourselves in a position to have misunderstanding on a matter such as this because sometimes it creates problems and troubles. I hope you can work it Out. Senator PASTORE. Does not international law recognize the theory or philosophy, if you do not own something you do not get paid for it? Why have you not renewed the suggestion made by this committee that title do not pass until such time as it is paid for 2 Mr. FLOBERG. As I say, we may wind up with something analogous to a chattel mortgage idea or conditional sale idea, if we are not able to resolve this problem otherwise within the framework of the act. We may be able to resolve it somehow ; whatever goes, the act governs. We all understand. Senator PASTORE. Are there any further questions? Mr. RAMEY. Without belaboring this point on the Commission establishing the minimum levels here, under your criteria I am not clear, have you established any minimum levels of fuel element per- formance? Do you intend to ? The law provides under this principle that you do so and the report indicates that it would be expected that the Commission shall establish and publish minimum levels of fuel elements cost and life to be guar- anteed by the manufacturer as a basis for inviting and evaluating proposals. Mr. FLOBERG. Let me ask Dr. Pittman to answer your question. Senator ANDERSON. It is a simple question. Mr. PITTMAN. This has not been published. Senator ANDERSON. Do you intend to publish Ż Mr. PITTMAN. Not as a specific minimum standard. Senator ANDERSON. And this guarantee that we gave to the Congress is no good. You testified that you would do it. We told the Congress that you would. Mr. PITTMAN. In essence, by establishing this criterion that we have established, it does give each manufacturer ahead of time the 88 AGREEMENT FOR COOPERATION WITH EURATOM ground rules under which we will operate, which does give within certain limitations the minimums for the guarantees. Senator ANDERSON. The understanding was that before you did it you would publish certain minimum standards. There is no argu- ment about that, is there, Doctor? It is in the law. You are not going to walk around that part of the law, are you? I know the manufacturer is not going to want to make these guar- antees, but the law says they are going to do it, and they said they could do it. Whether you like it or not, that is the law. Mr. RAMEy. At one time we had a series of questions as to whether or not it would be desirable to have a percentage that the manufacturer ought to guarantee 50 percent or 60 percent of what the Government was going to pick up. In other words, 10,000 megawatt-days, 60 percent or 6,000 megawatt- days. He would be expected to reach that. We thought that might be too inflexible. Then it was provided that the Commission would set up something for each type of fuel element for the type of reactor, something like this for the manu- facturer to go on. Mr. FLOBERG. Let me say this: This paragraph that you have read from the report of the Joint Committee on the Euratom Cooperation Act last year strikes me a little cold, so I can’t comment too intelli- gently on it. I will say this, however: That we will redeem the guarantee of the Joint Committee to the Congress in whatever way is necessary. I can’t answer how that is going to be right now. Mr. RAMEY. That is in the statute also. Representative HolſFIELD. Mr. Floberg, I am completely in accord with this. The statute does back this up. I do not believe this is going to be something that cannot be complied with. If I understand the situation correctly, I do not see how the Commission can advertise, can require in advance a specific number of fuel-days for an organic moderated fuel element. But certainly the Commission can evaluate a proposal. Remember, the manufacturer has to make a firm proposal to the buyer in order for the buyer to evaluate what he is buying. There is a time, as I see it, when you evaluate it, and say, “Your fuel does not come up to the point of economic justification; you just don’t have enough megawatt-days in it.” Mr. FLOBERG. I certainly agree with that. Representative Holrºſeid. How can you say in advance that an or- ganic moderated fuel element of a certain amount can last so many days? We do not know. Senator ANDERSON. The buyer does not care a lot what is guaran- teed. He has the guarantee of the United States that he gets 10,000 megawatt-days. We are worried whether the United States will get hooked on the guarantee that is given. If you do not require some minimum standards from the manufacturer, the United States is com- pletely without protection. Surely that is not the position of the Commission. Mr. FLOBERG. No. AGREEMENT FOR COOPERATION WITH EURATOM 89 Representative Holi FIELD. If I am confused on this thing, it is merely a matter of timing. I do not see how you can evaluate a proposal; how you can set the minimum life of the fuel, unless you Set an arbitrary figure in advance. Mr. FLOBERG. We could not set, a figure today, I suppose. The answer is when the proposal comes in you can tell after you Scrutinize it or, at least, it is our job to tell after we have scrutinized it, whether it does or does not have a reasonable manufacturers guarantee in connection with it. º Representative Holi FIELD. If you read the following paragraph in the report it goes into some detail. The manufacturer must make a guarantee as favorable as he makes anywhere else. It goes on, includ- ing any favorable guarantee offered by the manufacturer later. Mr. FLOBERG. That is correct. We understand that. Senator ANDERSON. If I may, the only reason I have any interest in this, Mr. Floberg, is that we have a peculiar type of committee here. A great many things are not made public in the Joint Committee. We have had the Congress say that we guarantee certain things. We know it is a ticklish question. If you started to explain to the Members of the House and the Senate what this is all about, it would be a little difficult. But the law was very plain. You folks said you could live with it. The law, subsec- tion C of section 4, says: The COmmission shall establish and publish minimum levels of fuel element Cost and life to be guaranteed by the manufacturer as a basis for inviting and evaluating proposals. Mr. FLOBERG. We can do that; yes, sir. Senator ANDERSON. All right. That is all. You have not done it. We asked if you are going to do it, Dr. Pittman said you might not. So you say you are. Mr. FLOBERG. What we have done is comply with that, but in a sense that combines radiation exposure and initial cost so as to give in effect a product of the two. Senator ANDERSON. No matter how thin you slice the argument, the law says that the Commission will require them to publish minimum levels of performance. . If you are going to do that, fine. If you are not going to do that, then you will have an awful time trying to get any money because you will run into violations of the law. You will have to come back and say you want the law to be changed. I think the committee might be reasonable and recommend to the Congress to change it. As long as the guarantee has been given to the Congress and the American people that this $90 million is not going to be frittered away by any foolish guarantee, I think you have to live up to subsection C. Mr. FLOBERG. All right, we will. Senator PASTORE. We are honored with the presence of two Mem- bers of the House, Mr. Westland, of Washington, and Mr. Bates, of Massachusetts. Mr. Westland 2 Representative WESTLAND. Mr. Chairman, I will defer to the judg- ment of my seniors on this committee. This is all new to me. I am absorbing this as rapidly as possible. I wish I could absorb it a little 90 AGREEMENT FOR COOPERATION WITH EURATOM quicker. I have many questions, but I think I will study this matter and perhaps ask more intelligent questions later. Representative DURHAM. As retiring chairman, I wish to welcome the new members from the House side. To Mr. Westland I say this is kind of like going back to college; it is so technical. Representative WESTLAND. Like a postgraduate course. Senator PASTORE. Is there anything further you would like to add, Mr. Floberg’ Mr. FLOBERG. No, sir; I think that concludes our presentation. Senator PASTORE. That being the case, we will recess until 10 o'clock tomorrow morning. (The letter referred to on p. 77 follows:) U.S. ATOMIC ENERGY COMMISSION, Washington, D.C., January 29, 1959. Hon. JOHN O. PASTORE, Chairmam, Subcommittee on Agreements for Cooperation, Joint Committee on Atomic Energy, Congress of the United States. DEAR SENATOR PASTORE : As you will recall, in the course of my testimony On January 21, 1959, On behalf of the agreement for cooperation with the European Atomic Energy Community several questions were raised with respect to section 4, paragraph C, Of the Euratom COOperation Act of 1958, which requires the Commission to establish and publish minimum levels for fuel element fabrica- tion Cost and integrity life to be guaranteed by the manufacturer as a basis for inviting and evaluating proposals. This letter discusses the manner in which the Commission has implemented this requirement and presents the COnsiderations which resulted in the establish- ment Of the minimum standard criteria Outlined in paragraph 34 of appendix C to the “Invitation for Proposals Regarding United States-Euratom Joint Nuclear Power Program,” submitted to the Joint Committee on January 20, 1959. As noted in Committee Report No. 2647 on the Euratom COOperation Act, the COmmittee “considered alternative provisions, Such as requiring a fixed percent- age arbitrarily limiting the proportion Of the GOvernment’s guarantee, but de- Cided more flexibility was necessary and desirable.” The Commission has also given careful consideration to several possible approaches to effecting this re- Quirement, and in SO doing, SOught a method Of establishing minimum Standards which would be neither too tight nor too loose, permit technical flexibility to the reactor designer and Operator, permit flexibility in its administration, and still meet the Criterion of a limit to the Contingent liability which the Commission Imay a SSume. An obvious and literal interpretation would be the establishment of a specific irradiation level (megaWatt-days per tonne) and an accompanying fabrication cost for each type of fuel element the Commission was prepared to guarantee. Recognizing the extremely wide variation in the range and extent Of guarantees which may be offered, we concluded that the establishment of a specific set of numbers was neither practical nor equitable, and that a System. Which, in effect, required each manufacturer to calculate the minimum guarantees which he must offer, based on his particular element and reactor design, provided the maximum degree Of flexibility to the program. This system, employing the principle of a prorata distribution of the maxi- mum contingent liability available ($90 million), limits each manufacturer to a proportionate share of the $90 million based on the ratio of the reactor net electrical power to the 1,000-megawatt goal, and the guaranteed core life to the 10-year period of the program. This assures that in no way will it be possible for the Commission to assume a contingent liability greater than the maximum allowed, and means also that the total amount available will only be used if all the elements supplied to all of the reactors for the entire 10 year period fail at, or below the level of, this minimum guarantee. We consider this to be a highly unlikely possibility. - The Commission's agreement to assume liability for Certain portions Of the fuel cycle cost is predicated on the concept that the annual fuel cycle costs which a reactor operator may incur using the manufacturer's guarantees of fabrication cost and integrity life will be higher than those that WOuld Occur AGREEMENT FOR COOPERATION WITH EURATOM 91 had the particular elements met the “standard” U.S. guarantee. Since there is a limit to the total contingent liability which may be assumed, there exists, for each reactor, a certain maximum annual fuel cycle cost which is greater than the standard fuel cycle cost by an amount equal to the share of the $90 million allotted to that reactor for 1 year. Since it is entirely possible that identical fuel elements used in different re- actors of different design could result in different annual fuel cycle costs, the establishment of a specific minimum standard for a particular type of fuel ele- ment does not give the Commission the assurance that its liability Will not eX- ceed the allowable limit. Furthermore, for one particular design, there is not just one set of numbers for fabrication cost and integrity life that give the same annual fuel cost. Instead there is essentially an infinite number of Combina- tions of fabrication cost and integrity life which give the same total cost for the fuel cycle. In other words, a much lower integrity life could be a CCOm- panied by an appropriately lower fabrication cost, which, combined with the larger quantity of material that would be required, would result in the same total cost for the year. This means also, therefore, that there is an infinite number of combinations of “minimum standard” guarantees for any particular reactor, for which the Commission's exposure to liability remains the same. Thus we have concluded that for maximum technical flexibility, each manu- facturer should calculate the minimum standards which he must meet for his particular fuel elements and reactor design. In regard to the allocation of the $90 million among the plants, we concluded that any system other than proration would be more complicated and inconsistent with the Overall objectives of the program. Several of the considerations are as follows : 1. An arbitrary distribution among the plants not in proportion to power level would be discriminatory. 2. An unequal allocation of the $90 million over the 10-year period could have the following results : (a) If more money were made available in the early years, we have no assurance that we could fulfill Our COmmitment to provide guarantees throughout the 10-year period. (b) If less money were made available in the early years, the minimum standards which a manufacturer would have to meet would be higher. 3. Basing the prorated share on something other than the $90 million gave rise to the following problems: (a) Using a figure less than $90 million would mean that the minimum standards would be higher, and might make in possible the participation Of Small U.S. manufacturers. (b) Using a figure more than $90 million would be misleading since the Commission's contingent liability is limited to $90 million. The distribution of the $90 million on a prorata basis means that the unused funds do not automatically accumulate and become available in the later years, thus permitting manufacturers to offer longer minimums. It is not our intention to assure the eXpenditure of the $90 million. We have, however, expressly re- served the right, in paragraph 34, to accept fuel element proposals which do not meet Our minimum Standard if, in Our judgment, the advantages of such a pro- posal outweigh the disadvantages of the increased liability within the $90 million limit. This provision provides the Commission the administrative flexibility to accept attractive fuel element proposals which otherwise would have to be re- jected as not meeting the minimum standard. The minimum standard set forth in paragraph 34 has been established as a basis for inviting and evaluating fuel element proposals. The actual proposals received will be greatly influenced by two other requirements, namely, the com- mercial guarantee must be as favorable as any other the manufacturer is offer- ing for comparable fuel elements, and the proposal must have come from the solicitation of Competitive bids. If we can be of further assistance to you in this matter, please do not hesitate to Call on us. Sincerely yours, JOHN FLOBERG, CO in mission Cr. (Thereupon, at 3:40 p.m., Wednesday, January 21, 1959, the sub- committee was recessed, to reconvene at 10 a.m., Thursday, January 22, 1959.) AGREEMENT FOR COOPERATION WITH EURATOM THURSDAY, JANUARY 22, 1959 CoNGREss of THE UNITED STATES, SUBCOMMITTEE ON AGREEMENTS FOR COOPERATION, JoſNT COMMITTEE ON ATOMIC ENERGY, Washington, D.C. The subcommittee met at 10:05 a.m., pursuant to recess, in the Old Supreme Court Chamber of the Capitol, Senator John O. Pastore (chairman of the subcommittee) presiding. Present: Senators Pastore (presiding), Anderson, Hickenlooper, and Dworshak; and Representatives Durham, Holifield, Aspinall, Van Zandt, Bates, and Westland. Also present: James T. Ramey, executive director; David, R. Toll; staff counsel; G. Edwin Brown, Jr., professional staff member; and Edward J. Bauser, staff technical adviser, Joint Committee on Atomic Energy. Senator PASTORE. The hearing will please come to order. This is the second day of the public hearings by the Subcommittee on Agreements for Cooperation, to discuss the proposed Agreement for Cooperation with Euratom. Today the subcommittee will receive testimony from Under Secre- tary Dillon and other representatives of the State Department cover- ing matters of a particular interest to the State Department. I understand, Mr. Secretary, that you have a brief statement to pre- sent and that following this we will have time for questions and dis- cussions. Is that correct? Mr. DILLON. Yes, sir. Senator PASTORE. You may now proceed. STATEMENT OF C. DOUGLAS DILLON, UNDER SECRETARY OF STATE FOR ECONOMIC AFFAIRS; ACCOMPANIED BY J. ROBERT SCHAETZEL, OFFICE OF SPECIAL ASSISTANT TO THE SECRETARY FOR DISARMAMENT AND ATOMIC ENERGY; ARTHUR HARTMAN, EUROPEAN REGIONAL AFFAIRS; AND STANLEY METZGER, OFFICE OF LEGAL ADVISER, DEPARTMENT OF STATE Mr. DILLON. Mr. Chairman and members of the committee, the President’s message to the Congress of June 23 and my statement before this committee on July 22 outlined the political objectives which the joint United States-Euratom program was intended to serve. These statements identified the European Atomic Energy Community as an integral part of the movement on the Continent of Europe de- signed to create new unity and strength at the heart of the Atlantic Community. 36636–59—7 93 94 AGREEMENT FOR COOPERATION WITH EURATOM Some of the members of this committee had the opportunity in Sep- tember to view at firsthand the operations of the European communi- ties—the European Economic and Coal and Steel Communities, as well as Euratom—and talk informally with the eminent leaders who are shipping the futures of these institutions. I think that all of us who have had occasion to witness these devel- opments are impressed with the dynamism of the ideal and the tre- mendous drive of the forces being set in motion by this political move- ment. It proves, I believe, the basic thesis underlying the support which both the legislative and executive branches have expressed for European integration. The modest beginnings represented by the first actions of these new communities have already led to results hardly foreseeable a year ago. Before turning to specific Euratom activities and the status of our joint efforts, I would like for a moment to refer to the recent actions in the economic field by this group of European states which I believe are real milestones in free world economic development. On January 1 the six members of the European communities took the first steps to remove trade barriers in a program to forge economic unity. On December 27 these European states, together with Great Britain and other European countries, responded to the challenge of a changing world economic situation, and took significant steps toward full cur- rency convertibility and toward freer trade and expanding economic activity. At the same time France initiated a bold program of economic re- forms in part to prepare herself for the challenge of increased com- petition represented by the Common Market. Moreover, despite certain problems which have arisen in establish- ing a pattern for future economic cooperation between the European communities and the 11 other members of the Organization for Euro- pean Economic Cooperation, we are hopeful that the important new economic developments I have just summarized will facilitate solutions for these problems. In summary, recent actions taken by the European communities and their European partners are welcomed by this Government as signs of real strength in Europe. The creation of expanding markets in Europe is certain to bring benefits not only to the participants but to all the free world nations. Mr. Floberg has mentioned several of the achievements of Euratom in the period since last summer. I would like to add further details on several of these actions. The supply agency statutes have been approved by the Council of Ministers and this important institution of the Community should begin shortly to assume its functions of ensuring the supply of all ores, raw materials, and special fissionable material as provided in the treaty. Basic health and safety standards for the community have also been approved. In the foreign relations field, Euratom and Great Britain will soon sign a bilateral agreement providing the farmework for future co- operation. It is similar to our normal bilateral agreements in that it deals generally with cooperation in the peaceful uses of atomic energy, exchanging information and methods for transferring fuel. AGREEMENT FOR COOPERATION WITH EURATOM 95 It also treats the safeguard problem along lines similar to those followed in our joint program. It does not, however, provide for joint research or development projects. Euratom is also continuing its close cooperation with the OEEC atomic program. In connection specifically with the United States-Euratom program, the Community has just received for its action a proposal, on third- party liability and has already taken action to minimize the impact of tariffs. On the latter point, since Mr. Floberg did not elaborate on the tariff actions of the Community, the situation is as follows: On January 1, 1959, the six member governments on the recommen- dation of the Euratom Commission fixed the common external tariff of the six countries on inclear products coming from third countries. At the same time, the member states in accordance with the Euratom Treaty eliminated all tariffs on trade in nuclear products among the six members of Euratom. Major action taken toward third countries is the establishment of a 10-percent duty on nuclear reactors and parts with a suspension of the collection of this duty for a period of 3 years. There was considerable debate on this action among the govern- ments of the member states. In the countries with relatively ad- vanced industrial potential in the nuclear field, there were pressures to protect these industries from outside competition by higher tariffs. The final decision to reject this approach was taken by the govern- ments with the realization that their basic long-term interests were better served by improving the technique of nuclear reactor develop- ment as quickly as possible and reducing the costs of producing nu- clear power as much as possible. This, of course, was one of the un- derlying assumptions of the joint United States-Euratom program. Finally I would like to describe briefly the current status of loan negotiations between Euratom and the Export-Import Bank. The Board of Directors of the Export-Import Bank has authorized the establishment of a line of credit not to exceed $135 million to Euratom to assist in financing the purchase of U.S.-type nuclear re- actors to be installed in nuclear powerplants, including initial fuel fabrication and engineering services. - The Export-Import Bank credit will be available to Euratom for loaning on a case-by-case basis with the prior approval of Eximbank for installations in nuclear powerplants located within the Euratom countries, i.e., Belgium, France, Germany, Italy, Luxembourg, and the Netherlands. * a..' . - Euratom has been informed of this authorization. It has also been informed, however, that the line of credit will not be established until the Agreement for Cooperation between the United States and Euratom, which was signed in Brussels on November 8, 1958, comes into effect. Allocations under the line of credit to finance projects, selected jointly by the U.S. Atomic Energy Commission and Euratom, will be made by the Bank upon the fulfillment of specific terms and condi- tions, among them : 1. The Bank must be satisfied that the enterprise selected will have available from other sources such additional financing as is necessary to complete the project. - * 96 AGREEMENT FOR COOPERATION WITH EURATOM 2. The Bank must be satisfied with the terms and conditions of the loan from Euratom to the enterprise, including the security therefor. 3. Obligations issued by enterprises to Euratom, in evidence of their indebtedness to it, together with security for such obligations, must be pledged for the benefit of the Bank in a manner satisfactory to it. - The proposed credit, which will bear interest at the rate of 41% percent per annum on outstanding balances, is to be amortized over a 15-year period, following completion of construction of the respective projects. With regard to future relations between Euratom and the United States, the AEC and the Department have under consideration the question of negotiating an overall bilateral agreement with Euratom which would comprehend the provisions of existing bilaterals into a single agreement. Our present bilaterals as well as the Euratom Treaty and the Agreement for Cooperation now before this committee all envisage that this will be done. I expect that talks with Euratom will begin some time this spring and that the negotiation of such an agreement could be completed before the end of this session of the Congress. In closing I would like to state that the congressional action of last summer was an indispensable element in moving ahead with the pro- gram. In Europe it was viewed as confirmation of our intent to proceed with this joint endeavor. I am told that following passage of the Euratom Cooperation Act, European utilities and business firms began making serious plans for participation in the program. This alone may have saved us many months in the development of contacts between European and Amer- ican industries which is essential to the success of this program. With the entry into force of the Agreement for Cooperation I believe that we can look forward to substantial further progress. Senator PASTORE. Could you, on your last page, elaborate a little further as to the meaning of subsections 2 and 3? You say: The Bank must be Satisfied with the terms and COnditions Of the loan from Euratom to the enterprise— I assume that would be the public utility company. Mr. DILLON. Yes, sir. e Senator PASTORE. In closing the contract. [Continuing:] including security therefor. And that will be a security from the company to Euratom rather than the Government' Mr. DILLON. Yes, sir. Correction. In the cases that these are pri- vate companies. Of course, in the case of some of these installations, such as in France, where the installations will be made in a country where all the power sources are under government operation, that would be the obligation of the government corporation. Senator PASTORE. Rut it is your understanding that on whatever loans are made out of the $135 million there will be security for the payment of the loan Mr. DILION. Yes, sir. This is a slightly better arrangement than Eximbank was able to obtain when they negotiated a somewhat similar loan with the Coal and Steel Community. AGREEMENT FOR COOPERATION WITH EURATOM 97 At that time it was agreed that evidences of obligation, obligation to the individual steel and coal entities toward the coal and steel institution would be pledged as is the case here. But in that case the Eximbank did not have the right to review and find those contracts satisfactory, and in this case they have the additional right of insuring that the contract between Euratom and the private agency is satis- factory—not just Euratom but also the Eximbank—before it is made. Senator PASTORE. I think Mr. Ramey would like to ask you a Question on that point. Mr. DILLON. All right. e Mr. RAMEy. In the case of the Coal and Steel Community was there a pledge of the full faith and credit of the member nations?. Mr. DILLON. No; there was not. But, of course, there is obligation, for whatever it may be worth, of all the member countries of Euratom through the obligation of Euratom, which is similar to the one in the Coal and Steel Community. There is nothing extra. There is no extra pledge by the indivdual countries of the Coal and Steel Community. Mr. RAMEy. As I recall there was quite a discussion of this full faith and credit problem, you might say. Has there been any thought of that, apart from the Coal and Steel Community as such, of backing up the loan not only by the obligation of the particular utility enter- prise but by having the countries themselves make a pledge on it? Mr. DILLON. There is the feeling of the Eximbank and of our- selves that through the obligation of Euratom, and the Community, we do in effect have that obligation because the individual countries are bound to fulfill and make up the budget of Euratom, and the budget of Euratom will contain the funds to repay these obligations. So in that way it is considered that the full faith and credit of these countries are also involved. - Mr. RAMEY. But legally speaking, Euratom is a separate entity from the countries? Mr. DILLON. That is correct. Mr. RAMEY. And this would be merely a kind of a moral obligation of theirs to make the appropriations necessary, but it would not be what you call a pledge of full faith and credit in the legal sense of the term 2 Mr. DILLION. I think probably not in the legal sense of the term, but we feel it is the equivalent for all practical aspects. It is the same as took place in the case of the Coal and Steel Community. Senator ANDERSON. If it is the same, why do they not take the final step 3 Mr. DILLON. The reason for that, sir, is that there is a great desire on the part of these European countries to insure Euratom is accepted as an institution that can stand on its own legs, the same way as they felt toward the Coal and Steel Community; and if they treat it merely as sort of a loose vehicle that cannot contract for loans on its own, that would be to a great extent vitiated. It is the same reasoning they followed during the coal and steel operation, which has so far been eminently satisfactory. Senator ANDERSON. But they had something to take as security in the Coal and Steel Community. What does Euratom have that you can take as security? 98 AGREEMENT FOR COOPERATION WITH EURATOM b Mr. DILLON. We will have the security of these plants that are to e built. Senator ANDERSON. They are going to be mortgaged by the indi- vidual company. Euratom will not own a single one of the plants; Will it? Mr. DILLON. They will be mortgaged to us, but that is the same thing Senator ANDERSON. What will they hold? Everything they have will be pledged. Mr. DILLON. The Coal and Steel Community does not own any- thing either, sir. Senator ANDERSON. I thought they had some mortgages on individ- ual mines. Mr. DILLON. The individual mines are owned by the individual people in the same way, and our loan with the Coal and Steel Com- munity is backed by the mortgages on individual mines. Senator ANDERSON. But they existed; they were doing something. You could lend them money on a going business. Mr. DILLON. That is a difference. These Euratom projects, or named to be built and are going to be constructed, where in the other thing there were existing coal mines or existing steel plants that needed to be improved, although some of the loans went for opening up of new mines. Representative DURHAM. Under such an arrangement the banks would have the final say as to whether or not they would loan this money. Mr. DILLON. That is correct. Representative DURHAM. According to your statement. Mr. DILLON. That is correct. Representative DURHAM. It is up to their judgment just like any private banking deal. Mr. DILLON. That is correct. Representative DURHAM. Otherwise it goes out. Senator PASTORE. That is covered by subparagraph 3. Is that correct? Mr. DILLON. Subparagraph 2 and 3 combined. Senator PASTORE. Mr. Ramey has another question. Mr. RAMEY. Do you have any information on the availability of conventional and equity loans in Europe to support the individual utility part of the effort? Mr. DILLON. We will have no specific information until these proj- ects are submitted, which will not take place until after the agree- ment comes into force. However, we have no reason to believe that individual companies that are interested cannot easily and readily finance their own re- quirements—$150 million, that is the equivalent cost of conventional powerplants. Representative DURHAM. If they are turned down by the bank they have to go out and seek other lines of credit? Mr. DILLON. That is correct; and the bank will not make their loan unless they are sure that the rest of the funds necessary to com- plete each of these plants is available. AGREEMENT FOR COOPERATION WITH EURATOM 99 Representative DURHAM. The criteria for a loan would be some- what different from the regular line of credit in the United States on a conventional-type plant. Mr. DILLON. That is correct. Representative DURHAM. It is entirely different, and the safety of the loan is entirely in the hands of the &j in controlling the banking funds. Mr. DILLON. That is correct. Senator PASTORE. At any rate, this is not contemplated as a give- away program' Mr. DILLON. Not at all, sir. Senator PASTORE. Mr. Secretary, turn your attention to page 2, and I think there will be other questions on this $135 million because it is quite an important question that concerns the committee, not only now but in the past. You say in the Second paragraph : The supply agency statutes have been approved by the Council of Ministers and this important institution of the Community should begin shortly to assume its functions of insuring the supply of all Ores, raw materials, and special fission- able materials as provided in the treaty. Basic health and safety standards for the Community have also been approved. Could we have a copy of those for the record? Mr. DILLON. We do not have them here with us, but we can give you a copy of that for the record. (The information referred to follows:) DEPARTMENT OF STATE, Washington, D.C., January 30, 1959. Hon. JOHN O. PASTORE, Chairman, Subcommittee on Agreements for Cooperation, Joint Committee on Atomic Energy. DEAR SENATOR PASTORE : I am enclosing certain information which we said We would make available to the committee during the hearings On January 22. This includes the projected health and safety standards adopted by the Euratom Commission (in French *) and a report On the Euratom nuclear common market prepared by the Industry and Economic Division of the Euratom Commission. I shall send you a copy of the English Version of the health and safety standards as soon as it is available. You will note that these standards were adopted in accordance with article 30 Of the Euratom treaty and were not drafted Specifically for the joint program. They were approved by the Council on December 22. According to article 33 the member states must enact legislative and administrative provisions to ensure compliance with these standards. In view of the committee's interest in the developing relationships between Euratom and the International Atomic Energy Agency it might also be noted that in the development of the Euratom health and safety standards discussions were held between experts of Euratom and the Agency. I trust that the report on tariffs will be helpful to the members of the Committee and the staff. :k :k × >'s * #: xit Sincerely yours, DOUGLAS DILLON, Under Secretary for Economic Affairs. *For informal English translation in the appendix, p. 131. 100 AGREEMENT FOR COOPERATION WITH EURATOM Common Customs Tariff on Goods and Products of List A2 of the Euratom Treaty as from 1 January, 1959 Goods and Products Tariff 1. Deuterium and its compounds (including heavy water); heavy paraſſin: Mixtures and Solutions; in which the ratio of deuterium atoms to hydrogen till 1/1/1962:0 % . atoms exceeds 1:5000 by number. after 1/1/1962:10% . Equipment for the isotope separation of uranium by gaseous diffusion or other till 1/1/1964:0% techniques. aſter 1/1/1964:5% . Equipment for the fabrication of the products mentioned under No. 1.- - - - - - - - - till 1/1/1964:0% after 1/1/1964:11% . Equipment specially designed for the processing of radio-active materials- - - - - - till 1/1/1964:7% after 1/1/1964:11% . Vehicles specially designed for the transport of highly radio-active products---- 10% a) lead Shielded containers----------------------------------------------------- 10% b) Other º Shielded packing materials for transport or storage of radio-active 12% materials. 7. Artificial radio-active isotopes and their inorganic or organic compounds-- - - - - - 0% 8. Remote controlled mechanical manipulators especially devised for handling 8% highly radio-active Substances: mechanical manipulating devices, fixed or mobile, but not for “free-hand” handling. Senator PASTORE. Did the U.S. experts participate in the formula- tion of these standards? Mr. DILLON. I am informed they were. Senator ANDERSON. Could we not have an answer out loud! Mr. DILLON. I am informed they were consulted in the formulation of these health and safety standards. Representative VANZANDT. Will the chairman yield there? Senator PASTORE. Yes. Representative VAN ZANDT. Would you explain how these safety standards were approved, through a convention or what? Mr. DILLON. The way that operates in the case of Euratom is that they are first prepared by a committee of experts and then approved by the Commission of Euratom. They are prepared under the direc- tion of the Commission and then they are submitted to the Council of Ministers where they are approved. When that approval takes place that completes the necessary action, and they go into effect either at some date specifically set or on a date to be fixed by the Commission to be practical. Representative VAN ZANDT. As I understand it, the Council of Ministers has approved this program. Mr. DILLON. That is correct—this program, I mean, not the agree- ment on cooperation but the things you have mentioned. Representative VAN ZANDT. We are talking about safety now. Mr. DILLON. That is correct? Representative VAN ZANDT. Does it mean, then, all of these coun- tries concerned, the six member countries, have approved these Safety standards? Mr. DILLON. Yes, sir. Senator PASTORE. Which brings me to the question of third-party liability, Mr. Dillon. At this point you may seek the assistance of any of your staff members. How far have they gone with relation to protecting American manu- facturers insofar as any agreements or contemplated agreements are concerned with reference to a third-party liability? Mr. DILLON. We understand that the Euratom Commission has just received in the last few days a proposal prepared by its staff covering third-party liability. We understand that this will deal adequately AGREEMENT FOR COOPERATION WITH EURATOM 101 with the problem for all concerned. We will be able to give copies of this memorandum on a confidential basis to the committee after the proposal has been approved by the Commission and prior to its approval by the Council of Ministers. We expect that the Commission will approve this any day now. It may have already been approved yesterday. As soon as that has been done we will be in a position to give the full text of it to the committee on a confidential basis. Senator PASTORE. Do you anticipate any difficulty with reference to this program under the Euratom agreement with reference to these proposals that are being discussed ? Mr. DILLON. Our experts inform me they do not expect any difficulty. Senator ANDERSON. Did we get an answer to the first part a minute ago? You said the United States was consulted on the standards for safety. Is there any way we can find out whether the standards they have set up are in any way comparable to what this country might require in case a similar reactor was being built in the United States? Mr. DILLON. We will give the committee a copy of these standards so you will have the full detail. Senator ANDERSON. You recognize there is a vast difference between consultation and approval 2 Mr. DILLON. Yes, sir. Senator ANDERSON. Did the United States approve these standards? Mr. DILLON. No, sir. Senator ANDERSON. No? Mr. DILLON. They were not asked to. Senator ANDERSON. They were not asked to ? Mr. DILLON. No, we were not asked to approve them. Mr. RAMEY. But they are U.S. reactors that are going to be installed there and it would be unfortunate if the standards were such that would require a redesign or other aspects that did not fit in with our program. Mr. DILLON. Conceivably, but we understand there are no such difficulties. In any event we will furnish you the full text of what these safety measures are. And you understand they are not just applicable to this program we are discussing. They are community- wide and will apply to all nuclear activity in the Community. Representative DURHAM. Yes, but they accept the liability. The probability, of course, is their standards will not be exactly like ours in this country. If they want to accept the liability, they accept it and will be responsible for it. Mr. DILLON. That is correct. Representative DURHAM. Regardless of the standards. Mr. DILLON. That is correct. Senator PASTORE. With one slight modification, of course: We would anticipate that America's participation in the Euratom pro- gram would have a reciprocal advantage to the development of our own reactor program. Therefore, we would want to be concerned with the safety construc- tion of a reactor insofar as its applicability to American electric lights are concerned. Would that be correct? 102 AGREEMENT FOR COOPERATION WITH ElJRATOM Mr. DILLON. That is a fair statement. Representative DURHAM. I agree with that, but we do not want to be running somebody else's business. That is the point in the whole thing, and I think that is important. Of course, we have a lot of information on safety and I think they will accept it and go along with it, and will be glad to get it. Mr. DILLON. That is right. Senator PASTORE. I would assume, too, you are dealing with an area much more congested than our own and they would be very, very careful about safety measures. And if you invoke this third party liability, whereby American manufacturers would be relieved of responsibility, I would think you have worked out a very good arrange- ment. Mr. DILLON. I would think so; yes. Mr. RAMEY. On indemnity, what further steps need to be taken in order to have an operating, working indemnity system in the six countries, and what is the estimate on how long this will take? This is important because the criteria say that on such products a company is not expected to enter into a contract or complete or oper- ate it unless they have adequate insurance and indemnity protection. That factor becomes quite important. Mr. DILLON. That is correct. The third party liability action, which we expect will be taken any day by the Commission, would then be ready for submission to the Council of Ministers at their next meet- ing. I do not know exactly when that next meeting is scheduled, but probably sometime in February. If approved by the Council of Ministers, it will then require par- liamentary action. Mr. RAMEY. How long would that take? Mr. DILLON. I would imagine, knowing the time parliamentary action usually takes in all countries, it might take 3 or 4 months, and this would not be in full effect until sometime in the summer. Senator PASTORE. Does any other member want to ask any questions on third party liability before we move on to the rest of the presentation ? Calling your attention now to the top of page 3 with reference to tariffs, the question arises in our mind as to what 3 years are meant and what that means to American manufacturers, and if this is a satisfactory agreement with relation to the tariff consideration to American manufacturers. Mr. DILLON. We think it is generally satisfactory to have the tariff Quoted at as low a level as 10 percent. The waiver provisions will last for 3 years from last January, which means to January 1, 1962. At that time the 10 percent tariff would become effective. It is not clear, in fact it is probable that some of these reactor elements that would be coming in from the United States would come in after 1962, and unless this period of 3 years is extended they might be subject to that 10 percent tariff. However, depending, I would think, a good deal on what the United States decides to do on its own tariff on nuclear components, I think there is a chance that the Community, at the end of the 3-year period, will be willing to look at it again and possibly consider some extension of that 3-year time period. AGREEMENT FOR COOPERATION WITH ElJRATOM 103 Senator PASTORE. Is this 10 percent a standard percentage with reference to other equipment? I mean is this the usual percentage? Mr. DILLON. This is the figure that was set for the common tariff for the six countries on all nuclear parts and nuclear components. These are tariffs on other items, many of them will be far higher. Senator PASTORE. How about other equipment like electrical equip- ment and what have you? Would they be the same figure? Mr. DILLON. No, not necessarily at all. Their schedules are just as complex as ours, very thick and they would differ for different elec- trical materials. I think most of those are not yet set definitely and they will not go into effect until 1962. I think that is one of the reasons that that 3-year date was set— because January 1, 1962, is the date on which the common tariff of the European Common Market is supposed to go into effect. Representative DURHAM. It would be stabilized at 10 percent for 3 years? Mr. DILLON. It is zero for the next 3 years and 10 percent there- after. Representative DURHAM. Will it be opened for negotiation at that time for a different percentage, at the end of 3 years? Mr. DILLON. It will be open before that. We will be having negoti- ations under the authority given by the extension of the Reciprocal Trade Agreements Act last year with European Common Market on all their tariffs prior to that time. And if we feel this is one that we want to get reduced, we may be able to do so. That is why I said I thought there would be a considerable impact, depending what we do that time on our tariffs. Representative DURHAM. It is important, Mr. Secretary, because at that time conditions may change. Of course, 3 years is quite a º in this field of operation and conditions may change very rapidly. Mr. DILLON. To answer your question flatly, there will be a chance for negotiation because we are expecting negotiations to begin some- time in 1960 on this whole problem of common tariff of the Common Market countries. Representative DURHAM. Do you think it would be better to have that finalized in your agreement as to that possibility rather than under the Reciprocal Trade Agreements Act? Do you think it would be better to put it in the agreement? Mr. DILLON. I do not think that would be practical, no, sir, because this is a tariff of theirs that applies not just against the United States but applies against the rest of the world, of course. I think that they have probably decided that 10 percent is a low figure, which we think it is, and that they would want to have that much protection. I think that they are probably looking at some of their neighbor countries. Senator PASTORE. May I ask this question: Did they insist on the 10 percent? Mr. DILLON. There was a great deal of argumentation. Countries who are more advanced, such as France, wanted a considerable higher degree of protection, which would insure they would get a greater amount of the business. 104 AGREEMENT FOR COOPERATION WITH EURATOM Countries which had very little of nuclear industrial capacity pre- Sumably wanted no tariff, and they mally wound up with a compromise of 10 percent, which is on the low side. Senator PASTORE. Which raises this question, Mr. Dillon : This may be a little farfetched, but I think I should bring it out at this moment. I Would assume the whole purpose behind the Euratom agreement would be to encourage as much as possible the parts of these reactors being manufactured in America and exported to these other countries. Of course, whether or not that is feasible economically depends upon the tariff structure of the individual country. Mr. DILLON. Yes. Senator PASTORE. And if the tariffs, of course, did go up it might induce the American manufacturer to establish himself in the foreign country and, still under this agreement, manufacture what is known as an American-type reactor but developed completely in a foreign country, which of course would be something that we as representa- tives of the people of America would not like so much. That is the reason why I think this tariff business is quite im- portant. But do you not agree with that? Mr. DILLON. Yes, sir, but I think the history has been that a 10 per- cent tariff differential has not generally led to that sort of a de- CIS] Ol). On the other hand, the factors that generally do lead to that type of decision are the overall costs, which include labor costs, where the differential might be considerably greater. Senator PASTORE. On this point would this apply also to the Eng- lish agreement with Euratom’ Mr. DILLON. Yes; this 10 percent tariff, as I said, is a tariff against everyone. When I said they probably had neighboring countries in mind, I think they probably had in mind Great Britain and British competition. Senator PASTORE. Mr. Bates. Representative BATEs. In the event you are not able to extend for a longer period of time this 10 percent, what would be the possibility of using that 10 percent for research purposes? After all, we are putting $50 million into this thing, the taxpayers of the United States, in trying to help these people. It would seem to show a little faith on their part to take the 10 percent and put it into research and development and still accomplish the purpose they have in mind. - Mr. DILLON. The difficulty, I think, with that would be this 10 percent tariff is a part of the common tariff, that is, the revenues do not go to Euratom itself. It would go to the individual countries into which parts were imported. This is a common tariff but the tariff is paid to the individual coun- tries where the imports come in, goes into their general budget and general receipts. Those countries do support the Euratom research and development program, and you might say to the extent that these collections are made, they would go toward the much larger expenditures they have already agreed to make in this joint research and development pro- gram. AGREEMENT FOR COOPERATION WITH EURATOM 105 Representative BATEs. Of course Euratom is a group of nations, and if they collect it individually, they can contribute individually for the purpose. Mr. DILLON. That is correct. tº Representative DURHAM. This is based on the Common Market, is it not ? Mr. DILLON. Yes. Representative BATES. I understand that. But this whole thing is separate and distinct from the program. This is taxes and all of us have a little experience with taxes, particularly in France. I recall when we were building airfields over there to defend France that we were paying 25 percent taxes for construction purposes. So it seems to me some of the money could be reverted to the purpose of research and development. If I could ask another question on that point. On construction costs On this program, taking the case of France, are there going to be taxes applied even though it is publicly owned 8 Just what is the situation generally as far as you know now on the question of taxes in the build- ing of these plants? - Mr. DILLON. I would have to get you a full report on that, which we will be glad to do. - - (The material referred to follows:) . DEPARTMENT OF STATE, - . . . . Washington, D.C., April 15, 1959. Mr. JAMES RAMEY, Joint Committee on 24 tomic Energy, U.S. COmgreSS. DEAR MR. RAMEY: You will recall that during Mr. Dillon’s testimony before the Committee On January 22, Congressman Bates raised a question about the kind of local taxes that might apply to reactors constructed under the joint U.S.-Euratom program. We requested information on this point from Ambas- sador Butterworth's mission and have received the following reply: - “The mission has consulted with appropriate officials Euratom's Industry and ECOnomic Division regarding taxation applying to construction nuclear reactors under joint program. Commission officials confirm substance of testimony by Under Secretary Dillon to JCAE when he replied to question of Congressman Bates that same type local taxation would apply to nuclear as to conventional power facilities. While Some member countries may offer special inducements Or aid, e.g., German 500 MW program or Italian southern development plan, no discriminatory tax rates are applicable by virtue of fact plant is powered from nuclear sources or constructed under joint program. Yours sincerely, J. ROBERT SCHAETZEL, Office of the Special Assistant to the Secretary. Mr. DILLON. I would assume that local taxes would apply on the construction of these plants, just as they would on the construction of any other plants; that is, there would not be any particular special tax On 15. Representative BATES. They are getting 4% percent money and they can loan it out at a higher rate than this. It is good business on their part. I think it is something we ought to look at and get further infor- mation on. Mr. DILLON. To answer the question about the loaning out at a higher rate, the whole objective of this program was to achieve power that would be competitive with ordinary power, and they set a figure of so much per kilowatt-hour which would be competitive. That 106 AGREEMENT FOR COOPERATION WITH EURATOM required loans at just the cheapest rate practicable, and they intend to relend this 4% percent money at no profit, to lend it at a slightly higher rate to cover their own expenses, but no profit. Representative BATEs. That is the answer to my entire point. If they are going to start charging taxes to build these plants, your costs are going to be greater. It seems to me that is working contrary to the purpose we all have in mind. Mr. DILLON. There is a very fundamental difference here between this program and construction of an airfield and things of that nature, because in those the United States contribution was a grant. This is a loan and will be repaid in full. Representative BATEs. Is that true of research and development? Mr. DILLON. Not of research and development, but we will get the benefits of the research and developments ourselves. Representative BATEs. We are putting $50 million in there. Mr. DILLON. We have joint control of it. We assume we will not waste it. Representative BATEs. I would just like to take a look at this. Mr. DILLON. They are putting in $50 million of their own funds for research and development also. We will be glad to give you what detail we can on that. Senator ANDERSON. Mr. Chairman Ż Senator PASTORE. Senator Anderson. Senator ANDERSON. I do not quite get an answer on the tariff question. Mr. DILLON. Yes. Senator ANDERSON. When we were having the original hearing and Mr. Floberg was testifying he said that these countries have agreed— he said, “I hope—Euratom have agreed to take all action open to it under the treaty establishing the European Atomic Energy Com- munity to minimize the impact of customs duties on goods and prod- ucts imported under the joint program.” Can you tell me what action Euratom has taken thus far to mini- mize the impact of customs duties? Mr. DILLON. They have agreed to set a duty that will be no higher than 10 percent on all these things and to waive all duties for a period of 3 years. Senator ANDERSON. We will not get the parts in there in 3 years. Mr. DILLON. We will not get all of them in. I think we will get some of them in. I think the fact the duty has been set at 10 percent— certainly as customs duties go, that is a very low duty. Senator ANDERSON. If this were an ordinary transaction, yes. But as Mr. Bates pointed out, this is our money. Mr. DILLON. Senator, this is not a tariff that is meant to be appli- cable to this particular deal. This is the overall tariff permanently applicable to the Community and applicable to their imports from England or from any other place. Senator ANDERSON. So there is no special concession at all on these manufactured goods that are brought in on loan from the United States? Mr. DILLON. There is no special concession. It was never expected there would be. AGREEMENT FOR COOPERATION WITH EURATOM 107 Senator ANDERSON. Why did they say they would take all action open under the treaty establishing the Community to minimize the impact of customs duties on goods and products imported under the joint program 4 º Mr. DILLON. They meant—I do not know why that particular lan- guage was used. e Senator ANDERSON. Because they promised they would do just that. Now you say they are not going to give anything special to this pro- gram. Why did they say “under the joint program”? You know it was supposed to be under this program. Mr. Herter testified at page 488, and I said to Mr. Herter: I say, is it to the world or among themselves? They are reducing tariffs among themselves 10 percent, are they not? Mr. HERTER. Yes, sir. And we are hoping that is going to be extended to the world, too. I said: Can We not distinguish between what people are doing and what we are hoping? Is there anything thus far contemplated that would reduce the tariff On American-made reactor parts into the Euratom countries? Mr. Herter said: “I could not answer that.” I said, “The answer is ‘No’ is it not?” He said, “As far as I know, it is ‘No.’” Here is a document that is brought before us. It is represented to us that they are going to reduce the tariffs on these American-made reactors. We read in the papers that General Electric has made an alliance with a Swiss company and Westinghouse with a company over there. None of it is going to be made in America. Is that not true when the final answer comes? Mr. DILLON. No, sir. Senator ANDERSON. Do you think it is going to be made in this country? Mr. DILLON. Yes, sir; I am convinced. Senator ANDERSON. You ought to read the international magazines. Mr. DILLON. Your skepticism has proved unfounded regarding that last testimony you just read, and Governor Herter's optimism has proven correct, because the 10 percent reduction in general duties these countries had agreed to give each other as of the first of J anuary has now been extended to the United States and to all other countries. Senator ANDERSON. Is that a special deal for this program alone? Mr. DILLON. No, sir. But what you read referred to Something that had nothing to do with this program. What had to do with this program is Senator ANDERSON. Are you really sure what I read had nothing to do with this program' Mr. DILLON. Yes, sir. Senator ANDERSON. I read from the Articles of Euratom. I thºught Euratom was this program. Mr. DILLON. You were reading some questions and answers between yourself and Governor Herter that had to do with the 10 percent reduction in the Common Market tariff. Senator ANDERSON. Let me read the language again. Mr. DILLON. Yes, sir. - *- :- 108 AGREEMENT FOR COOPERATION WITH EURATOM Senator ANDERSON (reading): Is there anything thus far contemplated that would reduce the tariff on American-made reactor parts into the Euratom countries? Is that the general world situation? - Mr. DILLON. That is one of the things you read, sir. You also read Some other things, which is what I replied to. As far as this tariff is concerned, there never was any intention to have a special rate for this program. The Euratom countries all have most-favored-nation obligations under GATT. They could legally not give special rates to the United States as against any other countries, and we would not request them so to do. They did take an obligation to minimize the tariffs on nuclear parts and production, nuclear materials, which will be helpful to us. But that will help this program. But that was part of a generalized reduction of tariffs and a keeping of the tariffs low so there can be rapid production, rapid advance in this field. Senator ANDERSON. I want to read the testimony again pretty care- fully. I thought we had some pretty definite assurance there was a Fº to reduce tariffs on American-made reactor parts which would e financed by the loan from the Export-Import Bank. Can I go back to the question of security again? Senator PASTORE. Absolutely, Mr. Anderson. Senator ANDERSON. Do I understand the security in this transaction is similar to the security in the European Coal Community ? Mr. DILLON. Except for one thing, in which it is considerably better. In the case of Euratom the Export-Import Bank has the specific right to review and approve, before accepting, the terms of loan agreement between Euratom and individual companies, that will be part of this deal and which will receive this loan. In the case of the Coal and Steel Community they have no such right. Senator ANDERSON. We had some testimony before us from Mr. Metzger. This is on page 133. He said: And now, in that agreement, some new devices were used. In that case you had a different situation to some extent. The European Coal and Steel Com- munity had some resources of its own at the time and had the power to levy to Secure additional resources. Is that still the case? Mr. METzGER. Yes, sir. Senator ANDERSON. Is there any such power under the Euratom agreement? Mr. METzGER. No, sir. Senator ANDERSON. On page 180 you are again testifying, Mr. Metzger, and we were talking about the pledge of the Community. You said: r It had nothing to do with the member states. The act of pledge that was referred to here, and which is described in great detail in the Coal and Steel Community instruments, was as follows: We loaned $100 million to the Coal and Steel Community. The Coal and Steel Community promised, as a Com- munity, to pay it back. The member states did not promise to pay it back. We buttressed the credit of the Community which had insufficient resources at the time to pay it back at the time by providing that, when they reloaned the money, the $100 million that they borrowed from us, to the individual coal AGREEMENT FOR COOPERATION WITH EURATOM 109 enterprisers in the various countries, private enterprise, public enterprise, how- ever they were organized, and got paper, mortgaged liens, second mortgages, de- bentures, whatever they got, they would put that in a pledge. Mr. METZGER. Yes, sir. - Senator ANDERSON. Did that happen? Mr. DILLON. Yes. Mr. METZGER. Yes, sir. If I may speak with respect to this Senator ANDERSON. Is the Export-Import Bank, going to get back from Euratom, when Euratom loans money to the individual utilities in individual countries, the debentures they get for that money? Mr. METZGER. They are going to have one right which is superior and the other right which is similar. The other right which is superior is that under the present arrangement the Export-Import Bank will review the transaction between Euratom and the private enterprise and be satisfied as to the kind of paper that Euratom re- ceives from the enterprise. That was not the case in the Coal and Steel loan. In the Coal and Steel case, the Coal and Steel Community decision as to what kind of paper to get from the enterprise was its own decision with no review by any U.S. agency. Here there is that review so that Export-Import Bank is satisfied with the quality of the paper gotten in the first instance. Senator ANDERSON. After it is satisfied with the quality, how does it get its hands on that paper ? Mr. METZGER. As Mr. Dillon’s testimony stated, once it is satisfied with the paper, this paper which Euratom receives from the enterprises must be pledged for the benefit of the Bank in a manner satisfactory to the Bank. So that there will be a pledge arrangement of this paper which Euratom receives in a manner satisfactory to the Export- Import Bank. In that respect it is quite similar to the pledge arrangement which was made in the Coal and Steel Community where the paper that the Coal and Steel Community received was pledged. Senator PASTORE. It is my thought this duty is a package situation and we should keep in mind that what we are trying to do here is to de- yelop the art. Here what we are trying to accomplish is achievement in the development of the research area that will inure to the benefit of the American art itself. Mr. DILLON. Right. Senator PASTORE. I hope it does not simmer down to strictly a finan- cial proposition rather than a research and development program. Mr. Holifield. Representative HolſFIELD. I would like to refer to article VII of the agreement between the United States and Euratom, which has to do with the patent provisions. As I read it, as I understand it, there has been arranged a rather free interchange of all patent rights which might accrue under the joint research and development plan and that it is a two-way street; it works both ways. * , Do you have any comment to make on that section, the complete section? Am I right about that assumption, or mot? Mr. DILLON. I would think so, but that section is a technical One, which was worked out by the Atomic Energy Commission. 36636–59 S 110 AGREEMENT FOR COOPERATION WITH EURATOM Representative Holi FIELD. Could we have a comment at this time, or is this a proper time to have it? Mr. FLOBERG. If you want an answer to your question, Mr. Holifield, your interpretation is correct, it was intended to be a free exchange of information. Representative Holi FIELD. I will leave it at this time and go to my other question, which is as follows: I notice that on December 29 there was a draft agreement for cooperation between the Government of the United Kingdom and the European Atomic Community. I notice in reading that it, in effect, adds another party to the agreement although it is outside of the original Euratom arrangement. As I remember, for several reasons the United Kingdom did not come into the original Euratom agreement. This seems to be a corol- lary agreement and seems to confer certain privileges and certain rights to the United Kingdom to actually participate in the Euratom program to the extent of furnishing materials, reactors, processing fuel, and so forth. Now, my question is this: In the event that the United Kingdom does participate with Euratom in the furnishing of reactors, are the financial arrangements, which are made by the United States to furnish moneys, available for the payment by Euratom for reactors which are actually sold by the British to the Euratom countries? Mr. DILLON. No, sir; not at all, because the agreement provides that we are only financing reactors of U.S. design. Representative Holi FIELD. So any financing of the reactors which might be sold by the British in the Euratom Community would be a matter of financing between those countries and without any obligation on our part? Mr. DILLON. That is right. (The agreement discussed above, approved February 4, 1959, follows:) AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED KING- DOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE EUROPEAN ATOMIC ENERGY COMMUNITY (EURATOM) FOR CO- OPERATION IN THE PEACEFUL USES OF ATOMIC ENERGY PREAMBLE The Government of the United Kingdom of Great Britain and Northern Ire- land, on their own behalf and on behalf of the United Kingdom Atomic Energy Authority (hereinafter referred to as “the Authority”) and the European Atomic Energy Community (Euratom) acting through its Commission (here- inafter referred to as “the Commission”) ; CONSIDERING that the Community has been established by the Kingdom of Belgium, the Federal Republic of Germany, the French Republic, the Italian Republic, the Grand Duchy of Luxembourg, and the Kingdom of the Netherlands, in the Treaty signed at Rome on March 25, 1957, with the aim of contributing to the raising of the standards of living in the Member States and to the development of exchanges with Other Countries by the creation of conditions necessary for the Speedy establishment and growth Of nuclear industries ; CoNSIDERING that the Community and the Government of the United King- dom have expressed their mutual desire for close co-operation in the peace- ful uses Of atomic energy , CoNSIDERING that the Government of the United Kingdom, to this end, on July 9, 1958, appointed a representative to the Commission ; i ; : # . | “. AGREEMENT FOR COOPERATION WITH EURATOM 111 DESIRING to develop further the relations between them ; DESIRING to collaborate with each Other for the promotion and develop- ment Of the peaceful uses Of atomic energy within the Community and in the United Kingdom ; CONSIDERING that an arrangement providing for CO-Operation in the peace- ful uses of atomic energy and in particular in connection with the ex- change Of information, the construction of reactors of types developed in the United Kingdom and within the Community, and the production, Supply and processing of fuel would initiate a fruitful exchange of experience, provide opportunities for mutually beneficial action, and reinforce Euro- pean Solidarity ; HAVE AGREED as follows : Article I 1. Subject to the rights Of third parties, to the Obligations entered into by either Contracting Party under any international agreement, and to the ap- plicable laws, regulations and Other license requirements in force within the Community and in the United Kingdom, the Commission and the Authority will make available to each other and to persons in the United Kingdom or within the Community, unclassified research information which is Or may in future be at their disposal concerning the peaceful uses Of atomic energy and which is relevant to the present Or any projected atomic energy developments in the United Kingdom or within the Community. 2. The recipient of research information under this Article shall have the right (save as may be specified in particular contracts made thereunder) : (a) to use it freely for his own purposes, save that if the information relates to an invention patented by the Authority Or the COmmunity in the country or countries in which the invention is to be used, its use, including communication to any third party, shall be subject to such terms as may be agreed. (b) to communicate it to a third party, unless the Contracting Party transmitting the information shall have stipulated to the contrary at the time of transmission. In the event of communication to a third party, the Contracting Party or person so communicating the information shall be at liberty, subject to any rights of the patentee, to make whatever arrange- ments he wishes with that third party in respect of the use of the infor- mation and of the ownership of any results, including patentable inventions, which may be obtained from the use Of the information. Article II The Contracting Parties shall facilitate exchanges of unclassified informa- tion between persons in the United Kingdom on the one hand and persons within the Community On the other hand with a view to forwarding the peaceful uses of atomic energy. Article III The transmission of information within the scope of the present Agreement which is regarded by the holder of the information as being of commercial Value shall be made Only at such time and on such commercial terms and condi- tions as may be agreed in each case. Article IV 1. The Authority and the Commission shall encourage and facilitate the granting Of Sub-licences to persons within the Community or in the United Kingdom by persons holding licences pertaining to patents owned by the Authority Or the Community, on such terms as are agreed by the owner. 2. The Authority and the Commission shall make available to each other or to persons within the Community or in the United Kingdom respectively, on commercial terms, licences under all patents owned by the Authority or the Community relating to the manufacture of fuel or in other cases as may be agreed. Article V The Authority and the Commission may arrange for the provision of technical advice from the Authority to the Commission or from the Commission to the Authority, by the secondment of experts or in such other ways as may be agreed. 112 AGREEMENT FOR COOPERATION WITH EURATOM Article VI Each Contracting Party shall provide, wherever possible, in its own schools or facilities, or shall assist in obtaining elsewhere in the United Kingdom or Within the Community, training in subjects relevant to the peaceful uses of atomic energy for students and trainees recommended by the other. Article VII The Authority and the Commission shall assist persons within the Community Or in the United Kingdom in obtaining research and power reactors and in Ob- taining assistance in the design, construction and operation of such reactors. Aºticle VIII The Authority and the Commission shall provide each other and persons within the Community Or in the United Kingdom respectively, on commercial terms, with assistance in the design, COnstruction and Operation of facilities for the manufacture of fuel and for the processing of used fuel within the Community or in the United Kingdom, or facilitate the procurement of such assistance. Article IX The Contracting Parties shall, to Such extent as is practicable, assist each other in the procurement, by either Contracting Party or by persons in the United Kingdom or within the Community, Of material, equipment and Other requisites for atomic energy research, development and production in the United Kingdom Or within the Community. Article X 1. The Authority shall On request Supply On COmmercial terms and conditions to the Supply Agency of the Community or to persons within the Community duly authorized by the Commission : (a) fuel of such quality and quantity as may be necessary for the efficient and continuous operation of research and power reactors obtained from the United Kingdom ; (b) to such an extent as may be agreed in particular contracts, fuel for the Operation of other research and power reactors. 2. The Authority shall, on the request of the Supply Agency of the Community, assist the Agency or persons duly authorised by the Commission to obtain fuel as provided in subparagraphs (a) and (b). Of paragraph 1 of this Article from the United Kingdom. On commercial terms and COnditions. 4 ºf jole XI 1. The Authority are prepared to process OI) commercial terms and conditions used fuel from research and power reactors Operating within the Community, or to assist persons within the Community in arranging for such processing in the United Kingdom, to such an extent as may be agreed. 2. Except as may be otherwise agreed, the form and content of any irradiated fuel elements shall not be altered after their removal from reactors and prior to delivery to the Authority Or to other facilities in the United Kingdom. 3. Special nuclear material and other material recovered from material sent to the United Kingdom for processing shall be returned to the Community unless Otherwise agreed. 4. For a period of ten years from the entry into force of the present Agreement the Authority are prepared to purchase On Commercial terms and conditions, for use for peaceful purposes Only, any special nuclear material produced in reactors using fuel Supplied from the United Kingdom pursuant to the present Agreement which is in excess of the need Of the Community for such material for the peaceful uses of Atomic energy. Article XII In relation to any contract concluded by the Authority under Article X or Article XI the commercial terms and conditions shall be not less favourable than the most favourable terms and conditions which the Authority are offering or are prepared to offer, at the date of the contract in question, to any other customer outside the United Kingdom for Similar products Or Services. AGREEMENT FOR COOPERATION WITH E U RATOM 113 Article XIII 1. Each Contracting Party undertakes that : (a) material Or equipment obtained pursuant to the present Agreement, and Source material Or special nuclear material derived from the use Of any material Or equipment so obtained, shall be employed SOlely for the promo- tion and development of the peaceful uses of atomic energy and not for any military purpose ; and (b) no material or equipment obtained pursuant to the present Agree- ment, Or Source Or Special nuclear material derived from the use Of any Imaterial Or equipment so Obtained shall be transferred to unauthorized presons Or beyond its control except with the prior consent in writing Of the Other Contracting Party. 2. The continuation of the co-operation envisaged in the present Agreement shall be COntingent upon the mutually satisfactory application, for the purpose of paragraph 1 of this Article, of the system for safeguards and control estab- lished by the Community in accordance with the Treaty establishing the Eu- ropean Atomic Energy Community (Euratom) and of the measures for account- ing for the use of material Or equipment established by the GOvernment Of the United Kingdom. 3. Consultation and exchange of visits between the Contracting Parties shall take place to give an assurance to both of them that the Community’s safe- guards and control system and the measures for accounting for the use of ma- terial Or equipment established by the GOvernment Of the United Kingdom are Satisfactory and effective for the purposes Of the present Agreement. 4. In recognition of the importance of the International Atomic Energy Agency and of the European Nuclear Energy Agency, the Contracting Parties will con- Sult together from time to time to determine whether there are any areas Of responsibility with regard to safeguards and control in which those Agencies might be asked to assist, Article XIV 1. Contracts made pursuant to the present Agreement may contain Such guar- antees as are agreed in specific cases. Subject to the provisions of such Con- tracts, nothing in the present Agreement shall be interpreted as imposing any responsibility on either Contracting Party for (a) the accuracy or completeness of any information communicated pur- Suant to the present Agreement ; (b) the Consequences of the use made of Such information Or any mate- terial Or equipment supplied pursuant to the present Agreement ; Or (e) the suitability Of Such information, material Or equipment for any particular use Or application. 2. The Contracting Parties recognize that adequate measures to deal with the question of third party liabilities which are now uninsurable are necessary for the full implementation of the present Agreement. The Contracting Parties will Co-Operate in developing and securing the adoption by the earliest possible date Of Suitable measures to provide adequate financial protection against third party liability. Article \ T 1. Article 106 of the Treaty signed at Rome on March 25, 1957 establishing the European Atomic Energy Community (EURATOM) contemplates that Mem- ber States which before the date of entry into force of that Treaty have con- cluded agreements with third countries for co-operation in the field of nuclear energy shall jointly with the Commission enter into the necessary negotiations With third countries in Order as far as possible to cause the rights and Obliga- tions arising Out Of such agreements to be assumed by the Community. 2. The GOvernment of the United Ringdom is prepared to enter into such 1negotiations with reference to any agreement to which it is a party. A 7-ticle VW I The Contracting Parties reaffirm their common interest in fostering the peace- ful uses of atomic energy through the International Atomic Energy Agency and the European Nuclear Energy Agency and intend that the results of their CO-Operation shall benefit those Agencies and their Members. 114 AGREEMENT FOR COOPERATION WITH EURATOM Article XVII 1. At the request of either Contracting Party, representatives of the Con- tracting Parties shall meet from time to time to consult with each other on matters arising Out of the application of the present Agreement, to supervise its Operation and to discuss arrangements for co-operation additional to those provided in the present Agreement. 2. These consultations may include consideration of mutual problems in the fields Of atomic energy research, production technology, health and safety and economics relating to the peaceful uses of atomic energy. 3. The Contracting Parties shall be represented, as appropriate, by members Of the Government of the United Kingdom and of the Commission, or by officials and experts. Article XVIII For the purposes of the present Agreement: “Contracing Parties” means the Government of the United Kingdom and the Authority on the One hand and the Community on the other. “Derived” means derived by One or more processes whether successive or not. “Equipment” means major items of machinery or plant, or major components thereof, specially suitable for use in atomic energy projects. “Fuel” means any substance, Or COmbination Of Substances which is pre- pared for use in a reactor for the purpose of initiating and maintaining a self- Supporting fission chain reaction. “Material” means fuel, source material, special nuclear material, heavy water, graphite of nuclear quality, and any other substance which by reason of its nature or purity is specially suitable for use in nuclear reactors. t “Person” means natural persons, any body of persons, incorporated or unin- corporated, public or private institution, Government agency or Government corporation but excluding the Contracting Parties. “Source material” means uranium containing the mixture of isotopes Occur- ring in nature; uranium depleted in the isotope 235; thorium ; any of the foregoing in the form of metal, alloy, chemical compound, or concentrate ; or any other substance as may be agreed by the Contracting Parties. “Special nuclear material” means plutonium ; uranium 233; uranium enriched in the isotopes 235 or 233; any substance COntaining One or more Of the fore- going ; or any other substance which may be agreed by the Contracting Parties to be special nuclear material. The term “special nuclear material” does not include source material. “Unclassified” means not classified as confidential, secret or top secret by either of the Contracting Parties. “Used fuel” means fuel which has been irradiated in a reactor, or which has been discarded without being irradiated. “Within the Community” means within the territories to which the Treaty establishing the European Atomic Energy Community (Euratom) applies or shall apply. Article XIX 1. The present Agreement shall enter into force on the date of signature and shall remain in force for a period of ten years, provided that Article XIII and XIV Shall remain in force thereafter for the duration of any contracts made pursuant to the present Agreement. 2. The Contracting Parties shall consult together, not less than one year before the termination of the present Agreement, with a view to its prolonga- tion, with Or without amendment, for a further period. IN WITNESS WHEREOF the undersigned being duly authorised thereto by the Government of the United Kingdom and the Commission respectively have signed the present Agreement. DONE at London on the 4th day of February 1959 in duplicate in the Dutch, English, French, German and Italian languages, all five texts being equally authoritative. For the Government of the United Kingdom SELWYN LLOYD REGINALD MAUDLING AGREEMENT FOR COOPERATION WITH EURATOM 115 For the European Atomic Energy Community (Euratom) E. MEDI P. DE GROOTE H. L. KREKELER E. M. J. A. SASSEN ExCHANGE OF LETTERS NO. 1-A Mr. E. M. J. A. Sassen to Mr. Selwyn Lloyd LONDON, February 4, 1959. YOUR EXCELLENCY, - I have the honour to refer to the negotiations leading to the conclusion Of the Agreement of today's date between the Government of the United Kingdom of Great Britain and Northern Ireland and the European Atomic Energy Commu- nity (Euratom) for co-operation in the peaceful uses Of atomic energy and to recall that, with reference to Article IV regarding patents, the representatives of Euratom asked that the terms on which licenses or sub-licenses are granted under that Article should take into account the purposes of the Euratom Treaty, in particular with regard to the establishment of a nuclear Common market providing for the free movement of material and equipment within the Commu- nity. I have the honour to record the understanding of the Commission that the Authority will be prepared to consider any representations that may be made by the Commisison that the terms proposed in any particular case Would be prejudicial to those purposes. I have the honour to request your confirmation that this is also the under- standing of the Government of the United Kingdom. I have, etc. E.M.J.A. SASSEN NO 1–B Mr. Selwyn Lloyd to Mr. E. M. J. A. Sassen LONDON, February 4, 1959 YOUR EXCELLENCY, I have the honor to acknowledge the receipt of your Excellency's note Of today’s date which reads as follows: “I have the honour to refer to the negotiations leading to the conclusion of the Agreement of today’s date between the Government of the United Kingdom of Great Britain and Northern Ireland and the European Atomic Energy Commu- nity (Euratom) for CO-Operation in the peaceful uses of atomic energy and to recall that, with reference to Article IV regarding patents, the representatives Of Euratom asked that the terms On which licences or sub-licenses are granted under that Article should take into account the purposes of the Euratom Treaty, in particular with regard to the establishment of a nuclear common market provid- ing for the free movement of material and equipment within the Community. I have the honour to record the undertsanding of the Commisison that the Authority Will be prepared to consider any representations that may be made by the Commission that the terms proposed in any particular case would be prejudicial to those purposes. I have the honour to request your confirmation that this is also the under- standing of the Government of the United Kingdom”. I have the honour to confirm that the above is also the understanding of the GOvernment Of the United Kingdom of Great Britain and Northern Ireland. I have, etc. SELWYN LLOYD 116 AGREEMENT FOR COOPERATION WITH EURATOM Mr. E. M. J. A. Sassem to Mr. Selwyn Lloyd LONDON, FC bruary 4, 1959 YOUR EXCELLENCY, I have the honour to refer to the Agreement of to-day's date between the Government of the United Kingdom of Great Britain and Northern Ireland and the European Atomic Energy Community (Euratom) for co-operation in the peaceful uses of atomic energy, and in particular to Article XIII thereof. I Wish to inform your Excellency that the Community, in establishing and implementing its system for safeguards and control, is willing to consult and exchange experiences with the International Atomic Energy Agency and the European Nuclear Energy Agency with the object of establishing a system rea- Sonably compatible with the control systems of those agencies. I have, etc. E. M. J. A. SASSEN NO 2–B Mr. Selwyn Lloyd to Mr. E. M. J. A. Sassom LONDON, February 4, 1959 YOUR ExCELLENCY, I have the honour to acknowledge receipt of your Excellency’s Note of to-day's date Which informed me that the European Atomic Energy Community (Euratom), in establishing and implementing its system for safeguards and COntrol, is Willing to consult and exchange experiences With the International Atomic Energy Agency and the European Nuclear Energy Agency with the object Of establishing a system reasonably compatible with the control Systems Of those agen CleS. The GOvernment of the United Kingdom has noted your Excellency's State- Innent with Satisfaction. I have, etc. SELWYN LLOYD NO 3–A Mr. Selwyn Lloyd to Mr. E. M. J. A. Sassen LoNDON, February 4, 1959 YOUR EXCELLENCY, I have the honour to refer to the Agreement Of today’s date between the GOV- ernment Of the United Kingdom Of Great Britain and NOrthern Ireland and the European Atomic Energy Community (Euratom) for co-operation in the peaceful uses of atomic energy and in particular to paragraph 2 Of Article XIV. It is understood that the Supply Of fuel by the Authority Cannot take place until mutually satisfactory arrangements have been made for the adequate pro- tection of the Authority against third party liability. I have accordingly to propose that, if there is delay in the conclusion of general arrangements to this end, the Contracting Parties shall consult together with a view to making mutually satisfactory ad hoc arrangements for the furtherance of specific transactions. If the foregoing proposal is acceptable to the European Atomic Energy Com- munity (Euratom), I have the honour to suggest that the present Note and your reply in that sense shall be regarded as constituting an agreement in this matter between the Government of the United Kingdom of Great Britain and Northern Ireland and the European Atomic Energy Community (Euratom). I have, etc. SELWYN LLOYD AGREEMENT FOR COOPERATION WITH EURATOM 117 NO 3–B Mr. E. M. J. A. Sassem to Mr. Selwyn Lloyd LONDON, February 4, 1959 YOUR ExCELLENCY, I have the honour to acknowledge the receipt of Your Excellency’s Note of today's date which reads as follows: “I have the honour to refer to the Agreement of today’s date between the Government of the United Kingdom of Great Britain and Northern Ireland and the European Atomic Energy Community (Euratom) for co-operation in the peaceful uses Of atomic energy and in particular to paragraph 2 of Article XIV. It is understood that the supply of fuel by the Authority cannot take place until mutually satisfactory arrangements have been made for the adequate pro- tection of the Authority against third party liability. I have accordingly to propose that, if there is delay in the conclusion of general arrangements to this end, the Contracting Parties shall consult together with a view to making mutually satisfactory ad hoc arrangements for the furtherance of specific transactions. If the foregoing proposal is acceptable to the European Atomic Energy Com- munity (Euratom), I have the honour to suggest that the present Note and your reply in that sense shall be regarded as constituting an agreement in this matter between the Government of the United Kingdom of Great Britain and Northern Ireland and the European Atomic Energy Community (Euratom)". In reply, I have the honour to inform Your Excellency that the foregoing proposal is acceptable to the European Atomic Energy Community (Euratom), who will regard your Note together with this reply as constituting an agree- ment in this matter between the European Atomic Energy Community (Euratom) and the Government Of the United Kingdom Of Great Britain and NOrthern Ireland. I have, etc. E. M. J. A. SASSEN Representative Hol.IFIELD. Mr. Toll, the staff counsel, has a question. Mr. Toll. Is it possible that some of the research and development funds could be used to do research in Britain? Article II (A) stafes that the research and development will be carried on “both in the United States and in Europe.” It does not say “in the United States and in the Community.” Mr. DILLON. When they say “Europe” there, the intent is to mean the Community; it is the countries of the Community. (A letter clarifying the above discussion follows:) [Copy J DEPARTMENT OF STATE, Washington, D.C., January 29, 1959. The Honorable JOHN O. PASTORE, Chairmam, Subcommittee on Agreements for Cooperation, U.S. Senatc. DEAR SENATOR PASTORE: As you will recall, in the course of my testimony on January 22, 1959, on behalf of the agreement for cooperation with the European Atomic Energy Community (Euratom), Mr. Toll inquired as to whether it would be possible for some of the research and development funds under the joint pro- gram to be spent in Europe but outside of the Euratom Community. Particular reference Was made to article II of the agreement for cooperation which indi- Cates that the joint research and development program will be conducted both in the United States and “in Europe.” In my reply, I indicated that I under- Stood that the Word “Europe” meant the Community in this context and I stated that it was not intended that the work supported in Europe would be performed Ouside the Community. I have since conferred with Mr. Floberg to verify the accuracy of my state- ment and, as a result of our conversation, I believe my reply to Mr. Toll should be qualified. In particular, I have been informed that, while it is generally 118 AGREEMENT FOR COOPERATION WITH EURATOM eXpected that most, if not all, of the work performed in Europe will, in fact, be performed in the Community, it was not intended that the program should be restricted to preclude the sponsorship in exceptional cases of research and de- Velopment projects in other than Euratom countries of these projects materially promise to benefit the joint program. Accordingly, in order to correct the impres- SiOn Created during my exchange with Mr. Toll, I would appreciate the insertion Of this letter in the record. Sincerely yours, C. DOUGLAS DILLON, Under Secretary for Economic Affairs. Mr. DILLON. This research will have to be approved by the Joint Board. That is what it will be. It is not intended that it will be out- side the United States or the Community itself. Representative HOLIFIELD. In this context does the word “Europe” really refer to the Euratom countries? Mr. DILLON. It refers to the six member countries in Euratom. Mr. ToI.L. Does not article VII-A. 3 indicate that assignment might be made of inventions made in third countries outside of the United States and the Community? Mr. DILLON. I would prefer that anything regarding this article VII be taken up with the Atomic Energy Commission. I am not competent to speak to that. Mr. HoLIFIELD. Mr. Secretary, my question in regard to the financing of reactors that might be built by the British stems from the fourth paragraph on page 3 of your testimony, where you mention that the line of credit will not exceed $135 million to Euratom to assist in financing the purchase of U.S.-type nuclear reactors to be installed in nuclear powerplants. My thought was that in place of having “U.S.-manufactured re- actors,” you have the word “type.” That would clearly open the door, if your testimony prevailed, to U.S.-type reactors being built by the foreign countries with our participation in the financing. Mr. DILLON. That is correct. These will be U.S.-type reactors that will be built by Euratom by Euratom countries and each project will be a joint project between the United States and one of the Euratom countries. It is anticipated that the European countries will join with us and there may be some, undoubtedly there will be some, materials for these reactors that will be manufactured in those countries, in the Euratom countries. But certainly there is no intention that this will have any applica- tion to the United Kingdom or any contract it may make with Euratom. This is understood by the British. Representative Hol.1FIELD. If this is the understanding, I am satisfied. Is it the understanding of your staff that this is the meaning 2 Mr. DILLON. Yes. Representative Hol.IFIELD. I am satisfied. Senator PASTORE. As a matter of fact, in our report the Euratom Cooperation Act for 1958 we did say on page 12: It should be clear that the Joint Committee does not intend that the British foreign atomic power efforts should be undercut. It is understood that Euratom is negotiating with the British as well as the United States. AGREEMENT FOR COOPERATION WITH EURATOM 119 Another question on the administration: What is the Euratom Or- ganizational situation and when will it get its chairman Ż I understand they are without a chairman now ; is that correct? Mr. DILLON. We understand that that is correct, but they are likely to get a chairman very, very rapidly. The matter has to be formally approved by the Council of Ministers, but the resignation of Mr. Armand is before the Council of Ministers, and we think that it is likely that his successor will be appointed very shortly. The Council of Ministers will approve Mr. Armand's successor and at that point there will be a chairman elected to succeed Mr. Armand. Senator PASTORE. I think you already know some members of the committee did meet with him last fall, and we were very much im- pressed with the quality and the caliber and the spirit of this whole program and with the quality of their staff as well. As a matter of fact, our staff members were very, very much im- pressed with the criteria and standards that were developed by their staff. They thought it was quite a significant achievement. My next question is this: What role does the State Department expect to exercise or play in the administration of Euratom and, if any, what organizational arrangements have been made? Mr. DILLON. The State Department has a representative, Ambas- sador Butterworth, who is the official U.S. Government representa- tive to all these European organizations. He is our representative to Euratom and the part we take will be through him, representing the President, and he will be on all renegotiations or major negotiations involving agreements in principle. That would be his business. The detailed operation of this program, the technical part, which will be by far the greater burden, once this Agreement for Coopera- tion goes into effect, will be handled by representatives of the Atomic Energy Commission who will be chosen for the purpose and who will be attached to Ambassador Butterworth’s mission in Europe for that urpose. p It will be handled directly through them. The State Department will not try to get into that sort of business. Senator PASTORE. Now, I have one final question on my part. It has also been desired to promote liaison between the international agency in Vienna and Euratom. Have there been any discussions along that line, any agreements reached, or what is really the feeling? Mr. DILLON. We understand discussions are still in the prelimi- nary stage. There have been discussions between the two, and we are hopeful that a close relationship will be worked out. That is one of our objectives. Senator ANDERSON. Your paper here says, on the top of page 3, the first paragraph : (NOTE-It is the actual duty that has been suspended, not the col- lection of it.—Ed.) Just straighten us out. What period does that mean? From when to when : What 3-year period? They could have it on for 2 years and then put it back on again for a while and give us a suspension in 1980. Mr. DILLON. No, sir; maybe I was not specific enough in this written statement. 120 AGREEMENT FOR COOPERATION WITH EVRATOM The 3-year period specifically runs from January 1, 1959, to Jan- uary 1, 1962. (NOTE.-It is the actual duty that has been suspended, not the col- lection of it.—AE'd.) Senator ANDERSON. I thought that was true. Then, finally, if there is a 10-percent duty in effect after that, would that not be paid at least in part by the American taxpayer under the aid being given the Euratom program & Mr. DILLON. One might be able to say it would be financed by the American taxpayer, but he will be repaid with interest. Senator PASTORE. Mr. Durham. Representative DURHAM. When we were in Brussels last year we were impressed with the Euratom organization as the Senator has al- ready stated. Since the Atomic Energy Commission is, of course, quite interested in this field, and connected with it for a long time to come, has any thought been given to having somebody in Mr. Butter- worth's organization, in some kind of official status? Mr. DILLON. Yes, sir; we expect there will be a Deputy to Mr. Butterworth for Euratom Affairs who will be chosen by the Atomic Energy Commission and will in effect be their representative in Mr. Butterworth’s office. Representative DURAAM. Then he can answer for the State Depart- ment and Atomic Energy Commission in case questions arise; is that correct? Mr. DILLON. That is correct. Senator PASTORE. Are there any further questions? This is a final comment: I want to commend the Atomic Energy Commission, State Department, and Euratom for the progress made so far. Much of the organization policy and procedures have been established, but I would stress that you still have a long way to go and that you must continue to press On. - I would especially call your attention to the indemnity problem and to your 1963 deadline for reactor construction. This latter deadline may be unrealistic, and if this becomes more apparent feel free to come up here and tell us about it and perhaps we can devise even more flexibility than the proviso on two reactors by December 31, 1965. . I want to thank all the witnesses for coming here. I think this concludes the hearing. (Thereupon, at 11:15 a.m., Thursday, January 22, 1959, the subcom- mittee was adjourned.) A PP E N ID I X EUROPEAN ATOMIC ENERGY COMMUNITY EURATOM The COmmission The PRESIDENT and MEMBERS Of the Euratom Commission to the PRESIDENT Of the European Parliamentary Assembly, the CHAIRMAN of the Economic and Social Committee, the PRESIDENT Of the COuncil BRUSSELS, 9th October, 1958. SIR, Article 31 of the Treaty establishing Euratom states that the Commission shall work out the basic standards for the protection Of the health Of workers and the general public against the dangers arising from iOnising radiations, after Obtaining the Opinion of a group of authorities appointed by the Scientific and Technical Committee. We have the honour to submit here with draft Directives laying down these basic standards, drawn up by the COmmission in accordance with Article 31. The opinion of the group of authorities appointed by the Scientific and Technical Committee is also attached hereto. We would add that the exchanges of views which have taken place between the Commission and the Scientific and Technical Committee, particularly dur- ing the session of that Committee held on 6th October, 1958, have been taken into account in drafting the Directives. With the assurance Of Our highest COInsideration, We are, Sir, L. ARMAND E. MEDI President Vice-President P. DE GROOTE H. KREEELER E. M. J. A. SASSEN Member Member Member [Unofficial informal translation] EUROPEAN ATOMIC ENERGY COMMUNITY EURATOM THE COMMISION DRAFT DIRECTIVES LAYING DOWN BASIC STANDARDS FOR THE PRO- TECTION OF THE HEALTH OF WORKERS AND THE GENERAL PUBLIC AGAINST THE DANGERS ARISING FROM IONISING RADIATIONS EXPLAN ATORY NOTE As part of its task, the European Atomic Energy Community is required under Article 2 of the Treaty to establish, and ensure the application of, uni- form Safety standards to protect the health of workers and the general public. Article 30 of the Treaty, particularising this task, stipulates that “basic | 2 || 122 AGREEMENT FOR COOPERATION WITH EURATOM Standards for the protection of the health of workers and of the general public against the dangers arising from ionising radiation shall be established within the Community. “The term “basic standards' shall mean : “(a) the maximum doses compatible with adequate safety : “(b) the maximum permissible degree of exposure and contamination and “ (C) the fundamental principles governing the medical Supervision of WOrkers.” Article 31 Of the Treaty lays down the procedure to be followed by the Com- mission in working out the basic standards. This procedure has been fol- lowed; a group of authorities, appointed by the Scientific and Technical Com- mittee from among the scientific experts and especially public health experts Of the Member States, has been formed and has submitted to the Commission, as required under the Treaty, an opinion which has been taken as a guide in WOrking Out the basic standards. This Working Party consisted of 12 experts, that is to say, two representa- tives from each Member State. There are available at the present time recommendations issued by interna- tional Commissions which, from the scientific standpoint constitute valid refer- ences On the subject of protection against ionising radiations; so far, how- ever, none of these are official and their form and scope does not correspond to that envisaged in the Treaty for basic standards intended to safeguard the health Of workers and the population as a whole. In this field, no international Organisation has such specific terms of reference as Euratom which has the Statutory power to lay the foundations Of a common policy for the protection Of health extending to the six countries which form the Community. - Although the Treaty confers this power upon the Commission, it reserves to each Member State the task of enacting the legislative and administrative provisions required to ensure compliance with the basic standards laid down. These standards constitute “directives” within the meaning of Article 161 of the Treaty since they bind any Member State to which they are addressed, as to the result to be achieved, while leaving to domestic agencies a competence as to form and means. In practice, the health authorities of each country have their own traditions and particular features, and, taking the Directives of the Community as a pattern, must interpret their provisions at national level. While the standards must be general in scope, it is none the less essential that they should be precise and, without departing from strictly scientific and objective principles, that they should cover all aspects of the problems con- nected with the protection of the health of workers and the population at large. The present Directives satisfy these requirements; they take into ac- count all the concepts that may be regarded as valid in a field where a measure of prudence is necessary in view of the uncertainties which exist. The bio- logical effects of radiation are not fully known and many factors must be taken into consideration. However, with the knowledge already available, it is possible to arrive at a reasonable evaluation of the risks which are considered to be acceptable in the peaceful uses of nuclear energy, and to draw up basic standards which provide the population and the Workers with an adequate guarantee against these hazards. Under Article 32 Of the Treaty, these stand- ards can be revised or supplemented at the request Of the Commission or of a Member state and in the light of new factors which may be introduced as science advances. The experts appointed by the Scientific and Technical Committee are unques- tionably qualified to deal with all aspects of protection against radiation and, in broad outline, they have followed the most recent recommendations of the Inter- national Commission on Radiological Protection, adapting these to the require- ments of the Community. It should be pointed out that in international scien- tific circles, this body is at present regarded as the best informed and least questioned authority on matters connected with protection against ionising radiations. All those parts of the Directives which lay down maximum permissible doses and maximum permissible exposures and contaminations are based on the values given by the International Commission on Radiological Protection. As regards the fundamental principles governing the medical Surveillance Of workers, these have been considered in the greatest possible detail and they AGREEMENT FOR COOPERATION WITH EURATOM 123 COmbine all the basic concepts which must govern the protection measures to be applied in all installations where danger of irradiation exists. It is not possible to define these fundamental COncepts without making a parallel study Of the principles governing the protection of the health of the population at large. These two problems are intimately linked and, quite rightly, they have been taken into consideration in drawing up the basic standards. The methods which translate the principles of protection are essentially Of a preventive nature and are based, first and forem Ost, On the limitation Of ex- posure and contamination. They represent the guarantee which public Opinion rightly expects of a sound policy for the protection of health linked with the development of the peaceful uses Of nuclear energy. Consequently, instead Of acting as a brake On the expansion of the present and future applications Of nuclear energy, the protective measures designed to safeguard the health Of the public are in fact likely to encourage such expansion, and are an essential Corollary to it. The present directives satisfy all these requirements, and are arranged as follows : Title I defines certain terms, units, values and symbols used in the Directives. The definitions must be incorporated in these basic Standards, and are essential for understanding the full meaning Of the subsequent Titles. Title II lays down the scope of application, i.e., the sectors in which the standards shall be applied, and specifies the activities and persons that may possibly be granted exemption in cases where it WOuld be unnecessary Or ex- cessive to insist upon the strict observance of the regulations. Titles III and IV relate to provisions (a) and (b) of Article 30 of the Treaty, and lay down the “maximum doses compatible with adequate safety” and the “maximum permissible exposures and COntaminations”. Insofar as the popula- tion as a whole is considered, the dose has been calculated with due regard to the genetic risk, and the maximum permissible doses and concentrations for Occupational exposure and for special groups of persons have been taken into account, by weighting them to the population as a Whole. These doses also insure the population against somatic risks. The standards take external radia- tion and internal radiation into a CCOunt : they exclude not Only the natural radiation background but also exposure during medical examination and treat- ment. Title V deals with the “fundamental principles” governing the medical Sur- veillance of workers ; compliance with the maximum permissible doses, exposures and contaminations is ensured mainly by the Organization of a physical control for protection against radiation and a medical control, the essential principles of which must necessarily be specified. The medical Surveillance of workers implies, in addition, measures to protect health of the population as a whole, the general outlines of which are given in Chapter III. .4 mm.C.T.C.s 1, 2 and 3 are tables for the practical application of certain values given in Titles II and IV. The General Remarks and Comments do not form an integral part of the Directives, but are intended as an explanatory note for the information of the reader. THE COUNCIL OF THE EUROPEAN ATOMIC ENERGY COMMUNITY Having regard to the provisions of the Treaty and particularly those of Articles 30 and 31 ; Having regard to the opinion of the group of authorities appointed by the Scientific and Technical Committee from among the scientific experts and eSpecially public health experts of the Member States : Having regard to the opinion of the Economic and Social Committees; Having consulted the Assembly ; Colisidering that basic standards for the protection of the health of Workers and of the general public against the dangers arising from ionising radiations, as defined in the Treaty, must be laid down in order to permit each Member State to enact the legislative and administrative provisions required to ensure compliance with them, to take the necessary measures With regard to instruction, education and professional training, and to enact such provisions in harmony with those applicable in the other Member States : Considering that protection of the health of workers and of the general public necessitates that any activity which involves danger arising from ionising radiations shall be governed by regulations : 124 AGREEMENT FOR COOPERATION WITH EURATOM Considering that the basic standards must be adapted to the conditions under Which nuclear energy is used and that they vary according to whether it be a matter of the individual Safety of persons occupationally exposed and of persons belonging to special groups Or of the protection of the population as a whole; Considering that practical measures to protect the health of workers and the general public necessitate both medical control and physical control; Considering that medical surveillance of workers would be inoperative if certain fundamental principles of protection were not applied to the population as a whole; Considering, lastly, that the protection of the health of WOrkers and Of the general public calls for a system of control and inspection designed to ensure compliance with the basic standards; Decreeing on the proposal of the Commission; HAS APPROVED THE PRESENT DIRECTIVES TITLE I–Definitions A riticle 1 The following definitions are used for the purposes of these Directives: $1. Units, values and symbols e “Activity”: the number of disintegrations in unit time. Activity is expressed in “Curies”. “Curie”: the quantity of radioactive nuclide in which the number of dis- integrations per second is 3.7 × 10"; it is a unit of radioactivity. One “kilocurie.” equals 10°. Curies, one “millicurie” (mc) equals 10° curies, and one “microcurie” equals 10" curies. “Rad”: the unit of absorbed dose: 1 rad equals 100 ergs per gramme of irradiated material at the place of interest. “Rem”: the quantity of ionising radiations which, when absorbed by the hu- man body, produces a biological effect identical to that produced in the same tissue by the absorption of one rad of X-radiation. The X-rays taken as reference are those producing an average specific ion- isation of 100 ion pairs per micron of travel in water. This corresponds to X-rays Of about 250 kV. “Röntgen”: the quantity of X or gamma radiation such as that the associated corpuscular emission in 0.001293 gramme of air produces, in air, ions carrying a positive Or negative quantity of electricity equal to One electrostatic unit. § 2. Doses “Absorbed dose” of any ionising radiation : amount of energy imparted to matter by ionising particles per unit mass of irradiated material at the place Of interest. The unit Of absorbed doSe is the “rad”. “Exposure dose” of X- or gamma rays : the measure of radiation in terms of its capacity to produce ionisation. The unit of exposure dose of X- or gamma rays is the “rontgen” (r). “Personal dose”: the dose of ionising radiations received by any individual during a given period of time. “Integral absorbed dose”: the total quantity of energy imparted to the ma- terial by ionising particles throughout the region of interest. The unit of in- tegral absorbed dose is the “gramme-rad”. “Relative biological effectiveness” (R.B.E.) : the ratio of a dose of X-rays taken as reference to the dose of the ionising radiation in question which pro- duces the same biological effect. The accepted values of the R.B.E. of various types of radiation are given in the following table : Radiation R.B.E. Biological effect X- and gamma rays, electrons and beta | 1.-------------------- --| Whole-body irradiation (blood-forming rays of all energies. organs critical). . . Fast neutrons and protons up to 10 MeV-| 10--------------------- Whole-body irradiation (cataract for- mation critical). Alpha particles emitted by natural radio- || Compare with 0.1 | Carcinogenesis. elementS. In 1CrOCUlr1e of radi- um. Otherwise= 10. Heavy recoil nuclei---------------------- 20--------------------- Cataract formation. AGREEMENT FOR COOPERATION WITH EURATOM 125 “R.B.E. dose”: obtained by multiplying the absorbed dose in rads by the R.B.E. factor. The R.B.E. dose is expressed in “rems”. º “Maximum doses compatible with adequate safety the doses of ionising radiation that, in the light of present knowledge, are not expected to cause ap- preciable bodily injury to a person at any time during his lifetime, or to the population at large. They are evaluated on the basis of the radiation received by individuals or by the population as a whole, excluding natural background radiation and radiation in the course of medical examination and treatment. “Accumulated dose”: the sum of all the doses, integrated in time, Which an individual has received from any source, except natural background radiation and medical examination and treatment. “Population dose”: the dose of ionising radiation received by a population during a given period of time and weighted in relation to demographic data. § 3. I’hysical and radiological terms “Contamination”: radioactive contamination, i.e. the contamination Of any material Or any area by radioactive Substances. In the particular case of workers, such contamination includes both external cutaneous contamination and internal contamination irrespective of method of intake (inhalation, ingestion, absorption through the skin, etc.). “Disintegration”: process of Spontaneous breakdown Of a nucleus of an atom resulting in the emission of a particle and/or a photon. “Flux”: the number of particles per unit time crossing unit area normal to the direction of flow. Generally expressed as the number of particles per square Centimetre per second. “Natural background radiation”: all iOnising radiations from terrestrial and COSmic natural Sources. “Uptake”: internal contamination in which radioactive substances participate in the metabolism Of the body. “Exposure”: any exposure to iOnising radiation. “Planned emergency exposure”: the total or partial exposure to ionising radiation of a person Occupationally exposed, studied and accepted as a risk beforehand. “Nuclide” : the atom defined by its mass number, atomic number and energy State. “Ionising radiation” : electromagnetic radiation, X-ray or gamma ray photons Or quanta, or corpuscular radiation (alpha particles, beta particles, electrons, positrons, protons, neutrons and heavy particles) capable of producing ions. “Radioactivity”: Spontaneous disintegration of a nuclide with the emission Of a particle or a photon, to form a different nuclide. “Radio-toxicity”: the toxicity attributable to ionising radiation emitted by a radioactive element taken up ; it depends not only on the radioactive charac- teristics but also on the metabolism of the element in the body or in the organ, and therefore On its chemical and physical state. “Source”: an apparatus or substance capable of emitting ionising radiation. “Sealed source”: a source consisting of radioactive substances firmly incorpo- rated in solid and inactive materials, or sealed in an inactive envelope of strength sufficient to prevent, under normal conditions of use, any dispersion of radioactive substances and any possibility of contamination. “Unsealed Source”: a source consisting of radioactive substances in such a form that dispersion of radioactive substances cannot be prevented and risk of Contamination Cannot be eliminated. “Radioactive substances”: any substances showing radioactivity. $4. Other terms “Accident’: a chance event which entails a risk of radiation exceeding the maximum permissible dose. *. “Medical control”: embraces all the medical examinations and the IlléâSll Tes taken by the approved medical practitioner for the health surveillance of WOrkers Who may be exposed to ionising radiations, and to ensure COImpliance with the basic standards. "Physical Control” embraces all the surveys, monitoring and tests carried Out With a View to protection of the health of workers and the population at large against ionising radiations, and to ensure Compliance with the basic Standards. 36636–59—9 126 AGREEMENT FOR COOPERATION WITH EURATOM “Qualified expert”: a person having the knowledge and training needed to measure ionising radiations, and to give advice with a view to ensuring effective protection of individuals and correct operation of protective installations. “Special groups”: these groups include: (a) persons who enter the controlled area occasionally in the course of their duties, but are not regarded as “persons occupationally exposed”; (b) perSons who handle apparatus emitting ionising radiations or con- taining radioactive substances in quantities such that the radiations emitted do not result in the maximum permissible dose for this category of person being exceeded ; (c) perSons who reside in the vicinity of the controlled area and on ac- Count Of this fact may be subjected to an exposure higher than that laid down for the population as a whole. “Approved medical practitioner”: a medical practitioner responsible for medi- cal control whose qualifications and skill are recognised and approved by the competent authority. “Persons occupationally exposed”: persons who in a controlled area regularly undertake work exposing them to the hazards of ionising radiations. “Controlled area” : a specified area in which there is a source of ionising radia- tions capable of delivering the maximum permissible dose for persons occupa- tionally exposed, and in which there is a physical control for protection against radiation and a medical COntrol. “Protected area” : any area surrounding a controlled area where there is a con- tinuous danger of the maximum permissible dose for the whole population being exceeded, and where there is a physical control for protection against radiation. TITLE II—SCOPE OF APPLICATION Article 2 These directives shall apply to the production, processing, handling, use, possession, storage, transport and disposal of natural and artificial radioactive substances and to any other activity which involves a hazard arising from ionising radiation. Article 3 The activities referred to in Article 2 shall be subject, in each Member State, to a prior authorisation granted by the authorities which the Member State designates for the purpose. A riicle 4 This requirement may, however, be waived in respect of : (a) the handling of radioactive substances of a concentration less than 0.002 microcurie per gramme or of total activity less than 0.1 microcurie. These values are set for the most highly toxic radioactive isotopes ; they shall be calculated in each case in accordance with the relative radio- toxicity and the information give in the Tables in Annex 1, page 133 and 134; (b) the handling of apparatus emitting ionising radiation, of a type recog- nised by the competent authorities, provided that the radioactive materials are effectively protected against any contact and any leakage and that the dose emitted, at any time and at any external point situated at a distance Of 0.1 metre from the surface of the apparatus, does not exceed 0.1 millirem per hour. Article 5 An authorisation shall always be required for : (a) the use of radioactive substances for medical purposes; (b) the addition of radioactive substances in the manufacture of food- stuffs, pharmaceuticals, cosmetics, and products for household use; (c) the use of radioactive substances in the manufacture of toys. TITLE III–MAXIMUM DOSES COMPATIBLE WITH ADEQUATE SAFETY Article 6 - Exposure of persons and the number of persons exposed to ionising radiations must be kept as low as practicable. AGREEMENT FOR COOPERATION WITH EURATOM 127 CHAPTER I : MAXIMUM PERMISSIBLE DOSES FOR PERSONS OCCUPATIONALLY EXPOSED Article 7–Total earposure of the body § 1. The maximum permissible dose for a person occupationally exposed shall be expressed in reins and shall be calculated on the basis of age and an average annual dose of 5 rems. The maximum permissible dose for a person OCCupa- tionally exposed, of any particular age, shall be obtained from the basic for Inula : D=5 (N–18) where D is dose in rems and N is age in years. Dose D is that actually received at the level of the blood-forming organs, the gonads and the lenses Of the eyes. § 2. Protective devices shall be based on an average weekly dose of 0.1 rein. § 3. The maximum accumulated dose during any thirteen consecutive Weeks may not exceed 3 rems. The following shall be taken into account in calculating the dose : (a) persons aged 18 and over may receive an accumulated dose of 3 rems distributed over thirteen consecutive weeks), provided that the basic formula is COInplied With and that the dose accumulated OVer One year never exceeds 12 rems. A single dose of 3 rems may be permitted only in an exceptional Case. (b) When the dose previously accumulated is known with certainty and is below the dose calculated according to the basic formula, doses may be accumulated at the rate of 3 rems per 13 weeks as long as the maximum per- missible dose calculated according to the basic formula has not been reached. (C) When the dose previously accumulated is not known with certainty, it Shall be assumed to be equal to the maximum permissible dose calculated according to the basic formula. (d) When the dose previously accumulated is known with certainty and Corresponds to Standards applying at a time when the recommended maximum permissible doses were higher than those according to the basic formula, the method of calculation shall be stipulated in (c) above. (e) Persons Occupationally exposed before reaching the age of 18 may in no Case receive an accumulated dose in excess of 5 rems per year before reaching that age, and the maximum permissible total dose up to the age of 30 shall be 60 rems. Article 8—Planned emergency eacposure In the case of a planned emergency exposure, a dose Of 12.5 rems may be per- mitted for persons occupationally exposed. This dose may be received only once in a lifetime ; it shall be included in the maximum permissible total dose cal- culated according to the basic formula. If the sum should exceed this maximum permissible total dose, the excess shall be disregarded. Article 9–Accidental earposure In the case of an accidental exposure of a person occupationally exposed, a dose between 3 and 25 rems, insofar as it is received only once in a lifetime, shall be included in the maximum permissible accumulated dose corresponding to the age Of the individual and Calculated in a CCOrdance with the basic formula. If this maximum permissible total dose is exceeded, the excess shall be disregarded. Article 10—Partial earposure In the case Of partial exposure Of the body, during which the doses received by the blood-forming Organs, the gonads and the lenses of the eyes together do not exceed the limits Set by the basic formula, the maximum permissible dose Shall be : (a) for external eXposures of the hands and forearms, and feet and ankles, 15 rems per 13 weeks and 60 rems per year ; (b) for external exposures of the whole skin, 8 rems per 13 weeks and 30 rems per year ; (e) for exposures of internal organs with the exception of the blood- forming Organs, the gonads and the lenses of the eyes, 4 rems per 13 weeks and 15 rems per year. 12S AGREEMENT FOR COOPERATION WITH EURATOM CHAPTER II : MAXIMUM PERMISSIBLE DOSES FOR SPECIAL GROUPS Article 11 (a) For persons belonging to the special groups within the meaning of Article 1, paragraph 4, fifth subparagraph (a) and (b), the maximum permissible dose shall be 1.5 rems per year ; the dose referred to is that actually received at the level Of the blood-forming Organs, the gonads and the lenses of the eyes. (b) For persons belonging to the special group within the meaning of Article 1, paragraph 4, fifth subparagraph (c), the maximum permissible dose shall be 0.5 rem per year; the dose referred to is that actually received at the level of the blood-forming organs, the gonads and the lenses of the eyes. CHAPTER III. MAXIMUM PERMISSIBLE DOSE FOR THE POPULATION AS A W HOLE Article 12 For the population as a Whole, the maximum permissible dose shall be 5 rems per head Of population accumulated up to the age of 30. This dose must take into account, by weighting, the doses received by persons Occupationally exposed and by Special groups of persons. It shall not take into account exposure to natural background radiation and in the COurse of medical examination and treatment. TITLE IV—MAXIMUM PERMISSIBLE EXPOSURES AND CONTAMINATIONS Article 13 § 1. By “maximum permissible exposures” is meant external radiation which in the light of present knowledge, divided in time and distributed in the body, imparts the maximum permissible dose to the individual or to the population. § 2. The exposures, according to the case, are expressed in terms of exposure doses, doses measured in the air, and particle flux. § 3. The Table in Annex 2, page 135, shows the corres), nding neutron flux for the maximum permissible dose in respect of persons Occupationally exposed. Article 14 § 1. By “maximum permissible contaminations” is meant contaminations such that the Quantities of radioactive isotopes present in the air inhaled Or in drink- ing Water do not exceed the maximum permissible concentrations laid down in the Table in Annex 3, pages 136 to 143. § 2. The concentrations are expressed in terms of activity per unit volume. § 3. The Table in Annex 3 gives the concentrations which correspond to the maximum permissible doses for persons Occupationally exposed. § 4. In the case Of COntamination resulting from the uptake in the same Or- gans of a mixture of radioactive isotopes of which the nature is known, the cumulative action Of the exposures which they cause must be taken into account. § 5. In the case Of COntamination Of a single Organ by a mixture of radioactive isotopes of which the nature is known, the sum Of the exposures from the dif- ferent isotopes must be taken into account in Calculating the maximum permis- Sible concentrations. § 6. The case of contamination of different Organs by the uptake of a mixture Of radioactive isotopes must be regarded as a total exposure. § 7. In the case of contamination by a mixture of radioactive isotopes of un- known COmpOsition, the Values used are those Shown in the Table in Annex 3 for any mixture of beta and gamma emitters and for any mixture of alpha emitterS. Article 15 When the exposure Of persons Occupationally exposed is linited to 40 hours per week, the concentrations shown in the Table in Annex 3 for air inhaled may be multiplied by 3. In the case of persons remaining for a limited period in an atmosphere contaminated by a radioactive substance, the conversion factor may be higher than 3, according to the time of exposure; provided that it shall never exceed 10. Article 16 The values of maximum permissible exposures and contaminations for condi- tions other than those of total exposure of persons Occupationally exposed shall be calculated from the maximum permissible doses as laid down in Title III. AGREEMENT FOR COOPERATION WITH EURATOM 129 Outside controlled areas, the maximum permissible concentrations which deter- mine the maximum permissible contaminations shall be one-tenth of the Values shown in the Table in Annex 3. TITLE V FUNDAMENTAL PRINCIPLES Govern ING THE MEDICAL SURVEILLANCE OF WORKERS Article 17 The medical surveillance of workers shall consist of physical control for pro- tection against radiation and of medical control; it also involves the adoption of measures to protect the health of the population as a Whole. Article 18 A system of inspection shall be established by each of the Member States to supervise the controls and to initiate action in regard to surveillance and inter- vention wherever necessary. CHAPTER I. PHYSICAL CONTROL FOR PROTECTION AGAINST RADIATION Article 19 Physical control shall be carried out by qualified experts with Specialised knowledge of the problems of physical control of radiations. The extent of the precautions taken must depend on the size of the installation and the hazards associated with the work involving exposure to ionising radiations. Article 20 Physical control shall include: § 1. Specifying and marking out controlled areas, that is, areas in which the maximum permissible dose of 1.5 rems per year, laid down in Article 11, (a), for special groups of persons may be exceeded, and in which protection is based on compliance with the maximum permissible doses laid down in Chapter I of Title III for persons occupationally exposed. § 2. The examination and control of protective devices, including: (a) the examination and prior approval of plans for installations Which involve a radiation hazard, and of the siting of these installations in the establishment; (b) the acceptance of new installations from the viewpoint of physical control; (c) tests to check the effectiveness of technical protective devices; (d) tests to check the serviceability and correct use of measuring instrumentS. § 3. Surveys and monitoring as follows: (a) the assessment of exposures in the places concerned, indicating the nature and where appropriate the Quality Of the radiations in Question, par- ticularly with a view to the possible application of the relative biological effectiveness of ionising radiations (R.B.E.), and, according to the case, determination of the exposure dose, dose measured in the air, or flux ; (b) the assessment of radioactive contaminations, indicating the nature and the physical and chemical state of the radioactive contaminants, and determination of their activity and their concentration per unit volume and unit area ; (c) assessment of the personal dose received by the whole body according to the COnditions Of exposure. The accumulated personal dose of persons exposed to external radiation must be assessed by one or more individual radiation detectors Continuously carried on the person ; the personal dose of those exposed to internal radiation must be assessed by any physical or medical method enabling the uptake to be evaluated. Article 21 The frequency of assessments shall be such as to ensure compliance with the basic standards in each case. Article 22 (a) Records relating to the assessment of personal doses shall be preserved for at least thirty years after the cessation of work which involved exposure to ionising radiations. (b) Results of assessment of exposures and radioactive contaminations, and the action taken, shall be recorded and preserved. 130 AGREEMENT FOR COOPERATION WITH EURATOM CHAPTER II. MEDICAL CONTROL Article 23 Medical Control of workers shall be carried out by qualified medical practi- tioners approved in each Member State by the bodies nominated for the purpose. Article 24 NO Worker may be started or maintained in a post involving exposure to iOnising radiations if this would be contrary to the medical findings. Article 25 Medical Control of workers shall include: § 1. Pre-Crn ployment medical catamination. (a) This examination shall include a thorough enquiry into the medical history of the person, during which any previous exposures to radiation must be taken into consideration ; and a general clinical examination to— gether with all the investigations necessary to judge the conditions of the Organs and functions liable to be most affected by exposure to radiation. (b) The medical practitioner conducting the examination must be in- formed of the initial duties and of any change in the duties of the worker, and the exposures which these involve. (c) Member States shall draw up a list, for the information of approved medical practitioners, showing the criteria which determine unsuitability, and shall lay down a procedure for appeal to the medical authorities which shall be available to Workers in appropriate Cases. § 2. Routine and Special medical cataminations TO determine the conditions of the most radiosensitive Organs aand functions. (a) The frequency of these examinations Shall depend upon the WOrking COnditions and the worker's State Of health. NOt more than One year may elapse between two successive examinations, and this interval Shall be reduced whenever necessary on account of exposure conditions Or the WOrk- er's State Of health. (b) The approved medical practitioner shall extend the health surveil- lance beyond cessation of work for as long as he considers necessary to safeguard the health of the person COncerned. (c) The following medical classification shall be adopted for work in- volving radiation hazards : (i) workers unsuitable for their duties, whose ability to Withstand from the hazard ; (ii) workers placed under observation, whose ability to withstand the hazard must be proved ; (iii) suitable workers, able to withstand the hazard which their duties in VOlve : (iv) workers under health surveillance after cessation of Work Which involved exposure to ionising radiations. § 3. Eacceptional surveillance (a) Exceptional surveillance shall be arranged in the case of Severe ex- ternal radiation and in case of contamination of the Worker. (b) In addition to the routine medical examinations, all the necessary further examinations, decontamination measures and/or urgent remedial treatment, as decided by the medical practitioner, shall be carried out. (c) The medical practitioner shall decide whether the worker should remain at work, be moved away, or be isolated and shall prescribe the medical treatment. - • (d) Añy worker subjected to accidental external radiation in excess Of 25 rems or accidental internal contamination must be referred to the medical COntrol. Article 26 § 1. A medical file shall be opened for each worker, which Shall be kept up-to- date and be preserved on file for at least 30 years after the cessation of work which involved exposure to ionising radiations. § 2. The medical file shall include: e * (a) information regarding the duties to which the worker has been as- signed ; (b) the personal doses received by the worker; (c) results of medical examinations. AGREEMENT FOR COOPERATION WITH EURATOM 131 § 3. Member States shall decide the practical arrangements to enable the medi- cal file for each worker to be kept up-to-date. In addition, they shall ensure the free circulation within the Community of all relevant information Concerning the duties performed by the worker and the doses received. Article 27 Every worker who is liable to be exposed to a radiation hazard must be in- formed about the risks which the work involves for his health, the techniques of the work, the precautions to be taken, and the importance of complying With the medical requirements. CHAPTER III. PROTECTION OF THE HEALTH OF THE POPULATION Article 28 Protection of the health of the population shall include continuous Surveillance by the competent bodies and a system of inspection, accompanied by planning with regard to the measures to be taken and Organisation Of Services for inter- vention in the event Of an accident. Article 29 This surveillance shall embrace all the arrangements and Controls which serve to detect and eliminate the factors which, in the generation and use Of iOnising radiations Or in the course of any Operation involving exposure to their action, may cause a radiation hazard for the population at large. The extent Of the Drecautions taken shall depend upon the magnitude Of the radiation hazards, especially in the event Of an accident, and the density Of the population. Article 30 The surveillance shall apply : (a) in the “protected areas”, that is, the areas in which protection is based on compliance with the maximum permissible dose of 0.5 rem per year laid down in Article 11, (b), for persons belonging to the special group Of the population residing in the vicinity of the controlled area ; (b) to the Whole territory for Which the maximum permissible dose is that laid down for the population as a whole. Article 31 The surveillance shall consist of the examination and control of protective de- Vices, and the dose determinations to be carried out for the protection of the population. § 1. The examination and control of prospective devices shall include: (a) examination and prior approval of plans for installations in- Vol Ving a radiation hazard, and Of the proposed siting of these installations in the territory ; (b) acceptance of new installations in regard to protection against any radiation or contamination liable to extend beyond the perimeter of the es- tablishment, taking into account demographic, meteorological, geological and hydrological conditions; (C) tests to check the effectiveness of technical protective devices ; (d) acceptance, from the viewpoint of physical control, of equipment for measuring radiation and contamination ; (e) tests to check the serviceability and correct use of measuring instru- ments. $2. The dose determinations to be carried out for the protection of the popu- lation shall include: - (a). assessment of external radiation, indicating the quality of the radia- tions in question, and according to the case, determination of the exposure Close, dose measured in the air, or flux : (b) assessment of radioactive contaminations, indicating the nature and the physical and Chemical state of the radioactive Contanninants, and deter- mination Of their activity and their concentration (per unit volume in the atmosphere and in Water, per unit area in the ground, and per unit weight in biological and food samples; (c) assessment of the population dose, taking into account the Conditions of eXposure and Weighted in relation to demographic data. In particular ex- }. to Various Sources of radiation must be added together wherever DOSS1016. 132 AGREEMENT FOR COOPERATION WITH EURATOM § 3. The frequency of assessments shall be such as to ensure compliance with the basic standards in each case. § 4. Records relating to measurements of external radiation and radioactive Contamination, and results of assessment Of the dose received by the population, Shall be preserved on the files. Article 32 A system of inspection shall be established by each of the Member States to Supervise the protection of the health Of the population and to initiate action in regard to Surveillance and intervention. Wherever necessary. Article 33 §1. As a precaution against possible accidents, Member States : (a) shall plan the action to be taken by the Competent authorities; (b) shall determine and provide the necessary resources both in person- nel and in equipment to enable action to be taken to safeguard and maintain the health Of the population. § 2. Member States shall notify to the Commission the arrangements made in accordance With paragraph 1, (a) and (b), above. § 3. Any accident involving exposure Of the population to radiation must be notified as a matter of urgency, when the circumstances so require, to neighbour- ing Member States and to the Euratom Commission. AGREEMENT FOR COOPERATION WITH ElJRATOM 133 ANNEX l l. RELATIVE RADIO-TOXICITY OF ISOTOPES The accepted classification of radioactive isotopes according to relative radio-toxicity is as follows: A. # high radio-toxicity B. Hil radio- #. C. Moderate radio- toxicity P. Sliant radio- toxicity (x) - gamma emitters 36636 O-59—10 Sr90 + Y90, To210, At2ll, Ra326+ 55%(x)daughter products Ac227, Pu239, (x) Am2%l, cm242 ca"5, (x) Fe39, srö9, Y91, Ruloğ (x}Rh106, Iljl, (x) Bal”0, Lal"0, cel", (x) prl", sm.151, (x)|Eulº", (x)tm170, Pb219, B1219 (Ra D+E), (x)u23, (x)th 234+ (x) pa24, (x)Na24, P32, S35, c.156, (x)K42, (x) scº, sc"7, scº, (x)wh9, (x)Mn56, Fe35, (x)coé0, N159, (x)cu64, (x):n65, (x) Gaſ 2, (x) As76, (x)Rb86, (x)2F95, (x)Nb55, (x)Mo99, Tc36, (x) Rh105, PalO3+ Rh105, (x)Aglos, Aglll, calo2, (x) Agio9, (x)Snlly, (x) tel27, (x) tel29, cs137, (x)Bal?7, Prl"3, Pml#7 (x)Hol66, (x)+.0177 Jº (x) tal&2, (x)wl8l Jº (x)Rel83, (*) Irigo, (x) Irig2, (x)ptl91 , (x) Ptl93, (x) aul.96, (x) Aul.98, (x) Aul.92, (x)+1200, (x)+1202, r1294 ) iſ , , (x)=eſ , clº, Flº, (x) crºl, deſi J Jº e 2 Jº (x)+120l. 134 AGREEMENT FOR COOPERATION WITH EURATOM ANNEX l (Cor.t'd) 2. Activity below which official authorisation may be waived The requirement with regard to official authorisation may be waived insofar as the activities corresponding to the hatched area are concerned , Very high || |> radio-toxicity ---J -— ---_- —— High radio- -- * - •N toxicity -- - ) – – Moderate radio- - - toxicity – ~~ -- - - - - - TN Slight radio- - — toxicity T T-I - T. T - LT. S lo–7 lo-6 lo-5 lo-" lo-2 lo-2 curie (Ordinate corresponds to relative radio- toxicity of tho isotope, and abscissa to the activity in curies.) AGREEMENT FOR COOPERATION WITH EURATOM 135 ANNEX 2 TABLE SHOWING CORRESPONDING NEUTRON FLUX FOR THE MAXIMUM PERMISSIBLE DOSE IN RESPECT OF PERSONS occupATIONALLY 3XPOSED (l;0 hours per week) *- - Neutron energy Neutron flux (neutrons/cm2/sec) O.025 eV 700 lO eV 7OO lO keV 350 F. O. l MeV 70 O.5 MeV 2O l MeV 2O 2 MeV l2 5 to 10 MeV lO 136 AGREEMENT FOR COOPERATION WITH EURATOM ANNE 2 MAXIMUM PERMISSIBLE CONCENTRATION OF RADIOACTIVE ISOTOPE IN AIR INHALED AND IN DRINKING WATER FOR CONTINUOUS EXPOSURE OF PERSONS OCCUPATIONALLY EXPOSED (Table based on Recommendations of the International Commission on Radiological Protection of l. l.2.1954) Maximum permissible | - §: Radioisotope *:::::1 C Oncentrations & se } rg, in drinking | In Inhaled (l) water micro- air micro- curie/c. c. ourie/o. c. l H3 (HTO Total body O.2 10-5 © or H.220) - (GI) (2) O. 2 lo-5 4 Be7 BOne l 5 x 10-6 (GI) 2 x 10-2 || 3 × 10-6 6 |cl”(coe in Fat 3 x lo-5 lo-5 the air) (GI) 6 x lo-2 lo-5 * - —r 9 |Flö Bone 0.2 3 x lo-5 (GI) > 0.2 23 x 10-5 ll ina?" Total body | 8 x 10-3 || 2 x 10-6 (GI) 8 x 10-5 lo-6 15 p52 BOne 2 x 10-4 10-7 (GI) 8 x 10-4 10-7 (l) This table is provisional; it is due to be revised shortly in the light of new conclusions reached by the I.C. R.P. (2) (GI) denotes gastro-intestinal tract. (h) Values of microouries and microcuries/o. c. are given for º the parent element. The daughter elements are assumed to reach the appropriate fraction of equilibrium with the parent after it is taken into the body. (r) The ourie of natural uranium is considered to correspond to 3.7 x 101° dis/sec. from U238, to 3.7 x 1010 dis/sec. from u” and 9 x 10° als/sec. from U235. The ourie of natural thorium is considered to correspond to 5.7 x lol9 dis/sec. from The 52 and 5.7 x lolo dis/sec. from Thé28. It is oonsi- dered that none of the other daughter products of U238 or The 22 are Present at the time of ingestion or inhalation. AGREEMENT FOR COOPERATION WITH EURATOM 137 aximum per missible Atomic - critica Number Fadioisotope Organ concentrationS sms-4 (l) in drinking in inhaled water Ticro- a 1r micro- eurie/e e: curie/c. c. l6 | S22 Skin 5 x lorº no-6 r- (GI) 6 x lorº 1o-6 A l7 cl29 Total boss i : lo º 6 x lo 7 (GI) i lorº 2 x lorº l9 Kº2 Muscle 10-2 2 x lorº d (GI) 5 X loT2 6 x lo 7 2O ca"? Bone no-º 3 x lorº (GI) 2 x lorº 3 x lorº - -------- - - – – 2l scº Cpleen - O. ll 7 x lo-º Liver O. 5 25 X no-º (GI) lº X no-º 7 X io-8 2l scº7 | Spleen lº 9 x lo 7 - Liver 5 6 x lo 7 (GI) 9 x lorº 2 x lo 7 2l scº Spleen 5 6 x lo 7 Liver l li 3 x lo 7 (GI) l X lO 7 X lo 25 vº0 Bone 0,5 6 x lo 7 (GI) 3 X lo-º 5 X no-0 24 crº Kidneys O. 7 lo-5 (GI) 2 x lorº l, i lorº - - SA - - 25 Mn2? Kidneys O , l 5 li X io-6 Liver O. 4 º x no-º l (GI) 5 x lorº 5 x lo77 55 º 26 Fe Elood 5 x lorº 7 x lo 7 (GI) O. l 2 x 1o º 138 AGREEMENT FOR COOPERATION WITH EURATOM Atomic } * r critical ſlaximum permissible T lumber Radioisotope Organ cor.centrations ! (l) in drinking ºn inhaled | water 1,\icro-fair micro- | curie/c. c. *:::1 26 Fe29 Blood lo-" 2 x 10−9 (GI) 2 < 0 | 3 × 10" /* 27 co°0 Liver 2 x 10-? lo-6 ~) (GI) l; X lo." 3 x 107° 23 Ni23 Liver O. 5 x lo-5 (GI) l; X loſ.” x lo-7 -T- 29 cu°" Liver 6 x 10-8 5 x 10° (GI) 5 x 10° 3 x 10-7 ) —1– -- 30 znº Bone | 6 x 10-8 2 x 10−9 | (GI) 2 x 10-2 l; x 10-7 5l. Gaſ & Bone 3 lo-6 i (GI) 5 x lo-" lo-7 d 32 o.” | Kidneys lo TxTIO-5T | (GI) i 2 x 10-8 3 x 10-6 53 As7% Kidneys O. 2 2 X lo-6 ! (ºil– 2 X 10T l; X loº *) | 37 Rb" ! Muscle 3 x 10-2 || || x 10-7 (01) 5 X lot l, x 10-7 . •) -—— — — — — —--- - - - - - 38 Sr*9 ! Bone 7 x lo-2 2 X 10T (GI) 7 x lot 10-7 50 srºº y29 (h) | Bone 3 x 10-7 2 x 10-19 (GI) lo-2 2 x 10-7 | 59 Y91. T Bºne | | x lo-2 9 x 10"? | | (GI) | 3 × 10T 3 x 16: AGFEEMENT FOR COOPERATION WITH EURATOM 139 tomio | - Critical Maximulin permissible umber . * Crgan conce-traºkons ----— (l) in drinking in inhaled i water micro- air r.icro- -- curie/c. c. curle/c. c. l{O zºº Q- jib25 | Bor, e O. l; - C - 107° ! (C L) 6 x 10−" lo-7 + - - * l;l troº Bon G. 2 x 10-2 2 X 107' (GI) 2 : loº” 3 x 10-7 +---—-H-4--- - --sº l;2 | Mo’’’ Bc n = 5 6 X lo-" - \ -- * ~-D v. 1 or 7 *- (G3) | 3 × 10 |5 × 10 l;3 To 99 Xidneys 3 × jo-2 3 x 10-6 (GI) 10-2 2 × 10-7 l;l; Ru” + Rh49° kidneys O, Y. 3 x 10−9 (h) (GI) lo" 2 x 10-9 l;5 Rh105 Kidneys ! O. l; 2 x 10−9 º (GI) lo-2 2 x 10-7 l;6 PalO3 + n, 105 Kidneys lo-2 8 x lo-7 } -*. - (h) (GI) 5 : loº 9 X lo l;7 Ag+05 Liver 2 | lo-5 •) | (GI) | x 10−" #7 x icº ~r- - + l;7 | Ag+ll Liver s ; 3 × 10-5 (GI) 5 : lo-" |- x 10−9 en - iOC o *Y l;8 cc.19% + ſº Liver 7 x lot “ 7 x lot- (h (GI) O. 7 lo" 50 |sºlº Bone O. 2 6 x 10-7 (GI) 2 x 10-2 3 × 10-7 52 Tel 27 IK1dneys 3 x lo-2 10-7 : (GI) 7 : lo-" 10-7 | 140 AGREEMENT FOR COOPERATION WITH EURATOM | Atomic lumber H.------ ** **.*.*.*.*.* * * * * * : *- * …*.* . 52 Tel29 4 * ~ * > . . . . . Radioisotope -- - - - - ---, -> < * * * * *** *** - * * * Critical Maximum permissible concentrations * - *- : *-*. … ----, * * * ~ * : : - * * * * * * - - - - ---- (l) in drinking, water micro- __ ______lounie/9.0... | -2 Kidneys lC) T-- | Organ | | ! } |ourie/g.o. in inhaled air micro- l; X lo-3 l, X 1c-8 | (GI) 2 x 10" --------~ *- :- - - - - - - - - - - - - --- - - ----|--------------- - - - - - - - - - Thyroid 6 x 10-2 (GI) 26 x 10-2 Total body + x lo-2 26 x 10−9 6 x 10−9 –6 | Totel body loº . –6 55 Cs127 + Ba127 (h) Muscle 56 Ba” + Laº” (h) Bone * * * *-* > *--> *-- ~~.--> * - - - - + Pr * : * : --- *** * * * * *-* * * ** --> -*--- * * ~~ 2 x 10-2 2 X lot 2 5 X lo-" 3 X lo-" (GI) { (GI) Bone O. 5 (GI) * (h) Bone (GI) lo-" 59 Pr |Bone C X 10 (GI) 5 x 10−" 6l Prºlº'7 Bone O. 2 (GI) 2 x 10-7 i s & tºº 62 smº 51 Bone 5 X lo 2 – (GI) C : 107° 63 Euº" Bone 10-2 (GI) l; x 10−" 67 Holé6 Bone 5 t (GI) (5 : lo-" 9 X 10 2 x 10-7 l; X lo l; x 10-7 |--~~~----------——# 3 x 10−9 6 |lo Tº - C 2 X LºnTZ 8 x lo 9 x 10-7 18 X LO" ** *** as:--> * * * * = . . . . . . ~. - * * * * --> -- ~ : * > . . . - AGREEMENT FOR COOPERATION WITH EURATOM 141 |Atonio - TößEzāI. TMaximum Førºss ſºlo Number Radio 1sotope Crcar. c oxic e ſtrations - - ; (1) in drizzing TTE inhaled | Water I.iicro-4-air nicro- ; | curle/c.c. • curiº/cºo. -. 69 Tal?0 F}one | 6 x 10-2 lo-8 i | (GI) | 5 X lo-" C X lo-3 l ———--- — -----------, --- – -—-I-—- -— --- 7l i. It" Done | 6 º (GI) lo- 2 x lo-7 ºmºmº-ºº: -- t | " .. 18 ------— ––– +---—-a-- tº Ta 2 Liver lo-l 2 x 107. (GI) 5 × 10−" 2 x 107° ~~~~~ -- ~~~~ *- : — — — — — 4 - — — —-———— –––– — • ! * º | 7, i8i Boſle | O. l ; : lo-6 | (GI) | 7 × 10−" 10-7 —— ~. * * 4—-- + am-º-º-º-º- as “sº- 75 Relº Thyroid 9 : lo-2 9 X lo-6 S}: i\l O. 5 25 X 16-5 (GI) 2 x 10-2 || x 10−7 —— - —- –– 77 Irl2O | Kidneys 2-2 '... x 16-7 | Spleen. O. 2 lo" (GI) 2 x lo-2 º ;: lo-7 * ––.---—-––– s:- - - - -, -sk- *-a- - - - - - - -s ºr -º- ~ *-* *- : * ~ *- : *-*. 77 In 192 | Kidneys o x lo-" i5 X lot" | 4 Cpleen 6 : 10-3 |3 × 10-8 | (GI) 5 x 10−" 9 × 10-8 —— ſ ~ 1.1%l 1 r -> →--------- 7G P+, Xidney’s | 6 × 10 § 2 X 10 (GI) 7 x lo-" 10-7 -- ~- * * * * > ----|- - - - - - - -g- – ----- ºr--— - - -- – - 73 Pt. 125 I(iC..ieys - 5 X , -5 ' 2 x lo–7 (GI) 9 : 10~" 2 : 10-7 79 | A.I.96 L’. ver 5 x lo-2 2 x 10-7 | i Xidneys 5 x 10-2 2 × 10-7 | (GI) 2 x 10-2 | x 10-7 :- T * - - - - - 4— : 9 Au-98 Liver l, X lo-2 2 x 10-7 i |ºeys 5 X lo-2 |lo-7 . | (GI) 3 X 10T lo-7 142 WITH EURATOM AGREEMENT FOR COOPERATION Atomic * * Cºnji cAl T Maxl mum permi S S 1 ble Number Radi oi sot ope Organ concent rat ā ans (l) l in drinking in inhaled water micro- air micro- curle/c. c. curle/c. c. 79 Aul.99 Live r" 9 x 107% | x 10-7 Kidneys 8 x 10"? 3 X lor/ (GI) 2 x 10-2 3 x 10-7 81 T1200 Mu S Cle 2 x 10-2 2 x 10-% (GI) lo'ſ 2 x 16°7 81 T1291 Muscle 8 x 107* 7 x 16° (GI) 9 X no-3 2 X 10-8 8l T1292 Mu SC le 2 x 10"? 2 X lo-6 (GI) 5 x 10−3 9 x 10-7 4– +--- - - - - --------º-º-º-º- * r * ******* 81 T120° Muscle | 8 x 10° 8 x 10-7 i (GI) 19 2 x 10-7 82 Pb295 : Bone O 1 7 X 10 * ! (GI) 2 x 1073 | x 10-7 82 irº, ar (h) Bone 2 x 10-8 8 x 10-11 #filiation (GI) || 3 x 16” 4 x 10-7 + --~ ------------ - - - - - - | 84 iPo” (son) Sple era 3 x 10-2 5 x 10–39 (GI) 3 x 10-6 5 x 10−10 81, Po” (inson) Lungs * * * 16-20 85 At 211 Thyrosa 3 x 10° 5 x 10-19 (GI) 23 x 10^* !-5 x no-ºº 86 Razzo + dr Lungs ºs - sº lo–7 fi li at i on 86 łRn” + ar LUngs esse - * lot? filiati on 88, R,226 +5.5% dr Bone l: X lo-8 8 x 10-12 filiation (h) AGREEMENT FOR COOPERATION WITH EURATOM 143 Atomic - Critical Maxinºn permissible Number Radioisotope Organ concentrations — in drin, wing in inhaled water falcro- air micro- curie/c. c. curie/c.e.: 89 A6%7 dr (h) BOne 3 X lo-6 iſ X lo-12 90 |Th–natural (r) PC ſhe six no-7 || 3 x 10-11 (GI) loT 2 x 10-19 90 |Th–natural (insol) Lungs sº gº tº 3 x 10-11 90 Thº", peº"(h) Bone 5 x 10-2 lo-8 (GI) 2 x 10−" 25 X lo-8 92 U-natural (r) Kidneys lo-" 3 x 10-11 (sol) (GI) 2 x 10-6 || 3 x 10-49 -- — —H – — Il- 92 U-natural (insol) Lungs -* . 3 X lot T. T.235 -Hºº-º-it- 92 (sol) Bone l. 5 X lo 3 X 10 (GI) 3 x 10-6 |5 x 10−4° 92 235 (insol) Lungs tºº-ºº º 3 X lo–ll | — 94 Pu?” (sol) BOne 6 x 10-6 || 2 x 107** (GI) 3 x 10−6 2 x 107** 94 F.2% (insol) Lungs gº ºsº 2 x lo-16 95 Amé" Bone 2 x 10−" | x 10-11 (GI) 3 x 10-0 |5 x 10−10 (GI) 2 X 10T 4 x lo-19 Any fission mixture (beta, gamma) lo-7 10–9 Any mixture of alpha emitters lo-7 5 x 10-12 144 AGREEMENT FOR COOPERATION WITH EURATOM GENERAL REMARKS AND COMMENTS 1. Hazards inherent in earposure to ionising radiations 1.1. Ionising radiations cause changes, by energy transfer, in the internal Structure of living matter and so impair its metabolism and, if their action is too powerful, too long or too frequent, may have serious effects on the health and the life of the individual and influence the offspring by their action on the gonads. 1.2. In addition to their important consequences insofar as the gonads are Concerned, the biological effects of radiations have two special features: (a) as the radiations are not detected by the sensory organs, the irradi- ated person receives no warning of the fact that he is being subjected to an action which may possibly be harmful ; (b) a lengthy period of latency, which may extend to ten or twenty years, usually elapses before the injuries first manifest themselves. 2. Effects of radiation on mam When man is exposed to ionising radiations, the biological effects to be con- sidered fall into two categories ; there are the somatic effects on the irradiated individual himself and the genetic effects which concern his offspring. 2.1. Somatic effects The action of ionising radiations on the irradiated person's tissues and organs (and essentially his critical organs) results in disorders of greater or lesser Severity, which may be immediate, latent or delayed. When the accumulated Close has been excessive, the delayed effects may include the appearance of chronic blood diseases and cancer. Furthermore, in the case of animals which have received slight but continuous Or frequently repeated during their lifetime, statistics show that the average life Span is reduced. In the case of man, it has not yet been established with certain- ty that a corresponding reduction occurs, and the question is still being investi- gated. Congenital malformations resulting from the action of ionising radiations on the embryo, where the tissues in the course of development are particularly Sensitive, also fall under the heading of Somatic effects and are not of a hereditary character ; Only the effect on the embryonic gonads can have genetic Consequences. Depending on the size of the dose and the frequency and time-pattern of ex- posure, the somatic effects may be reversible to a certain degree ; the body can repair the injuries caused, either within the irradiated cells themselves or by replacing irradiated cells by healthy cells. The possibility of recovery is particularly evident in the case of immediate effects. Even in this Case, however, recovery is not complete. MOreover, to a certain degree, the effects of slight but frequently repeated doses accumulate in the body tissues, and this accumulation of doses is Specially significant in respect of the delayed effects. Lastly, the existence of a threshold dose for the delayed effects, or at least for certain of these, is an Open question. Since it is not pos- Sible to eliminate radiations completely, it follows that the principle of protec- tion Imust be to reduce exposure to the lowest possible level. 2.2. Genetic effects When they reach an individual’s reproductive cells, ionising radiations can modify the structure of the genes which these Contain and so cause mutations that are transmitted to the Offspring. As almost all mutations are considered harmful, exposure to radiation seems to constitute an appreciable hazard for the individual’s Offspring. Since the mutations are COnsidered to be irreversible, the dOSes absorbed have a cumulative effect. Furthermore, in the light of present knowledge, it is con- sidered that there is no such thing as a harmless dose insofar as the genetic effects are COncerned. The mutations caused in this way are governed by the law Of heredity, accord- ing to which there may be interplay between the possibility of the mutations extending to the whole population (even when a restricted group is exposed to radiations) and the natural process of elimination. Furthermore, factors other than radiation enter into the question Of mutations Observed in man, which can only be assessed by statistical methods on the Scale of the whole population, and so far little is known regarding the part played by each of these various factors. Under these conditions, in any appraisal of the genetic Consequences Of the AGREEMENT FOR COOPERATION WITH EURATOM 145 3. exposure of man to new sources of radiation, it is advisable to introduce an overall weighting factor and to take into account both the concept of the risks and that of the benefits which the population as a whole stands to gain from the peaceful uses of atomic energy. It is therefore logical to envisage a Stip- ulated exposure dose, divided over the whole population and acceptable from the genetic standpoint because it leads to only a minimal increase in the OVerall genetic load. This assumes that the total number of persons Occupationally exposed represents only a very small percentage of the whole population, which is the case at the present. Lastly, allowance must be made for the fact that the genetic effects are to be feared only in respect of persons who have not passed the age Of reproduction. 3. Physical factors governing the mature of the hazards 3.1. Nature and energy of ionising radiations Its depth of penetration into tissues, and the extent to which its effects are marked, varies according to the corpuscular or electromagnetic nature of the incident radiation. There is a direct relationship between the dose and the number of iOns pro- duced in tissues. The absorption process is such that the ionisations are not dis- tributed symmetrically in the living matter but are grouped on the tracks of Varying length which run through the tissue. The injurious action is related to the linear density of ionisations produced on the track of the ionising radia- tions, and increases with it ; for example, ionisations caused by alpha particles are grouped On a track of minute length and the lesions produced are very concentrated and particularly serious, whereas in the case of high-energy X- rays or gamma rays, the ionisations are spread over a much longer track. It follows that, for the same dose of energy absorbed, the concentration in space of the iOnisations produced is an important factor in the biological effect. A co- efficient known as the “relative biological effectiveness” (R.B.E.) applied to ra- diations of different types enables this to be taken into account, and their in- jurious effects in relation to their physical nature to be forseen. 3.2 Relationship between radiation doses and their biological effects The total quantity of energy imparted to living tissues by radiation which passes through them is an essential factor in the hazards, and the biolical effect in CreaseS with it. 3.2.1. Doses and biological effects The effects produced by the radiations depend : (a) on the quantity of energy absorbed at the locus concerned (absorbed dose or “energiedosis”) ; (b) on the Specific properties of the radiations in question, denoted by the relative biological effectiveness (R.B.E.). 3.2.2. Absorbed dose The absorbed dose is expressed in “rads”. The value of the absorbed dose Imay be determined : (a) by direct measurement; (b) by measurement of the exposure dose in “Röntgen” for X- and gamma rays of energy below 3 MeV, introducing factors depending on the energy of the radiations and on the material under consideration; (C) by the particle flux. 3.23. R.B.E. dose and relative biological effectiveness (R.B.E.) . The effective biological dose, called the “R.B.E. dose” is obtained by multiply- ing the absorbed Close in rads by the R.B.E. The latter depends on the nature of the radiations and on their energy. The R.B.E. dose is eXpressed in “rennS’’. In the present documents, the term “dose” means “R.B.E. dose in rems”. 3.3. Distribution of earposures in time The somatic, effects differ according to whether the absorbed dose is received at one single time (Single exposure) or during successive eXposures Spread over a period of time (fractionated exposure). In this connection, it is possible for the irradiated tissues to repair some or all of the lesions caused, during the interval between two successive eXposures. 36,636–59 11 146 AGREEMENT FOR COOPERATION WITH EURATOM * In the case of a single dose, the effects differ according to whether it is received in a Very Short time or over a long period of continuous exposure. 3.4. Influence of the volume of tissue irradiated The hazard increases as the integral dose rises. 3.5. Types of irradiation—easternal and internal radiation In assessing the effects of exposure, distinction must be made between : (a) Easternal radiation, where the source of radiation is located outside the body. In this case, the distance between the source and the body, the depth of penetration, and the distribution of the radiations in the body are decisive factors; (b) Radioactive contamination, where the sources of radiation are in Contact With the tissues; this may be external cutaneous contamination or contamination by radioactive substances which have penetrated into the human body by a variety of ways—inhalation, ingestion, absorption through the skin, etc. (uptake). Since in this latter case the irradiation is associ- ated in particular with the effective half-life of the radioisotope, the dis- tribution of the isotope in the body and in the various organs, and the im- portance of the irridiated organ in the functions of the body as a whole, are decisive factors in internal radiation due to uptake. HOW ever, it must not be overlooked that the effects of internal radiation and eXternal radiation are additive in every case; this should be taken into account in the assessment of doses received, and when laying down maximum permis- Sible (loses and concentrations in the case of combined exposures. 4. Biological factors governing the mature of the hazards 4.1. Radiosensitivity and radio-toacicity—critical organs The various tissues and organs of the human body are not all equally sensitive to the action of radiation. Among the most radiosensitive are the gonads, the blood-forming organs, the skin, the mucous membrane of the intestines, the lenses of the eyes, and tissues in course of embryonic development. The tissues and Organs Which On account Of their radiosensitivity and the conditions of irradiation (distribution in space, concentration of radioactive substances in Certain organs) are particularly vulnerable, and of which the irradiation is the most prejudicial to the body, are termed critical tissues and organs. It is par- ticularly important to limit the doses received by these organs. In the case of external irradiation of the whole body, the critical Organs are the blood-forming Organs, the gonads and the lenses of the eyes. If On account of its shallow penetration external radiation produces an effect limited to the superficial parts of the body, it is the skin wheih becomes the Critical Organ. The physical and chemical properties of radioactive substances taken up de- termine the injurious effect of such substances. The chemical nature Of radio- active substances determines their distribution. On the body Organs, and the range of the radiations which they emit determines their radius of action. TO- gether, these factors govern the relative radio-toxicity. 4.2. Partial eacposure and whole-body ea:posure The hazard is particularly great in the case of whole-body exposures, i.e. when the entire body is irradiated. Partial exposures are generally less injurious and more likely to be followed by recovery ; in this case, the risk becomes greater as the integral dose is increased. 4.3. Nature of biological effects observed in mam Mention has already been made of two types of biological effect—the Somatic effects and the genetic effects. Whereas in the case of somatic effects it is the doses accumulated up to any particular age throughout the person’s life which are significant, in the case of genetic effects the doses accumulated up to the end of the age of reproduction only need be considered. To calculate the dose which must be taken into account insofar as genetic effects are concerned, it is necessary to Weight the doses received up to a particular age in the light of the probability of repro- duction for that age ; in practice, the mean age of reproduction is assumed to be 30. AGREEMENT FOR COOPERATION WITH EURATOM 147 It must also be borne in mind that the biological reaction to the injury (de: struction, recovery, or unlimited proliferation) also has a bearing on the magni- tude Of the hazard. 5. Sources of radiation & The human race is to-day exposed to different sources of radiation Which may be grouped as follows : (a) natural background radiation ; (b) artificial sources Of radiation, 5.1. Background radiation Natural radiation comes from cosmic rays and natural radioactive Substances present in the earth's crust, the sea and the atmosphere near the ground. * It is both external and internal. The latter is due to the presence within the organism of radioactive substances, which are natural constituents of the body such as radioactive potassium and radioactive carbon Or are of external Origin like radium. Background radiation varies from one part of the world to another, depending largely on the composition of the rock and Soil and on altitude. Moreover, it has been present since the beginnings Of mankind. It may therefore be disregarded when deciding maximum permissible doses and concentrations. 5.2. Artificial sources of radiation. These are extremely varied and their relative importance is incessantly chang- ing. At the present time, it is mainly a function Of (1) the increasing use of X-rays for medical, technical and Scientific purposes, (2) the increasing number of uses for radioactive substances, especially in research laboratories, medicine and industry, and (3) the ever-increasing progress being made in the release Of nuclear energy for peaceful purposes. The dangers arising from the dissemination in the earth’s atmosphere of fission products from experimental nuclear explosions must also be mentioned, but these will not be discussed here. 5.2.1. X-rays for medical, technical and industrial purposes Their use involves the risk of external radiation of both the operator and, in the case of medical applications, of the patient subjected to examination Or treatment. In the event of inadequate or faulty protection, the hazards may extend to the immediate vicinity. The extension of widespread radiological examinations to a percentage of the population which is already large, and continues to increase, raises a problem of genetic risks which is by no means negligible. * * 5.2.2. Radioactive substances, especially in research laboratories, medicine and industry Uses in these fields are multiplying rapidly. The hazards vary depending On the type of source: 5.2.2.1. Sealed sources produce external radiation. Under normal conditions of use, there is no danger of contamination from sealed sources. There is, however, a risk of possible internal radiation if they should be disseminated or escape as a result of a leaking or fractured envelope. In such cases, they behave in the same way as unsealed sources; 5.2.2.2, unsealed sources producing either external radiation, internal radia- tion or a combination of the two. The fact that there are no means Of COn- trolling the possible dissemination of unsealed sources in the Surroundings Con- Stitutes an additional hazard in view of the resulting contamination of the area and personnel affected. 5.2.3. Nuclear installations Nuclear installations (reactors, nuclear power stations, chemical processing plant, etc.) involve the combined hazards of sealed and unsealed sources, in- Creased by the fact that enormous quantities of energy and radioactive sub- stances are handled in the course of normal operations. The possibility of ac- cident cannot be ruled out completely and the potential danger to a greater or lesser percentage of the population must be taken into consideration at the time of planning and building these installations to ensure protection of the workers during normal operation and in the event of accident, of the population 148 AGREEMENT FOR COOPERATION WITH EURATOM in the vicinity. The necessary facilities must be available for use in an emer- gency. Under normal Operating conditions, the handling, temporary storage and re- lease of radioactive effluents raises considerable problems, and a solution that is entirely satisfactory has not yet been found. Among other questions, the release of effluents involves a danger of contami- nation of food Supplies which must not be underestimated. However, although research Still proves necessary, the data already available, especially in regard to drinking Water and inhaled air, are such that appropriate steps can be taken to ensure protection of the population with an adequate margin of safety. 5.2.4. Particle accelerators Depending on the energy involved, particle accelerators (betatrons, linear ac- Celerators, cyclotrons, synchrotrons, etc.) may give rise to considerable quan- tities of radiations of particularly high penetrating power, and can produce radioactive nuclides, in situ. The protective devices call for particular atten- tion when these machines are used. 6. Marimum permissible dose During his lifetime, every human being is exposed to radiation from natural SOurces, i.e. background radiation. The importance of such irradiation and the part that it plays in man's natural evolution is still not thoroughly understood. Any artificial radiation from man-made sources which is additional to the natural background radiation is liable to have deleterious effects. Since the state of Our civilisation and the needs of mankind make recourse to artificial sources of ionising radiations inevitable, it is therefore necessary to define suitable means of protection which will limit the effect of the resulting exposures to doses that correspond to acceptable risks and, in particular, to deter- mine the maximum permissible doses. Since the first international recommendations concerning maximum permissi- ble doses were issued some thirty years ago, the values laid down have been re- duced On Several Occasions in the light Of the increasingly precise information in regard to the possibility of injury, and in view of the technical progress in the application Of protective measures. The maximum permissible doses do not take into a CCOunt the natural radia- tion received by the Whole population at all times ; it is not possible to take action with regard to this background radiation and, moreover, it varies a C- COrding to the constitution of the soil and rock, and with altitude. Furthermore, they do not take into account the radiation which persons re- ceive during medical examinations and treatment ; in these cases, the exposure to radiation is governed by medical considerations. The dose received must then be considered as essential, and it cannot be taken into account when laying down maximum permissible doses. Nevertheless, when the total dose actually received by the whole population is calculated, medical exposure accounts for a considerable share ; hence, although the use of ionising radiations for medical examinations and treatment is exclusively a matter for members of the medical profession, these facts should be brought to their notice and they should be asked to take all possible steps to reduce the dose received, at the time of diagnostic examinations, by the gonads of persons who have not passed the age of reproduction—without, of course, renouncing up-to-date medical techniques which the development of radiology has made possible. Protection, against radiations must be essentially preventive because radia- tions are not detected by the senses and the effects do not manifest theimselves immediaately. Without exception, irradiation of exposed persons must be kept as low as possible; furthermore, it is preferable that the number of per- sons exposed should be limited. The basic principles of protection must be as follows: (a) maximum permissible doses laid down for individuals and for the population as a whole : (b) limitation of external radiation, essentially achieved by the correct shielding of sources emitting radiation, by maintaining them at a distance, and by limiting the exposure time ; (c) limitation of the dangers of contamination of the air, water, the ground and food supplies, essentially achieved by controlling effluents; (d) publication of codes of practice and of the principles of health safeguards : AGREEMENT FOR COOPERATION WITH EURATOM 149 (e) strict supervision of working conditions and control of exposures and COntaminations : (f) measurement of doses received (external and internal radiation) by the exposed individuals, to ensure compliance with maximum DermIS- sible doses and to ensure, in the light of present knowledge, that they will enjoy normal health throughout life. 7. Groups of persons to be taken into consideration in laying down maa'imum permissible doses The maximum permissible dose cannot be the same for all human beings, but must be adjusted to the practical conditions under which nuclear energy is used. It will also vary according to whether the question is the personal safety of individuals occupationally exposed or the measures to be taken to ensure the Safety of either large Or small sections Of the population. Compliance with the maximum permissible doses for the first two groups of persons (persons occupationally exposed and special groups of the population) must be compatible with the maximum permissible dose for the whole population, and acceptable from the genetic viewpoint. This requires that all the DerSOnS occupationally exposed and all the special groups should together represent Only a relatively small percentage, in order that the weighting of the doses which they receive in relation to the population as a whole does not result in the maximum permissible dose for the latter being exceeded. For the purposes of example, it may be considered that if 0.7 per cent Of the population are occupationally exposed to a dose of 5 rems per year in accordance with the basic formula, the dose weighted to the whole of the population will be about 1 rem over thirty years. The United Nations report indicates that in the countries which are developed from the economic standpoint, persons OCCupa- tionally exposed constitute about 0.1 per cent of the population. Similarly, it may be considered that if 6 per cent of the population receive 0.5 rem per year as a result of living in the vicinity of the controlled area, the dose weighted to the Whole of the population will be about 1 rem over thirty years. 7.1 Persons occupationally CJ posed In this case, it is essentially the somatic risks which are taken into account. To a certain extent, recovery is possible and this allows a maximum permissible dose accumulated over a person's working life to be laid down ; if this dose is not exceeded, in the light of present knowledge the individual's health should not be impaired throughout his lifetime. Strict safeguards must be introduced to protect the health of persons Occu- pationally exposed, i.e. those who by the nature of their work are exposed to sources of radiation. Such protection presupposes, above all, the existence of adequate arrangements for Surveillance, capable of ensuring Compliance With the maximum permissible doses. In the area where the persons occupationally exposed are working (controlled area), there must be a physical control ena- bling the dangerous areas—Where radiation may reach an abnormal level—to be defined. In addition to this collective control, monitoring and medical su- pervision of individuals is necessary together with routine and special medical examinations; measurement of the doses received by workers is the keystone in protection against the deleterious action of radiations. As pointed Out in paragraph 6, the maximum permissible doses do not take into account either exposure to background radiation, or exposure in connection with medical examinations and treatment. If, in the case of persons occupa- tionally exposed, the use of radiations for diagostic or therapeutic purposes is justified for medical reasons, the benefit to the individual in question makes such exposure essential ; it Will depend Only on individual factors associated with the person's State of health, and cannot be taken into consideration in cal- culating the maximum permissible dose during occupational exposure. 7.2. Special groups In addition to the group Of persons Occupationally exposed to sources of ionising radiations, it is necessary to define Other groups of persons which are called special groups; although not Occupationally exposed, these persons run the risk of receiving a dose larger than the mean received by the population as a whole. 150 AGREEMENT FOR COOPERATION WITH EURATOM These groups comprise: (a) persons who enter the controlled area occasionally in the course of their duties. Although in certain cases irradiation may Occur in the COurSe Of Occupational activities, it is regarded as non-occupational exposure. (b) persons who handle apparatus emitting ionising radiations Or Con- taining radioactive substances in quantities such that the radiations emitted do not result in the maximum permissible dose for this category of persons being exceeded. (c) persons who reside in the vicinity of the controlled area and On a C- COunt Of this fact may be subjected to an exposure which is greater than the mean exposure Of the Whole population. 7.3. Population as a whole This category represents the entire population of the country. ASSOCiated with the steady increase in the number of artificial sources of radiation is the risk of a considerable rise in the doses of radiations additional to natural background radiation. It is therefore necessary to evaluate and to limit, from the standpoint of the genetic effects, the level of exposure of the pOpulation considered as a whole. These genetic effects can only be evaluated Statistically and, to calculate the doses, the doses received by persons falling Within the Categories mentioned in 7.1 and 7.2 above must be weighted to the Whole of the population. The maximum dose found in this way for the whole population also provides protection against the somatic risks. 8. Need for control To ensure that the health of workers and the population is safeguarded, not Only must maximum permissible doses, exposures and contaminations be laid ClOWn but compliance with these standards must be ensured. This calls for regular surveillance from the standpoint of both physics and medicine. Such control must be exercised by competent persons or bodies pro- vided with adequate facilities and the necessary staff. The physical control is concerned with all those factors which, during any Operation whatsOver, Can give rise to a radiation hazard for persons who are exposed Occupationally Or Otherwise, and for the Whole population. Among Other things, it includes marking Out areas liable to be dangerous, Surveillance Over installations and instrumentation, evaluation Of external radiation, radio- active contamination, and doses received, and implementation Of decontamina- tion procedures when necessary. The medical control applies to the pre-employment Selection of persons Occu- pationally exposed, and their routine and exceptional medical supervision. In particular, it includes preparation of the “balance sheet” to show health in relation to doses received. In association with the physical Control, it is also Concerned with general preventive measures. For the exercise of these essential controls distinction is made between : (a) Controlled areas: any area in which protection is based on Com- pliance with maximum permissible doses for persons occupationally exposed. Both physical and medical controls are advisable in these areas. (b) Protected areas: any area surrounding a controlled area where there is a continuous danger of the maximum permissible dose for the whole population being exceeded, and where protection is based on COmpliance with the maximum permissible dose laid down for the Special group of persons residing in the vicinity of the controlled area. It is advisable that physical control should be exercised regularly in these areas. (c) Remainder of the territory, that is, the whole of the territory except the controlled and protected areas. Controls of a general nature are advis- able here. In view of the possibility of accidents in nuclear installations which may in- volve the release of considerable quantities of radioactivity, it is advisable to plan emergency regions which may include the controlled and protected areas and also embrace either a large or a small part of the remainder of the territory. An emergency region should include arrangements for immediate action to be taken in the event of an accident. 9. Need for inspection The above controls presuppose inspecting bodies with a Staff Of qualified experts, exercising surveillance over the controls applied and ensuring COm- pliance with the basic standards and recommended protective measures. VERS X |||||||| 3 9015 OO1 74.1 | To renew ſhe charge, book must be brought to the desk. D0 NOT RETURN B00KS ON SUNDAY DATE DUE JUL 1973 Form 7 O'79 a