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Hiroshima for Global Peace

(5) Implementing Appropriate Export Controls on Nuclear- Related Items and Technologies

(5) Implementing Appropriate Export Controls on Nuclear- Related Items and Technologies

A) Establishment and implementation of the national control systems

On establishing and implementing national control systems regarding export controls on nuclear-related items and technologies, there were few remarkable developments in 2019. As described in the previous Hiroshima Report, the following countries surveyed in this Report belong to the four international export control regimes,76 including the Nuclear Suppliers Group (NSG), have national implementation systems in place, and have implemented effective export controls regarding nuclear- (and other WMD-) related items and technologies through list and catch-all controls: Australia, Austria, Belgium, Canada, France, Germany, Japan, South Korea, the Netherlands, New Zealand, Norway, Poland, Sweden, Switzerland, the United Kingdom and the United States.77

These countries have also proactively made efforts to strengthen export controls. For example, Japan held the 26th Asian Export Control Seminar in February 2019. The purpose of this annual seminar is to “assist export control officers in Asian countries and regions.” Persons in charge of export control from 32 Asian and other regional major countries participated in the seminar, and discussed the strengthening the effectiveness of export controls, catch-all regulations, measures for intangible technology transfer, and cooperation among relevant government organizations.78

Among other countries surveyed in this project, Brazil, China, Kazakhstan, Mexico, Russia, South Africa and Turkey are members of the NSG.

These countries have set up export control systems, including catch-all controls.

As for non-NSG members, the UAE and the Philippines have been developing their respective national export control systems, whereas Egypt, Indonesia and Saudi Arabia have yet to establish sufficient export control legislations and systems.

India, Israel and Pakistan have also set up national export control systems, including catch-all controls.79 India’s quest for membership in the NSG is supported by some member states, but a consensus on the matter was not reached in 2019. Pakistan has also sought to join the NSG. Meanwhile, in March 2018, the United States imposed sanctions on seven Pakistani companies over claims that they were involved in procurement activities with entities already on the U.S. “Entity List.”80

At the time of writing, the status of export control implementation by North Korea, Iran and Syria is not clear. Rather, cooperation among these countries in ballistic missile development remains a concern, as mentioned below. In addition, North Korea was involved in the past in constructing a graphite-moderated reactor in Syria to produce plutonium.

B) Requiring the conclusion of the Additional Protocol for nuclear exports

Article III-2 of the NPT stipulates, “Each State Party to the Treaty undertakes not to provide: (a) source or special fissionable material, or (b) equipment or material especially designed or prepared for the processing, use or production of special fissionable material, to any non-nuclearweapon State for peaceful purposes, unless the source or special fissionable material shall be subject to the safeguards required by this Article.” In the Final Document of the 2010 NPT RevCon, “[t]he Conference encourage[d] States parties to make use of multilaterally negotiated and agreed guidelines and understandings in developing their own national export controls” (Action 36). Under the NSG Guidelines Part I, one of the conditions for supplying materials and technology designed specifically for nuclear use is to accept the IAEA comprehensive safeguards. In addition, NSG member states agreed on the following principle in June 2013:

Suppliers will make special efforts in support of effective implementation of IAEA safeguards for enrichment or reprocessing facilities, equipment or technology and should, consistent with paragraphs 4 and 14 of the Guidelines, ensure their peaceful nature. In this regard suppliers should authorize transfers, pursuant to this paragraph, only when the recipient has brought into force a Comprehensive Safeguards Agreement, and an Additional Protocol based on the Model Additional Protocol or, pending this, is implementing appropriate safeguards agreements in cooperation with the IAEA, including a regional accounting and control arrangement for nuclear materials, as approved by the IAEA Board of Governors.81

The NPDI and the Vienna Group of Ten have argued that conclusion and implementation of the CSA and the Additional Protocol should be a condition for new supply arrangements with NNWS.82 Some of the bilateral nuclear cooperation agreements that Japan and the United States concluded recently with other capitals make the conclusion of the Additional Protocol a prerequisite for their cooperation with respective partner states. On the other hand, the NAM countries continue to argue that supplier countries should refrain from imposing or maintaining any restriction or limitation on the transfer of nuclear equipment, material and technology to other states parties with comprehensive safeguards agreements.83

Issues on enrichment and reprocessing under the bilateral nuclear cooperation agreements

Enriching uranium and reprocessing spent fuel by NNWS is not prohibited under the NPT if the purpose is strictly peaceful and the activities are under IAEA safeguards, yet they are highly sensitive activities in light of nuclear proliferation. The spread of enrichment and reprocessing technologies would mean that more countries would acquire the potential for manufacturing nuclear weapons. As mentioned above, NSG guidelines make implementation of the Additional Protocol by the recipient state a condition for transfer of enrichment or reprocessing facilities, equipment or technology.

While the U.S.-UAE and U.S.-Taiwan Nuclear Cooperation Agreements stipulate a so-called “gold standard”— the recipients are obliged to forgo enrichment and reprocessing activities— other bilateral agreements concluded and updated by the United States, such as that with Vietnam in 2014, do not stipulate similar obligations.84 In the meantime, the Japan-U.S. Nuclear Cooperation Agreement, which stipulates comprehensive prior consent to Japan’s enrichment and reprocessing activities, was automatically extended since neither side notified an intention to terminate or re-negotiate the agreement by January 2018, six months prior to its expiration.

Whether a nuclear cooperation agreement being negotiated between Saudi Arabia and the United States will include the gold standard has been the subject of considerable public attention. The United States asked Saudi Arabia to forgo enrichment and reprocessing activities, but Saudi Arabia has not accepted this. In March 2019, the U.S. Department of Energy reported that it had issued thirty-seven Part 810 authorizations to U.S. companies allowing them to export unclassified civil nuclear technology to Saudi Arabia.85 This did not mean, however, that negotiations on an 123 agreement were nearing completion. In September, the U.S. Energy Secretary James Perry sent a letter to Saudi Arabia saying that Saudi Arabia would be required to forgo enriching or reprocessing spent uranium and conclude an Additional Protocol if it would like to conclude a bilateral nuclear cooperation agreement with the United States.86

C) Implementation of the UNSCRs concerning North Korean and Iranian nuclear issues

With regard to the North Korean nuclear issue, UN Member States are obliged to implement measures set out in the resolutions adopted by the UN Security Council, including embargos on nuclear-, other WMD-, and ballistic missile-related items, material, and technologies. The Panel of Experts, established pursuant to UNSCR 1874 (2009), has published annual reports on its findings and recommendations about the implementation of the resolutions. As for the Iranian nuclear issue, the Iran Sanctions Committee and Panel of Experts ceased to exist after the conclusion of the JCPOA, at the insistence of Iran, and the UN Security Council now has responsibility of oversight of remaining limitations.

North Korea
The UN Security Council has adopted numerous resolutions criticizing North Korean nuclear and missile activities. In 2018, as mentioned above, expectations for North Korean denuclearization increased, and inter-Korean and U.S.- North Korea relations improved. However, since no concrete steps concerning North Korea’s abandonment of its nuclear weapons and missiles were agreed, sanctions measures were not eased.
The Annual Report87 of the UN Panel of Experts in March 2019 and its Midterm Report88 in August pointed out North Korea’s activities in defiance of the UNSCRs. According to the Annual Report, among others:
➢ North Korea continued to violate the arms embargo by exporting small arms and other military equipment to Syria, Libya, Sudan and to Houthi rebels in Yemen.
➢ Since 2016, North Korea has expanded a scale of cyberattacks as a means to evade financial sanctions and to illicitly gain foreign currency. It is estimated that at least five successful attacks were carried out against cryptocurrency exchanges in Asia between January 2017 and September 2018, resulting in a total loss of $571 million. It is also alleged cyber attacks on financial agencies in India and Chile in 2018.
➢ Individuals who empowered to act as extensions of North Korean financial institutions operated in at least five countries, and North Korean diplomats manage bank accounts in several countries to evade sanctions.
➢ During the period from January to November 2018, more than 15 Chinese fishing vessels were found to be carrying North Korean fishing licenses. One fisherman stated that there were around 200 Chinese fishing boats operating in the water of North Korea.
Another interviewee stated that the monthly cost of an individual fishing license was 50,000 yuan (about $7,000).
➢ The scope and scale of ship-toship transfers have been expanded, and deception of vessel registers has become more sophisticated. The United States reported that North Korea imported refined oil products by ship-to-ship transfers at least 148 times between January and August 2018.
➢ The Panel investigated the acquisition by North Korea of leading luxury brand goods, such as Rolls-Royce, Mercedes-Benz and Lexus vehicles.
In the Midterm Report, the following issues, inter alia, were pointed out:
➢ During the period from December 2015 to May 2019, North Korea was alleged to have conducted 35 cyberattacks against financial institutions and cryptocurrency exchanges in at least 17 countries, and illegitimately admitted to stealing as much as an estimated $2 billion.
➢ North Korea continued to acquire luxury goods illicitly. A U.N. member state seized in total 105,600 bottles of Belarusian vodka worth $41,000 in November 2018 and February 2019.

Regarding sanctions against North Korea, China’s behavior has been drawing attention because of its close relationship with North Korea. According to China’s trade statistics released on January 14, 2019, exports from North Korea to China plunged in 2018 to 1.42 billion yuan, down 88% from the previous year. However, some pointed out that China’s efforts are still insufficient. In February 2019, for instance, a report published by the Royal United Services Institute (RUSI) argued:
Although this does not indicate support from the Chinese authorities in general for North Korea’s illegal arms trade, it raises questions about China’s enforcement of UN Security Council resolutions. The authors make no judgement as to the reason for Chinese state connections to the relationships and activities outlined in this report. However, the information laid out in this report points to a need for better due diligence by the various state-owned and part-owned enterprises involved, and for Chinese authorities to investigate and address any activities that run counter to China’s commitments to enforcing UN resolutions.89

In July, the U.S. Department of Justice announced that “A federal grand jury has charged four Chinese nationals and a Chinese company with violating the International Emergency Economic Powers Act (IEEPA), conspiracy to violate IEEPA and defraud the United States; conspiracy to violate, evade and avoid restrictions imposed under the Weapons of Mass Destruction Proliferators Sanctions Regulations (WMDPSR); and conspiracy to launder monetary instruments.”90

In accordance with the JCPOA, approval of the Procurement Working Group, establishment under the agreement, is required for Iranian procurement of nuclear-related items and material. From December 12, 2018 to June 15, 2019, the Procurement Working Group received two procurement proposals. Among these proposals, one was disapproved and another one was under review. In addition, and one proposal, which was noted as under consideration in the previous report, was subsequently approved.91 From June 16 through December 16, 2019, no proposal was submitted.92 According to the report, in total 44 proposals have been submitted since the JCPOA’s Implementation Day. Among these proposals, 30 were approved, five were disapproved, and nine were withdrawn.93

Nuclear-related cooperation between concerned states
In addition to the (reported) illicit activities mentioned above, it is often alleged that North Korea and Iran have been engaged in nuclear and missile development cooperation. Bilateral cooperation has been well documented in the area of missiles. In 2016, the United States imposed sanctions regarding such cooperation.94 However, no concrete evidence has been revealed to support allegations of nuclear-related cooperation.95

The Annual Report of the Panel of Experts published in March 2018 indicated that North Korea and Syria continue to cooperate on WMD and ballistic missile-related activities. According to the report, examples of North Korea’s activities in defiance of the UNSCRs included: a group of ballistic missile technicians affiliated with the designated North Korean Academy of National Defence Science visiting Syria in November 2016; and the existence of more than 40 previously unreported shipments from North Korea to Syria between 2012 and 2017 by entities considered as front companies for the Syrian Scientific Studies Research Centre, which is alleged to be involved in chemical weapons development.96

D) Participation in the PSI

As of 2019, a total of 107 countries—including 21 member states of the Operational Expert Group (Australia, Canada, France, Germany, Japan, South Korea, the Netherlands, New Zealand, Norway, Poland, Russia, Turkey, the United Kingdom, the United States and others) as well as Belgium, Chile, Israel, Kazakhstan, the Philippines, Saudi Arabia, Switzerland, Sweden, the UAE and others—have expressed their support for the principles and objectives of the Proliferation Security Initiative (PSI). Many of them have participated and cooperated in PSIrelated activities.

The interdiction activities actually carried out within the framework of the PSI are often based on information provided by intelligence agencies; therefore, most of them are classified. Additionally, participating states have endorsed the PSI statement of interdiction principles and endeavored to reinforce their capabilities for interdicting WMD through exercises and outreach activities. In July 2019, South Korea hosted an interdiction exercise, named “Eastern Endeavor 19,” in which six countries (Australia, Japan, South Korea, New Zealand, Singapore and the United States) participated, together with some observer countries, including India, Indonesia, Pakistan, Russia.

In January 2018, several PSI participating countries released a joint statement reiterating their commitment to impede and stop North Korea’s illicit activities, including smuggling, and to take measures such as: inspecting proliferation-related shipments on vessels with the consent of the flag State, on the high seas, if they have information that provides reasonable grounds to believe that the cargo of such vessels contains items prohibited under UNSCRs; and prohibiting their nationals, persons subject to their jurisdiction, entities incorporated in their territory or subject to their jurisdiction, and vessels flying their flag, from facilitating or engaging in ship-toship transfers to or from the DPRK-flagged vessels of any goods or items that are being supplied, sold, or transferred to or from the DPRK.97

Regarding illicit maritime activities, including ship-to-ship transfers with North Korean-flagged vessels prohibited by UNSCRs, the Japan Maritime Self-Defense Force has engaged in monitoring and surveillance activities in the Sea of Japan and the Yellow Sea since December 2017. Japan’s Foreign Ministry posted the North’s illicit activities on the website.98
The monitoring and surveillance activities have been conducted by Japan and the United States, together with Australia, Canada, France, New Zealand and the United Kingdom.

E) Civil nuclear cooperation with nonparties to the NPT

In September 2008, the NSG agreed to grant India a waiver, allowing nuclear trade with the state. Since then, some countries have sought to engage in civil nuclear cooperation with India, and several countries, including Australia, Canada, France, Japan, Kazakhstan, South Korea, Russia and the United States, have concluded bilateral civil nuclear cooperation agreements with India.

Actual nuclear cooperation with India has not necessarily been concluded, except India’s import of uranium from Australia, Canada, France, Kazakhstan and Russia, and its conclusion of agreements to import uranium from Argentina, , Mongolia, Namibia and Uzbekistan.99 In the meantime, the United States and India announced in March 2019 that they concluded an agreement, including the U.S. construction of six nuclear power plants in India.100 Again in 2019, the NSG could not achieve consensus on India’s membership application. China, the main opponent, has argued that applicant countries must be parties to the NPT.101 It has also been reported that China will not accept India’s participation in the NSG unless Pakistan is also accepted as a member.102 Pakistan has argued that, as a state behaving responsibly regarding nuclear safety and security, it is qualified to be accepted as an NSG member. The NSG has considered a draft set of nine criteria to guide membership applications from states that are not party to the NPT. Items of condition written in a draft document in December 2016 included safeguards, moratorium on nuclear testing, and support of multilateral non-proliferation and disarmament regime.103

Meanwhile, China has been criticized for its April 2010 agreement to export two nuclear power reactors to Pakistan, which may constitute a violation of the NSG guidelines. China has claimed an exemption for this transaction under the “grandfather clause” of the NSG guidelines (i.e. it was not applicable as China became an NSG participant after the start of negotiations on the supply of the reactors). China will also supply enriched uranium to Pakistan for running those reactors.104 Their construction started in November 2013 in Karachi. Because all other Chinese reactors that were claimed to be excluded from NSG guidelines under the grandfather clause were built at Chashma, there is a question about whether the exemption can also apply to the Karachi plant.105

The NAM countries have been critical of civil nuclear cooperation with non-NPT states, including India and Pakistan, and continue to argue that exporting states should refrain from transferring nuclear material and technologies to those states which do not accept IAEA comprehensive safeguards.106

76 Aside from the NSG, Australia Group (AG), Missile Technology Control Regime (MTCR), and Wassenaar Arrangement (WA).
77 In July 2019, Japan pointed out the inadequacy of South Korea’s domestic export control system, and reviewed its operation of export control to South Korea.
78 Ministry of Economy, Trade and Industry, “The 26th Asian Export Control Seminar Held,” March 4, 2019,
79 Regarding a situation of Pakistani export controls, see Paul K. Kerr and Mary Beth Nikitin, “Pakistan’s Nuclear Weapons,” CRS Report, August 1, 2016, pp. 25-26.
80 Drazen Jorgic, “U.S. Sanctions Pakistani Companies Over Nuclear Trade,” Reuters, March 26, 2018,
81 INFCIRC/254/Rev.12/Part 1, November 13, 2013.
82 See, for instance, NPT/CONF.2020/PC.III/WP.5, March 15, 2019.
83 NPT/CONF.2020/PC.III/WP.18, March 21, 2019.
84 The U.S.-Vietnam Nuclear Cooperation Agreement concluded in May 2018, it is stated in the preamble that Mexico will not conduct sensitive nuclear activities, which is called a “silver standard.”
85 The U.S. Department of Energy, “Statement from DOE Press Secretary on Saudi Arabia,” March 28, 2019,
86 Ari Natter, “U.S. Says Saudis Must Forgo Enrichment for Nuclear Sharing Deal,” Bloomberg, September 19, 2019,
87 S/2019/171, March 5, 2019.
88 S/2019/691, August 30, 2019.
89 James Byrne and Tom Plant, “The Jie Shun Incident: Chinese State-Owned Enterprise Connections to the North Korean Arms Trade,” Royal United Services Institute, February 2019.
90 The U.S. Department of Justice, “Four Chinese Nationals and Chinese Company Indicted for Conspiracy to Defraud the United States and Evade Sanctions,” July 23, 2019,
91 S/2019/514, June 21, 2019.
92 S/2019/952/Rev.1, December 18, 2019.
93 Ibid.
94 U.S. Department of Treasury, “Treasury Sanctions Those Involved in Ballistic Missile Procurement for Iran,” January 17, 2016,
95 John Park and Jim Walsh, Stopping North Korea, Inc.: Sanctions Effectiveness and Unintended Consequences (Cambridge, MA: MIT Security Program, 2016), p. 33; Paul K. Kerr, Steven A. Hildreth and Mary Beth D. Nilitin, “Iran-North Korea-Syria Ballistic Missile and Nuclear Cooperation,” CRS Report, February 26, 2016, pp. 7-9; Kenneth Katzman, “Iran’s Foreign and Defense Policies,” CRS Report, October 8, 2019, pp. 56-57.
96 S/2018/171, March 5, 2018.
97 “Joint Statement from Proliferation Security Initiative (PSI) Partners in Support of United Nations Security Council Resolutions 2375 and 2397 Enforcement,” January 12, 2018, Originally, 17 countries signed the joint statement. By the end of 2018, 47 countries became signatories, including Australia, Austria, Belgium, Canada, France, Germany, Japan, South Korea, the Netherlands, Norway, Sweden, Switzerland, the United Kingdom, and the United States.
98 Ministry of Foreign Affairs of Japan, “Suspicion of Illegal Ship-to-Ship Transfers of Goods by North Korea-Related Vessels,” December 27, 2019,
99 Adrian Levy, “India Is Building a Top-Secret Nuclear City to Produce Thermonuclear Weapons, Experts Say,” Foreign Policy, December 16, 2015, secret_china_pakistan_barc/; James Bennett, “Australia Quietly Makes First Uranium Shipment to India Three Years after Supply Agreement,” ABC, July 19, 2017,; Dipanjan Roy Chaudhury, “India Inks Deal to Get Uranium Supply from Uzbekistan,” Economic Times, January 19, 2019,
100 “U.S. and India Commit to Building Six Nuclear Power Plants,” Reuters, March 14, 2019,
101 Ministry of Foreign Affairs of China, “Foreign Ministry Spokesperson Geng Shuang’s Regular Press Conference,” January 31, 2019,
102 “China and Pakistan Join Hands to Block India’s Entry into Nuclear Suppliers Group,” Times of India, May 12, 2016,
103 Kelsey Davenport, “Export Group Mulls Membership Terms,” Arms Control Today, Vol. 47, No. 1 (January/February 2017), p. 50.
104 “Pakistan Starts Work on New Atomic Site, with Chinese Help,” Global Security Newswire, November 27, 2013,
105 Bill Gertz, “China, Pakistan Reach Nuke Agreement,” Washington Free Beacon, March 22, 2013,
http://freebeacon. com/china-pakistan-reach-nuke-agreement/.
106 NPT/CONF.2020/PC.III/WP.18, March 21, 2019.

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