A) Establishment and implementation of the national control systems

There were few remarkable developments in 2022 regarding establishing and implementing national control systems regarding export controls on nuclear-related items and technologies. The following countries surveyed in this report belong to the four international export control regimes,125 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.126

These countries have also made proactive efforts to strengthen export controls. For example, Japan has held an annual Asian Export Control Seminar, inviting Asian countries and other major countries from outside the region, to promote Asian and international non-proliferation efforts, although it could not be convened in 2021 due to the COVID-19 pandemic. At the 28th Asian Export Control Seminar in February 2022, approximately 400 persons in charge of export control from 31 Asian and other regional major countries attended. The seminar featured two panel discussions: the strengthening of intangible technology transfer (ITT) controls; and the government’s efforts to strengthen cooperation with industry, which plays a key role in strengthening export control implementation.127

Among other countries surveyed in this project, Brazil, China, Kazakhstan, Mexico, Russia, South Africa and Turkey are NSG members. These countries have all set up export control systems, including catch-all controls. China published a white paper titled “China’s Export Controls” in the end of 2021. It stated that “China safeguards the authority of international treaties and mechanisms that uphold true multilateralism, and actively promotes the implementation of fair, reasonable and non-discriminatory international export controls.” It also explained China’s basic positions—maintaining a holistic approach to national security, honoring international obligations and commitments, promoting international cooperation and coordination, and opposing the abuse of export control measures—and outlined its efforts.128

As for non-NSG members, Egypt, Indonesia and Saudi Arabia have yet to establish sufficient export control legislations and systems. In the meantime, Egypt and Indonesia underscored that many of the export control regimes were developed outside of the UN framework in selective, non-inclusive ways and without proper involvement of developing countries.129 The draft final document of the NPT RevCon, in addition to noting the importance of export controls, took into account the arguments of non-NSG members by “reaffirm[ing] that supplier arrangements should continue to promote transparency and ensur[ing] that the export guidelines formulated by them do not hamper the development of nuclear energy for peaceful uses by States parties in conformity with the Treaty.”

India, Israel and Pakistan have also set up national export control systems, including catch-all controls.130

In 2022, the NSG was again unable to achieve a consensus on India’s membership application. China, the main opponent to this application, has argued that applicant countries must be parties to the NPT.131 It has also been reported that China will not accept India’s participation in the NSG unless Pakistan is also accepted as a member.132 Pakistan has argued that, as a state behaving responsibly regarding nuclear safety and security, it qualifies for acceptance as an NSG member.

At the time of writing, the status of export control implementation by North Korea, Iran and Syria remains unclear. Cooperation among these countries in ballistic missile development continues to be 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

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:

[S]uppliers 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.133

The Non-Proliferation and Disarmament Initiative (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. Some of the bilateral nuclear cooperation agreements that Japan and the United States concluded recently with other countries make conclusion of the Additional Protocol a prerequisite for their cooperation with the respective partner states. On the other hand, the NAM continues to argue that supplier countries should refrain from imposing or maintaining any restrictions or limitations on transfers of nuclear equipment, material and technology to other states parties with comprehensive safeguards agreements.

Enriching uranium and reprocessing spent fuel by NNWS is not prohibited under the NPT, as long as the purpose is strictly peaceful and the activities are under IAEA safeguards. Still, these remain highly sensitive activities in light of nuclear proliferation, as the spread of enrichment and reprocessing technologies would mean that more countries would acquire the potential for manufacturing nuclear weapons. As previously mentioned, NSG guidelines require implementation of the Additional Protocol by the recipient state as a condition for transferring enrichment or reprocessing facilities, equipment or technology.

Although the U.S.-UAE Nuclear Cooperation Agreement concluded in 2009 stipulates a so-called “gold standard”—i.e. that the recipients are obliged to forgo enrichment and reprocessing activities— other bilateral agreements concluded and updated by the United States (except that with Taiwan) do not stipulate similar obligations.134 In the meantime, the nuclear cooperation agreements that Japan has signed with the UAE and Jordan, respectively, prohibit the enrichment and reprocessing of nuclear materials transferred, recovered or produced under the agreements.

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 has asked Saudi Arabia to forgo enrichment and reprocessing activities, but Saudi Arabia has not accepted this restriction. Also, as previously mentioned, Saudi Arabia has not yet concluded an amended SQP, a CSA or an Additional Protocol.

 

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

North Korea

With regard to the North Korean nuclear issue, UN Member States are obliged to implement measures set out in the UN Security Council resolutions, including embargoes on nuclear-, other WMD-, and ballistic missile-related items, material, and technologies.

The Panel of Experts, established pursuant to UNSCR 1874 (2009), has published biannual reports on its findings and recommendations about implementing the resolutions. According to the report published in March 2022, the Panel pointed out North Korea’s activities in defiance of the UNSCRs, including:135

➢ Maintenance and development of the nuclear and ballistic missile infrastructure of North Korea continued, and the country continued to seek material, technology and know-how for these programs overseas, including through cyber means and joint scientific research.

➢ Although maritime exports of coal from North Korea increased in the second half of 2021, they were still at relatively low levels. The quantity of illicit imports of refined petroleum increased sharply in the same period, but at a much lower level than in previous years. Direct delivery by non-North Korea tankers to North Korea ceased, probably in response to COVID-19 measures: instead, only tankers of North Korea delivered oil, a marked change of methodology. Sophisticated evasion of maritime sanctions continued, facilitated by deliberately obfuscated financial and ownership networks. Although North Korea-flagged merchant fleet continued to grow, fewer foreign fishing vessels were observed in the country’s waters

➢ There remain some nationals of North Korea earning revenue overseas, and the COVID-19 blockade prevented their direct repatriation. Cyberattacks, in particular on cryptocurrency assets, remain an important revenue source for the Government of North Korea.

➢ According to a Member State, cyberactors of North Korea stole more than $50 million between 2020 and mid-2021 from at least three cryptocurrency exchanges in North America, Europe and Asia, probably reflecting a shift to diversify cybercrime operations.

➢ According to the Member State, from 2016 to 2020, North Korean diplomats stationed in Moscow procured ballistic missile components, including aramid fiber and stainless steel tubing.

In the Panel’s Midterm Report published in September 2022, the following issues, inter alia, were pointed out:136

➢ Illicit imports of oil and exports of coal continued. Although new methodologies for oil imports were reported to the Panel of Experts, and new vessels investigated, in general the same entities, networks and vessels continued unhindered to evade sanctions using the same methodologies and in the same places. Obfuscation of ownership structures and the misuse of automatic identification systems (AIS) continued, and North Korea fleet continued to acquire vessels.

➢ Investigations show that the country’s cyberactivity continued, with two major hacks in 2022, at least one of them attributed to North Korean actors, resulting in the theft of cryptoassets worth hundreds of millions of U.S. dollars. Other cyberactivity focusing on stealing information and more traditional means of obtaining information and materials of value to the country’s prohibited programs, including weapons of mass destruction, continued.

➢UN agencies report a continuing humanitarian crisis in the country, likely exacerbated by the COVID-19 outbreak. The extent of that crisis, and the relative part played in it by the effects of UN sanctions, is extremely challenging for all, including the Panel, to assess accurately. However, there can be little doubt that UN sanctions have unintentionally affected the humanitarian situation.

➢ North Korean IT technicians living in Russia and the UAE falsified their nationality and registered on a U.S. website that refers freelance technicians for compensation for their services.

➢ North Korean IT technicians earned foreign currency by selling voice phishing hacking applications.

➢ North Korea has outfitted some of its cargo ships illegally to transport oil products by: reconfiguring the cargo ship’s holds and ballast tanks to multiple oil tanks with concrete installed in the bottom of the vessel to maintain the ship’s balanced; or loading the washed ballast tanks with oil products.

In relation to North Korea’s illegal activities, one expert analyzed that Russia and China “seem content with a ‘do-nothing’ approach, despite the grave risks that North Korea poses,” and they remain the financial hubs for North Korea’s sanction-evading activities.137 The United States has added companies and other entities as well as individuals from China, Russia and other countries to its sanctions list in connection with illegal transactions with North Korea and other activities.

 

Iran

The UN Iran Sanctions Committee and Panel of Experts was wound up after the conclusion of the JCPOA, at Iran’s insistence, and the UN Security Council is now responsible for overseeing the remaining limitations.

In accordance with the JCPOA, approval of the Procurement Working Group, established under the agreement, is required for Iranian procurement of nuclear-related items and material. The number of cases has been reported to the Security Council every six months. According to the reports published in June and December 2022, in the six months leading up to that month, respectively, no proposals were under review by the Procurement Working Group.138

Although it is not clear whether Iran is engaged in illegal nuclear-related procurement activities, German intelligence agencies reportedly indicated that Iran had increasingly tried to source material in Europe for its nuclear and ballistic missile programs, and there had been a “clear increase” in procurement efforts linked to Iran’s nuclear activities.139 In addition, it was reported that, according to US intelligence officials, Iran is angling for Russia’s help in strengthening its nuclear program in return for supplying weapons for Russia’s war in Ukraine.140

 

Nuclear-related cooperation between concerned states

There have been repeated allegations that North Korea and Iran have engaged in nuclear and missile development cooperation. According to the report by the Panel of Experts on North Korea in March 2021, North Korea and Iran “have resumed cooperation on long-range missile development projects. This resumed cooperation is said to have included the transfer of critical parts, with the most recent shipment associated with this relationship taking place in 2020. … [T]hese shipments included valves, electronics, and measuring equipment suitable for use in ground testing of liquid propellant ballistic missiles and space launch vehicles.” In response, “[i]n an interim reply of 21 December 2020, [Iran] stated that: ‘Preliminary review of the information provided to us by the Panel indicates that false information and fabricated data may have been used in investigations and analyses of the Panel.’”141 The reports published by the Panel of Experts in 2022 did not contain any mention of cooperation between North Korea and Iran.

Meanwhile, no concrete evidence has been revealed to support allegations of nuclear-related cooperation between North Korea and Iran.

According to a report by the U.S. Congressional Research Service, “Official U.S. government reports indicate that the Chinese government has apparently ended its direct involvement in the transfer of nuclear- and missile-related items, but Chinese-based companies and individuals continue to export goods relevant to those items, particularly to Iran and North Korea. U.S. officials have also raised concerns about entities operating in China that provide other forms of support for proliferation-sensitive activities, such as illicit finance and money laundering.” The report also highlighted the possibility that China is directly or indirectly involved in supporting nuclear and missile proliferation, by revealing that, inter alia, Chinese companies provided missile-related materials to Iran, North Korea, Syria and Pakistan in 2018—the export of which is restricted by the Missile Technologies Control Regime (MTCR).142

 

D) Participation in the PSI

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 Israel, Kazakhstan, Saudi Arabia, Sweden, Switzerland and others—have expressed their support for the principles and objectives of the Proliferation Security Initiative (PSI). Many of them have also participated and cooperated in PSI-related 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. In Addition, 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 the Pacific region, an interdiction exercise, which had been postponed since 2020 due to the COVID-19 pandemic, took place in Hawaii in August 2022 with participation by six countries (Australia, Japan, South Korea, New Zealand, Singapore, and the United States). According to the United States which hosted the exercise named “Fortune Guard 22,” 21 countries, including the six listed above, attended the exercise, and featured briefs by experts on a number of topics, a tabletop discussion on a proliferation problem, a demonstration of ship boarding interdiction capabilities (LIVEX), and a demonstration of seaport interdiction capabilities (PORTEX).143

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, by taking 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-to-ship transfers to or from DPRK-flagged vessels of any goods or items that are being supplied, sold, or transferred to or from the DPRK.144

Regarding illicit maritime activities, including ship-to-ship transfers with North Korean-flagged vessels prohibited by UNSCRs, the Japan Maritime Self-Defense Force has carried out monitoring and surveillance activities in the Sea of Japan and the Yellow Sea since December 2017. Japan’s Foreign Ministry published a post regarding North Korea’s illicit activities on its official website.145 Monitoring and surveillance activities regarding this matter were conducted by Japan and the United States, together with Australia, Canada, France, Germany, New Zealand and the United Kingdom in 2022 as in previous years.

 

E) Civil nuclear cooperation with non-parties to the NPT

In September 2008, the NSG agreed to grant India a waiver allowing nuclear trade with the member states under the condition that India made commitments, including conclusion of the IAEA Additional Protocol and continuation of the nuclear test moratorium. 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 under these agreements has been sparse,146 with the exception of India importing uranium from Australia, Canada, France, Kazakhstan and Russia, and the conclusion of its agreements to import uranium from Argentina, Mongolia, Namibia and Uzbekistan.147

Meanwhile, China has been criticized for its April 2010 agreement to export two nuclear power reactors to Pakistan, an act which may violate 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 at the time 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 operating these reactors.148 Their construction started in 2015 in Karachi, and commercial operations were scheduled to begin in 2021 and 2022 respectively.149 Because all other Chinese reactors that were claimed to be excluded from NSG guidelines under the grandfather clause were built at Chashma, there remains a question as to whether or not the exemption can also apply to the Karachi plant.

The NAM has criticized civil nuclear cooperation with non-NPT states, and continues to argue that exporting states should refrain from transferring nuclear material and technologies to those states that have not accepted IAEA comprehensive safeguards.

 

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125 Aside from the NSG, Australia Group (AG), Missile Technology Control Regime (MTCR), and Wassenaar Arrangement (WA).
126 In July 2019, Japan pointed out the inadequacy of South Korea’s domestic export control system, and reviewed its operation of export controls with respect to South Korea.

127 Ministry of Economy, Trade and Industry, “28th Asian Export Control Seminar Held,” February 24, 2022, https://www.meti.go.jp/english/press/2022/0224_003.html.

128 State Council Information Office of the People’s Republic of China, “China’s Export Controls,” December 29, 2021, https://english.www.gov.cn/archive/whitepaper/202112/29/content_WS61cc01 b8c6d09c94e48a2df0.html.
129 Allison Pytlak, “Main Committee II: Thematic Exchange,” NPT: News in the Review, Vol. 17, No. 5 (October 13, 2022), p. 30.
130 Regarding the 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.

131 “Foreign Ministry Spokesperson Geng Shuang’s Regular Press Conference,” Ministry of Foreign Affairs of China, January 31, 2019, https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/t16345 07.shtml.
132 “China and Pakistan Join Hands to Block India’s Entry into Nuclear Suppliers Group,” Times of India, May 12, 2016, http://timesofindia.indiatimes.com/india/China-and-Pakistan-join-hands-to-block-Indias-entry-into-Nuclear-Suppliers-Group/articleshow/52243719.cms.
133 INFCIRC/254/Rev.12/Part 1, July 26, 2011.

134 The U.S.-Mexico Nuclear Cooperation Agreement concluded in May 2018, and it is stated in the preamble that Mexico will not conduct sensitive nuclear activities, which is referred to as a “silver standard.”
135 S/2022/132, March 1, 2022.

136 S/2022/668, September 7, 2022.

137 Aaron Arnold, “To Sanction North Korea, Sanction Those That Won’t—Russia and China,” Bulletin of the Atomic Scientists, July 14, 2022, https://thebulletin.org/2022/07/to-sanction-north-korea-sanction-those-that-wont-russia-and-china/.

138 S/2022/510, June 24, 2022; S/2022/937, December 12, 2021.
139 Tim Stickings, “Iran Suspected of Seeking Nuclear and Missile Materials in Germany,” The National News, June 8, 2022, https://www.thenationalnews.com/world/europe/2022/06/08/iran-suspected-of-seeking-nuclear-and-missile-materials-in-germany/.

140 Maya Zanger-Nadis, “Iran Seeking Nuclear Help from Russia in Exchange for Weapons,” The Jerusalem Post, November 4, 2022, https://www.jpost.com/international/article-721483.
141 S/2021/211.
142 Paul K. Kerr, “Chinese Nuclear and Missile Proliferation,” CRS In Focus, May 17, 2021.

143 The U.S. Department of State, “Proliferation Security Initiative Asia-Pacific Exercise Rotation Joint Statement,” August 15, 2022, https://www.state.gov/proliferation-security-initiative-asia-pacific-exercise-rotation-joint-statement/.
144 “Joint Statement from Proliferation Security Initiative (PSI) Partners in Support of United Nations Security Council Resolutions 2375 and 2397 Enforcement,” January 12, 2018, https://www.psi-online.info/psi-info-en/aktuelles/-/2075616. Originally, 17 countries signed the joint statement. By the end of 2018, 42 countries had become signatories, including Australia, Austria, Belgium, Canada, France, Germany, Japan, South Korea, the Netherlands, Norway, Sweden, Switzerland, the United Kingdom and the United States.
145 Ministry of Foreign Affairs of Japan, “Suspicion of Illegal Ship-to-Ship Transfers of Goods by North Korea-Related Vessels,” October 31, 2022, https://www.mofa.go.jp/fp/nsp/page4e_000757.html.

146 “No New Power Projects from Indo-US Nuclear Deal,” The Pioneer, March 9, 2020, https://www. dailypioneer.com/2020/india/no-new-power-projects-from-indo-us-nuclear-deal.html.
147 Adrian Levy, “India Is Building a Top-Secret Nuclear City to Produce Thermonuclear Weapons, Experts Say,” Foreign Policy, December 16, 2015, http://foreignpolicy.com/2015/12/16/india_nuclear_ city_top_secret_china_pakistan_barc/; James Bennett, “Australia Quietly Makes First Uranium Shipment to India Three Years after Supply Agreement,” ABC, July 19, 2017, https://www.abc.net.au/news/2017-07-19/australia-quietly-makes-first-uranium-shipment-to-india/8722108; Dipanjan Roy Chaudhury, “India Inks Deal to Get Uranium Supply from Uzbekistan,” Economic Times, January 19, 2019, https://econ omictimes.indiatimes.com/news/defence/india-inks-deal-to-get-uranium-supply-from-uzbekistan/article show/67596635.cms.
148 “Pakistan Starts Work on New Atomic Site, with Chinese Help,” Global Security Newswire, November 27, 2013, http://www.nti.org/gsn/article/pakistan-begins-work-new-atomic-site-being-built-chinese-he lp/.
149 “Karachi Nuclear Power Plant (KANUPP) Expansion,” Power Technology, May 22, 2020, https://www. power-technology.com/projects/karachi-nuclear-power-plant-expansion/.