Beyond the Hyde Act

Written by GOPALAN BALACHANDRAN | Updated: Dec 31 2009, 04:19am hrs
In recent days, there has been a lot of debate on the progress of the Indo-US bilateral discussion on civil nuclear trade. The issue was discussed when the Indian Prime Minister was visiting the US, and it also came up in the discussions between Indian and US companies during the latters recent visit to India. The debate has been focused exclusively on two aspects. For the US side, the key issue has been the need for India to enact a suitable nuclear liability law. For the Indian side, the debate has revolved around certain elements of the US Code of Federal Regulations (CFR).

CFR is the codification of the general and permanent rules published in the Federal Register by the executive departments and agencies of the Federal government. It is divided into 50 titles that represent broad areas subject to Federal regulation.

Title 10 deals with energy and under the Title, Parts 0-199 deal with the Nuclear Regulatory Commission. 10 CFR 810 deals with assistance to foreign atomic energy activities. India has moved forward on the nuclear liability legislation. The issues connected with 10 CFR 810 are minor in nature and can be easily resolved.

However, there still exist some major impediments to stress-free India-US commerce in civil nuclear area. Surprisingly, all the major players in the drama the US and Indian governments, the US industry and the Indian industryseem to have missed these elements, all of which relate to US government lapses in making appropriate changes to domestic laws.

The Henry J Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006, popularly known as the Hyde Act, was passed into law in mid-December 2006, more than three years ago. In spite of this three-year gap, the US government has not yet amended its regulations governing export and import of nuclear equipment and material, codified by 10 CFR 110. The regulations in this part prescribe licensing, enforcement, and rulemaking procedures and criteria, under the Atomic Energy Act for the export of nuclear equipment and material, and the regulations in this part apply to all persons in the US.

As a result, notwithstanding the Hyde Act and the US-India 123 agreement, civil nuclear cooperation between the US and India remains at the same state of exception and denials that has characterised India-US civil nuclear relations since 1978, when the Atomic Energy Act of 1954 was amended.

The particular sections of 10 CFR 110 that inhibit India-US civil nuclear trade and that need to be amended in light of the Hyde Act are Sec 110.29, 110.42 and 110.46.

Section 110.29 lists the restricted destinations, countries that are not parties to the NPT or are listed for reasons recommended by the executive branch. India is still listed as a restricted destination. As a consequence, any application for a licence to export any nuclear material or equipment to any restricted country, including India, will have to be promptly referred to the executive branch for review to provide, amongst other things, its judgment as to whether the proposed export would be inimical to common defence and security, along with supporting rationale and information. This was certainly not the intention of either the Hyde Act or the two governments when they negotiated the nuclear agreement.

Section 110.42 lists the export licensing criteria. Amongst other items, 110.42 (6) states that, With respect to exports of such material or facilities to non-nuclear weapon states, IAEA safeguards will be maintained with respect to all peaceful activities in, under the jurisdiction of, or carried out under the control of such state at the time of export. This criterion will not be applied if the Commission has been notified by the President in writing that failure to approve an export because this criterion has not been met would be seriously prejudicial to the achievement of United States nonproliferation objectives or otherwise jeopardise the common defence and security, in which case the provisions of section 128 of the Atomic Energy Act regarding Congressional review will apply. The intention of the Hyde Act was to remove the requirement of full-scope safeguards.

In the absence of an amendment to 110.42(6), the requirement still stands.

Section 110.46 deals with conduct resulting in termination of nuclear exports. According to 110.46(a) (1), Except as provided in paragraph (c) of this section, no licence will be issued to export nuclear equipment or material, other than byproduct material, to any non-nuclear weapon state that is found by the President to have, after March 10, 1978, detonated a nuclear explosive device. The Hyde Act had exempted India from this requirement. However, 10 CFR 100 still retains this condition, which would require a Presidential waiver before any civil nuclear trade can take place.

These are the three major amendments that will have to be notified by the US government before there can be any normal civil nuclear trade with India, notwithstanding any nuclear liability law or 10 CFR 810 resolution.

The author is visiting fellow, IDSA and National Maritime Foundation