What We Heard Report – DIS-15-01

DIS-15-01: Proposal to Amend the Nuclear Non-proliferation Import and Export Control Regulations

Preamble

Discussion papers play an important role in the selection and development of the regulatory framework and regulatory program of the Canadian Nuclear Safety Commission (CNSC). They are used to solicit early public feedback on CNSC policies or approaches.

The use of discussion papers early in the regulatory process underlines the CNSC’s commitment to a transparent consultation process. The CNSC analyzes and considers preliminary feedback when determining the type and nature of requirements and guidance to issue.

Introduction

The CNSC regulates the use of nuclear energy and materials to protect health, safety, security and the environment, and to implement Canada's international commitments on the peaceful use of nuclear energy. The Nuclear Non-proliferation Import and Export Control Regulations (NNIECR) play an important role in achieving this goal. The NNIECR provide for the regulatory control of imports and exports of nuclear and nuclear-related dual-use substances, equipment and technology deemed to be of proliferation significance. The schedule of items controlled under the NNIECR is derived principally from lists agreed by the Nuclear Suppliers Group (NSG).

DIS-15-01: Proposal to Amend the Nuclear Non-proliferation Import and Export Control Regulations describes the CNSC's proposals to amend the NNIECR. These amendments would harmonize the NNIECR with updated NSG guidelines, where appropriate. DIS-15-01 also outlines additional proposed changes to the NNIECR and a change to section 18 of the General Nuclear Safety and Control Regulations (GNSCR) to clarify certain entries, reduce regulatory burden for items deemed to be of low proliferation significance, and require additional information to be submitted to the CNSC, for use in assessing applications and licensee compliance.

Consultation process

The CNSC posted DIS-15-01 for public comment from March 4, 2015 until July 2, 2015. Stakeholders were informed and invited to comment though a number of mechanisms, including announcements in the “Latest News” and “What’s New” sections of the CNSC website. In addition, an email was sent to the CNSC’s subscribers’ list alerting recipients that this document had been posted.

On July 20, 2015 the CNSC posted comments it received on its website, and issued an invitation to provide feedback on the comments until August 10, 2015. No additional comments were received.

Summary of stakeholder comments

The CNSC received feedback from ten organizations in response to DIS-15-01. A summary of comments received follows.

Overall, feedback received indicated support for maintaining international alignment with our nuclear import and export controls.

The addition of explanatory and introductory notes was supported.

Stakeholders expressed some confusion as to why the NNIECR overlaps with the Group 3: Nuclear Non-Proliferation List and Group 4: Nuclear-Related Dual-Use List in the Export Control List (ECL), which is included in A Guide to Canada's Export Controls administered by Global Affairs Canada. The ECL includes not only nuclear and nuclear-related dual-use items, but also other military and strategic goods. To address the overlap in Groups 3 and 4 of the ECL, Global Affairs Canada's General Export Permits (GEP) No. 43 and 44 were introduced on May 3, 2012. As a result of these regulations, exporters are not required to obtain an individual export permit from Global Affairs Canada when exporting eligible goods and technology to eligible destinations, but rather only require an export licence from the CNSC. The application of these GEPs has streamlined the regulatory authorization process, but is not intended to eliminate any overlap that exists in controls under the two sets of legislation.

Stakeholders were very supportive of the proposal to amend section 18 of the GNSCR. In response to some requests for clarification, the CNSC confirms that the intention is to eliminate the need to present the import or export licence to a customs officer for both tangible and intangible transfers of prescribed information.

Interest was expressed in having better alignment with foreign countries. For example, when nuclear material is exported from Canada, an export permit is needed from Canada, and an import permit must be obtained from the destination country. Stakeholders expressed an interest in having internationally aligned processes so that only one permit application would be needed. That is not considered feasible within the scope of this regulatory amendment project. That said, basing controls on the NSG Guidelines and Control Lists provides for international harmonization.

The CNSC is no longer planning to add the name of the anticipated place of entry or exit in 3(1)(i). Feedback indicated that it may be difficult to provide this information as some stakeholders use a transportation company, and don’t directly manage the transportation of imports or exports.

Stakeholders supported proposed exemptions to schedule entries, particularly the import of nuclear grade graphite not used in a reactor – as well as tritium contained in various articles and devices for illumination purposes. Stakeholders also suggested the exemption of tritium should be extended to all signs containing tritium, not just those that were installed in aircraft, ships or vehicles (conveyances).

The proposal for the provision of an applicant’s written procedures to ensure compliance with import and export regulatory requirements was generally supported by larger stakeholders with well-established processes. It was noted that this may be an increase in regulatory burden for smaller licensees. Some stakeholders were hesitant to submit their written procedures, as they viewed them as confidential and proprietary. The CNSC would like to highlight that proprietary or confidential submissions are not publicly shared. For smaller licensees, the Government of Canada’s Cabinet Directive on Regulatory Management requires regulators to apply a “small business lens” to new regulatory proposals. The CNSC will address this as required.

The CNSC proposal to add a requirement that would specify a six-year record retention period (versus the GNSCR default of one year) was supported – but a desire was expressed to align record retention requirements across CNSC regulations and documentation. The CNSC would like to highlight that the six-year timeframe was selected to align with the requirements of the ECL and with Canada Border Services Agency’s Exporters’ and Producers’ Records Regulations and Imported Goods Records Regulations. The CNSC’s Regulatory Modernization Project will also look at ways to ensure better alignment across its regulations.

Several requests for clarity of terms were noted – including:

• intangible technology transfer
• prescribed information in the GNSCR versus controlled nuclear information in the NNIECR
• prescribed equipment in the GNSCR versus controlled nuclear substances and controlled nuclear equipment in the NNIECR
• What exactly is a part of controlled nuclear equipment

All requests for clarity will be considered as appropriate when implementing changes to the NNIECR.

Next steps

The CNSC plans to move forward with amendments to the NNIECR, taking into account the feedback received on DIS-15-01, which has contributed to an enhanced understanding of stakeholder needs.

DIS-15-01 is the first step in the public consultation process for the CNSC’s revisions to the NNIECR. Stakeholders will have further opportunities to comment on any proposed amendments when they are published in Canada Gazette, Part I.