When Foreign Countries Want to Buy into U.S. Nuclear Power Plants – What Then?

The United States has historically struggled to balance its commitment to economic openness and foreign investment with national security concerns. For example, U.S. national policy makers have worked to make sure sensitive military and defense technology and production remain with American companies.

After 9/11, concerns grew that foreign ownership of U.S. infrastructure could increase our vulnerability to terrorist attacks. One example is the heated debate triggered by the 2006 purchase of a company that ran U.S. ports by the United Arab Emirates-owned company Dubai Ports World. (Dubai Ports eventually sold its interests to a U.S. company.) More recently, globalization of the nuclear industry and the weak U.S. economy have attracted significant levels of foreign investment in the U.S. nuclear industry.

The Atomic Energy Act prohibits the NRC from issuing a license to any entity that the Commission believes is “owned, controlled or dominated by an alien, a foreign corporation or foreign government.” Broadly speaking, the foreign ownership prohibition protects the “common defense and security” of the United States, even though this may prevent some nations from participating in U.S. nuclear joint ventures.

However, the NRC can permit foreign investment in nuclear power reactors if certain conditions are met. What are these conditions?

The licensee must submit a plan that describes how it will mitigate foreign control issues. For example, the licensee could exclude foreign board directors from nuclear safety and security decisions or establish “Nuclear Advisory Committees” made up of U.S. citizens to oversee safety and security practices.

For any proposed foreign joint venture, the NRC staff reviews many aspects of the proposed corporate structures of the owners, including parent companies and subsidiaries, financial arrangements, operating agreements, voting requirements, and decision-making authorities. The staff can impose license conditions specific to the situation.

Foreign investment will continue to play a critical part in the U.S. nuclear industry. Through effective staff review and implementation of effective mitigation measures, the NRC can continue to protect the common defense and security regardless of ownership.

Anneliese Simmons
Nuclear Reactor Financial Analyst