On May 13, 2008, the President submitted to Congress a proposed Agreement Between the Government of the United States of America and the Government of the Russian Federation for Cooperation in the Field of Peaceful Uses of Nuclear Energy (henceforth referred to as the U.S.-Russia 123 agreement) in accordance with the review requirements established under Section 123 of the Atomic Energy Act of 1954 (AEA), as amended. The United States has agreements for peaceful nuclear cooperation governing nuclear exports to nearly 50 countries, Taiwan, and the International Atomic Energy Agency (IAEA). Such agreements provide the framework and authorization for civilian nuclear cooperation, but do not guarantee that cooperation will take place or that nuclear material or technology transfers will occur. The proposed agreement with Russia would, among other things, establish the legal basis for the Department of Energy (DOE) to work with Russia on large-scale development of nuclear energy. However, owing to Russia's status as a nuclear weapons state, the size of its nuclear complex, and past proliferation concerns, including weaknesses in the Russian export control system, an agreement for peaceful nuclear cooperation between the United States and Russia raised a number of concerns among Members of Congress. Section 123 of the AEA (Section 123) identifies the key U.S. government agencies and sets forth the procedures for negotiating, proposing, and entering into peaceful nuclear cooperation agreements with foreign nations. Consistent with Section 123, the Department of State (State) is responsible for negotiating any proposed agreement, with the technical assistance and concurrence of DOE. After consultation with the Nuclear Regulatory Commission (NRC), State and DOE jointly submit the proposed agreement to the President, accompanied by the views and recommendations of State, DOE, and NRC. Section 123 also provides that State supply the President with an unclassified Nuclear Proliferation Assessment Statement (NPAS) for each proposed agreement, accompanied by a classified annex, prepared in consultation with the Director of National Intelligence that summarizes relevant classified information. The NPAS serves as an analysis of the proposed agreement to ensure compliance with provisions of the AEA as well as the adequacy of safeguards and other control mechanisms to ensure assistance furnished under the agreement is not used to further any military or nuclear explosive purpose.

We identified weaknesses in the process State used to ensure interagency consultation during the development of the classified NPAS annex that accompanied the U.S.-Russia 123 agreement. First, there are no formal guidelines or procedures governing the interagency consultation and review process used to develop 123 agreements and supporting documentation. Second, in part due to the lack of formal guidelines, the NRC Commissioners did not base their vote to approve the agreement on the final version of the classified NPAS annex, but instead relied on a draft version of the document. We found that the differences between the draft version NRC used to inform its vote and the final version of the classified NPAS annex were not merely editorial in nature. Third, ODNI officials told us the intelligence community's review of the classified NPAS annex would have benefited from additional time and that State did not provide the final version of this document to the intelligence community prior to the agreement's submission to the President to ensure that the intelligence community's views were adequately incorporated. In our view, these weaknesses need to be addressed to ensure adequate consultation of all key interagency parties. As a result, we are recommending improvements to the interagency review process, including establishing written guidance and ensuring adequate time for interagency consultations.