Nov

17

Export Nickel, Pay 14 Million Nickels


Posted by Clif Burns at 10:33 pm on November 17, 2009
Category: BISNonproliferationWassenaar

K25 Building at the East Tennessee Technology ParkNovamet Specialty Products Corporation recently agreed to pay $700,000 to the Bureau of Industry and Security (“BIS”) for 15 unlicensed shipments of nickel powder worth about $80,000. According to the charging documents, the powder was classified as ECCN 1C240.a. It does not appear from the charging documents that the violation was voluntarily disclosed by Novamet to the United States.

You may wonder why such a large fine for nickel powder. Well there is a partial answer to that, and the hint to the answer is the picture of the Oak Ridge gaseous diffusion uranium enrichment facility that illustrates this post. Gaseous diffusion enrichment requires a barrier that is used to separate isotopes of uranium, the goal being an output of fissionable uranium such as U-235. Apparently sintered nickel powder serves this purpose well. Sintered powder is powder that has been formed into a mass by high temperature and pressure alone without melting the powder. After this process, nickel creates a solid porous structure that permits the right isotopes to pass through and the others to stay behind, although it requires a multi-step cascading procedure. Sintered nickel powder was used as such a barrier in the gaseous diffusion plant at Oak Ridge.

Barrier technologies are, naturally, classified. But the description of ECCN 1C240.a probably gives a potential nuclear proliferator a good head start in developing a sintered nickel powder barrier. To be controlled under that ECCN, the nickel powder must be 99.0% pure and must have a mean particle size of less than 10 micrometers. I didn’t check each of the Novamet nickel powder exports alleged by BIS but five of them involved Novamet’s 4SP-10 powder, which judging from this specification sheet falls well within the parameters of ECCN 1C240.a.

That being said, and with requisite acknowledgment that this product could be used in uranium enrichment, there is certainly a foreign availability issue to consider here. The U.S. doesn’t mine or produce significant quantities of nickel. Russia is the largest producer, followed by Canada, Australia, and Indonesia. And nickel powder isn’t controlled under the Wassenaar Arrangement meaning that these countries can freely export nickel powder meeting the specifications described in ECCN 1C240.a. So, a $700,000 fine against Novamet seems far in excess of any injury that the exports might have caused.

UPDATE: Ed Fox, from DOE’s NNSA, points out in the comments that nickel powder is controlled by the Nuclear Suppliers Group. Indeed, it is listed on that group’s Guidelines for Transfers of Nuclear-Related Dual-Use Equipment, Materials, Software, and Related Technology under Category 2.C.16.a. That would prevent exports by Russia, Canada and Australia of nickel powder to certain countries. Singapore, another major producer of nickel, however, is not a member of the Nuclear Suppliers Group, although I can’t determine whether it has manufacturers who export nickel powder.

[P.S. The brief I mentioned earlier as my excuse for not posting more has been filed, so I should be on a more regular posting schedule.]

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5 Comments:


Nickel powder is controlled by the Nuclear Suppliers Group. Russia, Canada and Australia would require an export license before it could be exported to most countries.

Comment by Ed Fox on November 18th, 2009 @ 11:28 am

Thanks, Ed. I’ve updated the post to reflect your comments.

Comment by Clif Burns on November 18th, 2009 @ 12:17 pm

15 unlicensed shipments? The final order lists charges 1 through 28, no? Plus knowledge counts? I would imagine the knowledge issue explains the high fine. Or at least was a factor.

Comment by Ann on November 18th, 2009 @ 3:12 pm

The schedule to the charging letter lists 15 shipments.

I’m sure that the knowledge issue was also a contributing factor to the size of the fine, but it was applied to only two counts, both of which involved exports while license applications were pending. I’m not so sure that this was exporting “with knowledge” as it was some administrative snafu by the company. It’s certainly not like those cases where people are told that licenses are necessary and then put a false description of the item in the AES entry and never even apply for a license.

Even with the knowledge and proliferation aspects involved it still seems a large fine. Of course, I can hear BIS saying now that it’s small in comparison to the eleventy million trillion dollar fine that they could have charged for 28 counts at $250,000 each.

Comment by Clif Burns on November 18th, 2009 @ 3:57 pm

Hello,
I always enjoy reading your blog. Thank you.

As for Singapore, although they are not a member of NSG, they implement export control with strict manner in samw way as other member states.
Singapore have controlled list and 1C240a is also listed as export license required. Please see below URL for your information.

http://www.customs.gov.sg/stgc/leftNav/str/

Thanks!

Comment by Tatsuya Kanemitsu on November 18th, 2009 @ 7:14 pm