Nuclear Regulatory Commission Order on Protecting Safeguards Information

Federal Register: January 23, 2004 (Volume 69, Number 15)
Notices
Page 3397-3400

=======================================================================
-----------------------------------------------------------------------

NUCLEAR REGULATORY COMMISSION

In the Matter of All Licensees Authorized To Manufacture or
Initially Transfer Items Containing Radioactive Material for Sale or
Distribution and Possess Certain Radioactive Material of Concern and
All Other Persons Who Obtain Safeguards Information Described Herein;
Order Issued on November 25, 2003 Imposing Requirements for the
Protection of Certain Safeguards Information (Effective Immediately)

The Licensees identified in Attachment 1 \1\ to this Order hold
licenses issued in accordance with the Atomic Energy Act of 1954 by the
U.S. Nuclear Regulatory Commission (NRC or Commission) or an Agreement
State authorizing them to manufacture or initially transfer items
containing radioactive material for sale or distribution. The NRC
intends to issue security Orders to certain manufacturing and
distribution licensees in the near future. Orders will be issued to
both NRC and Agreement State materials licensees who may possess
radioactive material of concern. The Orders will require compliance
with specific Additional Security Measures to enhance the security of
certain radioactive materials. The NRC will issue Orders to both NRC
and Agreement State Licensees under its authority to protect the common
defense and security, which has not been relinquished to the Agreement
States. Before issuing Orders for Additional Security Measures, the
Commission seeks comments from affected licensees on the draft
Additional Security Measures, Implementing Guidance, and Regulatory
Issue Summary Table ``Threat Conditions and Specific Actions for
Manufacturing and Distribution Licensees.'' However, the Commission has
determined that these draft documents are Safeguards Information, will
not be released to the public, and must be protected from unauthorized
disclosure. Therefore, the Commission is imposing the requirements, as
set forth in Attachment 2 of this Order, so that affected Licensees can
receive these draft documents for review and comment. This Order also
imposes requirements for the protection of Safeguards Information in
the hands of any person,\2\ whether or not a licensee of the
Commission, who produces, receives, or acquires Safeguards Information.
---------------------------------------------------------------------------

\1\ Attachment 1 contains OFFICIAL USE ONLY sensitive
information and will not be released to the public.
\2\ Person means (1) any individual, corporation, partnership,
firm, association, trust, estate, public or private institution,
group, government agency other than the Commission or the
Department, except that the Department shall be considered a person
with respect to those facilities of the Department specified in
section 202 of the Energy Reorganization Act of 1974 (88 Stat.
1244), any State or any political subdivision of, or any political
entity within a State, any foreign government or nation or any
political subdivision of any such government or nation, or other
entity; and (2) any legal successor, representative, agent, or
agency of the foregoing.
---------------------------------------------------------------------------

The Commission has broad statutory authority to protect and
prohibit the unauthorized disclosure of Safeguards Information. Section
147 of the Atomic Energy Act of 1954, as amended, grants the Commission
explicit authority to ``issue such orders, as necessary to prohibit the
unauthorized disclosure of safeguards information * * *'' This
authority extends to information concerning special nuclear material,
source material, and byproduct material, as well as production and
utilization facilities. Licensees and all persons who produce, receive,
or acquire Safeguards Information must ensure proper handling and
protection of Safeguards Information to avoid unauthorized disclosure
in accordance with the specific requirements for the protection of
Safeguards Information contained in Attachment 2. The Commission hereby
provides notice that it intends to treat all violations of the
requirements contained in Attachment 2 applicable to the handling and
unauthorized disclosure of Safeguards Information as serious breaches
of adequate protection of the public health and safety and the common
defense and security of the United States. Access to Safeguards
Information is limited to those persons who have established the need
to know the information, and are considered to be trustworthy and
reliable. A need to know means a determination by a person having
responsibility for protecting Safeguards Information that a proposed
recipient's access to Safeguards Information is necessary in the
performance of official, contractual, or licensee duties of employment.
Licensees and all other persons who obtain Safeguards Information must
ensure that they develop, maintain and implement strict policies and
procedures for the proper handling of Safeguards Information to prevent
unauthorized disclosure, in accordance with the requirements in
Attachment 2. All licensees must ensure that all contractors whose
employees may have access to Safeguards Information either adhere to
the Licensee's policies and procedures on Safeguards Information or
develop, maintain and implement their own acceptable policies and
procedures. The Licensees remain responsible for the conduct of their
contractors. The policies and procedures necessary to ensure compliance
with applicable requirements contained in Attachment 2 must address, at
a minimum, the following: the general performance requirement that each
person who produces, receives, or acquires Safeguards Information shall
ensure that Safeguards Information is protected against unauthorized
disclosure; protection of Safeguards Information at fixed sites, in use
and in storage, and while in transit; correspondence containing
Safeguards Information; access to Safeguards Information; preparation,
marking, reproduction and destruction of documents; external
transmission of documents; use of automatic data processing systems;
and removal of the Safeguards Information category.
In order to provide assurance that the Licensees are implementing
prudent measures to achieve a consistent level of protection to
prohibit the unauthorized disclosure of Safeguards Information, all
Licensees who hold licenses issued by the U.S. Nuclear Regulatory
Commission or an Agreement State authorizing them to manufacture or
initially transfer items containing radioactive material for sale or
distribution and may possess certain radioactive material of concern
shall implement the requirements identified in Attachment 2 to this
Order. In addition, pursuant to 10 CFR 2.202, I find that in light of
the common defense and security matters identified above, which warrant
the issuance of this Order, the public health, safety and interest
require that this Order be effective immediately.

III

Accordingly, pursuant to Sections 81, 161b, 161i, 161o, 182 and 186
of the Atomic Energy Act of 1954, as amended, and the Commission's
regulations in 10 CFR 2.202, 10 CFR part 30, and 10 CFR part 32, it is
hereby ordered, effective immediately, that all licensees identified in
Attachment 1 to this order and all other persons who produce, receive,
or acquire the additional security measures identified above (whether
draft or final) or any related safeguards information shall comply with
the requirements of Attachment 2.

[[Page 3398]]

In accordance with 10 CFR 2.202, the Licensee must, and any other
person adversely affected by this Order may, submit an answer to this
Order, and may request a hearing on this Order, within twenty (20) days
of the date of this Order. Where good cause is shown, consideration
will be given to extending the time to request a hearing. A request for
extension of time in which to submit an answer or request a hearing
must be made in writing to the Director, Office of Nuclear Material
Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington,
DC 20555, and include a statement of good cause for the extension. The
answer may consent to this Order. Unless the answer consents to this
Order, the answer shall, in writing and under oath or affirmation,
specifically set forth the matters of fact and law on which the
Licensee or other person adversely affected relies and the reasons as
to why the Order should not have been issued. Any answer or request for
a hearing shall be submitted to the Secretary, Office of the Secretary
of the Commission, U.S. Nuclear Regulatory Commission, ATTN:
Rulemakings and Adjudications Staff, Washington, DC 20555. Copies also
shall be sent to the Director, Office of Nuclear Material Safety and
Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555,
to the Assistant General Counsel for Materials Litigation and
Enforcement at the same address, and to the Licensee if the answer or
hearing request is by a person other than the Licensee. Because of
possible disruptions in delivery of mail to United States Government
offices, it is requested that answers and requests for hearing be
transmitted to the Secretary of the Commission either by means of
facsimile transmission to (301) 415-1101 or by e-mail to
hearingdocket@nrc.gov and also to the Office of the General Counsel
either by means of facsimile transmission to (301) 415-3725 or by e-
mail to OGCMailCenter@nrc.gov. If a person other than the Licensee
requests a hearing, that person shall set forth with particularity the
manner in which his interest is adversely affected by this Order and
shall address the criteria set forth in 10 CFR 2.714(d).
If a hearing is requested by the Licensee or a person whose
interest is adversely affected, the Commission will issue an Order
designating the time and place of any hearing. If a hearing is held,
the issue to be considered at such hearing shall be whether this Order
should be sustained.
Pursuant to 10 CFR 2.202(c)(2)(i), the Licensee may, in addition to
demanding a hearing, at the time the answer is filed or sooner, move
the presiding officer to set aside the immediate effectiveness of the
Order on the ground that the Order, including the need for immediate
effectiveness, is not based on adequate evidence but on mere suspicion,
unfounded allegations, or error. In the absence of any request for
hearing, or written approval of an extension of time in which to
request a hearing, the provisions specified in Section III above shall
be final twenty (20) days from the date of this Order without further
order or proceedings. If an extension of time for requesting a hearing
has been approved, the provisions specified in Section III shall be
final when the extension expires if a hearing request has not been
received. An answer or a request for hearing shall not stay the
immediate effectiveness of this order.

Dated this 25th of November 2003.

For the Nuclear Regulatory Commission.
Martin J. Virgilio,
Director, Office of Nuclear Material Safety and Safeguards.

Attachment 2--Modified Handling Requirements for the Protection of
Certain Safeguards Information (SGI-M)

General Requirement

Information and material that the U.S. Nuclear Regulatory
Commission (NRC) determines are safeguards information must be
protected from unauthorized disclosure. In order to distinguish
information needing modified protection requirements from the
safeguards information for reactors and fuel cycle facilities that
require a higher level of protection, the term ``Safeguards
Information-Modified Handling'' (SGI-M) is being used as the
distinguishing marking for certain materials licensees. Each person who
produces, receives, or acquires SGI-M shall ensure that it is protected
against unauthorized disclosure. To meet this requirement, licensees
and persons shall establish and maintain an information protection
system that includes the measures specified below. Information
protection procedures employed by State and local police forces are
deemed to meet these requirements.

Persons Subject to These Requirements

Any person, whether or not a licensee of the NRC, who produces,
receives, or acquires SGI-M is subject to the requirements (and
sanctions) of this document. Firms and their employees that supply
services or equipment to materials licensees would fall under this
requirement if they possess facility SGI-M. A licensee must inform
contractors and suppliers of the existence of these requirements and
the need for proper protection. (See more under Conditions for Access.)
State or local police units who have access to SGI-M are also
subject to these requirements. However, these organizations are deemed
to have adequate information protection systems. The conditions for
transfer of information to a third party, i.e., need-to-know, would
still apply to the police organization as would sanctions for unlawful
disclosure. Again, it would be prudent for licensees who have
arrangements with local police to advise them of the existence of these
requirements.

Criminal and Civil Sanctions

The Atomic Energy Act of 1954, as amended, explicitly provides that
any person, ``whether or not a licensee of the Commission, who violates
any regulations adopted under this section shall be subject to the
civil monetary penalties of section 234 of this Act.'' Section 147a. of
the Act. Furthermore, willful violation of any regulation or order
governing safeguards information is a felony subject to criminal
penalties in the form of fines or imprisonment, or both. See sections
147b. and 223 of the Act.

Conditions for Access

Access to SGI-M beyond the initial recipients of the order will be
governed by the background check requirements imposed by the order.
Access to SGI-M by licensee employees, agents, or contractors must
include both an appropriate need-to-know determination by the licensee,
as well as a determination concerning the trustworthiness of
individuals having access to the information. Employees of an
organization affiliated with the licensee's company, e.g., a parent
company, may be considered as employees of the licensee for access
purposes.

Need-to-Know

Need-to-know is defined as a determination by a person having
responsibility for protecting SGI-M that a proposed recipient's access
to SGI-M is necessary in the performance of official, contractual, or
licensee duties of employment. The recipient should be made aware that
the information is SGI-M and those having access to it are subject to
these requirements as well as criminal and civil sanctions for
mishandling the information.

[[Page 3399]]

Occupational Groups

Dissemination of SGI-M is limited to individuals who have an
established need-to-know and who are members of certain occupational
groups. These occupational groups are:
(I) An employee, agent, or contractor of an applicant, a licensee,
the Commission, or the United States Government;
(II) A member of a duly authorized committee of the Congress;
(III) The Governor of a State or his designated representative;
(IV) A representative of the International Atomic Energy Agency
(IAEA) engaged in activities associated with the U.S./IAEA Safeguards
Agreement who has been certified by the NRC;
(V) A member of a State or local law enforcement authority that is
responsible for responding to requests for assistance during safeguards
emergencies; or
(VI) A person to whom disclosure is ordered pursuant to section
2.744(e) of part 2 of part 10 of the Code of Federal Regulations.
(VII) State Radiation Control Program Directors (and State Homeland
Security Directors) or their designees.
In a generic sense, the individuals described above in (II) through
(VII) are considered to be trustworthy by virtue of their employment
status. For non-governmental individuals in group (I) above, a
determination of reliability and trustworthiness is required.
Discretion must be exercised in granting access to these individuals.
If there is any indication that the recipient would be unwilling or
unable to provide proper protection for the SGI-M, they are not
authorized to receive SGI-M.

Information Considered for Safeguards Information Designation

Information deemed SGI-M is information the disclosure of which
could reasonably be expected to have a significant adverse effect on
the health and safety of the public or the common defense and security
by significantly increasing the likelihood of theft, diversion, or
sabotage of materials or facilities subject to NRC jurisdiction.
SGI-M identifies safeguards information which is subject to these
requirements. These requirements are necessary in order to protect
quantities of nuclear material significant to the health and safety of
the public or common defense and security.
The overall measure for consideration of SGI-M is the usefulness of
the information (security or otherwise) to an adversary in planning or
attempting a malevolent act. The specificity of the information
increases the likelihood that it will be useful to an adversary.

Protection While in Use

While in use, SGI-M shall be under the control of an authorized
individual. This requirement is satisfied if the SGI-M is attended by
an authorized individual even though the information is in fact not
constantly being used. SGI-M, therefore, within alarm stations,
continuously manned guard posts or ready rooms need not be locked in
file drawers or storage containers.
Under certain conditions the general control exercised over
security zones or areas would be considered to meet this requirement.
The primary consideration is limiting access to those who have a need-
to-know. Some examples would be:
Alarm stations, guard posts and guard ready rooms;
Engineering or drafting areas if visitors are escorted and
information is not clearly visible; Plant maintenance areas if access
is restricted and information is not clearly visible;
Administrative offices (e.g., central records or purchasing) if
visitors are escorted and information is not clearly visible;

Protection While in Storage

While unattended, SGI-M shall be stored in a locked file drawer or
container. Knowledge of lock combinations or access to keys protecting
SGI-M shall be limited to a minimum number of personnel for operating
purposes who have a ``need-to-know'' and are otherwise authorized
access to SGI-M in accordance with these requirements. Access to lock
combinations or keys shall be strictly controlled so as to prevent
disclosure to an unauthorized individual.

Transportation of Documents and Other Matter

Documents containing SGI-M when transmitted outside an authorized
place of use or storage shall be enclosed in two sealed envelopes or
wrappers. The inner envelope or wrapper shall contain the name and
address of the intended recipient, and be marked both sides, top and
bottom with the words ``Safeguards Information--Modified Handling.''
The outer envelope or wrapper must be addressed to the intended
recipient, must contain the address of the sender, and must not bear
any markings or indication that the document contains SGI-M.
SGI-M may be transported by any commercial delivery company that
provides nation-wide overnight service with computer tracking features,
U.S. first class, registered, express, or certified mail, or by any
individual authorized access pursuant to these requirements.
Within a facility, SGI-M may be transmitted using a single opaque
envelope. It may also be transmitted within a facility without single
or double wrapping, provided adequate measures are taken to protect the
material against unauthorized disclosure. Individuals transporting SGI-
M should retain the documents in their personal possession at all times
or ensure that the information is appropriately wrapped and also
secured to preclude compromise by an unauthorized individual.

Preparation and Marking of Documents

While the NRC is the sole authority for determining what specific
information may be designated as ``SGI-M,'' originators of documents
are responsible for determining whether those documents contain such
information. Each document or other matter that contains SGI-M shall be
marked ``Safeguards Information--Modified Handling'' in a conspicuous
manner on the top and bottom of the first page to indicate the presence
of protected information. The first page of the document must also
contain (i) the name, title, and organization of the individual
authorized to make a SGI-M determination, and who has determined that
the document contains SGI-M, (ii) the date the document was originated
or the determination made, (iii) an indication that the document
contains SGI-M, and (iv) an indication that unauthorized disclosure
would be subject to civil and criminal sanctions. Each additional page
shall be marked in a conspicuous fashion at the top and bottom with
letters denoting ``Safeguards Information--Modified Handling.''
In addition to the ``Safeguards Information--Modified Handling''
markings at the top and bottom of page, transmittal letters or
memoranda which do not in themselves contain SGI-M shall be marked to
indicate that attachments or enclosures contain SGI-M but that the
transmittal does not (e.g., ``When separated from SGI-M enclosure(s),
this document is decontrolled'').
In addition to the information required on the face of the
document, each item of correspondence that contains SGI-M shall, by
marking or other means, clearly indicate which portions (e.g.,
paragraphs, pages, or appendices) contain SGI-M and which do not.
Portion marking is not required

[[Page 3400]]

for physical security and safeguards contingency plans.
All documents or other matter containing SGI-M in use or storage
shall be marked in accordance with these requirements. A specific
exception is provided for documents in the possession of contractors
and agents of licensees that were produced more than one year prior to
the effective date of the order. Such documents need not be marked
unless they are removed from file drawers or containers. The same
exception applies to old documents stored away from the facility in
central files or corporation headquarters.
Since information protection procedures employed by State and local
police forces are deemed to meet NRC requirements, documents in the
possession of these agencies need not be marked as set forth in this
document.

Removal From SGI-M Category

Documents containing SGI-M shall be removed from the SGI-M category
(decontrolled) only after the NRC determines that the information no
longer meets the criteria of SGI-M. Licensees have the authority to
make determinations that specific documents which they created no
longer contain SGI-M information and may be decontrolled. Consideration
must be exercised to ensure that any document decontrolled shall not
disclose SGI-M in some other form or be combined with other unprotected
information to disclose SGI-M.
The authority to determine that a document may be decontrolled may
be exercised only by, or with the permission of, the individual (or
office) who made the original determination. The document should
indicate the name and organization of the individual removing the
document from the SGI-M category and the date of the removal. Other
persons who have the document in their possession should be notified of
the decontrolling of the document.

Reproduction of Matter Containing SGI-M

SGI-M may be reproduced to the minimum extent necessary consistent
with need without permission of the originator. Newer digital copiers
which scan and retain images of documents represent a potential
security concern. If the copier is retaining SGI-M information in
memory, the copier cannot be connected to a network. It should also be
placed in a location that is cleared and controlled for the authorized
processing of SGI-M information. Different copiers have different
capabilities, including some which come with features that allow the
memory to be erased. Each copier would have to be examined from a
physical security perspective.

Use of Automatic Data Processing (ADP) Systems

SGI-M may be processed or produced on an ADP system provided that
the system is assigned to the licensee's or contractor's facility and
requires the use of an entry code/password for access to stored
information. Licensees are encouraged to process this information in a
computing environment that has adequate computer security controls in
place to prevent unauthorized access to the information. An ADP system
is defined here as a data processing system having the capability of
long term storage of SGI-M. Word processors such as typewriters are not
subject to the requirements as long as they do not transmit information
off-site. (Note: if SGI-M is produced on a typewriter, the ribbon must
be removed and stored in the same manner as other SGI-M information or
media.) The basic objective of these restrictions is to prevent access
and retrieval of stored SGI-M by unauthorized individuals, particularly
from remote terminals. Specific files containing SGI-M will be password
protected to preclude access by an unauthorized individual. The
National Institute of Standards and Technology (NIST) maintains a
listing of all validated encryption systems at http://csrc.nist.gov/cryptval/140-1/1401val.htm.
SGI-M files may be transmitted over a
network if the file is encrypted. In such cases, the licensee will
select a commercially available encryption system that NIST has
validated as conforming to Federal Information Processing Standards
(FIPS). SGI-M files shall be properly labeled as ``Safeguards
Information--Modified Handling'' and saved to removable media and
stored in a locked file drawer or cabinet.

Telecommunications

SGI-M may not be transmitted by unprotected telecommunications
circuits except under emergency or extraordinary conditions. For the
purpose of this requirement, emergency or extraordinary conditions are
defined as any circumstances that require immediate communications in
order to report, summon assistance for, or respond to a security event
(or an event that has potential security significance).
This restriction applies to telephone, telegraph, teletype,
facsimile circuits, and to radio. Routine telephone or radio
transmission between site security personnel, or between the site and
local police, should be limited to message formats or codes that do not
disclose facility security features or response procedures. Similarly,
call-ins during transport should not disclose information useful to a
potential adversary. Infrequent or non-repetitive telephone
conversations regarding a physical security plan or program are
permitted provided that the discussion is general in nature.
Individuals should use care when discussing SGI-M at meetings or in
the presence of others to insure that the conversation is not overheard
by persons not authorized access. Transcripts, tapes or minutes of
meetings or hearings that contain SGI-M should be marked and protected
in accordance with these requirements.

Destruction

Documents containing SGI-M should be destroyed when no longer
needed. They may be destroyed by tearing into small pieces, burning,
shredding or any other method that precludes reconstruction by means
available to the public at large. Piece sizes one half inch or smaller
composed of several pages or documents and thoroughly mixed would be
considered completely destroyed.

[FR Doc. 04-1415 Filed 1-22-04; 8:45 am]

BILLING CODE 7590-01-P