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projects. U.S. law, for example, can require U.S. government access to Russian facilities to confirm that equipment and materials paid for by the United States are being used for the purposes intended. Russian laws and regulations may restrict such access. Therefore, to move forward in the cooperation, a detailed understanding and some adaptation of laws and regulations on each side may be necessary. In some cases, it may be necessary to add or amend laws or regulations to enable the cooperation to go forward in ways that are consistent with the laws of both countries.

Law, including legally binding agreements and domestic legal reforms, has proven to be a powerful tool for the overall advancement of U.S.-Russian cooperation on nuclear nonproliferation. Examples include the Cooperative Threat Reduction Agreement and the HEU Purchase Agreement. At the same time, disputes over certain legal issues have been major stumbling blocks to cooperation in particular areas. This section suggests ways of making progress on several legal issues of particular importance to cooperation between the United States and Russia in the nuclear nonproliferation arena. During the course of consultations with Russian and American government and nongovernment experts, the joint committee was able to identify mutually beneficial paths forward on several key issues. Interested readers may find useful background information in Appendix G, which contains a particularly extensive set of Russian recommendations on legal issues.

LEGAL ISSUES HINDERING COOPERATION

Liability

The governments of the United States and Russia disagree about the level of liability protection that should be afforded agents and contractors of the U.S. government who are working on projects involving nuclear technology in Russia. The U.S.-Russian impasse over liability protection has had a significant negative effect on cooperation on nonproliferation. Solving this problem should be a very high priority. The joint committee recommends that the governments of the United States and Russia, as a long-term and comprehensive solution to the liability issue, adopt and ratify the Convention on Supplementary Compensation for Nuclear Damage (CSC).1 The ratification of CSC by the United States and Russia would result in all third-party claims for nuclear damage resulting from a nuclear incident being channeled exclusively to the operator responsible for the nuclear incident and being resolved exclusively through the legal system of the country where the nuclear incident occurred. CSC ratification by Russia and the United States would also have the benefit of prompting ratification by other states, thereby facilitating future joint efforts to solve nonproliferation problems in other countries and regions of the world.

Until this solution is achieved, government-to-government agreements on liability will be necessary to provide a framework within which cooperation on nuclear nonproliferation can proceed. Because of this necessity, the joint committee recommends that the Russian Duma ratify both the CTR umbrella and the ISTC umbrella agreements.2 This would be an initial, practical step toward a long-term and comprehensive resolution of the liability issue. The continuing limbo serves neither country’s interest in continuing vital cooperation on nonproliferation.

Russia’s accession, in March 2005, to the 1963 Vienna Convention on Civil Liability for Nuclear Damage3 was just such an important initial step forward. The joint committee recommends that the Russian government, in implementing the 1963 Vienna Convention, adopt a comprehensive domestic nuclear liability law that is consistent with CSC and that covers both civilian and defense nuclear sites (which the Price-Anderson Act in the United States does).

Taxation

Taxation issues continue to hinder cooperation on nonproliferation. These problems stem from the fact that the U.S. government is unwilling to have its contributions to bilateral nonproliferation efforts taxed by the Russian government. Exemptions must therefore be provided for contractors and grantees who receive U.S. funding for work performed in Russia. However, there are often problems with the provision and implementation of these exemptions. The joint committee recommends that the governments of the United States and Russia conclude negotiation and adoption of the umbrella bilateral agreement entitled the Protocol Between the Government of Russia and the U.S. Government on the Implementation of Taxes, Dues, and Duty Exemptions in Connection with Gratuitous Assistance Rendered to the Russian Federation by the U.S. Government, which the two governments have in recent years negotiated almost to conclusion.

In addition, the joint committee recommends that the Russian government modify its tax system along the following lines to facilitate cooperation on nonproliferation:

  1. The amount of time that it takes to complete the bureaucratic procedure of assigning projects and programs the status of gratuitous technical aid should be reduced. Improvements in this area could be made either by changes to the Russian tax code or by government decree. For example,

1  

See http://www.iaea.org/Publications/Documents/Infcircs/1998/infcirc567.shtml online. Accessed April 30, 2005.

2  

More information about the CTR agreement is available online at http://www.defenselink.mil/pubs/ctr/; more information about ISTC is available online at http://www.istc.ru. Accessed May 8, 2005.

3  

See http://www.iaea.org/Publications/Documents/Conventions/liability.html online. Accessed April 30, 2005.



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