Nuclear Deal

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U.S. DEPARTMENT OF STATE

Office of the Spokesman

For Immediate Release August 3, 2007

2007/658

MEDIA NOTE

U.S and India Release Text of 123 Agreement

The following is the text of the Agreement for Cooperation between the Government of

the United States of America and the Government of India concerning peaceful uses of

nuclear energy (123 Agreement):

BEGIN TEXT:

AGREEMENT FOR COOPERATION BETWEEN

THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE

GOVERNMENT OF INDIA

CONCERNING PEACEFUL USES OF NUCLEAR ENERGY (123 AGREEMENT)

The Government of India and the Government of the United States of America,

hereinafter referred to as the Parties,

RECOGNIZING the significance of civilian nuclear energy for meeting growing global

energy demands in a cleaner and more efficient manner;

DESIRING to cooperate extensively in the full development and use of nuclear energy

for peaceful purposes as a means of achieving energy security, on a stable, reliable and

predictable basis;

WISHING to develop such cooperation on the basis of mutual respect for sovereignty,

non-interference in each other’s internal affairs, equality, mutual benefit, reciprocity and

with due respect for each other’s nuclear programmes;

DESIRING to establish the necessary legal framework and basis for cooperation

concerning peaceful uses of nuclear energy;

AFFIRMING that cooperation under this Agreement is between two States possessing

advanced nuclear technology, both Parties having the same benefits and advantages, both

committed to preventing WMD proliferation;

NOTING the understandings expressed in the India - U.S. Joint Statement of July 18,

2005 to enable full civil nuclear energy cooperation with India covering aspects of the

associated nuclear fuel cycle;

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AFFIRMING their support for the objectives of the International Atomic Energy Agency

(IAEA) and its safeguards system, as applicable to India and the United States of

America, and its importance in ensuring that international cooperation in development

and use of nuclear energy for peaceful purposes is carried out under arrangements that

will not contribute to the proliferation of nuclear weapons or other nuclear explosive

devices;

NOTING their respective commitments to safety and security of peaceful uses of nuclear

energy, to adequate physical protection of nuclear material and effective national export

controls;

MINDFUL that peaceful nuclear activities must be undertaken with a view to protecting

the environment;

MINDFUL of their shared commitment to preventing the proliferation of weapons of

mass destruction; and

DESIROUS of strengthening the strategic partnership between them;

Have agreed on the following:

ARTICLE 1 – DEFINITIONS

For the purposes of this Agreement:

(A) “By-product material” means any radioactive material (except special fissionable

material) yielded in or made radioactive by exposure to the radiation incident to the

process of producing or utilizing special fissionable material. By-product material shall

not be subject to safeguards or any other form of verification under this Agreement,

unless it has been decided otherwise by prior mutual agreement in writing between the

two Parties.

(B) “Component” means a component part of equipment, or other item so designated

by agreement of the Parties.

(C) “Conversion” means any of the normal operations in the nuclear fuel cycle,

preceding fuel fabrication and excluding enrichment, by which uranium is transformed

from one chemical form to another – for example, from uranium hexafluoride (UF6) to

uranium dioxide (UO2) or from uranium oxide to metal.

(D) “Decommissioning” means the actions taken at the end of a facility’s useful life to

retire the facility from service in the manner that provides adequate protection for the

health and safety of the decommissioning workers and the general public, and for the

environment. These actions can range from closing down the facility and a minimal

removal of nuclear material coupled with continuing maintenance and surveillance, to a

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complete removal of residual radioactivity in excess of levels acceptable for unrestricted

use of the facility and its site.

(E) “Dual-Use Item” means a nuclear related item which has a technical use in both

nuclear and non-nuclear applications.

(F) “Equipment” means any equipment in nuclear operation including reactor, reactor

pressure vessel, reactor fuel charging and discharging equipment, reactor control rods,

reactor pressure tubes, reactor primary coolant pumps, zirconium tubing, equipment for

fuel fabrication and any other item so designated by the Parties.

(G) “High enriched uranium” means uranium enriched to twenty percent or greater in

the isotope 235.

(H) “Information” means any information that is not in the public domain and is

transferred in any form pursuant to this Agreement and so designated and documented in

hard copy or digital form by mutual agreement by the Parties that it shall be subject to

this Agreement, but will cease to be information whenever the Party transferring the

information or any third party legitimately releases it into the public domain.

(I) “Low enriched uranium” means uranium enriched to less than twenty percent in

the isotope 235.

(J) “Major critical component” means any part or group of parts essential to the

operation of a sensitive nuclear facility or heavy water production facility.

(K) “Non-nuclear material” means heavy water, or any other material suitable for use

in a reactor to slow down high velocity neutrons and increase the likelihood of further

fission, as may be jointly designated by the appropriate authorities of the Parties.

(L) “Nuclear material” means (1) source material and (2) special fissionable material.

“Source material” means uranium containing the mixture of isotopes occurring in nature;

uranium depleted in the isotope 235; thorium; any of the foregoing in the form of metal,

alloy, chemical compound, or concentrate; any other material containing one or more of

the foregoing in such concentration as the Board of Governors of the IAEA shall from

time to time determine; and such other materials as the Board of Governors of the IAEA

may determine or as may be agreed by the appropriate authorities of both Parties.

“Special fissionable material” means plutonium, uranium-233, uranium enriched in the

isotope 233 or 235, any substance containing one or more of the foregoing, and such

other substances as the Board of Governors of the IAEA may determine or as may be

agreed by the appropriate authorities of both Parties. “Special fissionable material” does

not include “source material”. Any determination by the Board of Governors of the

IAEA under Article XX of that Agency’s Statute or otherwise that amends the list of

materials considered to be “source material” or “special fissionable material” shall only

have effect under this Agreement when both Parties to this Agreement have informed

each other in writing that they accept such amendment.

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(M) “Peaceful purposes” include the use of information, nuclear material, equipment

or components in such fields as research, power generation, medicine, agriculture and

industry, but do not include use in, research on, or development of any nuclear explosive

device or any other military purpose. Provision of power for a military base drawn from

any power network, production of radioisotopes to be used for medical purposes in

military environment for diagnostics, therapy and sterility assurance, and other similar

purposes as may be mutually agreed by the Parties shall not be regarded as military

purpose.

(N) “Person” means any individual or any entity subject to the territorial jurisdiction

of either Party but does not include the Parties.

(O) “Reactor” means any apparatus, other than a nuclear weapon or other nuclear

explosive device, in which a self-sustaining fission chain reaction is maintained by

utilizing uranium, plutonium, or thorium or any combination thereof.

(P) “Sensitive nuclear facility” means any facility designed or used primarily for

uranium enrichment, reprocessing of nuclear fuel, or fabrication of nuclear fuel

containing plutonium.

(Q) “Sensitive nuclear technology” means any information that is not in the public

domain and that is important to the design, construction, fabrication, operation, or

maintenance of any sensitive nuclear facility, or other such information that may be so

designated by agreement of the Parties.

ARTICLE 2 – SCOPE OF COOPERATION

1. The Parties shall cooperate in the use of nuclear energy for peaceful purposes in

accordance with the provisions of this Agreement. Each Party shall implement this

Agreement in accordance with its respective applicable treaties, national laws,

regulations, and license requirements concerning the use of nuclear energy for peaceful

purposes.

2. The purpose of the Agreement being to enable full civil nuclear energy

cooperation between the Parties, the Parties may pursue cooperation in all relevant areas

to include, but not limited to, the following:

a. Advanced nuclear energy research and development in such areas as may be

agreed between the Parties;

b. Nuclear safety matters of mutual interest and competence, as set out in

Article 3;

c. Facilitation of exchange of scientists for visits, meetings, symposia and

collaborative research;

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d. Full civil nuclear cooperation activities covering nuclear reactors and

aspects of the associated nuclear fuel cycle including technology transfer on an

industrial or commercial scale between the Parties or authorized persons;

e. Development of a strategic reserve of nuclear fuel to guard against any

disruption of supply over the lifetime of India’s reactors;

f. Advanced research and development in nuclear sciences including but not

limited to biological research, medicine, agriculture and industry, environment

and climate change;

g. Supply between the Parties, whether for use by or for the benefit of the

Parties or third countries, of nuclear material;

h. Alteration in form or content of nuclear material as provided for in Article 6;

i. Supply between the Parties of equipment, whether for use by or for the

benefit of the Parties or third countries;

j. Controlled thermonuclear fusion including in multilateral projects; and

k. Other areas of mutual interest as may be agreed by the Parties.

3. Transfer of nuclear material, non-nuclear material, equipment, components and

information under this Agreement may be undertaken directly between the Parties or

through authorized persons. Such transfers shall be subject to this Agreement and to such

additional terms and conditions as may be agreed by the Parties. Nuclear material, nonnuclear

material, equipment, components and information transferred from the territory

of one Party to the territory of the other Party, whether directly or through a third country,

will be regarded as having been transferred pursuant to this Agreement only upon

confirmation, by the appropriate authority of the recipient Party to the appropriate

authority of the supplier Party that such items both will be subject to the Agreement and

have been received by the recipient Party.

4. The Parties affirm that the purpose of this Agreement is to provide for peaceful

nuclear cooperation and not to affect the unsafeguarded nuclear activities of either Party.

Accordingly, nothing in this Agreement shall be interpreted as affecting the rights of the

Parties to use for their own purposes nuclear material, non-nuclear material, equipment,

components, information or technology produced, acquired or developed by them

independent of any nuclear material, non-nuclear material, equipment, components,

information or technology transferred to them pursuant to this Agreement. This

Agreement shall be implemented in a manner so as not to hinder or otherwise interfere

with any other activities involving the use of nuclear material, non-nuclear material,

equipment, components, information or technology and military nuclear facilities

produced, acquired or developed by them independent of this Agreement for their own

purposes.

ARTICLE 3 – TRANSFER OF INFORMATION

1. Information concerning the use of nuclear energy for peaceful purposes may be

transferred between the Parties. Transfers of information may be accomplished through

reports, data banks and computer programs and any other means mutually agreed to by

the Parties. Fields that may be covered include, but shall not be limited to, the following:

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a. Research, development, design, construction, operation, maintenance and

use of reactors, reactor experiments, and decommissioning;

b. The use of nuclear material in physical, chemical, radiological and

biological research, medicine, agriculture and industry;

c. Fuel cycle activities to meet future world-wide civil nuclear energy needs,

including multilateral approaches to which they are parties for ensuring nuclear

fuel supply and appropriate techniques for management of nuclear wastes;

d. Advanced research and development in nuclear science and technology;

e. Health, safety, and environmental considerations related to the foregoing;

f. Assessments of the role nuclear power may play in national energy plans;

g. Codes, regulations and standards for the nuclear industry;

h. Research on controlled thermonuclear fusion including bilateral activities

and contributions toward multilateral projects such as the International

Thermonuclear Experimental Reactor (ITER); and

i. Any other field mutually agreed to by the Parties.

2. Cooperation pursuant to this Article may include, but is not limited to, training,

exchange of personnel, meetings, exchange of samples, materials and instruments for

experimental purposes and a balanced participation in joint studies and projects.

3. This Agreement does not require the transfer of any information regarding matters

outside the scope of this Agreement, or information that the Parties are not permitted

under their respective treaties, national laws, or regulations to transfer.

4. Restricted Data, as defined by each Party, shall not be transferred under this

Agreement.

ARTICLE 4 – NUCLEAR TRADE

1. The Parties shall facilitate nuclear trade between themselves in the mutual

interests of their respective industry, utilities and consumers and also, where appropriate,

trade between third countries and either Party of items obligated to the other Party. The

Parties recognize that reliability of supplies is essential to ensure smooth and

uninterrupted operation of nuclear facilities and that industry in both the Parties needs

continuing reassurance that deliveries can be made on time in order to plan for the

efficient operation of nuclear installations.

2. Authorizations, including export and import licenses as well as authorizations or

consents to third parties, relating to trade, industrial operations or nuclear material

movement should be consistent with the sound and efficient administration of this

Agreement and should not be used to restrict trade. It is further agreed that if the relevant

authority of the concerned Party considers that an application cannot be processed within

a two month period it shall immediately, upon request, provide reasoned information to

the submitting Party. In the event of a refusal to authorize an application or a delay

exceeding four months from the date of the first application the Party of the submitting

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persons or undertakings may call for urgent consultations under Article 13 of this

Agreement, which shall take place at the earliest opportunity and in any case not later

than 30 days after such a request.

ARTICLE 5 – TRANSFER OF NUCLEAR MATERIAL, NON-NUCLEAR

MATERIAL, EQUIPMENT, COMPONENTS AND RELATED TECHNOLOGY

1. Nuclear material, non-nuclear material, equipment and components may be

transferred for applications consistent with this Agreement. Any special fissionable

material transferred under this Agreement shall be low enriched uranium, except as

provided in paragraph 5.

2. Sensitive nuclear technology, heavy water production technology, sensitive

nuclear facilities, heavy water production facilities and major critical components of such

facilities may be transferred under this Agreement pursuant to an amendment to this

Agreement. Transfers of dual-use items that could be used in enrichment, reprocessing or

heavy water production facilities will be subject to the Parties’ respective applicable

laws, regulations and license policies.

3. Natural or low enriched uranium may be transferred for use as fuel in reactor

experiments and in reactors, for conversion or fabrication, or for such other purposes as

may be agreed to by the Parties.

4. The quantity of nuclear material transferred under this Agreement shall be

consistent with any of the following purposes: use in reactor experiments or the loading

of reactors, the efficient and continuous conduct of such reactor experiments or operation

of reactors for their lifetime, use as samples, standards, detectors, and targets, and the

accomplishment of other purposes as may be agreed by the Parties.

5. Small quantities of special fissionable material may be transferred for use as

samples, standards, detectors, and targets, and for such other purposes as the Parties may

agree.

6. (a) The United States has conveyed its commitment to the reliable supply of fuel

to India. Consistent with the July 18, 2005, Joint Statement, the United States has

also reaffirmed its assurance to create the necessary conditions for India to have

assured and full access to fuel for its reactors. As part of its implementation of the

July 18, 2005, Joint Statement the United States is committed to seeking

agreement from the U.S. Congress to amend its domestic laws and to work with

friends and allies to adjust the practices of the Nuclear Suppliers Group to create

the necessary conditions for India to obtain full access to the international fuel

market, including reliable, uninterrupted and continual access to fuel supplies

from firms in several nations.

(b) To further guard against any disruption of fuel supplies, the United States

is prepared to take the following additional steps:

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i) The United States is willing to incorporate assurances regarding

fuel supply in the bilateral U.S.-India agreement on peaceful uses

of nuclear energy under Section 123 of the U.S. Atomic Energy

Act, which would be submitted to the U.S. Congress.

ii) The United States will join India in seeking to negotiate with the

IAEA an India-specific fuel supply agreement.

iii) The United States will support an Indian effort to develop a

strategic reserve of nuclear fuel to guard against any disruption of

supply over the lifetime of India’s reactors.

iv) If despite these arrangements, a disruption of fuel supplies to India

occurs, the United States and India would jointly convene a group

of friendly supplier countries to include countries such as Russia,

France and the United Kingdom to pursue such measures as would

restore fuel supply to India.

(c) In light of the above understandings with the United States, an Indiaspecific

safeguards agreement will be negotiated between India and the IAEA

providing for safeguards to guard against withdrawal of safeguarded nuclear

material from civilian use at any time as well as providing for corrective measures

that India may take to ensure uninterrupted operation of its civilian nuclear

reactors in the event of disruption of foreign fuel supplies. Taking this into

account, India will place its civilian nuclear facilities under India-specific

safeguards in perpetuity and negotiate an appropriate safeguards agreement to this

end with the IAEA.

ARTICLE 6 – NUCLEAR FUEL CYCLE ACTIVITIES

In keeping with their commitment to full civil nuclear cooperation, both Parties, as they

do with other states with advanced nuclear technology, may carry out the following

nuclear fuel cycle activities:

i) Within the territorial jurisdiction of either Party, enrichment up to twenty percent

in the isotope 235 of uranium transferred pursuant to this Agreement, as well as of

uranium used in or produced through the use of equipment so transferred, may be carried

out.

ii) Irradiation within the territorial jurisdiction of either Party of plutonium, uranium-

233, high enriched uranium and irradiated nuclear material transferred pursuant to this

Agreement or used in or produced through the use of non-nuclear material, nuclear

material or equipment so transferred may be carried out.

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iii) With a view to implementing full civil nuclear cooperation as envisioned in the Joint

Statement of the Parties of July 18, 2005, the Parties grant each other consent to

reprocess or otherwise alter in form or content nuclear material transferred pursuant to

this Agreement and nuclear material and by-product material used in or produced through

the use of nuclear material, non-nuclear material, or equipment so transferred. To bring

these rights into effect, India will establish a new national reprocessing facility dedicated

to reprocessing safeguarded nuclear material under IAEA safeguards and the Parties will

agree on arrangements and procedures under which such reprocessing or other alteration

in form or content will take place in this new facility. Consultations on arrangements and

procedures will begin within six months of a request by either Party and will be

concluded within one year. The Parties agree on the application of IAEA safeguards to all

facilities concerned with the above activities. These arrangements and procedures shall

include provisions with respect to physical protection standards set out in Article 8,

storage standards set out in Article 7, and environmental protections set forth in Article

11 of this Agreement, and such other provisions as may be agreed by the Parties. Any

special fissionable material that may be separated may only be utilized in national

facilities under IAEA safeguards.

iv) Post-irradiation examination involving chemical dissolution or separation of

irradiated nuclear material transferred pursuant to this Agreement or irradiated nuclear

material used in or produced through the use of non-nuclear material, nuclear material or

equipment so transferred may be carried out.

ARTICLE 7 – STORAGE AND RETRANSFERS

1. Plutonium and uranium 233 (except as either may be contained in irradiated fuel

elements), and high enriched uranium, transferred pursuant to this Agreement or used in

or produced through the use of material or equipment so transferred, may be stored in

facilities that are at all times subject, as a minimum, to the levels of physical protection

that are set out in IAEA document INFCIRC 225/REV 4 as it may be revised and

accepted by the Parties. Each Party shall record such facilities on a list, made available to

the other Party. A Party's list shall be held confidential if that Party so requests. Either

Party may make changes to its list by notifying the other Party in writing and receiving a

written acknowledgement. Such acknowledgement shall be given no later than thirty days

after the receipt of the notification and shall be limited to a statement that the notification

has been received. If there are grounds to believe that the provisions of this sub-Article

are not being fully complied with, immediate consultations may be called for. Following

upon such consultations, each Party shall ensure by means of such consultations that

necessary remedial measures are taken immediately. Such measures shall be sufficient to

restore the levels of physical protection referred to above at the facility in question.

However, if the Party on whose territory the nuclear material in question is stored

determines that such measures are not feasible, it will shift the nuclear material to another

appropriate, listed facility it identifies.

2. Nuclear material, non-nuclear material, equipment, components, and information

transferred pursuant to this Agreement and any special fissionable material produced

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through the use of nuclear material, non-nuclear material or equipment so transferred

shall not be transferred or re-transferred to unauthorized persons or, unless the Parties

agree, beyond the recipient Party’s territorial jurisdiction.

ARTICLE 8 – PHYSICAL PROTECTION

1. Adequate physical protection shall be maintained with respect to nuclear material

and equipment transferred pursuant to this Agreement and nuclear material used in or

produced through the use of nuclear material, non-nuclear material or equipment so

transferred.

2. To fulfill the requirement in paragraph 1, each Party shall apply measures in

accordance with (i) levels of physical protection at least equivalent to the

recommendations published in IAEA document INFCIRC/225/Rev.4 entitled “The

Physical Protection of Nuclear Material and Nuclear Facilities,” and in any subsequent

revisions of that document agreed to by the Parties, and (ii) the provisions of the 1980

Convention on the Physical Protection of Nuclear Material and any amendments to the

Convention that enter into force for both Parties.

3. The Parties will keep each other informed through diplomatic channels of those

agencies or authorities having responsibility for ensuring that levels of physical

protection for nuclear material in their territory or under their jurisdiction or control are

adequately met and having responsibility for coordinating response and recovery

operations in the event of unauthorized use or handling of material subject to this Article.

The Parties will also keep each other informed through diplomatic channels of the

designated points of contact within their national authorities to cooperate on matters of

out-of-country transportation and other matters of mutual concern.

4. The provisions of this Article shall be implemented in such a manner as to avoid

undue interference in the Parties’ peaceful nuclear activities and so as to be consistent

with prudent management practices required for the safe and economic conduct of their

peaceful nuclear programs.

ARTICLE 9 – PEACEFUL USE

Nuclear material, equipment and components transferred pursuant to this Agreement and

nuclear material and by-product material used in or produced through the use of any

nuclear material, equipment, and components so transferred shall not be used by the

recipient Party for any nuclear explosive device, for research on or development of any

nuclear explosive device or for any military purpose.

ARTICLE 10 – IAEA SAFEGUARDS

1. Safeguards will be maintained with respect to all nuclear materials and equipment

transferred pursuant to this Agreement, and with respect to all special fissionable material

used in or produced through the use of such nuclear materials and equipment, so long as

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the material or equipment remains under the jurisdiction or control of the cooperating

Party.

2. Taking into account Article 5.6 of this Agreement, India agrees that nuclear

material and equipment transferred to India by the United States of America pursuant to

this Agreement and any nuclear material used in or produced through the use of nuclear

material, non-nuclear material, equipment or components so transferred shall be subject

to safeguards in perpetuity in accordance with the India-specific Safeguards Agreement

between India and the IAEA [identifying data] and an Additional Protocol, when in

force.

3. Nuclear material and equipment transferred to the United States of America

pursuant to this Agreement and any nuclear material used in or produced through the use

of any nuclear material, non-nuclear material, equipment, or components so transferred

shall be subject to the Agreement between the United States of America and the IAEA

for the application of safeguards in the United States of America, done at Vienna

November 18, 1977, which entered into force on December 9, 1980, and an Additional

Protocol, when in force.

4. If the IAEA decides that the application of IAEA safeguards is no longer possible,

the supplier and recipient should consult and agree on appropriate verification measures.

5. Each Party shall take such measures as are necessary to maintain and facilitate the

application of IAEA safeguards in its respective territory provided for under this Article.

6. Each Party shall establish and maintain a system of accounting for and control of

nuclear material transferred pursuant to this Agreement and nuclear material used in or

produced through the use of any material, equipment, or components so transferred. The

procedures applicable to India shall be those set forth in the India-specific Safeguards

Agreement referred to in Paragraph 2 of this Article.

7. Upon the request of either Party, the other Party shall report or permit the IAEA

to report to the requesting Party on the status of all inventories of material subject to this

Agreement.

8. The provisions of this Article shall be implemented in such a manner as to avoid

hampering, delay, or undue interference in the Parties’ peaceful nuclear activities and so

as to be consistent with prudent management practices required for the safe and economic

conduct of their peaceful nuclear programs.

ARTICLE 11 – ENVIRONMENTAL PROTECTION

The Parties shall cooperate in following the best practices for minimizing the impact on

the environment from any radioactive, chemical or thermal contamination arising from

peaceful nuclear activities under this Agreement and in related matters of health and

safety.

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ARTICLE 12 – IMPLEMENTATION OF THE AGREEMENT

1. This Agreement shall be implemented in a manner designed:

a) to avoid hampering or delaying the nuclear activities in the territory of either

Party;

b) to avoid interference in such activities;

c) to be consistent with prudent management practices required for the safe

conduct of such activities; and

d) to take full account of the long term requirements of the nuclear energy

programs of the Parties.

2. The provisions of this Agreement shall not be used to:

a) secure unfair commercial or industrial advantages or to restrict trade to the

disadvantage of persons and undertakings of either Party or hamper their

commercial or industrial interests, whether international or domestic;

b) interfere with the nuclear policy or programs for the promotion of the

peaceful uses of nuclear energy including research and development; or

c) impede the free movement of nuclear material, non nuclear material and

equipment supplied under this Agreement within the territory of the Parties.

3. When execution of an agreement or contract pursuant to this Agreement between

Indian and United States organizations requires exchanges of experts, the Parties shall

facilitate entry of the experts to their territories and their stay therein consistent with

national laws, regulations and practices. When other cooperation pursuant to this

Agreement requires visits of experts, the Parties shall facilitate entry of the experts to

their territory and their stay therein consistent with national laws, regulations and

practices.

ARTICLE 13 – CONSULTATIONS

1. The Parties undertake to consult at the request of either Party regarding the

implementation of this Agreement and the development of further cooperation in the field

of peaceful uses of nuclear energy on a stable, reliable and predictable basis. The Parties

recognize that such consultations are between two States with advanced nuclear

technology, which have agreed to assume the same responsibilities and practices and

acquire the same benefits and advantages as other leading countries with advanced

nuclear technology.

2. Each Party shall endeavor to avoid taking any action that adversely affects

cooperation envisaged under Article 2 of this Agreement. If either Party at any time

following the entry into force of this Agreement does not comply with the provisions of

this Agreement, the Parties shall promptly hold consultations with a view to resolving the

matter in a way that protects the legitimate interests of both Parties, it being understood

that rights of either Party under Article 16.2 remain unaffected.

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3. Consultations under this Article may be carried out by a Joint Committee

specifically established for this purpose. A Joint Technical Working Group reporting to

the Joint Committee will be set up to ensure the fulfillment of the requirements of the

Administrative Arrangements referred to in Article 17.

ARTICLE 14 – TERMINATION AND CESSATION OF COOPERATION

1. Either Party shall have the right to terminate this Agreement prior to its expiration

on one year’s written notice to the other Party. A Party giving notice of termination shall

provide the reasons for seeking such termination. The Agreement shall terminate one

year from the date of the written notice, unless the notice has been withdrawn by the

providing Party in writing prior to the date of termination.

2. Before this Agreement is terminated pursuant to paragraph 1 of this Article, the

Parties shall consider the relevant circumstances and promptly hold consultations, as

provided in Article 13, to address the reasons cited by the Party seeking termination. The

Party seeking termination has the right to cease further cooperation under this Agreement

if it determines that a mutually acceptable resolution of outstanding issues has not been

possible or cannot be achieved through consultations. The Parties agree to consider

carefully the circumstances that may lead to termination or cessation of cooperation.

They further agree to take into account whether the circumstances that may lead to

termination or cessation resulted from a Party’s serious concern about a changed security

environment or as a response to similar actions by other States which could impact

national security.

3. If a Party seeking termination cites a violation of this Agreement as the reason for

notice for seeking termination, the Parties shall consider whether the action was caused

inadvertently or otherwise and whether the violation could be considered as material. No

violation may be considered as being material unless corresponding to the definition of

material violation or breach in the Vienna Convention on the Law of Treaties. If a Party

seeking termination cites a violation of an IAEA safeguards agreement as the reason for

notice for seeking termination, a crucial factor will be whether the IAEA Board of

Governors has made a finding of non-compliance.

4. Following the cessation of cooperation under this Agreement, either Party shall

have the right to require the return by the other Party of any nuclear material, equipment,

non-nuclear material or components transferred under this Agreement and any special

fissionable material produced through their use. A notice by a Party that is invoking the

right of return shall be delivered to the other Party on or before the date of termination of

this Agreement. The notice shall contain a statement of the items subject to this

Agreement as to which the Party is requesting return. Except as provided in provisions of

Article 16.3, all other legal obligations pertaining to this Agreement shall cease to apply

with respect to the nuclear items remaining on the territory of the Party concerned upon

termination of this Agreement.

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5. The two Parties recognize that exercising the right of return would have profound

implications for their relations. If either Party seeks to exercise its right pursuant to

paragraph 4 of this Article, it shall, prior to the removal from the territory or from the

control of the other Party of any nuclear items mentioned in paragraph 4, undertake

consultations with the other Party. Such consultations shall give special consideration to

the importance of uninterrupted operation of nuclear reactors of the Party concerned with

respect to the availability of nuclear energy for peaceful purposes as a means of achieving

energy security. Both Parties shall take into account the potential negative consequences

of such termination on the on-going contracts and projects initiated under this Agreement

of significance for the respective nuclear programmes of either Party.

6. If either Party exercises its right of return pursuant to paragraph 4 of this Article,

it shall, prior to the removal from the territory or from the control of the other Party,

compensate promptly that Party for the fair market value thereof and for the costs

incurred as a consequence of such removal. If the return of nuclear items is required, the

Parties shall agree on methods and arrangements for the return of the items, the relevant

quantity of the items to be returned, and the amount of compensation that would have to

be paid by the Party exercising the right to the other Party.

7. Prior to return of nuclear items, the Parties shall satisfy themselves that full

safety, radiological and physical protection measures have been ensured in accordance

with their existing national regulations and that the transfers pose no unreasonable risk to

either Party, countries through which the nuclear items may transit and to the global

environment and are in accordance with existing international regulations.

8. The Party seeking the return of nuclear items shall ensure that the timing, methods

and arrangements for return of nuclear items are in accordance with paragraphs 5, 6 and

7. Accordingly, the consultations between the Parties shall address mutual commitments

as contained in Article 5.6. It is not the purpose of the provisions of this Article regarding

cessation of cooperation and right of return to derogate from the rights of the Parties

under Article 5.6.

9. The arrangements and procedures concluded pursuant to Article 6(iii) shall be

subject to suspension by either Party in exceptional circumstances, as defined by the

Parties, after consultations have been held between the Parties aimed at reaching

mutually acceptable resolution of outstanding issues, while taking into account the effects

of such suspension on other aspects of cooperation under this Agreement.

ARTICLE 15 – SETTLEMENT OF DISPUTES

Any dispute concerning the interpretation or implementation of the provisions of this

Agreement shall be promptly negotiated by the Parties with a view to resolving that

dispute.

ARTICLE 16 – ENTRY INTO FORCE AND DURATION

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1. This Agreement shall enter into force on the date on which the Parties exchange

diplomatic notes informing each other that they have completed all applicable

requirements for its entry into force.

2. This Agreement shall remain in force for a period of 40 years. It shall continue in

force thereafter for additional periods of 10 years each. Each Party may, by giving 6

months written notice to the other Party, terminate this Agreement at the end of the initial

40 year period or at the end of any subsequent 10 year period.

3. Notwithstanding the termination or expiration of this Agreement or withdrawal of

a Party from this Agreement, Articles 5.6(c), 6, 7, 8, 9, 10 and 15 shall continue in effect

so long as any nuclear material, non-nuclear material, by-product material, equipment or

components subject to these articles remains in the territory of the Party concerned or

under its jurisdiction or control anywhere, or until such time as the Parties agree that such

nuclear material is no longer usable for any nuclear activity relevant from the point of

view of safeguards.

4. This Agreement shall be implemented in good faith and in accordance with the

principles of international law.

5. The Parties may consult, at the request of either Party, on possible amendments to

this Agreement. This Agreement may be amended if the Parties so agree. Any

amendment shall enter into force on the date on which the Parties exchange diplomatic

notes informing each other that their respective internal legal procedures necessary for

the entry into force have been completed.

ARTICLE 17 – ADMINISTRATIVE ARRANGEMENT

1. The appropriate authorities of the Parties shall establish an Administrative

Arrangement in order to provide for the effective implementation of the provisions of this

Agreement.

2. The principles of fungibility and equivalence shall apply to nuclear material and

non-nuclear material subject to this Agreement. Detailed provisions for applying these

principles shall be set forth in the Administrative Arrangement.

3. The Administrative Arrangement established pursuant to this Article may be

amended by agreement of the appropriate authorities of the Parties.

IN WITNESS WHEREOF the undersigned, being duly authorized, have signed this

Agreement.

DONE at , this day of , 200 , in duplicate.

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FOR THE GOVERNMENT OF THE FOR THE GOVERNMENT

UNITED STATES OF AMERICA: OF INDIA:

AGREED MINUTE

During the negotiation of the Agreement for Cooperation Between the Government of the

United States of America and the Government of India Concerning Peaceful Uses of

Nuclear Energy (”the Agreement”) signed today, the following understandings, which

shall be an integral part of the Agreement, were reached.

Proportionality

For the purposes of implementing the rights specified in Articles 6 and 7 of the

Agreement with respect to special fissionable material and by-product material produced

through the use of nuclear material and non-nuclear material, respectively, transferred

pursuant to the Agreement and not used in or produced through the use of equipment

transferred pursuant to the Agreement, such rights shall in practice be applied to that

proportion of special fissionable material and by-product material produced that

represents the ratio of transferred nuclear material and non-nuclear material, respectively,

used in the production of the special fissionable material and by-product material to the

total amount of nuclear material and non-nuclear material so used, and similarly for

subsequent generations.

By-product material

The Parties agree that reporting and exchanges of information on by-product

material subject to the Agreement will be limited to the following:

(1) Both Parties would comply with the provisions as contained in the IAEA

document GOV/1999/19/Rev.2, with regard to by-product material subject to the

Agreement.

(2) With regard to tritium subject to the Agreement, the Parties will exchange

annually information pertaining to its disposition for peaceful purposes consistent with

Article 9 of this Agreement.

FOR THE GOVERNMENT OF THE FOR THE GOVERNMENT

UNITED STATES OF AMERICA: OF INDIA:

END TEXT

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