U.S. Senate Passes Bill Banning Russian Uranium Imports

U.S. Senate Passes Bill Banning Russian Uranium Imports

May 2, 2024, Covington Alert

On April 30, 2024, by unanimous consent, the U.S. Senate passed H.R.1042 — a bill previously passed by the U.S. House of Representatives in December 2023 — that could ban importation into the United States of enriched uranium from Russia as early as 90-days after enactment, but more likely will encourage a gradual reduction of Russian uranium imports between now and the end of 2027 and then ban them entirely from January 1, 2028, through December 31, 2040.

If signed into law by the President, the law would have broad implications for the nuclear fuel market and would create significant uncertainty for U.S. utilities that currently rely on low-enriched uranium (LEU) produced in the Russian Federation or by a Russian entity (specifically Tenex, the trading company owned by Rosatom, which is owned by the Russian government).

For context: per the World Nuclear Association, Russia maintained nearly half of the world’s uranium enrichment capacity as of 2020.[1]

Currently, Russia supplies about 44 percent of global uranium enrichment services and between 20 to 30 percent of enriched uranium used in the U.S. and Europe.[2]

Although the bill provides that the prohibition on Russian LEU imports will become effective 90 days after enactment, the prohibition is subject to a waiver authority that permits the Secretary of Energy to authorize LEU imports from Russia in each of calendar years 2024 through 2027, up to levels specified in the bill for each such year. The annual import level permitted under any such waiver is equivalent to the level currently set under the 2020 amendment to the U.S.-Russia Agreement Suspending the Antidumping Investigation on Uranium from the Russian Federation (the “Uranium Suspension Agreement”).[3] Accordingly, if the waiver authority is exercised, the bill will impose no additional restrictions on the amount of LEU from Russia that may be imported between now and the end of 2027. 

The Secretary may exercise this waiver authority if she determines that “no alternative viable source of low-enriched uranium is available to sustain the continued operation of a nuclear reactor or a United States nuclear energy company” or that “importation of low-enriched uranium [produced in the Russian Federation or by a Russian entity] is in the national interest.” The bill specifies that all such waivers “shall terminate not later than January 1, 2028,” and no further LEU imports from Russia will be permitted thereafter.

The ban does not apply to imports of non-uranium isotopes, or certain imports for national security or nonproliferation purposes.

Notably, Tenex has previously warned that the Russian Federation may bar exports of nuclear fuel to the U.S. if this ban is enacted into law.[4]

Ultimately, given the nature of the nuclear fuel cycle—and, in particular, the need for utilities to have a stable, secure, and reliable source of LEU for fabrication and scheduled reloads of reactors—it will be critical for participants in the nuclear fuel market to understand how this law is to be implemented, and the impact of this ban on contractual rights and obligations. Customers that import Russian LEU, or whose contracts are exposed to market changes affected by the ban on Russian uranium, should seek advice on their force majeure provisions, provisions related to compliance with applicable laws, and other potentially applicable legal doctrines that may either reduce their risk or excuse non-performance of their agreements.

If you have any questions concerning the material discussed in this client alert, please contact the members of our firm.