An Internal Compliance Program (ICP) is a system through which enterprise internally manage their own export control processes to ensure compliance with domestic export control laws. Around the world, ICPs are actively utilized as a means of export control for strategic items. However, they are not mostly applied to the Trigger List Items. However, advanced countries such as the United States and the Nuclear Suppliers Group (NSG) have been actively researching the potential application of ICPs to the Trigger List Items recently. This paper suggests additional considerations that should be taken into account when applying an ICP to the Trigger List Items. The key elements of classical ICP include Top-level management commitment to compliance; Risk analysis; Organizational structure/chain of responsibilities; Human and technical resources allocated to the management of exports; Workflow management and operational procedures; Record -keeping and documentation; Selection of staff; training and awareness-raising; Process-/Systemrelated controls (ICP audit)/Corrective Measures; Physical and technical security. An ICP for Trigger List Items must encompass all these core elements. Additionally, as the nuclear industry often involves collaborative projects participating with various companies, the effectiveness of the ICP could be enhanced through the operation of consultation groups among participating companies. Furthermore, enterprises must take into account the unique characteristics of Trigger List Items that differ from other strategic items, when making requirements of the ICP establishment. First, export requirements related to safety measures and physical protection should be reviewed to export the Trigger List Items. The procedure and obligations in aspects of internationally controlled items should also be reviewed. Moreover, active support from enterprises for GTGA procedures should also be included, since the Government to Government Assurance (GTGA) procedure is additionally required for the export of Trigger List Items, in contrast to other strategic items. Additionally, for materials categorized within Trigger List Items, such as deuterium and heavy water, should be controlled based on their end-use and cumulative quantity, which Government cannot effectively manage without enterprise supports. Therefore, enterprises must establish an internal material management system based on the end-use and cumulative quantity of these materials under ICP.

In South Korea, the exporters of items related to nuclear power generation are diversified. Consequently, there is a risk of illegitimate export by companies failing to recognize the export control system because the awareness about this system for the strategic items among the subcontractors of nuclear power facilities is limited. To prevent illegitimate export of the strategic items, it is necessary to conduct outreach activities regarding the export control system for the related companies. Additionally, the exporters and export license examiners should consider whether an export target is on the Denial List, who may divert the strategic items to weapons of mass destruction. Therefore, the Korea Institute of Nuclear Nonproliferation and Control developed two systems for controlling illegitimate export of the Trigger List items. The first system, Nuclear Industry Information Collection and Analysis System, can gather information about the key nuclear industries in Korea and analyze the dealing of strategic items. The second system, Denied Persons Information Gathering System, can regularly gather information about the denied persons and provide the updated data to the exporters and regulatory examiners. These two systems can be used for outreach activities and export license examination to prevent illegitimate export of the strategic items.

Trades are classified as a direct trade, in which an exporter and an importer directly conclude a contract to execute a transaction, and an indirect trade, in which a transaction is conducted through a third party. A license issued by NSSC is required for the indirect trade of Trigger List Items although the items do not cross the Korea’s borders. This study would summarize characteristics for each type of the indirect trade, and suggest things considered from the perspective of regulations. Sensitive items such as weapons of mass destruction could be illegally transferred through black trade, and the role of brokers is important. Therefore, Korea controls indirect trade of Trigger List Items in a more conservative approach, although NSG guidelines does not include it as a control scope. Advanced countries in export control field such as the US, UK, and Canada also controls on indirect trade. One of the indirect trade types is an intermediate trade in which the goods are imported from a foreign country and exported to another foreign country without being brought into the trader’s country. Another type is a merchandising trade which is a form of brokerage between exporter from a foreign country and importer from another foreign country. Both types have one thing in common that the goods are not crossed the trader’s country. The difference is that an intermediate trader directly participates in the contract and earn a difference between import and export amount, whereas a merchandising trader just arranges the transaction and earns a brokerage fee. The profits from the intermediate trade are considered as export records, while merchandising trade profits are not considered export records. In other words, only the intermediary trade is considered as an export. Also, the license types are different for each of them. An export license should be issued for the intermediate trade of Trigger List Items, whereas a brokerage license should be issued for the merchandising trade of Trigger List Items. The definition of export in the Foreign Trade Act includes intermediate trade for only goods, but technology is missing, although the sub-regulation specifies the intermediate trade including both. The technology need to be added as it can be the subject of intermediate trade in spite of intangible characteristics. Also, outreach activities are more needed as nuclear industry awareness on export control for both trades is low.

According to Article 3(2) of the NPT and NSG the Guidelines, the exporting country should be guaranteed the import country’s willingness to implement nuclear non-proliferation and the level of implementation before the transfer of Trigger List Items. Also, unknown or new end-users could be officially identified through GA procedure. Accordingly, Korea government requests the importing country a formal Governmental Assurance (GA), before issuing an export license. This study summarizes GA items and characteristics. First, GA is The NSG guidelines suggests four items that should be assured by importing countries: peaceful use of export items, full-scope safeguards application, physical protection measures, and retransfer control. Therefore, these four items are generally requested based on the NSG guidelines. However, if they are already guaranteed by bilateral nuclear cooperation agreement, the GA could be based on the nuclear cooperation agreement. The GA procedure could be omitted in the case of concluding an administrative agreement that imposes another implementation procedure. The levels of requested GA requested vary with the countries, since the NSG guidelines are just recommendations that are not legally enforceable. Korea requests the level based on the NSG guidelines. Among the four GA items, peaceful use of export items is the most fundamental obligation, and levels of safeguards and physical protection of the importing country could be verified in advance by reviewing the conclusion status of international agreement with the IAEA. Thus, the important thing for the licensee to consider is to decide the level of retransfer control. The NSG guidelines suggest two levels of retransfer control, taking into account the sensitivity of the export items and the level of safeguards in the end-user country, which is either to receive GA from the third receiving country at an equivalent level with that originally requested from exporting country, or to get a prior consent by the exporting country. The latter should be approached more carefully, as requiring a prior consent is not only to have authority, but also to have responsibility when problem occurs. In addition, the level of retransfer control must be decided through sufficient reviewing on the transaction characteristics, it may affect the domestic export industry.

Nuclear Suppliers Group (NSG), one of the international multilateral export control systems, has designated Trigger List Item and Nuclear Dual-Use Item as control items. The Trigger List Item includes the “Especially Designed or Prepared (EDP)” term as control context. This term is very subjective and vague. Why this ambiguous term reflected in the control context? The EDP term is one of the essential elements of multilateral nuclear export controls since the NPT came into effect in 1970. The EDP concept is the basis of the rules in the Trigger List of NSG Part 1. NSG control items and contexts are decided through consensus among Participate governments, and there are three main reasons for reflecting EDP term in the guideline. First, it is to expand the control network by preventing the diversion of concerned traders. Secondly, technology development is faster than the regulatory speed, and it is tough to put all the items on the list. And last, it is to control other sensitive information such as concerned traders’ shopping list. To reduce the ambiguity of EDP, the US, UK, and Canada presented their interpretation methods at LEEM, a sub-group of the NSG. The United States and Canada have four location criteria (inside the containment building, RCS system or control, RCS system attachment, outside the containment building) and three purpose criteria (custom-made for nuclear power, whether it is an item according to the nuclear industry standard, not made to order) to determine the EDP items. The United Kingdom considers the original design intent and the purpose for which the item was originally designed. They also think about the nature of any specific or unique design features in terms of an item’s “fit,” “form,” and “function” that determine EDP item. Currently, in the case of KINAC, although it is not a controlled item in Korea, items designated by other countries are controlled as EDP items, and detailed standards for parts are prepared and controlled as EDP items. The interpretation of TL’s EDP differs from country to country, and differences are allowed between member states to some extent. Suppose Korea, like the US, UK, and Canada, examines measures to control EDP and reflects it after benchmarking. In that case, it is expected that it will contribute to reducing the export control loopholes for advanced technologies in the future and improve nuclear transparency through strict implementation of Korea’s export controls.