The United States and Thailand signed an agreement on January 14, 2025, which outlines peaceful nuclear cooperation between the two countries. The agreement is authorized by Section 123 of the Atomic Energy Act of 1954, as amended (42 USC § 2153) (AEA), and is known as a “123 Agreement.” That same day, former President Biden transmitted that 123 Agreement and a Nuclear Proliferation Assessment Statement (NPAS) to Congress for their review. Congress has 90 days of being in session to either disapprove or passively allow the Agreement to take effect.
This new 123 Agreement follows Thailand’s recent announcement that it is considering deploying two small modular reactors (SMRs) to meet future load growth and decarbonize its electric generation sector. Thus, this new 123 Agreement with Thailand will facilitate the potential use of US SMRs in Thailand. Reactors, major reactor components, and enriched nuclear fuel cannot be exported to Thailand without a 123 Agreement. Further, a 123 Agreement is a precondition to a country becoming a “generally authorized” destination under the US Department of Energy’s nuclear technology export regulations in 10 CFR Part 810.
Background
Under AEA Section 123, all significant non-defense nuclear cooperation with other countries requires a nuclear cooperation agreement known as a “123 Agreement.” 123 Agreements are required to export complete reactors, major reactor components, and enriched uranium from the United States to a foreign country. 123 Agreements also facilitate cooperation in scientific research and technical exchanges, but primarily are designed to help advance US nonproliferation principles. The US has about 25 such agreements in place with individual countries, members of the European Union (through a single agreement with the European Atomic Energy Community), and the International Atomic Energy Agency.
The US Department of State is the lead agency for negotiating a 123 Agreement, with concurrence from the Department of Energy and the Nuclear Regulatory Commission. After a 123 Agreement is negotiated and signed with another country, the AEA requires the president to submit the agreement to the House Committee on Foreign Affairs and the Senate Committee on Foreign Relations. The president must also submit a classified and unclassified NPAS, which explains the agreement’s compliance with nonproliferation requirements.
Congress then reviews the 123 Agreement. Although the AEA contemplates a 30-day consultation period before the agreement is submitted for review and a 60-day review period, in practice, presidents submit the 123 Agreement at the start of the process, which results in a 90-day review period. If Congress does not act, the 123 Agreement takes effect after 90 days of “continuous session.” If Congress wants to prevent an agreement from taking effect, it must pass a joint resolution of disapproval before the end of the 90-day period.
Potential for Nuclear Power in Thailand
The United States and Thailand entered into a 123 Agreement in 1974, but this agreement expired in 2014. During the term of the first 123 Agreement, Thailand planned to construct up to five reactors, the first of which was to begin operations in 2020. Thailand indefinitely delayed the construction of these reactors in response to the crisis at the Fukushima Daiichi Nuclear Power Plant in Japan. Since then, growing electrical demand from recent heat waves and Thailand’s commitment to reduce the carbon intensity of its economy have led Thailand to reconsider deploying nuclear power to meet its growing electricity demand.
Thailand’s most recent draft Power Development Plan contemplates building two 300 MW SMRs that would commence operations by 2037. This is a potential market opportunity for several US-based companies with SMR designs. The 123 Agreement must be in place prior to exporting these reactors and their enriched uranium fuel to Thailand. This 123 Agreement also is required if Thailand is to become a “generally authorized” destination under the Department of Energy’s nuclear technology export regulations in 10 CFR Part 810, although the existence of a 123 Agreement does not, by itself, guarantee that the Department of Energy will designate Thailand as a generally authorized destination. There are a few countries that have 123 Agreements but are not generally authorized destinations listed in Part 810.
Congress has never disapproved a 123 Agreement, and we therefore expect the agreement with Thailand to take effect this spring.
Morgan Lewis regularly counsels companies on compliance with nuclear export laws and restrictions and will continue to monitor development in this area.