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ENERGY RESOURCESQ: Can a noncitizen of the U.S. hold mining claims or mineral deposits in public lands?A: No, not unless the noncitizen has declared his or her intention to become a U.S. citizen. The policy of the Department of the Interior dates back to the Mining Law of 1872 and various other laws relating to public lands and interests in their resources. Q: Have the federal courts ever allowed any exceptions? A: Yes, if a noncitizen obtains naturalization or citizenship in some other way before a court has rendered judgment on another's claim against him, usually courts will allow the acquisition or declaration of citizenship to relate back to the date of the location or acquisition of the noncitizen's interest. Q: Do corporations have to be U.S. "citizens" to hold claims to resources in U.S. land? A: Yes, they must be corporations organized under U.S. federal or any state's law and must prove that they are by providing a certified copy of their charter or certificate of incorporation. Q: Do the majority of a corporation's stockholders have to be U.S. citizens? A: No. Q: What types of restrictions does the U.S. impose on foreign mining and use of nuclear source material? A: The Atomic Energy Act of 1954 and the Nuclear Regulatory Commission (NRC) regulations do not prohibit foreign individuals or corporations from obtaining permits or licenses to mine nuclear source material. But after source material has been removed, no person, including a foreign government may transfer or receive in interstate commerce, transfer, deliver, receive possession of or title to, or import into or export from the U.S., nuclear source material unless specifically authorized by the NRC. Q: Are there any exceptions? A: Yes, the only exception is for quantities of source material which the NRC deems "unimportant." Q: What other restrictions should foreign investors be aware of when nuclear source material is involved? A: The 1954 Act expressly forbids the NRC from licensing any person to transfer or deliver, receive possession of or title to, or import into or export from the U.S. any source material if the Commission thinks doing so would be inimical to the common defense and security or the health and safety of the public. It also limits foreign participation in nuclear production facilities unless the facilities are (1) exclusively owned by the Department of Energy (DOE); (2) useful in the conduct of certain nuclear-related research and development activities but lacking the potential to produce sufficient special nuclear material; or (3) owned by the U.S. Enrichment Corporation. Q: What does the NRC require facilities' license applicants to submit if it believes that the applicant may be owned, controlled, or dominated by a foreign interest? A: The NRC's Final Standard Review Plan on Foreign Ownership, Control, or Domination requires the applicant to submit (1) copies of all current Securities & Exchange Commission (SEC) Schedules 13D and 13g; (2) management positions held by non-U.S. citizens; and (3) ability of foreign entities to control the appointment of management personnel. If after reviewing these three items, the NRC finds the applicant is owned, controlled or dominated by a foreign entity, it will request the submission of a "negation action plan." Q: What might a negation action plan include? A: It might include (1) modification or termination of loan agreements, contracts, and other understandings with foreign interests; (2) diversification or reduction of foreign source income; (3) demonstration of financial viability independent of foreign interests; (4) elimination or resolution of problem debt; (5) assignment of specific oversight duties and responsibilities to board members; and (6) adoption of special board resolutions. Q: Do similar restrictions apply for contracts with DOE? A: Yes, if a contractor bidding on a contract which would require access to significant quantities of special nuclear material or to classified information, DOE will attempt to determine whether the contractor is subject to foreign ownership, control or influence (FOCI). FOCI is defined as the situation where the degree of ownership, control or influence over the contractor is such that a reasonable basis exists for concluding that classified information or special nuclear material might be compromised. Q: What happens if DOE determines that FOCI exists? A: The bidder or contractor will need to propose a plan of action to avoid or mitigate the foreign influence by isolating the foreign interest. Q: What are the limitations on foreign investors regarding nonnuclear fuel materials? A: The Mineral Leasing Act of 1920 prevents foreign individuals and corporations from directly acquiring leases on deposits of nonnuclear fuel materials either through initial grant or through assignment or transfer. But foreign investors may acquire stock ownership, holding or control in a U.S. company that has a lease if they satisfy the two-prong test. Q: What is the two-prong test? A: First, the Department of the Interior must determine whether the laws, customs, and regulations of the foreign investor's home country permit U.S. citizens or corporations to own, hold, or control stock in that country’s corporations. Second, even if the foreign country is found to permit meaningful stock participation in its corporations, the Department may rebut the presumption of reciprocity if it determines that the country discriminates against U.S. interests by precluding or unreasonably restricting a corporation owned in whole or in part by U.S. interest from participating the country's mineral resources on its public lands. Q: Are there any other federal laws foreign investors should be aware of before they attempt to invest in U.S. energy resources? A: Yes. Depending on the investors' objectives, the Naval Petroleum Reserves Production Act, Indian Mineral Development act of 1982, Submerged Lands Act, Outer Continental Shelf Lands Act, the Geothermal Steam Act of 1970, and the Public Utility Holding Company Act of 1935 may be relevant. | |