President Donald Trump proclaimed recently that, based on the strength of the military alliance between the United States and South Korea, he had “given them approval to build a Nuclear-Powered Submarine,” which would be built at the Hanwha Philly Shipyard, a commercial yard in Philadelphia purchased by a South Korean company in 2024. A few days later, in early November, U.S. Secretary of Defense Pete Hegseth confirmed this support during a visit to South Korea, noting that the Department of Defense would closely coordinate with other agencies, including the Department of State and the Department of Energy, on how best to assist South Korea’s efforts.
But Trump does not unilaterally have the power to approve U.S. nuclear cooperation with South Korea. U.S. nuclear cooperation with foreign powers is governed by the Atomic Energy Act of 1954 (42 U.S.C. §§ 2011-2059). Under the AEA, all significant U.S. civilian and military nuclear cooperation with other countries requires a congressional-executive agreement, colloquially known as a “123 agreement” based on the statute that governs these agreements and determines whether and how they come into effect (section 123 of the AEA 42 U.S. Code § 2153). These 123 agreements must be submitted to Congress for its review, with the potential that Congress might reject the agreement.
The current 123 agreement the United States has with South Korea, the 2015 Atomic Energy Peaceful Uses Agreement, recognized South Korea’s status as a major contributor to the global nuclear industry and an important commercial nuclear partner of the United States. However, it does not allow South Korea to enrich uranium or reprocess nuclear material without U.S. consent or allow the types of cooperation necessary to build a nuclear-powered submarine. Hence, before any assistance to Seoul can occur, a new agreement must be negotiated and submitted to Congress. This agreement would need to explain in detail the types of cooperation proposed and, importantly, how the agreement meets the nine nonproliferation conditions required by the statute to prevent the spread of nuclear weapons and material.
At the moment there is a great deal of confusion about the most basic details of the plan, making it very difficult to determine what a potential nuclear agreement would need to contain. A joint fact sheet issued two weeks after South Korean President Lee Jae Myung hosted Trump for their summit on Oct. 29 provided little guidance beyond restating U.S. “approval” for a South Korean nuclear-powered submarine program and that both countries would work closely together on shipbuilding and “finding avenues to source fuel.”
South Korea has expressed a long-standing desire for nuclear-powered submarines to counter North Korea’s submarine and missile programs. Nuclear-powered submarines have a number of advantages over the diesel-powered submarines South Korea currently operates. These include enhanced endurance, a much greater degree of stealth, and the ability to operate at far greater distances from the coastline. Despite these advantages, the United States has sought to limit the development of naval nuclear propulsion by South Korea and other states considered to be “non-nuclear weapon states” under the global Nuclear Non-Proliferation Treaty (NPT) because of their potential to serve as a gateway to a nuclear weapons program.
Three Options for South Korea-U.S. Nuclear Cooperation
There appear to be three options for a South Korean nuclear-powered submarine program. Each option would require different types of nuclear cooperation between the two countries that would need to be authorized under different aspects of the AEA. In addition, other laws such as the Arms Export Control Act (AECA) of 1976 would likely be triggered, as well as Section 516 of the Foreign Assistance Act (FAA) (22 U.S.C. 2321j), depending on which option the two sides choose.
Option 1: South Korean Domestic Production
Based on statements by South Korean officials, they would prefer an option that minimizes the role of the United States, with South Korea utilizing domestic production and technology as much as possible. Under this option, South Korea would build the hull of the vessel in a domestic shipyard, and a Korean-designed-and-built small modular reactor (SMR) would power the submarine. South Korea has a very active nuclear research program and commercial nuclear industry, which include efforts to develop small nuclear reactors that theoretically could be used for a nuclear-powered vessel.
South Korean shipbuilder Samsung Heavy Industries and the government’s Korea Atomic Energy Research Institute (KAERI) have already jointly designed a type of SMR, a molten salt reactor (MSR), which has been provisionally approved by the American Bureau of Shipping and the Liberian Registry for powering liquefied natural gas (LNG) carriers. Since this is a commercial (non-military) vessel and the fuel is imported, this type of reactor is permissible under the current 123 agreement. A molten salt reactor has never been used in a submarine and would present unique nonproliferation and technology challenges. It operates on a thorium fuel cycle, which has different properties than the uranium fuel cycle.
The main contribution of the United States in this option would be the fuel for the reactor. A South Korean SMR reactor of the standard type (if South Korea did not proceed with an MSR design) would likely require high-assay low-enriched uranium with enrichment levels between 5 percent and 20 percent. Other technical solutions for fueling the reactor are possible. For example, South Korea could establish a uranium enrichment program or could import nuclear fuel from Russia, but for strategic and nonproliferation reasons these technical solutions are impractical.
Because of the fueling requirement for the reactor, a new 123 agreement would be necessary even under an option in which South Korea builds the vessel and the reactor domestically. The current 123 agreement between the United States and South Korea has several provisions that would need to be altered to allow the United States to provide fuel. Article 13, for example, prevents the research and development of U.S. nuclear material for “any military purpose,” which would include fuel for a naval reactor.
Option 2: American Submarine Production
A second option could involve American workers producing the hull of the submarine at the Hanwha Philly Shipyard. Although not explicitly stated in his X post, Trump and other administration officials have indicated that U.S. approval of a South Korean nuclear-powered submarine program is contingent on it being built in the United States. If the hull were made in the United States, it would still be possible to utilize a Korean SMR. However, the reactor would need to be imported to the United States and then carefully fitted and welded into the main hull structure. This would require extensive coordination between the South Korean and U.S. governments to ensure the safety of the process. The U.S. Nuclear Regulatory Commission (NRC), under 10 CFR Part 110—Export and Import of Nuclear Equipment and Material, regulates the import of nuclear equipment and material.
Building the submarine in the United States, rather than in South Korea, would require several additional legal and regulatory steps. The Hanwha Philly Shipyard, despite being owned by a South Korean company, is located in the United States and therefore subject to U.S. laws and regulations. This means anything constructed there for South Korea’s military use would be considered a foreign military sale under the Arms Export Control Act. In this case, Trump must formally notify Congress 15 calendar days before his administration can take the final steps to conclude a government-to-government foreign military sale. During this period, Congress would have the opportunity to pass a joint resolution of disapproval of the arms sales, although this mechanism has never successfully blocked a transaction.
One other legal and congressional requirement would also be relevant. Under 10 USC § 7307 (2011) Disposals to foreign nations: Title 10, a South Korean nuclear-powered submarine constructed in Philadelphia would be considered a naval vessel. According to Title 10, “any naval vessel in excess of 3,000 tons may not be disposed of to another nation unless the disposal of that vessel is authorized by law.” Although the submarine is intended for South Korea, because it would be constructed in the United States, the U.S. Navy would have to take possession of it before it could be transferred to South Korea. This means Congress would need to pass legislation to authorize its sale. Such a process was undertaken in the National Defense Authorization Act for Fiscal Year 2024 when Congress authorized the transfer of three Virginia-class submarines to Australia, one of which would come straight off the production line.
As in option 1, the United States would still supply fuel for the reactor and therefore a new 123 agreement would be necessary.
Option 3: AUKUS-Style Partnership
A third option, which does not appear to be the preferred pathway for South Korean or U.S. officials, based on their statements, would involve a process that mirrors portions of the trilateral partnership among Australia, the U.K. and the United States (AUKUS). Pillar 1 of AUKUS is a joint effort by the United States and the U.K. to support Australian acquisition of conventionally armed, nuclear-powered submarines (SSNs). Unlike options 1 and 2, this option, as with AUKUS, would involve the United States in all aspects of South Korea’s submarine-acquisition process, including the design, production, and operation of the boats, along with the supply of fuel.
The legal and policy process for AUKUS involved the three countries signing an initial nuclear-cooperation agreement, the Multilateral (22-208) – Agreement for the Exchange of Naval Nuclear Propulsion Information. That allows the United States to share sensitive naval nuclear-propulsion information with Australia, a non-nuclear-weapon state under the NPT, a treaty intended to limit the possession of nuclear weapons to the five permanent members of the U.N. Security Council that had them at the time of its signing in 1970 – the United States, the U.K., Russia, France, and China. The naval nuclear propulsion agreement was submitted to and reviewed by Congress in 2022.
The United States has an entire classified category for naval nuclear propulsion information, restricted data (NNPI/RD) because of the sensitivity of any information associated with U.S. naval reactor technology. An initial AUKUS 123 agreement was necessary even to begin exchanging naval nuclear-propulsion information with Australia, which was required for an informed discussion on how to build and acquire submarines along with the training and education necessary to safely operate them. If South Korea wanted to partner with the United States in the construction of their submarines, for example, to ensure the safe operation of the reactor, a similar type of 123 agreement would be necessary.
Under option 3, after the United States and South Korea agreed on the design of the submarine, a second 123 agreement would be necessary. The framework of this second agreement would depend on the final design of the submarine. This agreement might permit the transfer to South Korea of U.S. naval nuclear-propulsion equipment, or the technology and transfer of nuclear material to fuel the reactor. In the second AUKUS Agreement (the Agreement among the United Kingdom of Great Britain and Northern Ireland, Australia, and the United States of America for Cooperation related to Naval Nuclear Propulsion [MS No.8/2024] – GOV. UK, submitted to Congress in 2024) there was a long appendix that detailed provisions concerning information – physical and personnel security of all sensitive data and technology – that the United States was going to provide to its AUKUS partners.
Comprehensive Safeguards Agreement
A final international legal issue interlinked with congressional review of a new 123 agreement would be South Korea’s Safeguards Agreement with the International Atomic Energy (IAEA) and the country’s obligations under the NPT. Among the nine non-proliferation requirements put in place by the AEA is that the IAEA apply comprehensive safeguards on all nuclear facilities and materials in a non-nuclear weapon state.
If South Korea embarked on a nuclear-powered submarine program, it would need to enter into what is known as an Article 14 agreement with the IAEA. Article 14 refers to a subsection of safeguard agreements (INFCIRC/153 (Corrected) | Reporting Assistant for International Nuclear Safeguards) that non-nuclear weapon states must conclude with the agency. Under an Article 14 arrangement, routine safeguard procedures are not applied to nuclear material that is to be used in military activities since applying them would involve the IAEA in sensitive national-security matters. In these cases, the IAEA replaces standard safeguard activities with other measures that allow the agency to provide credible assurance that this nuclear material is not diverted.
The process of establishing alternative measures to ensure nuclear materials in a naval reactor are not diverted has proven challenging for the IAEA. Both Australia and Brazil have been involved in multiyear negotiations with the agency that still have not reached a positive conclusion. The difficulty is finding a robust package of verification measures the IAEA can implement to ensure no diversion has taken place while protecting classified and controlled information.
During the negotiations of the AUKUS 123 agreement, the United States and the United Kingdom insisted Australia have in place an Article 14 arrangement, and implementing mechanisms, prior to the transfer of any nuclear material to Australia. The view of the United States was that the non-proliferation requirements under the AEA required this step. In addition, the 123 agreement requires Australian consultation with the U.K. and the United States during its negotiations with the IAEA in relation to Article 14. This step was put in place to ensure the United States was comfortable that IAEA safeguard measures would not reveal classified information and that the United States would have input into the non-proliferation standards the IAEA was applying to naval reactors.
Based on the AUKUS experience, it seems likely the United States would seek significant input into whatever Article 14 arrangements South Korea negotiates with the IAEA. This will be partly to satisfy the non-proliferation criteria of the AEA and partly to put in place barriers to any South Korean use of nuclear-powered SSNs as a cover for a nuclear weapons program. It also seems likely the United States would require South Korea to reach an Article 14 arrangement before it transfers any nuclear fuel to Seoul. This means an Article 14 arrangement would be necessary for all the options outlined above but the nature of the agreement would differ depending upon the option that was chosen.
Conclusion
The United States understandably has a complex legal framework for governing nuclear cooperation with foreign countries. The AEA and other laws passed by Congress provide transparency into the types of nuclear cooperation the executive branch is seeking and the proliferation risks associated with them. The laws also provide for an extensive congressional review process and, in some cases, an approval mechanism for nuclear cooperation agreements.
President Trump simply cannot on his own reach an agreement with South Korea to support its ambition to achieve a nuclear-powered submarine program – and the U.S. administration’s understandable desire to create jobs at home. If the Trump administration is serious about this endeavor, it will need to explain to Congress the types of nuclear cooperation it seeks to have with South Korea and begin the negotiating process to reach a 123 agreement and the other terms required under U.S. law.
– Lowell H. Schwartz, Published courtesy of Just Security.
