NRC Updates FOCD Rules to Boost Foreign Investment in Nuclear Sector

The Facts -

A New Era for Nuclear Investment: NRC Eases Foreign Ownership Restrictions

In a significant development for the US nuclear energy sector, the Nuclear Regulatory Commission (NRC) has initiated a major shift in its regulations concerning foreign ownership, control, or domination (FOCD) of nuclear facilities. On April 26, 2026, the NRC released a direct final rule alongside a proposed rule, allowing members of the Organisation for Economic Co-operation and Development (OECD) and the Republic of India to be exempt from the FOCD restriction. This regulatory update follows statutory amendments from the 2024 ADVANCE Act, aimed at boosting foreign investments in the US nuclear power industry to meet rising electricity demands.

Historical Context of FOCD Regulations

The Atomic Energy Act of 1954 (AEA) first set the precedent for the FOCD prohibition, which was meant to prevent foreign influence over US nuclear technology and infrastructure due to security concerns. The NRC's stringent interpretation of this rule has historically limited foreign involvement, as evidenced by cases like the Calvert Cliffs Unit 3 application denial and the licensing conditions imposed on South Texas Project (STP) Units 3 and 4. These decisions highlight the Commission’s conservative stance on FOCD, often requiring substantial governance safeguards to comply with statutory standards.

Transformative Changes Under the ADVANCE Act

The 2024 ADVANCE Act redefined the approach to FOCD, eliminating it as a substantial barrier and enabling newer investment models and international collaborations for proposed nuclear projects. As per Section 301 of the ADVANCE Act, FOCD restrictions were lifted for OECD members and India, barring sanctions or inclusion on the List of Specially Designated Nationals and Blocked Persons. Although Turkey, due to specific sanctions, remains excluded from this list.

Despite this relaxation, the ADVANCE Act maintains the mandate that any licensing must still align with the AEA’s “inimicality” requirement. This ensures that granting licenses is not detrimental to national security or public safety.

Regulatory Amendments and Public Input

The NRC has opted to issue both a direct final rule and a proposed rule, anticipating no major opposition. The amendments are scheduled to come into effect on July 7, 2026. However, should significant adverse comments arise before the May 26, 2026 deadline, the direct final rule may be retracted, converting the comments into feedback on the proposed rule. Unless substantial modifications are necessary, no additional comment period will follow.

Implications for Future Nuclear Developments

The revised regulations promise greater clarity and stability for entities from OECD nations and India, fostering increased foreign investment in the US nuclear sector. The NRC’s analysis suggests qualitative gains through enhanced investment clarity and sustained national security via continued inimicality examination. Nonetheless, questions regarding the status of dependent territories with OECD ties remain unresolved.

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