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Cablegate: Meeting with Westinghouse to Discuss Facilitated Visa

VZCZCXRO9668
PP RUEHCN RUEHGH
DE RUEHGH #0133/01 0920437
ZNR UUUUU ZZH
P R 010437Z APR 08
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC PRIORITY 6798
RUCPDOC/USDOC WASHDC PRIORITY 0215
RUCPDOC/USDOC WASHINGTON DC PRIORITY 0019
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
INFO RUEHBJ/AMEMBASSY BEIJING 1810
RUEHCN/AMCONSUL CHENGDU 1183
RUEHGZ/AMCONSUL GUANGZHOU 1154
RUEHSH/AMCONSUL SHENYANG 1181
RUEHHK/AMCONSUL HONG KONG 1313
RUEHIN/AIT TAIPEI 0993
RUEHGH/AMCONSUL SHANGHAI 7342

UNCLAS SECTION 01 OF 03 SHANGHAI 000133

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR CA/VO, EEB, OES, EAP/CM, AND INR/EAP - CLARKE
USDOC FOR 4420
USDOC FOR ITA/MAC DAS KASOFF, MELCHER AND MCQUEEN
TREASURY FOR OASIA/DOHNER, WRIGHT, MEDEIROS, CUSHMAN
STATE PASS USTR STRATFORD
STATE PASS USNRC FOR CHAIRMAN KLEIN
USDOE FOR MIZROCH/CHIANG/GINSBERG
USDOE FOR INTERNATIONAL/PUMPHREY AND GEBERT
STATE PASS NATIONAL SCIENCE FOUNDATION CHAN/KARAFI/HUBER

E.O. 12958: N/A
TAGS: CMGT CVIS PGOV ECON CH ENRG
SUBJECT: MEETING WITH WESTINGHOUSE TO DISCUSS FACILITATED VISA
PROCESSING FOR AP1000 PROJECT PARTICIPANTS

REF: BEIJING 001212

1. (SBU) SUMMARY: On March 12, 2008, Consular Section Chief met
with Westinghouse representatives to discuss special visa
processing in support of the AP1000 Nuclear Power Plant Project.
This year alone, Westinghouse plans to sponsor up to 200
Chinese nationals for nuclear power technologies training in the
United States in preparation for construction of four AP1000
nuclear reactors in China. Since two of these reactors are
being built in the Shanghai Consular District, and the vast
majority of these visa applicants will require MANTIS Special
Advisory Opinion (SAO) processing before visa issuance,
Westinghouse sought to understand the visa application process
and any Shanghai-specific procedures. Westinghouse, which is
required under its contract to transfer proprietary technology,
is nevertheless relatively sanguine about the safety of its
intellectual property. END SUMMARY.

2. (U) Westinghouse Meeting: On March 12, 2008, AmConGen
Shanghai's Consular Chief and ConOff met with Westinghouse
Electric Company's Vice-President Timothy Collier and other
Westinghouse staff to discuss visa processing in support of
Westinghouse's AP1000 Nuclear Power Plant Project (AP1000)
contract. An offspring of the original Westinghouse Electric,
Westinghouse Electric Company is a multi-national nuclear
technologies company incorporating various nuclear services,
power plants, nuclear fuel, inspection equipment, advanced
welding services, and remote handling equipment to utilities and
governments in the United States, Europe, Asia, and Africa.
Westinghouse World Headquarters is located in Monroeville, PA.
Japan's Toshiba Group is its majority owner.

------------------
THE AP1000 PROJECT
------------------

3. (SBU) AP1000 TECHNOLOGY: Westinghouse's AP1000 reactor
design was the first "Generation III Plus" reactor to receive
approval from the Nuclear Regulatory Commission in December
2005. The AP1000 pressurized water reactor is an evolutionary
improvement on Westinghouse's Generation III AP600 reactor,
producing almost twice as much power with roughly the same size
footprint. The AP1000 design has an 1100 megawatt generating
capacity. The AP1000's passive safety systems are intended to
make it safer than any existing nuclear power plant. AP1000
construction takes five years, including 18 months of site
preparation, 36 months of site construction, and 6 months of
startup and testing. American turn-key fabrication firm Shaw,
Stone and Webster (a 20 percent shareholder in Westinghouse)
provides all power plant engineering and construction services.
The plant has a design life of 60 years based on the service
life of the reactor vessel.

4. (SBU) The Chinese Contract: In December 2006, after three
years of bidding, the State Nuclear Power Technology Corporation
selected the Westinghouse/Shaw consortium to build four nuclear
reactors. The estimated USD 8 billion contract, awarded in
July 2007, is the largest international nuclear contract in
history. China's units will be the first AP1000 power plants
ever built. Two of the AP1000 units will be built at the Sanmen
Nuclear Power Plant in Zhejiang Province, which lies in
Shanghai's Consular District. Construction at the Sanmen site
began on February 25, 2008, with commercial operation expected
by 2013.

5. (SBU) Intellectual Property Rights: Most high-tech companies
are reluctant to transfer technology to Chinese subsidiaries and
business partners. However, as part of the AP1000 contract,
Westinghouse agreed to wholly transfer all AP1000 technology to
China. When asked about this, Westinghouse representatives
responded that the Chinese government made it very clear that
failure to transfer AP1000 technology would have been a deal

SHANGHAI 00000133 002 OF 003


breaker, and Westinghouse would have lost the contract. In
response, Westinghouse adopted the view that the AP1000 project
is a true partnership with China, and that transferring
technology would result in a better relationship with China and
result in future power plants sales. (COMMENT: Westinghouse
expressed the pragmatic view that, "If people are going to
reverse engineer or copy nuclear technology, Westinghouse would
prefer that people copy Westinghouse technology." END COMMENT)

---------------
VISA ASSISTANCE
---------------

6. (SBU) AP1000 Visa Needs: The Bureau of Consular Affairs has
committed to facilitating AP1000 travel to the United States.
Under the AP1000 contract, a large number of Chinese will go to
the U.S. to visit Westinghouse and its partners for training,
design participation, project review and coordination,
manufacturing surveillance, quality assurance auditing, and
business development. This year, Collier estimates Westinghouse
will send 100 to 200 visitors for pre-construction and site
preparation discussions, including construction and design
meetings, engineering consultations, etc. The number of Chinese
travelers will increase once the AP1000 technology transfer
program begins. Since October 2007, Westinghouse has frequently
asked AmConGen Shanghai to expedite visa appointments, which we
have always tried to accommodate. However, since the scale of
the AP1000 project will require increased coordination, Shanghai
CONS and Westinghouse met to formalize procedures for
facilitating the application and processing of the visas.
Westinghouse's primary Shanghai area customers that will send
travelers to the U.S. are:

SNPTC -- The State Nuclear Power Technology Corporation, the
leading Westinghouse purchaser in China, has headquarters in
Beijing, with subsidiaries in Shanghai and Jinan.

SMNPC -- The Sanmen Nuclear Power Company, owner of the Sanmen
Nuclear Power Plant, is headquartered in Sanmen, Zhejiang
Province. It is a subsidiary of the China National Nuclear
Corporation in Beijing.

SNPEC -- The State Nuclear Power Engineering Company, a
subsidiary of SNPTC, is based in Shanghai.

SNERDI -- The Shanghai Nuclear Engineering and Research
Institute, a subsidiary of SNPTC, is located in Shanghai.

SEC -- The Shanghai Electric Corporation, one of Westinghouse's
key partners in China, is the utility that owns almost all power
and electrical equipment factories in Shanghai.

7. (SBU) AP1000 Visa Processing: The majority of visa
applicants from the above institutions hold quasi-official
Foreign Affairs passports on the basis of their employment in a
state-owned enterprise. Interviews and passport pass-backs for
such applicants are handled by local Foreign Affairs Offices
(FAO). Because the Consular Section already has a special
channel for processing FAO visa applicants, it is fairly easy
for the Consular Section to accommodate AP1000 applicants with
FAO passports. If visa appointment dates available through the
FAO are not early enough for AP1000 travel, Westinghouse can
request expedited appointments directly from the Consular Chief.
Pass-back for these cases will continue to be coordinated
through the FAO. AP1000 visa applicants without Foreign Affairs
passports are encouraged to obtain them. If FAO passports are
not appropriate for proposed AP1000 travel (i.e. long-term
training, etc.), applicants are encouraged to schedule interview
appointments through normal channels (i.e., the visa appointment
Call Center). As is the case with FAO passport holders, if the
private passport holder requires an appointment sooner than the

SHANGHAI 00000133 003 OF 003


Call Center's next available date, Westinghouse can again
request an expedited appointment. To facilitate AP1000 visa
processing, Consular Chief has assigned an "AP1000 Coordinator",
who will serve as Westinghouse's direct line to the Consular
Section, and will be available to consult with Westinghouse on
all visa matters.

8. (SBU) AP1000 SAO Processing: Because the AP1000 project
involves sensitive nuclear technologies, the great majority of
applicants require MANTIS Special Advisory Opinions (SAO). SAO
processing in Shanghai currently takes a minimum of three weeks.
In the past, Shanghai CONS has had to request expedited SAO
processing for AP1000 applicants. While SAO clearers in
Washington have been highly responsive to these requests
(returning SAO clearances in a matter of days), the Consular
Section is working with Westinghouse to ensure that such
requests for expedited SAO clearances are only made as a last
resort. Westinghouse has been advised to apply as early as
possible, and to allow enough time for normal SAO processing.
Shanghai will submit SAO clearance requests for all potential
U.S. sites that applicants will visit over a one-year period.
If no objections are received, this will qualify eligible AP1000
travelers for expedited return traveler SAO processing through a
"post-check", which is a much faster SAO process. The AP1000
Coordinator will work with ACG Shanghai's Locally Engaged Staff
to brief them on the special handling of AP1000 applicants to
ensure that these cases are processed in the fastest way
possible.

9. (U) Consular Chief also advised Westinghouse representatives
on visa application best practices, such as how to prepare
applicants, what materials to present during the interview, etc.
AmConGen Shanghai and Westinghouse are confident that this
expedited application process will greatly facilitate AP1000
travel, and make applying for a U.S. visa a less intimidating
experience for Westinghouse customers. Furthermore, this
tailored visa service reaffirms the USG's continued commitment
to assist Westinghouse in facilitating AP1000 travel.

-------
Comment
-------

10. (SBU) COMMENT: Recent Xinhua News Agency reports have
praised the Sanmen, Zhejiang phase of the AP1000 project, which
began construction in February, a full month ahead of schedule.
Westinghouse, which has its corporate offices in Beijing,
established its AP1000 office in Shanghai because so many of its
customers are here - SNERDI, SEC, SNPEC, etc. Westinghouse will
even begin to embed its employees inside the SNERDI, SEC, and
other customers' offices. Post will follow up on this project
as both the volume of AP1000 visa applicants and the frequency
of local media coverage of the project continue to increase.
END COMMENT.

11. (U) This cable was coordinated with AmEmb Beijing.
JARRETT

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