Presidential Determination No. 2026-18 approves the proposed agreement between the United States and the Kingdom of Saudi Arabia concerning peaceful uses of nuclear energy, together with related side letters and additional safeguards and verification arrangements. The Secretary of State is authorized to arrange for execution of the agreement.

The determination is issued under Section 123 of the Atomic Energy Act of 1954, which requires a presidential determination that a proposed agreement for peaceful nuclear cooperation will not be inimical to the common defense and security of the United States before the agreement can be submitted to Congress and ultimately enter into force.

A Section 123 agreement — commonly called a 123 Agreement or peaceful nuclear cooperation agreement — establishes the legal framework within which the United States may transfer nuclear materials, equipment, components, and technology to a foreign country for peaceful purposes. Key characteristics:

What a 123 Agreement authorizes:

• The legal basis for U.S. exports of nuclear reactors, components, fuel, and technology
• The framework for safeguards, physical security, and nonproliferation commitments
• The conditions under which retransfer, enrichment, and reprocessing of U.S.-origin nuclear material may occur

What a 123 Agreement does not authorize:

• Individual exports — each transfer of nuclear material, equipment, or technology requires separate NRC or DOE authorization
• Enrichment or reprocessing of U.S.-origin material without specific consent
• Any activity inconsistent with IAEA safeguards or the Nuclear Non-Proliferation Treaty

The presidential determination is a major procedural milestone but does not itself authorize any specific export or transaction.

Section 123 agreements are subject to congressional review before they enter into force. The standard review period is 90 days of continuous session during which Congress may act to disapprove the agreement. If Congress takes no action, the agreement enters into force.

For agreements involving countries that have not agreed to the so-called Gold Standard — a commitment not to enrich uranium or reprocess plutonium — congressional scrutiny tends to be more intensive. The U.S.–Saudi agreement has been the subject of significant congressional attention given Saudi Arabia's stated interest in domestic uranium enrichment.

The side letters and additional safeguards arrangements referenced in the presidential determination may address some of these concerns, but the specific terms of those arrangements will be subject to congressional review.

Even after the 123 Agreement enters into force, individual exports require separate authorization:

Nuclear Regulatory Commission (NRC)

• Exports of nuclear reactors and major components require NRC export licenses
• Exports of nuclear fuel and special nuclear material require NRC authorization
• The NRC evaluates each export application against nonproliferation criteria, physical security standards, and the terms of the applicable 123 Agreement

Department of Energy (DOE)

• Exports of nuclear technology and assistance require DOE authorization under Part 810 of Title 10 of the Code of Federal Regulations
• Specific authorization is required for transfers of sensitive nuclear technology, including enrichment and reprocessing technology

U.S. nuclear reactor vendors — including companies offering light water reactor technology, small modular reactors, and advanced reactor designs — may now begin more substantive commercial discussions with Saudi counterparties. Key considerations:

Technology Transfer Restrictions Even with a 123 Agreement in place, technology transfer is subject to NRC and DOE authorization. Vendors should structure preliminary agreements and memoranda of understanding to be conditional on obtaining all required authorizations before any controlled technology is transferred.

ITAR Compliance Nuclear reactor technology, components, and related software may be subject to the International Traffic in Arms Regulations or the Export Administration Regulations. Vendors must conduct jurisdiction and classification analyses before sharing technical information with Saudi counterparties, even in pre-contract discussions.

Intellectual Property Protection Saudi Arabia's intellectual property framework for nuclear technology is still developing. Licensing agreements, technology transfer contracts, and joint development arrangements should include robust IP protection provisions, including restrictions on sublicensing and reverse engineering.

Engineering, procurement, and construction contractors pursuing Saudi nuclear projects should begin structuring their project delivery frameworks now, subject to the conditions described below. Key contract considerations:

Conditions Precedent All EPC contracts and major subcontracts should remain conditional on: execution of the 123 Agreement; completion of congressional review; NRC and DOE export authorizations; IAEA safeguards arrangements; financing; and project-specific permits and approvals. No binding commitments should be made that assume these conditions will be satisfied on any particular timeline.

Supply Chain Authorization EPC contractors must ensure that their supply chains — including non-U.S. suppliers of nuclear-grade components — comply with applicable export control requirements. Components manufactured outside the United States may be subject to U.S. export controls if they incorporate U.S.-origin technology or are destined for a U.S.-supplied nuclear facility.

Dispute Resolution Nuclear construction projects are among the most complex and dispute-prone in the infrastructure sector. EPC contracts for Saudi nuclear projects should include carefully negotiated dispute resolution provisions, including international arbitration clauses with neutral seat selection and enforcement mechanisms compatible with Saudi law.

Project Finance Structures Saudi nuclear projects are likely to require project finance structures given their capital intensity. Lenders will require comfort on the regulatory authorization pathway — specifically, the timeline for NRC and DOE authorizations — before committing to financing. The 123 Agreement's entry into force is a necessary but not sufficient condition for project finance closing.

Saudi Investors in U.S. Nuclear Companies Saudi sovereign wealth funds and private investors interested in acquiring stakes in U.S. nuclear technology companies should be aware that such investments may be subject to CFIUS review. Nuclear technology is a sensitive technology sector under CFIUS regulations, and foreign government-connected investors face heightened scrutiny.

Offtake and Power Purchase Agreements The commercial viability of Saudi nuclear projects will depend in part on the structure of power purchase agreements with Saudi Aramco, the Saudi Electricity Company, or other offtakers. Investors should assess the creditworthiness of potential offtakers and the enforceability of long-term power purchase commitments under Saudi law.

Turkish companies with experience in nuclear construction, engineering services, or nuclear-grade component manufacturing may find opportunities in the Saudi nuclear program as subcontractors or technology partners. Key considerations:

• Export control compliance: Turkish companies supplying components or services to a U.S.-supplied Saudi nuclear facility may be subject to U.S. export control requirements, even if the transaction does not involve a direct U.S. party
• IAEA safeguards: All work on Saudi nuclear facilities will be subject to IAEA safeguards inspections and physical security requirements
• Contract structure: Subcontracts should clearly allocate responsibility for export control compliance, safeguards obligations, and regulatory authorization costs

This article is based on publicly available presidential determination materials and Federal Register notices. It does not constitute legal advice. Companies with specific questions about nuclear export licensing or project structuring should consult qualified nuclear energy counsel.