12 July 2017

What is Euratom?

Euratom, the European Atomic Energy Community, is an international organisation which aims to provide secure access to nuclear material, ensure high safety standards, and prevent the diversion of nuclear material from its intended civil use. It establishes a Nuclear Common Market, which allows for the free movement of skilled nuclear professionals, material, equipment and associated investment capital across the Euratom community. It also promotes and funds research and development of nuclear technology.

The European Atomic Energy Community was established by the 1957 Euratom Treaty, alongside the Treaty of Rome which founded the European Economic Community. The rationale behind Euratom’s creation is laid out in Article 1 of the Euratom Treaty: “To contribute to the raising of the standard of living in the Member States and to the development of relations with the other countries by creating the conditions necessary for the speedy establishment and growth of nuclear industries.” At the start, membership was limited to Germany, France, Italy, Belgium, the Netherlands and Luxembourg; the UK only acceded in 1973. Membership of Euratom has expanded in line with that of the EU.

Euratom is a separate legal entity to the EU, with a distinct legal personality, but its shares the EU’s institutions. This was not always the case: under the original treaty, Euratom held different executives to the EEC (now EU). However, following the 1965 Merger Treaty, EEC and Euratom executives were fused to establish a single Commission and Council. Euratom also sits under the jurisdiction of the European Court of Justice (ECJ).

Furthermore, changes under the 2007 Lisbon Treaty created direct interaction between the Euratom Treaty and the institutional framework of the EU. Article 106a of the Euratom Treaty, inserted after Lisbon, transposes articles from the EU treaties relating to the role of EU institutions. This creates a more complicated picture of which authorities govern movement and safe use of nuclear material.

What is Euratom responsible for in the UK?

Euratom plays a major role in the UK’s civil nuclear industry in three ways:

  1. The Euratom Supplies Agency (ESA) is responsible for the regular and equitable supply of fissile material to Euratom members for nuclear fuel, research and innovation, and medical industries (among other uses). The UK’s Royal College of Radiologists have argued that leaving Euratom without alternative provisions could destabilise the continuous supply of medical isotopes from France, Belgium and the Netherlands, which is crucial in diagnosing and treating cancer in the UK. The UK itself has no reactors capable of producing the necessary isotopes for treatment (although we do produce some for certain diagnostics). Protecting the nuclear supply chain is also particularly important for the UK’s energy supply – it has no domestic sources of nuclear fuel despite around 20% of supply being dependent on this resource.
  2. Membership of Euratom has helped boost the UK’s activity in nuclear research and experimentation, including the provision of funds, facilities and professionals. As a member of Euratom, Britain hosts the largest nuclear fission experiment in the world, the Joint European Torus (JET) project at the Culham Centre for Fusion Energy (CCFE) in Oxfordshire. Euratom provides 87.5%of funding for this project. The UK also participates in the International Thermonuclear Experimental Reactor (ITER) project in France.
  3. The Euratom safeguard regime means that nuclear safeguard inspections – which the UK is committed to upholding (despite its exemption under the Nuclear Non-Proliferation Treaty) – are largely carried out by Euratom officials. The UK also has a Voluntary Offer Safeguards Agreement with the International Atomic Energy Agency (IAEA), signed trilaterally with Euratom – but these apply to select, voluntarily offered facilities. Euratom safeguards are more comprehensive – they underpin nuclear trade between the UK and other Euratom members, as well as some other countries holding Nuclear Cooperation Agreements with Euratom (i.e. US, Canada and Australia).

Why is staying in Euratom tricky if the UK leaves the EU?

Legal argument

Firstly, this has to do with the previously mentioned Article 106a of the Euratom Treaty. This carries across articles in the Treaty on the Functioning of the EU (TFEU) and the Treaty on European Union (TEU) and applies them to the Euratom Treaty. One of the articles mentioned is Article 50 TEU, the formal mechanism for withdrawal from the EU, which the UK triggered in March 2017. Article 106a explains that references to the European Union and the EU treaties in the transposed EU articles should be replaced by Euratom and the Euratom Treaty.

The UK government’s White Paper consequently argues, “The Euratom Treaty imports Article 50 into its provisions,” meaning that Euratom and the EU are “uniquely legally joined” and “triggering Article 50 therefore also entails giving notice to leave Euratom.” The Business Secretary, Greg Clark, has also said, “[Leaving Euratom] was a concomitant decision that was required in triggering Article 50.”

However, Jonathan Leech and Rupert Cowen, senior nuclear, energy and commercial lawyers at Prospect Law, argue that Article 106a establishes a “separate but similar” exit process from Euratom – in other words, there is no direct legal link to Article 50 TEU, meaning exit from Euratom need not be conducted automatically and in parallel with Brexit.

During debate in the Commons on the European Union (Notification of Withdrawal) bill earlier this year, a Labour amendment to decouple the process of leaving Euratom from that of the EU was defeated by 336 votes to 287, a majority of 49. The UK government therefore included withdrawal from Euratom in its formal Article 50 letter to the UK in March, triggering our exit from the nuclear energy body.

Institutional argument

But if there was dispute among legal scholars as to the process for leaving Euratom, all recognise the institutional complexities of attempting to remain a member post-Brexit. Indeed, most of the EU treaty articles referred to within Article 106a of the Euratom Treaty relate to the EU institutions and their roles. According to professor of EU law, Steve Peers, failure to exit the Euratom Treaty post-Brexit would mean there remains a legal basis for UK participation and representation in the European Parliament, the Commission, the Council and the EU courts. This would clearly be highly difficult from a political perspective once the UK withdraws from the EU.

Furthermore, the Euratom Treaty provides the European Commission with considerable powers to carry out verification duties. It gives the Commission licence to send inspectors anywhere within Euratom, and allows them right of access at all times to nuclear materials in the installations concerned. It also provides the power to impose sanctions on those who fail to meet Euratom safeguards. This, however, should not be a standalone reason for rejecting Euratom membership – inspection of safeguards will be enforced by an international IAEA authority outside of Euratom.

Many have also referenced the fact that membership of Euratom would require continued jurisdiction of the ECJ, and continued application of free movement of people. While these are correct to an extent, the operation of both is limited within the remit of the Euratom Treaty. For instance, free movement provisions only refer to the movement of those within the nuclear energy field to take up skilled employment, and the movement of people for the construction of nuclear installations of a scientific or industrial nature. This is clearly a long way from current provisions under EU membership. Furthermore, the ECJ has to date only delivered a small number of rulings with respect to Euratom and the UK – primarily to do with protecting workers from exposure to radiation.

What alternative can the UK seek?

The UK government has invoked the formal process for exiting Euratom. Consideration must now turn to the alternative arrangements the UK should seek.

Article 206 of the Euratom Treaty allows for an associate agreement with Euratom, based on “reciprocal rights and obligations, common action and special procedures.” This must be agreed by unanimity in the Council, after securing the consent of the European Parliament. Switzerland and Ukraine both hold associate agreements. However, the Swiss-Euratom deal, for instance, is restricted to scientific and technological cooperation for research and development in the nuclear industry. Interestingly, even this narrow agreement requires the free movement of professionals in the nuclear field.

Alternatively, Article 101 of the Euratom Treaty provides for third-party bilateral agreements with the community. Euratom holds such bilateral agreements with at least nine other countries, including the US, Australia, Canada and Japan. These allow such countries to establish common research topics of mutual interest with Euratom and sets up cooperation on a shared-cost basis. These only require qualified majority approval in the Council.

The Swiss “associate” model is currently the government’s preferred option, and would help maintain funding for world-leading nuclear fusion research programmes in the UK, on the same terms as the EU member states. But, under this agreement, cooperation does not extend to the wider security, supply and safeguarding benefits of Euratom membership. As such, the UK government has said it will legislate to give the UK Office for Nuclear Regulation “powers to take on the role and responsibilities required to meet our international safeguards, and nuclear non-proliferation obligations.” It will then subsequently aim to re-establish Nuclear Cooperation Agreements with relevant third-country partners.

Transitional arrangements will likely be necessary

It is clearly the case that a non-EU country can have a strong civil nuclear industry. If the UK is able to secure an associate agreement with Euratom in research and development, and establish priority cooperation agreements with other third countries, it should largely retain access to its existing nuclear supply chains. It is not the question of no longer being within Euratom that poses greatest risk now – the fact remains, we have already formal notified our intention to leave. What is crucial now is the process by which we get there.

International trade of nuclear material relies on the existence of credible safeguards. Trade between the UK and Euratom members, as well as with some other third countries, is currently predicated on the application of Euratom’s safeguards. The UK does also hold a voluntary agreement with the IAEA, but these safeguards are far less comprehensive. In fact, the voluntary agreement itself may need to be renegotiated as part of disentangling the UK from Euratom –concluded as a tripartite agreement with the UK, the IAEA and Euratom, implementation of the voluntary offer as is will prove difficult outside Euratom.

The UK must therefore establish a new domestic safeguard regime, and renegotiate its commitments with the IAEA, before it leaves Euratom. Failure to ensure credible UK nuclear safeguards are in place at the point of its withdrawal would run the real risk of significantly disrupting – or even halting – the UK’s nuclear supply chains, particularly with countries with strict nuclear non-proliferation policies.

Yet, the UK’s Office for Nuclear Regulation (ONR) has told the Business, Energy and Industrial Strategy Committee that setting up alternative arrangements within this period would be “very challenging.” ONR director David Senior cited in particular the difficulty in replacing Euratom-owned infrastructure, equipment, skilled personnel and processes. He argued, “We would only be in a position in the two-year period to put a basic arrangement in place.” Other witnesses also noted that, beyond establishing UK safeguards, agreeing international cooperation agreements would not be possible within the two years.

If it is unlikely the UK will have adequate measures in place at the time of our exit from Euratom, the government should seriously consider transitional arrangements. Current ideas for a transition include temporarily extending Euratom membership or voluntarily applying Euratom safeguards. But questions still remain as to how the EU would recognise and agree interim measures.

Accessing nuclear material for the UK’s energy, medical and research sectors is critically important, so all minds should be focused on ensuring there is no cliff-edge resulting from our exit from Euratom. This may mean accepting some continued oversight from European institutions, which some Leave campaigners look prepared to accept on the narrow topic of nuclear energy. Overall, this is a complex, sensitive and dangerous topic – and the Government and its critics need to proceed carefully and calmly. Given the extent of concern amongst Parliamentarians of both major parties about the decision to leave Euratom, the Government will need to make a much better case for why it has proceeded in this way, or offer compromise.