When the UK leaves Euratom Community all legislation, recommendations, decisions or communications derived from the Euratom Treaty will cease to have legal effect in the UK.

While it is the government’s intention to import all applicable EU law (including Euratom law) directly into the UK legal system in the so called Great Repeal Bill, this will only be practical for safeguards if the UK retains full membership of the Euratom Community during any transitional period agreed with the EU. While the full impact of the UK leaving the Euratom Treaty is not yet clear the following are possible high level implications:

Leaving the Euratom Safeguards Regime

When the UK leaves the Euratom Treaty the Euratom Safeguards regime will cease to apply leaving the UK subject only to the international safeguards regime implemented by the IAEA pursuant to the NPT.

If the UK were a non-nuclear weapons state under the NPT and subject to a comprehensive safeguards agreement with the IAEA, the potential implications of leaving the Euratom Safeguards regime would be far less significant. As a nuclear weapons state under the NPT, the UK is instead subject to voluntary safeguards agreed with the IAEA in its VOSA.

Accepting that the UK is also likely to have to renegotiate its current VOSA (see below) and will seek to secure broadly similar terms to those in its current VOSA and/or those accepted by other nuclear weapons states under the NPT, the following table makes high level comparisons to the safeguards regimes that might apply in the UK before and after Brexatom:

Please click here to view the image.

The above comparison suggests that once the UK leaves the Euratom Treaty the safeguards regime that is likely to be in place pursuant to any replacement VOSA with the IAEA could be perceived as significantly weaker by the International Nuclear Community. Any weakening of the safeguards regime in the UK whether perceived or real could potentially affect the approach of the UK’s nuclear trading partners, particularly those with strict nuclear non-proliferation policies such as the USA, Canada and Australia.

Without assurance that comprehensive safeguards are in place in the UK, either under the Euratom Treaty or the NPT, states exporting nuclear material, technology or know-how to the UK may struggle to satisfy the requirements of their own domestic legislation or nuclear non-proliferation policies. The response of nuclear exporting states to these circumstances is hard to predict but it seems fair to say that there is a real possibility that nuclear trade could be interrupted or even stopped until suitable measures are put in place.

Replacement of the UK's VOSA

As outlined above it is arguable that the UK’s existing VOSA will become obsolete as soon as it leaves the Euratom Community. Although the UK will not be under any strict legal obligation to replace its existing VOSA, it seems inconceivable that it would not do so given the likely reaction of the international nuclear community and the potential impacts on international nuclear trade and collaboration.

Before the UK is able to conclude a replacement bi-lateral VOSA with the IAEA it will be necessary to establish a standalone UK safeguards regime sufficient to comply with any obligations the UK accepts. We are aware from evidence provided to the [BEIS Committee] that the ONR views the establishment of even the most basic UK safeguards regime by 29 March 2019 as extremely challenging, due primarily to a lack of Suitably Qualified and Experienced Personnel within the ONR and more widely in the UK market. As a result in a 'hard brexit' scenario it is likely that the UK's national safeguards regime will be minimal which could then constrain the UK's ability to negotiate its owns bi-lateral NCAs (see below).

Negotiating bilateral NCAs with nuclear trading partners

When the UK leaves the Euratom Community it will no longer be able to use Euratom’s NCAs which are contingent on the application of Euratom Safeguards. To ensure the UK avoids any significant cliff-edge effects when leaving Euratom the UK government would ideally ensure that NCAs are in place with its key international nuclear trading partners which might include Euratom, the USA, Canada and Australia.

Given the negotiation and approval of NCAs can take several years even with an established and comprehensive safeguards regime is in place, the current lack of an established UK safeguards regime and doubts over the status of its VOSA suggest conclusion of NCAs with key trading partners by March 2019 to protect against a 'hard brexit', could be extremely challenging.

As a result the UK government will have to prioritise states in relation to which the absence of an NCA might be significant both in terms of that state's involvement in the UK nuclear sector and/or the likely reaction of that state if an NCA were not in place at the point the UK withdrew from Euratom.

Whether or not the UK's nuclear trading partners would be prepared to carry on trading with the UK on current terms without an NCA in place depends on a number of factors which include that state’s domestic legislation, policy requirements, wider politics and public opinion. It is well known for instance that section 123 of the US Atomic Energy Act prohibits nuclear trade / collaboration with any state unless an NCA is in place. As a result any failure by the UK government to agree a NCA with the US by the time the UK withdraws from Euratom could technically cause all nuclear trade / collaboration with the US to cease which would have significant impacts on the UK nuclear sector.

For those states which require an NCA as a matter of policy the position is less clear although it is important to note that many states are committed to internationally accepted best practice in the field of nuclear non-proliferation which requires NCAs to be in place prior to the export of sensitive nuclear materials. Although such best practice is not legally binding in the strictest sense it is still likely to be taken extremely seriously by exporting states to the extent it would be dangerous to assume that such requirements would simply be waived to maintain continuity of trade with the UK post Brexatom.

Once the UK government has identified its priorities for NCAs it must then begin the negotiation process. There is no set timetable for negotiating NCAs but commentators suggest that broad scope NCA with the USA typically takes at least 2-3 years to complete due primarily to the various government approvals that are required. Whilst establishing a UK safeguards regime, negotiating a replacement VOSA and negotiating NCAs with key trading partners is all likely to happen in tandem it is worth noting that the actual completion of NCAs is likely to be conditional on a replacement VOSA being in place and in some cases acceptance by the UK of additional safeguards obligations to satisfy the non-proliferation objectives of exporting states.

For more information on this topic, please contact Ian Salter or Ian Truman.

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