Exiting Euratom – an update on the impact of Brexit on the nuclear industry

The UK government has made good progress on its no-deal Brexit planning and has now issued its long-awaited proposal for future nuclear trade and collaboration with the EU after Brexit.

22 October 2018

In our previous articles examining the potential impacts of Brexit on the nuclear sector we have covered:

Since our last update there have been a number of key developments.

The Withdrawal Agreement

The UK government has confirmed that all of the nuclear elements of the Withdrawal Agreement are now agreed with the EU. The key outstanding point therefore remains the status of future arrangements for the supply of nuclear fuel which have not yet been agreed due to the fact such arrangements are considered to be part of the Future Trade Agreement between the EU and UK, which cannot be finalised until after the UK has left the EU and Euratom on 29 March 2019.

Update on the UK government’s no-deal preparations

While the UK government continues to negotiate the Withdrawal Agreement with the EU, it has been progressing its no-deal contingency planning in parallel. The UK government has recently:

  • confirmed that replacement Nuclear Cooperation Agreements (NCAs) with key nuclear trading partners (the USA, Canada, Australia and Japan) are on track for ratification by 29 March 2019
  • signed a replacement, bilateral voluntary offer safeguards agreement with the International Atomic Energy Agency that is on track for ratification by 29 March 2019
  • adopted its own domestic Safeguards legislation and issued safeguards regulations for consultation
  • stated that the Office for Nuclear Regulation is making good progress in recruiting safeguards inspectors to replace those previously provided by Euratom.

No deal planning

In August 2018 the UK government also published guidance for private companies on civil nuclear regulation and nuclear research in the event of a no-deal Brexit. Perhaps the most significant element of this guidance relates to UK parties which are subject to existing contracts for the supply of nuclear materials:

  • with an entity or entities from another Euratom member state
  • which have been co-signed by the Euratom Supply Agency
  • that have supply periods which extend beyond 29 March 2019.

At present UK operators have been advised to engage with the Euratom Supply Agency and their counterparts to agree a process for re-approval of such agreements. There is concern over this issue in both the UK and the EU with requests for the Euratom Supply Agency and the European Commission to communicate to the sector as soon as possible, a process for the review and approval of all relevant contracts by the 29 March 2019 deadline.

The Brexit White Paper

In July 2018 the UK government issued its long awaited proposal for its preferred future relationship between the UK and the EU after Brexit (also referred to as the Chequers Plan) in which it restated its desire for a close association with Euratom in the form of a new relationship that was more comprehensive and broad than any existing arrangement between Euratom and another non-EU member state. The Brexit White Paper goes on to suggest that this proposed new civil nuclear relationship should be based on a comprehensive NCA between Euratom and the UK:

  • establishing a cooperation mechanism between the UK safeguards regulator (the Office for Nuclear Regulation) and Euratom, enabling activity such as technical information exchanges, joint studies and consultation on regulatory or legislative changes
  • providing for UK 'association' with the Euratom Research and Training Programme, as part of an ambitious science and innovation accord which would include continuation of the JET project and ongoing UK participation in the ITER project
  • ensuring continuity of contractual arrangements for the supply of nuclear material, either by allowing for existing nuclear supply contracts with the UK to remain valid after the UK’s exit, or by providing for their seamless re-approval prior to the UK’s exit
  • minimising barriers and simplifying export control arrangements in the trade and transfer of sensitive nuclear materials, equipment and technology between the UK and the Euratom Community
  • providing for technical cooperation on nuclear safety including continued notification and information sharing arrangements on radiological events and monitoring, with the UK participating in EU systems such as the European Community Urgent Radiological Information Exchange (ECURIE) and the European Radiological Data Exchange Platform (EURDEP) and
  • continuing UK cooperation and information-sharing with the European Observatory on the Supply of Medical Radioisotopes.

It appears that the UK’s preference is based on the fact that Euratom is already familiar with the NCA format and that NCAs are relatively straight forward to ratify under Article 101 of the Euratom Treaty, requiring only a qualified majority within the European Council. By way of contrast one of the main alternatives is an association agreement under Article 206 of the Euratom Treaty which has never been used by Euratom and requires unanimous consent of all remaining 27 EU member states in line with their own constitutional requirements.

It remains to be seen whether Euratom accepts this proposal or whether individual EU Member States object on the basis that such a broad and comprehensive agreement is actually performing the role of an association agreement or covering areas of mixed competence between the EU and member states, in which case unanimous approval should be required under Article 206 of the Euratom Treaty.

The Nuclear Common Market

The Brexit White Paper does not mention the common market established under the Euratom Treaty but the UK government has informally confirmed that such issues will be dealt with in the proposed customs union and common rule book for manufactured goods set out in the wider Brexit deal.

This means that if the Brexit White Paper were agreed in its current form (which is admittedly a big 'if'), frictionless trade in nuclear goods and products listed in Annex IV of the Euratom Treaty should continue after Brexit. The position in relation to nuclear services, however, is less clear given the Brexit White Paper proposes a different approach for services which reserves more flexibility for the UK and as a result reduced access to the European Single Market.

Watch this space

There has been much discussion over recent months about the acceptability of the Brexit White Paper, both domestically for those pushing for a so called 'hard Brexit', and in Europe which quickly rejected the proposals on the basis that they would provide the UK with an unfair advantage and consequently threatened the integrity of the Single Market.

If the UK government is to avoid a no-deal Brexit, it will have to agree the Withdrawal Agreement with the EU which will include a solution to the Irish border and a sufficiently detailed political declaration regarding the future relationship between the EU and the UK after Brexit. Even if the UK gets a deal with the EU, it then has to get the deal through a vote in the UK parliament with a wafer thin parliamentary majority and a number of different activists pursuing their own agendas, willing to cross party lines or alternatively do whatever it takes to force a general election.

Key contact

Ian Truman

Ian Truman Director

  • Nuclear
  • Projects
  • Environment

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