Is Brexit still the nuclear option?

The UK should benefit from a transitional period which provides more time to mitigate the potentially harmful effects of Brexit and help secure the best possible future relationship with Euratom.

25 January 2018

Since triggering Article 50 on 29 March 2017, the UK government has been negotiating issues relating to the UK’s separation from the EU and the Euratom Community. On 7 December 2017, the EU confirmed sufficient progress had been made on these ‘separation issues’ to allow talks to move on to future trade arrangements.

During the first phase of negotiations a raft of technical papers, position papers, negotiation guidelines, EU decisions and reports have been published. These papers are relevant both to the framework for the UK’s withdrawal from Euratom and to specific nuclear issues.

In this briefing we summarise the story so far before looking ahead to the possibility of a transitional period and the shape of the UK’s future relationship with Euratom after Brexit.

Leaving Euratom

  • On 23 June 2016 the UK voted to leave the EU. Euratom membership was not mentioned in the referendum campaign or included on the ballot paper.
  • On 26 January 2017 the UK government published its Bill to trigger the Article 50 process. The explanatory notes to the Bill confirmed the UK would also be leaving Euratom with the government later stating this was unavoidable on the basis the EU and Euratom were ‘uniquely legally joined’.
  • Leaving Euratom is seen as a largely unwanted consequence of Brexit and a strong consensus has formed that the UK should remain as closely aligned as possible with the Euratom Community after Brexit.

Possible impacts

Separation issues

  • The UK government has confirmed that its new domestic safeguards regime will replicate Euratom Safeguards despite the fact the UK will only be legally obliged to implement less stringent IAEA Safeguards. The ONR has indicated that achieving this by 29 March 2019 is likely to be challenging.
  • The UK is negotiating a replacement, bilateral Voluntary Offer Safeguards Agreement with the IAEA and replacement bilateral nuclear co-operation agreements with the USA, Australia, Canada and Japan. The government is confident that these agreements will be ratified by 29 March 2019.
  • The UK government is also working on nuclear co-operation agreements with other states (and Euratom) but has suggested such arrangements are not a priority as trade and collaboration could continue with these states on the basis of government-to-government assurances after Brexit.
  • The UK appears to have reached agreement with the EU on most of the key Euratom separation issues with the exception of nuclear materials held in the UK by EU27 entities. As separation issues, most Euratom matters will be dealt with in the Withdrawal Agreement. Arrangements covering nuclear fuel supply contracts have been categorised as future trade arrangements, which will be discussed in the next phase of negotiations.

The current position on transitional arrangements

  • In June 2017, we reviewed some key points regarding the UK's proposal for a transitional period.
  • The European Commission has since confirmed that transitional arrangements covering Euratom matters should be included in the Withdrawal Agreement, meaning these potentially controversial arrangements may not need unanimous approval from the EU27.
  • The UK has proposed a transitional period of two years but suggested it could pursue a longer period for Euratom issues. The European Commission, however, suggests that any transitional period must not extend beyond 31 December 2020, giving a transitional period of only 21 months.
  • The EU has also confirmed that the UK may not be able to rely on Euratom’s nuclear co-operation agreements during the transitional period. This underlines the importance of the UK government securing replacement, bilateral agreements and appropriate government-to-government assurances with key trading partners before 29 March 2019.

Options for future arrangements

  • In its wider Brexit negotiations the UK has rejected full membership of the single market on the basis it would require acceptance of the four fundamental freedoms of the EU. Instead, the UK has stated its preference for a bespoke Free Trade Agreement allowing ‘a close economic partnership but with a new and different balance of rights and obligations’.
  • It remains to be seen whether the UK will be able to secure the access to the single market it desires without compromising its negotiation redlines relating to freedom of movement of people and jurisdiction of the Court of Justice of the European Union. Recent statements suggest, however, that the UK government may be prepared to accept close regulatory alignment with Euratom on the basis it is a discrete policy area in which regulatory alignment after Brexit is considered beneficial.
  • If the UK were able to accept regulatory alignment with Euratom after Brexit it could theoretically secure almost full access to the Nuclear Common Market through an Association Agreement with the Euratom Community. Such agreement would require the unanimous approval of the EU27.
  • While the potential scope of an Association Agreement is broad it is questionable whether the UK would be able to negotiate direct participation in the Euratom Safeguards regime and the continued benefit of Euratom's nuclear co-operation agreements under such an arrangement.

If you are interested in receiving our more detailed Euratom updates please contact either Ian Salter or Ian Truman to discuss your requirements.

The impact of Brexit on nuclear law

04 July 2016

Thermal power plant at night

The primary legislation governing the nuclear sector in the European Union is the Treaty establishing the European Atomic Energy Community (“the Euratom Treaty”). Whilst the Euratom Treaty takes precedence over more general European laws established under the Treaty of the Functioning of the European Union (“TFEU”), general EU law still applies to areas that fall outside the scope of the Euratom Treaty such as public procurement, state aid and environmental protection. See our dedicated Brexit page for further information.

As things stand there is a huge amount of uncertainty surrounding the UK's exit from EU but here are a few points on the potential implications for UK nuclear law (in the order they appear in the Euratom Treaty) which deliberately exclude possible commercial implications:

Withdrawal from the Euratom Treaty

Article 106a of the Euratom Treaty provides that the Article 50 procedure under the Treaty of European Union also applies to the Euratom Treaty. As a result Brexit will mean the UK leaving the Euratom Community at which point it will no longer be governed by the Euratom Treaty or any of the Directives or Regulations adopted under it.

Implementing UK legislation and the origin of UK nuclear law

UK legislation will remain in force following Brexit until repealed and/or amended by the UK government. The only immediate impact following Brexit is that directly effective EU regulations will cease to have legal effect.

Most nuclear law in the UK is ultimately derived from International Treaties (typically IAEA/NEA/UN Treaties) or internationally accepted standards and best practice, rather than originating from EU law. As a result the withdrawal from the Euratom Treaty and any Directives or Regulations will only impact those provisions of the treaty itself (eg Article 37 below) or any directly applicable EU Regulation. Some (non-exhaustive) examples are below.

Research and development and dissemination of technical information

In recent years the UK has benefited from grant funding from the Joint Nuclear Research Centre established under Article 8 of the Euratom Treaty. Brexit could mean such funding is withdrawn and that new arrangements will possibly have to be agreed regarding, for instance, the Joint European Torus project based at Culham.

Basic safety standards

Article 30 of the Euratom Treaty provides authority for the adoption of the Basic Safety Standards Directive (“BSS Directive”) which itself provides the legal basis for justification and radiation protection within EU law. On withdrawal from the EU, the BSS Directive will cease to apply but it is likely that the current UK legislation will remain substantially the same in order to maintain UK compliance with IAEA Fundamental Safety Principles and best practice published by the International Council for Radiation Protection.

Article 37 of the Euratom Treaty

The UK government is currently obliged to submit ‘general data’ to the Commission in relation to any plan for the disposal of radioactive waste in the UK, to enable the Commission to consider whether such a plan is liable to result in the radioactive contamination of the water, soil or airspace of another Member State. In practice this covers many new nuclear developments.

While UK planning authorities may no longer require a positive opinion from the Commission under Article 37 prior to granting planning permission for nuclear developments, the UK may retain legislation requiring developers to undertake transboundary environmental impact assessment under its general environmental laws and/or to secure compliance with its obligations under the Convention on Environmental Impact Assessment in a Transboundary Context.

Articles 41 and 43 of the Euratom Treaty

Developers of certain nuclear projects in the UK are currently obliged to notify the Commission in advance of any investment. Given this notification requirement originally related to pre-qualification for EURATOM loans it could disappear once the UK withdraws from the Euratom Treaty.

Nuclear fuel supply contracts

Chapter 6 of the Euratom Treaty governs the supply of ores, source materials and special fissile materials to or from a member of the European Union as well as providing a legal right of option for the Euratom Supply Agency over such materials entering or leaving the Community.

On its withdrawal the UK is likely to need to enter a specific agreement with the Euratom Community regarding its ongoing supply of ores, source materials and special fissile materials to members of the European Union. The terms of this agreement will obviously dictate the extent to which UK suppliers remain bound by Chapter 6 of the Euratom Treaty and the impact that withdrawal will have on existing supply contracts.

Existing fuel contracts between UK suppliers and operators based outside the EU will no longer be subject to Chapter 6 of the Euratom Treaty and the implications of which will depend on the terms and conditions of existing contractual arrangements between the parties.

Safeguards

Although Commission Regulation (Euratom) 302/2005 has direct effect and has not been specifically implemented into UK law, wider UK legislation on safeguards will remain in force in some form to ensure the UK complies with various obligations under international law including the Treaty on the Non-Proliferation of Nuclear Weapons and the voluntary offer safeguards agreement and additional protocol in place between the UK, Euratom and the IAEA. We can probably expect some changes here.

Nuclear Common Market

Chapter 9 of the Euratom Treaty provides for the establishment of a nuclear common market which effectively guarantees the free movement of people, goods, services and capital within the Euratom Community.

The extent to which the UK retains access to the EU single market (including the nuclear common market) has already been highlighted as a key area of debate for the UK in its exit negotiations with the EU. Depending on the outcome of these negotiations, any restrictions on the UK’s access to the nuclear common market could be one of the most significant impacts on the UK nuclear sector following the UK's withdrawal from the Euratom Community.

Export controls

Although the Dual Use Regulation (428/2009) has direct effect and has not been specifically implemented into UK law, the substance of domestic legislation is unlikely to change as the UK remains subject to other obligations such as those associated with its membership of the Nuclear Suppliers Group.

Bilateral Co-operation Agreements

To date the UK has entered a number of co-operation agreements with non EU states such as China, Japan and the USA. Following withdrawal from the Euratom Community the UK may seek to amend these existing arrangements and / or enter similar agreements with certain EU member states.

We will keep this area under review, and it will of course develop significantly in the months to come. If you have any feedback or wish to discuss nuclear Brexit issues then please contact Ian Salter, Head of Nuclear.

Key contact

Ian Salter

Ian Salter Partner

  • Head of Nuclear
  • Projects
  • Environment

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