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Brexit -- Commodities Implications: A Platts news and analysis feature

Euratom exit headache looms for UK nuclear

By Oliver Adelman in London

Euratom and the Euratom Treaty of 1957 that governs it were founded to create a market for nuclear power in Europe and to promote development of the nuclear power industry within European Union member states.

Vanessa Jankovich, a lawyer at Freshfields Bruckhaus Deringer in London, told S&P Global Platts March 13 that if and when the UK leaves Euratom around 2019, the "most obvious" immediate steps to avoid industry disruption will be to deliver "a means for continuation or replacement of the existing inspection and audit resources provided centrally by Euratom, and to provide certainty as to the treatment of fissile materials (which are technically owned by Euratom) present in Britain at the moment on Brexit."

Jankovich said that in terms of practical implementation of things Euratom previously did for the country and “politically, in terms of regulation and standard-setting,” the UK will need to cooperate with Euratom even after it leaves the EU.

The UK said it will leave Euratom at the same time it leaves the European Union, according to notes released January 26 that accompanied a bill sent to Parliament that day seeking authorization to trigger the Article 50 notification that would formally start the process of the UK’s EU exit.

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The UK voted in a referendum June 23 to leave the EU. The Article 50 notification triggers a two-year period of negotiation on the terms of the UK’s exit from the EU, although the country will remain in the EU during the negotiation period.

The notes on the government’s bill say that the power to trigger Article 50 includes withdrawal from Euratom because a 2008 law defines the EU to include Euratom.

Jurisdiction issue

A London-based energy lawyer said in an interview March 13 that the Euratom Treaty and the legislation surrounding the UK’s 1973 accession to the European Union are two separate legal issues so the UK could technically remain a member of Euratom even after it leaves the EU in 2019.

The lawyer declined to be named due to client confidentiality issues. However, the lawyer said he believes the UK government had chosen to leave Euratom at the same time as it leaves the EU because the ultimate jurisdiction under which the Euratom Treaty and membership in Euratom operate is the European Court of Justice, or ECJ.

The lawyer noted that the UK government had publicly said many times that it interpreted the 52% to 48% June 23 vote by the UK electorate to leave the EU as a mandate for the country to no longer be under the legal jurisdiction of the ECJ, but instead under the jurisdiction of UK-based courts.

George Borovas, the head of the energy practice at the Shearman & Sterling law firm in Tokyo, said March 13 that “if the UK decides to leave Euratom as part of Brexit there will be a period of uncertainty as new nuclear cooperation agreements will be required for the trading of nuclear materials, goods and services.”

Transition arrangements

Borovas added that it is “therefore possible that the government will consider to remain in Euratom beyond the likely April 2019 Brexit while such agreements are negotiated and put in place.”

Simon Stuttaford, head of nuclear at the DWF law firm in Bristol, England, said March 14 that “transitional arrangements were quite possible,” but added that the UK “shies away” from “referring to it [Euratom transitional arrangements] in these terms.”

UK politicians have been reluctant to talk publicly about transition arrangements after Brexit, as this has often led to vociferous criticism by Brexit campaigners that such transition arrangements are an attempt to remain in the EU by another means.

Tom Greatrex, chief executive of the Nuclear Industry Association UK, said March 13 that if the “political will is there, the UK could have a strong and mutually supportive relationship with Euratom [post-Brexit], but there are a number of hurdles to overcome in a relatively short period of time.”

Among these hurdles, Greatrex cited the need for the UK to introduce its own nuclear material safeguards regime, negotiate continued involvement in the Fusion 4 Energy program and the need to “renegotiate or negotiate from scratch a series of nuclear co-operation agreements with a number of other countries.”

Fusion 4 Energy is a program developing fusion energy including the ITER project to build a demonstration fusion reactor in France. Greatrex added that the UK would also have to come to a trading agreement with Euratom, “potentially adopting third country status or some form of associated membership.”

Greatrex also said that “none of these are insurmountable,” adding that “with nuclear new build, operations and decommissioning all taking place in this country, it is clearly in the interest of both the UK and European nuclear industries that a strong relationship is maintained [with Euratom], even with the UK outside the EU.”

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