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The Australia-UK-U.S. Submarine Deal: Submarines and Safeguards
December 2021
By Laura Rockwood
If the AUKUS deal, under which the United States and the United Kingdom agreed to sell nuclear-powered submarines to Australia, goes forward, it will have a precedent-setting effect on the International Atomic Energy Agency (IAEA) safeguards implemented pursuant to the nuclear Nonproliferation Treaty (NPT), which is formally known as the Treaty on the Non-Proliferation of Nuclear Weapons.
These technical measures are at the heart of international efforts to prevent the spread of nuclear weapons. They are accepted by non-nuclear-weapon state-parties to the NPT through the conclusion of comprehensive safeguards agreements. Under these agreements, the agency is empowered to verify independently that such states are complying with their obligation not to divert nuclear material for use in nuclear weapons or other nuclear explosive devices. Australia concluded such an agreement in 1974.1
The NPT does not prohibit the use of nuclear material for certain non-explosive military uses, such as nuclear naval propulsion. To accommodate that possibility, the comprehensive safeguards agreement includes a provision that allows a state to request the withdrawal of nuclear material from safeguards for use in such a nonprohibited activity. Prior to doing so, the state must conclude a separate, specific arrangement with the IAEA.
In the 40 years since the IAEA has been implementing comprehensive safeguards agreements, it has never concluded such an arrangement. If one results from the AUKUS deal, Australia, the IAEA, and the other two participant countries will have to take great care to avoid creating a loophole in such agreements that could provide cover for the diversion of nuclear material for use in a nuclear weapons program.
As IAEA Director-General Rafael Mariano Grossi stressed to reporters on October 21, “There has to be a specific arrangement with the IAEA” that will require the agency “to dot the I’s and cross the T’s, which has never been done before, and it’s a very, very demanding process.”
Legal Framework
All comprehensive safeguards agreements are based on INFCIRC/153, a document negotiated in the 1970s by a committee of the IAEA Board of Governors that was open to all members of the agency.2 As regards submarines, the most important provision is paragraph 14, entitled “Non-application of safeguards to nuclear material to be used in non-peaceful activities.” It contains the procedures to be followed in the event that a state wishes to “exercise its discretion to use nuclear material required to be safeguarded under the agreement in a nuclear activity which does not require the application of safeguards.” This is often referenced as the “withdrawal” of nuclear material from safeguards, distinguishing it from provisions related to the termination of safeguards on nuclear material, for example, if the material has become practicably irrecoverable, and to the exemption of nuclear material from safeguards, such as for use in a non-nuclear activity.
Pursuant to paragraph 14, before any nuclear material may be withdrawn from safeguards for use in such an activity, the IAEA and the state concerned must “make an arrangement” so that safeguards will not be applied only while the nuclear material is being used in that activity.
The drafters of INFCIRC/153 insisted on this as a means of balancing a state’s interest in protecting militarily sensitive information while ensuring, to the extent possible, that the withdrawal of nuclear material from safeguards would not create opportunities for the state to divert the material for prohibited purposes.
The withdrawal of nuclear material under paragraph 14 is not automatic and is not intended as a blanket exemption for nuclear material, facilities, or activities due to their military nature. A state may not withdraw nuclear material from safeguards without invoking paragraph 14 and concluding an arrangement with the IAEA.
Only Canada has ever invoked paragraph 14. Although discussions on a possible arrangement with the IAEA were initiated in the late 1980s, Canada decided not to pursue the project, and no arrangement was ever concluded.
Brazil, the only non-nuclear-weapon state with an active nuclear naval propulsion program, has already announced its plan to build a land-based prototype for a submarine reactor and has provided facility design information to the IAEA. Unlike the AUKUS project, the Brazilian project is based on a domestic fuel cycle, including conversion, enrichment of nuclear material using low-enriched uranium, fabrication of the fuel, and assembly of the fuel into a reactor core. The IAEA has not received a request from Brazil to conclude a relevant arrangement.
In 2012, Iran also announced its intention to produce nuclear-powered submarines3 and recently started producing uranium enriched to 60 percent in uranium-235.4 Although Iran also recently alluded to the possible use of 60 percent-enriched uranium for a submarine program, no formal announcements have been made. South Korea has also expressed interest in acquiring nuclear-powered submarines and commissioned a feasibility study in 2017.5 Neither Iran nor South Korea has raised with the IAEA the prospect of concluding a paragraph 14 arrangement.
In the 1960s and 1970s, Germany and Japan developed nuclear naval propulsion but for civilian application to surface ships.6 No special safeguards arrangements were concluded with either country.
Questions to Answer
The key process-related question is whether approval by the IAEA Board of Governors is required for a paragraph 14 arrangement. Paragraph 14 speaks only of the IAEA agreeing on the arrangement, not whether such an arrangement would be subject to board approval.
An exchange of letters between the IAEA and Australia in 1978 concerning the secretariat’s handling of paragraph 14 requests is likewise ambiguous, but suggests that the board would determine the appropriate action.7 Should the matter be presented to the board by the director-general, the board itself could decide whether approval is necessary.8 Given the divergent interests of the states represented on the board, the results of such deliberations are far from predetermined and could become quite political and contentious.
There are also substantive issues associated with the use of nuclear material in a nonproscribed military activity and the conclusion of an arrangement under paragraph 14.
Details of the arrangement. Paragraph 14 requires that “only while the nuclear material is in such an activity, the safeguards provided for in the Agreement will not be applied” and that safeguards are to apply again “as soon as the nuclear material is reintroduced into a peaceful nuclear activity.” The arrangement must identify, to the extent possible, the period or circumstances during which safeguards will not be applied. It also must provide for the IAEA to be kept informed of the total quantity and composition of the material withdrawn from safeguards, whether in the country or exported.9
In addition, the arrangement may only relate to “such matters as” temporal and procedural requirements and reporting arrangements. The list in INFCIRC/153 of what the arrangement may include is not exhaustive and the IAEA and the states involved must work out the details. In agreeing to such an arrangement, however, the IAEA has no authority to require information deemed by the state to be classified or to approve or disapprove the activity in question.10
Withdrawal of material from safeguards and safeguards reapplication. The material should spend as little time as possible outside safeguards. As agreed by the drafters of INFCIRC/153, “[S]uch peaceful nuclear activities as transport and storage, and activities or processes which merely change the chemical or isotopic composition of nuclear material, such as enrichment or reprocessing, are not intrinsically military and, therefore, [are] not entitled to exclusion from safeguards under paragraph 14.”11 Insofar as Australia could be receiving submarines already equipped with the reactors,12 there inevitably will be some transport and storage of the submarines, which will have to be addressed. As Australia will not be engaged in enrichment or reprocessing of the reactor fuel, that could simplify the negotiation process. Yet, there needs to be clarity regarding when the nuclear material in the reactor would have to be brought back under safeguards.
Implications for additional protocols. The implementation of an additional protocol could mitigate the possible negative impacts on safeguards of a paragraph 14 arrangement. An additional protocol offers the IAEA expanded access to information and locations, which increases the agency’s ability to detect indications of undeclared nuclear material and activities. Many measures contained in an additional protocol, such as the IAEA’s right to request access to and information about nuclear fuel-cycle-related research and development activities not involving nuclear material, could be relevant to a nuclear naval propulsion program, depending on what activities are actually carried out by the non-nuclear-weapon state.
Australia concluded an additional protocol in December 1997.13 Would some of these provisions be suspended as well? If so, how would that impact the IAEA’s ability to determine whether a state is pursuing undeclared nuclear activities?
More complicated still is how such a suspension might impact the IAEA’s drawing of “safeguards conclusions,” in particular the drawing of the “broader conclusion.” Each year, the IAEA draws a safeguards conclusion for each state in which safeguards were implemented during the previous year. If a state with a comprehensive safeguards agreement has an additional protocol in force and the IAEA sees no indications of the diversion of declared nuclear material and no indications of undeclared nuclear material or activities in the state, the agency draws a “broader conclusion” that “all nuclear material remained in peaceful activities.” Would the IAEA still be able to draw such a conclusion? Would there have to be a reformulation of the broader conclusion?
Although it is tempting to suggest that no paragraph 14 arrangement should be approved unless a state has an additional protocol in force, such a position is likely to meet resistance among NPT states-parties, given the insistence by many states on the voluntary nature of such protocols.
Military-to-military transfers and paragraph 14 arrangements. The question has been posed whether a transfer of nuclear material from a military program in a nuclear-weapon state to a military program in a non-nuclear weapon state—a so-called military-to-military transfer—would fall outside the requirements of the NPT or INFCIRC/153. The answer is no. Any efforts to circumvent the paragraph 14 mechanism should be resoundingly rejected, not just from a policy perspective but from a legal perspective. This approach was actually raised in the context of the Canadian project and rejected by the secretariat.
Paragraph 1 of INFCIRC/153 tracks the language of the NPT in requiring the application of safeguards “on all source or special fissionable material in all peaceful nuclear activities.” The reference to peaceful nuclear activities was intended to accommodate the interest in nuclear-powered submarines among some non-nuclear-weapon states in the late 1960s. It was not intended as a means for securing an exclusion of nuclear material from safeguards due its use in a military activity.
Paragraph 34(c) requires that nuclear material of a composition and purity suitable for fuel fabrication or isotopic enrichment or produced later in the nuclear fuel cycle, as the nuclear material in a reactor core would be, become subject to all safeguards procedures upon its import into a state with a comprehensive safeguards agreement. Unlike other provisions in paragraph 34, subparagraph (c) is not limited to the import of such material for particular purposes. Thus, the nuclear material contained in a reactor would become subject to safeguards upon its import, regardless of the purpose for which it is imported.
Finally, pursuant to paragraphs 92 to 96, a state must provide advance notification to the IAEA of the expected transfer into the state of nuclear material in an amount greater than one effective kilogram, as would be the nuclear material in a reactor core, and in any case not later than the date on which the recipient state assumes responsibility for the material. Likewise, the state would be obliged to report the export of such material. None of these provisions has an exclusion for nuclear material used in or transferred for a military purpose.
The general rule under customary international law for interpreting a treaty is that a treaty should be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of an agreement in their context and in light of its object and purpose. From a plain reading of INFCIRC/153, safeguards agreements must be interpreted as states having committed themselves to notifying the IAEA of the production and import of nuclear material even if the material is intended for use in a nonproscribed military nuclear activity. Such states also are committed to abiding by the provisions of paragraph 14 should they wish to use nuclear material in a nonproscribed military nuclear activity.
Under customary international law, supplementary means of interpretation, such as the negotiating history of a treaty, may be used to confirm the ordinary meaning resulting from the application of this general rule. The negotiating history also can be used to determine the meaning of a treaty when interpretation in accordance with the general rule results in an ambiguous or obscure interpretation or leads to a result that is manifestly absurd or unreasonable. In this instance, the interpretation resulting from the application of the general rule does not result in an ambiguous, obscure, or manifestly absurd or unreasonable interpretation of INFCIRC/153. Nevertheless, it is useful to review the negotiating history, which clearly confirms that interpretation.
The negotiators agreed that the IAEA “should be consulted and satisfactory administrative arrangement[s] reached concerning the use of any nuclear material for a military purpose permitted under [the NPT], whether or not the material was initially under safeguards.”14 They also noted that “[t]he provision should thus be applied to all material which was either actually under safeguards and to be withdrawn or which had never been placed under safeguards and which was intended to be used in a permitted nuclear activity.”15 Finally, the negotiators made a change to the secretariat’s proposed draft of paragraph 14 to avoid any ambiguity that might suggest that nuclear material would not be subject to safeguards if it were assigned at the moment of production to a non-explosive military activity.16
Thus, to interpret paragraph 1 as providing what would be tantamount to an automatic exclusion from safeguards of nuclear material because it is used in or was produced for use in a military activity would be manifestly absurd and unreasonable. It would create an enormous loophole in safeguards, thereby defeating the very object and purpose of comprehensive safeguards agreements, contrary to international treaty law.17
Although some will argue that Australia’s sterling nonproliferation credentials should allow for greater flexibility, any arrangement will inevitably be invoked as a precedent by other states.
In fact, as Grossi told reporters, it “cannot be excluded” that other countries would use the AUKUS precedent to pursue their own nuclear submarine plans. General Sir Nicholas Carter, the departing UK chief of the defense staff, recently suggested that Japan, Canada, and New Zealand could eventually join the AUKUS partnership.
To that end, whatever the arrangement, it must be designed as fit for purpose, which is to say, it cannot be used to defeat safeguards regardless of who the partner states might be. Ultimately, the acceptability of any given arrangement should be judged on its nonproliferation merits and be able to survive the following test: if the names of the parties involved are changed, is it still acceptable?
ENDNOTES
1. International Atomic Energy Agency (IAEA), “The Text of the Agreement Between Australia and the Agency for the Application of Safeguards in Connection With the Treaty on the Non-proliferation of Nuclear Weapons,” INFCIRC/217, December 13, 1974.
2. IAEA, “The Structure and Content of Agreements Between the Agency and States Required in Connection With the Treaty on the Non-proliferation of Nuclear Weapons,” INFCIRC/153 (Corr.), June 1972 (hereafter INFCIRC/153). The paragraph numbers in INFCIRC/153 correspond, by and large, to article numbers in the actual agreements. To avoid confusion, this article will refer to paragraphs as reflected in INFCIRC/153.
3. Olli Heinonen, “Nuclear Submarine Program Surfaces in Iran,” Harvard Kennedy School Belfer Center for Science and International Affairs, July 23, 2021, https://www.belfercenter.org/publication/nuclear-submarine-program-surfaces-iran; Tom O’Connor, “Iran Says It Wants Nuclear Submarines to Power Up Fleet After Confrontation With U.S. Navy,” Newsweek, April 17, 2020.
4. Uranium enriched to a level of 20 percent or higher uranium-235 is considered to be highly enriched uranium. Uranium that is enriched below 20 percent U-235 is referenced as low-enriched uranium.
5. Nuclear Threat Initiative, “South Korea Submarine Capabilities,” February 17, 2021, https://www.nti.org/analysis/articles/south-korea-submarine-capabilities/.
6. In the case of Japan, its surface vehicle Mutsu (1970–1992) never carried commercial cargo and was converted to diesel engine power in 1996. Germany’s Otto Hahn (1968–1979) was converted to diesel engine power in 1979.
7. IAEA, “Exchange of Letters Between the Resident Representative of Australia and the Director General,” GOV/INF/347, November 27, 1987. See Laura Rockwood, “Naval Nuclear Propulsion and IAEA Safeguards,” Federation of American Scientists Issue Brief, August 2017, https://uploads.fas.org/media/Naval-Nuclear-Propulsion-and-IAEA-Safeguards.pdf.
8. See Rockwood, “Naval Nuclear Propulsion and IAEA Safeguards,” p. 11.
11. GOV/COM.22/53/Mod.1.; GOV/COM.22/OR.76, paras. 47–53.
12. It is not certain whether construction of the actual submarines will be in Australia, the United Kingdom or the United States.
13. IAEA, “Protocol Additional to the Agreement Between Australia and the International Atomic Energy Agency for the Application of Safeguards in Connection With the Treaty on the Non-proliferation of Nuclear Weapons,” INFCIRC/217/Add.1, February 9, 1998.
14. GOV/COM.22/OR.11, para. 40.
15. GOV/COM.22/OR.13, para. 11.
16. GOV/COM.22/53/Mod.1; GOV/COM.22/OR.76, paras. 47–53.
17. In 1993 the IAEA advised North Korea that there was no automatic exclusion for IAEA access to information or locations simply by virtue of such information or locations being associated with military activities.
Laura Rockwood is the director of Open Nuclear Network in Vienna. She retired from the International Atomic Energy Agency (IAEA) in November 2013 as the section head for nonproliferation and policy in the Office of Legal Affairs after 28 years of service.