The dangers of fission: Euratom and Brexit

11 Jul 2017

Over the last weekend, there has been considerable discussion of Euratom, and of the Government’s position that the United Kingdom will be leaving the Euratom Treaty along with the EU.

There is great concern that exit from Euratom will cause substantial problems for the UK nuclear industry.  Those concerns are set out, for example here. It is also worth reading a useful background briefing from the Nuclear Industry Association (NIA), which makes recommendations as to action that the UK Government should take.

What are the legal issues?

The Euratom Treaty

The Euratom Treaty is a separate Treaty from those of the European Union, reflecting its origins as a separate treaty from that establishing the European Economic Community.  It sets up a system for the regulation of the nuclear industry across the Member States.

The Euratom Treaty simply adopts the institutions set up by the EU Treaties (the Commission, the Councils and the Court of Justice.  It does this, now, in Article 106a(1), which simply states that a long list of provisions of the EU Treaties (including those provisions that set up the institutions and confer powers on them) “shall apply to this Treaty”.

Article 50 TFEU and Euratom

One of the list of provisions “imported” by Article 106a(1) Euratom is Article 50 TEU – the famous withdrawal provision.  Further, in contrast to the EEA Agreement (which has its own separate withdrawal mechanism in Article 127), the Euratom Treaty has no withdrawal mechanism of its own.

That would appear to suggest that, if a Member State gives notice of withdrawal from the EU under Article 50 TEU, that amounts to notice of withdrawal from Euratom.  That consideration is strengthened by the fact that, not only is no provision made for any State to be a member of Euratom but not the EU, but that it is hard to see how the institutional arrangements common to both the EU Treaties and the Euratom Treaty could work in such a scenario. (How would elections to the European Parliament or membership of the Council operate for a Member State that was in Euratom but not the EU?)

An alternative view might be that the effect of importing Article 50 TEU into Euratom is simply that there is a separate, but procedurally identical, process for leaving Euratom (rather than that any invocation of Article 50 TEU necessarily carries over into Euratom).  However, such an interpretation would be difficult to reconcile with the points made in the previous paragraph.

The Government’s public position

The Government first set out its position in the Explanatory Notes to the EU (Notification of Withdrawal) Bill.  Paragraph 18 said that:

The power that is provided by clause 1(1) applies to withdrawal from the EU. This includes the European Atomic Energy Community (‘Euratom’), as the European Union (Amendment) Act 2008 sets out that the term “EU” includes (as the context permits or requires) Euratom (section 3(2)).

That, in itself, was no more than a statement that the Government considered that the wording of the Bill gave it power to withdraw from Euratom (because, in UK statutes, “EU” is taken to include Euratom).  It said nothing about whether, as a matter of EU / Euratom and international law, withdrawal from the EU but not Euratom was an option.

In her Article 50 letter, the Prime Minister said this, immediately after referring to withdrawal under Article 50:

In addition, in accordance with the same Article 50(2) as applied by Article 106a of the [Euratom Treaty], I hereby notify the European Council of the United Kingdom’s intention to withdraw from the European Atomic Energy Community. References in this letter to the European Union should therefore be taken to include a reference to [Euratom].

That drafting is interesting.  Given that the Prime Minister had, in the previous sentence, already notified under Article 50, the words “I hereby notify” in this sentence must refer to a separate act of notification.  But if that is so, then it would seem to follow that the Prime Minister was proceeding on the basis that her Article 50 notification would not, on its own and without these additional words, count as a notification of the withdrawal from the Euratom Treaty, and that she considered that a further notification was needed.

Finally, in evidence to the House of Lords Select Committee on Science and Technology in February 2017, the Energy Minister (Jesse Norman MP) said this:

37. Let me talk about the Euratom side … As the Committee will be aware, as a Government, we have taken an extremely proactive forward-leaning stance as regards Euratom. It will be a regrettable necessity, from our point of view, that notification has to be filed at the same time as Article 50. We remain very engaged with European partners in the EU and among nation states on Euratom. We are actively working up alternative arrangements. (emphasis added)

That language appears to indicate that a separate notification act was required (“filed at the same time as [the] Article 50 [notification].”  But it also suggests that the Government saw that as a “regrettable necessity”.

Analysis of the Government’s position

As I said above, the position under the Treaties seems to be that a Member State withdrawing from the EU has no choice but to withdraw from Euratom.

That, though, raises the question of why the Government has not said so in clear terms.  As we saw above, the Article 50 letter presented the decision to withdraw from Euratom as a separate decision.  And even the phrase “regrettable necessity” is ambiguous: the phrase is entirely consistent with a political, as opposed to a legal, necessity (such as a political “necessity” to avoid any post-Brexit contact with the CJEU).

One possible answer is that the Government did not wish to expose itself to judicial review.  After all, when a decision maker states that she is taking a decision because she has no legal alternative, she exposes herself to judicial review on the basis of error of law: if in law she does have an alternative legally open to her, her decision is likely to be quashed.  And, as will be apparent, the legal position is not entirely clear.

Moreover, the issue is a new question of pure EU/Euratom law on which only the Court of Justice of the EU could give a definitive ruling.  So the argument for any such judicial review application to be referred to the CJEU for a preliminary ruling would have been a strong one.  One suspects that a reference to the CJEU of that issue would not be entirely welcome to the Government.

That position does however leave the Government in a political difficulty.  If it wants to maintain that it could have avoided notifying withdrawal from Euratom, it has to explain why it did do so.  And, as Jesse Norman’s language indicates, it is not finding that easy to explain. That may be why, according to an article in The Guardian yesterday, it was told by an unnamed “senior Whitehall source” that “the government … included that line [in the Article 50 letter] because of a belief that the UK had no choice. [The source] said that ‘both the UK government and the European [C]ommission thought it was a legal necessity’ to leave Euratom as part of Brexit.”

How to keep the UK in Euratom

Assuming that it is not possible under the existing treaties to withdraw from the EU and stay in Euratom, what should the Government do?  After all, if that assumption is right, the Government would achieve nothing by unilaterally revoking its notice of withdrawal from Euratom, as long as the Article 50 notification in relation to the EU remains in place.

EEA membership (even if it were acceptable to the Government for other reasons) does not assist here.  The EEA Agreement does not include Euratom.  Though Norway has various technical agreements with Euratom and participates in some of its programmes, it is not otherwise part of Euratom.  The same applies to Switzerland (not in the EEA but with partial access to the internal market) – although Switzerland has an association agreement with Euratom enabling it to take part in various research programmes.  Neither the Norwegian nor the Swiss arrangements with Euratom will deal with the urgent regulatory issues that have to be resolved if a disastrous gap in regulation in March 2019 is to be avoided. Those difficulties centre on the enormous practical difficulties in getting a domestic regulatory regime that meets strict international standards up and running in time: in particular, as the NIA paper points out at §3.10:

If the UK has not replaced the Euratom safeguards regime with its own system by the time it left Euratom, normal business could be disrupted right across the nuclear industry. It is currently unclear the extent to which transitional arrangements could operate to ensure the UK remains compliant with its obligations under international nuclear law. It is vital therefore that a replacement Voluntary Offer Agreement is agreed with the [International Atomic Energy Authority] and that a new safeguards regime, compliant with IAEA requirements, is in place by the time the UK leaves Euratom.

It seems to me that the best that can be achieved is the negotiation, first, in the withdrawal agreement of continued membership of Euratom for a period (though the UK would lose its vote in decision-making) and, second, a further treaty between the EU and the UK giving the UK some form of associate member status so as not to lose the co-operation and scientific benefits of involvement in Euratom (probably covering far more ground than the Swiss agreement).

It will be apparent that this is one area where “no deal” is simply not an option, for the reasons explained above.  Moreover, any arrangement under Euratom will necessarily mean accepting the jurisdiction of the Euratom institutions – the European Commission and the Court of Justice of the EU.  That is why Euratom is a test case for the Government’s “red line” on the jurisdiction of the CJEU. However, though this is a critical sector, its sudden prominence in the debate is largely due to the historical accident that the nuclear industry is subject to a separate Treaty, thus raising the legal issue discussed in this blog and causing it to have special attention in the Article 50 letter.  In fact, the legal and policy issues – how to reconcile Brexit with remaining closely involved in EU regulatory regimes which there is little or no UK interest in trying to duplicate and with which there is an overwhelming interest in remaining harmonised, while also honouring the “red line” of ECJ jurisdiction – are very similar to those raised by other sectors such as pharmaceuticals (as to which see my recent blog post).