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Legal Regulation of Relations regarding the Nuclear Fuel Supply to the European Union Countries
 
PIIS231243500022171-6-1
DOI10.18572/2410-4396-2019-4-82-86
Publication type Article
Status Published
Authors
Sergey A. Babich 
Affiliation: Kutafin Moscow State Law University
Address: Russian Federation, Moscow
Journal nameEnergy law forum
EditionIssue 4
Pages82-86
Abstract

Currently, legal regimes of trafficking of nuclear materials in Russia and the EU countries differ significantly. These differences can be attributed to the main legal risks to be considered by Russian nuclear fuel exporters in their foreign trade activity.

Authorizing such bodies as the European Commission and Euratom Supply Agency to actually define the structure of the European market for nuclear materials under the pretext of necessity to ensure an equal and non- discriminatory access to nuclear power industry resources also opens up wide opportunities for a protectionism policy and imposing limitations on non-European suppliers of nuclear materials. The Agency exercises its powers and through these powers the policy stated in the Corfu Declaration in relation to new contracts for the nuclear materials supply to the Community. However, a probability exists that these powers can be applied also to contracts and agreements concluded by nuclear products consumer companies prior to their country’s becoming a member of the Community.

It seems that if statutory requirements for licensing operations in the field of nuclear energy use and an efficient system for monitoring nuclear materials relocation (including transborder relocation) are in place, a state would be able to provide consumers with an uninterrupted and sufficient supply of nuclear products without recurring to the above more sophisticated mechanisms of legal regulation.

 

Keywordsenergy law, nuclear law, legal regulation of relations regarding the nuclear fuel supply, European Union’s energy law
Received19.09.2019
Publication date01.12.2019
Number of characters16331
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1 As V.V. Romanova justly notes, nuclear law is one of the most developed institutes of energy law [1]. While numerous aspects of legal regulation in the field of nuclear energy use are the subject of legal studies [2], there are many aspects of legal regulation remaining worth attention and detailed analysis. The European Union countries represent a strategically important market for Russian nuclear fuel producers. The European Union countries are home to 7 nuclear power plants built according to Soviet design projects (reactors of the WWER type) with most fuel for them supplied by Russian nuclear industry companies. While legal regimes of trafficking of nuclear materials in Russia and the EU countries differ significantly due to the fact that the European Union countries consuming Russian nuclear industry’s products are members of such a largescale geopolitical body as the European Union and this membership limits the states’ independence in foreign trade. Accordingly, these differences (specific features) can be attributed to the main legal risks to be considered by Russian nuclear fuel exporters in their foreign trade activity.
2 The European system of legal regulation of nuclear material circulation is based on the European Atomic Energy Community (Euratom) Treaty, as initially signed by France, FRG, the Netherlands, Belgium, Luxembourg, and Italy, in effect since January 1, 1958 [3]. The new European community (hereinafter referred to as “Euratom”, the “Community”) was established to encourage peaceful use of nuclear energy, to provide the Euratom members’ control over the nuclear power industry, and to form a common energy policy and coordinated decision making. [4]
3 One should start studying regulatory issues of the nuclear fuel supply to European countries with the voluntary waiver of the Euratom Treaty signatories of the right of ownership of nuclear materials: according to Article 86 of the said treaty, special fissile materials are the property of the Community, Euratom. Euratom’s right of ownership extends to special fissile materials which have been produced or imported by Euratom member states, persons, or undertakings of member states. In exchange for that “sacrifice”, the said states, persons, and undertakings are granted the unlimited right to use and consume special fissile materials which have properly come into their possession and also enjoy an equal and non-discriminatory access to nuclear resources based on a common supply policy administered by a special body, the Euratom Supply Agency, established for this purpose (Articles 52 and 87 of the said Treaty), and its role in the general system of nuclear materials market regulation is worth a detailed analysis.
4 The Agency has been granted a legal identity and financial autonomy for the purposes of performing its functions. On behalf of the Community, the Agency records relocations of special fissile materials in special accounts and also enjoys rather wide powers, including, first of all, the Agency’s exclusive right to enter into agreements (contracts) with their principal aim being the supply of ores, source (raw) materials and/or special fissile materials (import to or export from the Community countries), as well as the privileged right to buy ores and, raw and other materials produced within the Community. The above exclusive right of the Agency to enter into nuclear materials supply agreements is exercised in practice by the Agency’s co-signing the corresponding supply contract as a third party or the Agency’s refusal to sign the same (in this case, the contract will not take effect) [5]. And only if the Agency is not able to satisfy the demands of European buyers for nuclear materials supply, such suppliers may be granted the right to enter into a direct supply contract for the term of up to one year (with a renewal option) (Article 66 of the Euratom Treaty).
5 On the one hand, such an exclusive status provides efficient satisfaction of all needs of nuclear products consumer companies due to distribution of materials received thus ensuring an uninterrupted operation of nuclear power plants located in the Community. On the other hand, it makes the Agency the main player in the domestic and, more importantly for Russian suppliers, foreign nuclear materials markets.
6 Granting the Agency such considerable powers is justified by the very purpose of its establishing, namely exercising the policy of an equal and unprivileged access to the nuclear materials supply for all Community’s market participants, as well as ensuring a secure (uninterrupted) provision with nuclear materials for internal needs of the Community. The said powers are also supported by judicial interpretation: according to the European Court’s judgement, the Agency has been granted a broad discretion when determining what is necessary for securing supplies and, accordingly, what option to choose when making a decision. [6]
7 Despite the fact that Euratom was seemingly “brought beyond the European Union’s framework” [8] with the Treaty of Lisbon taking effect [7], it preserved the system of institutes in common with the European Union: for example, the European Commission, which replaced the Euratom Commission in 1967 [9] as a governing body, is a supervisory body for the Agency with the right to veto the its resolutions.

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