Nuclear-Powered Subs “Down Under”: the Legal Consequences of the AUKUS Announcement

As the United States and United Kingdom support the creation of a new Australian nuclear-powered submarine fleet, legal issues are bubbling to the surface and China and France are crying foul.

The USS Hawaii, a Virginia-class, nuclear-powered submarine, visits Busan, South Korea in 2010. Photo: U.S. Navy

By: Alex Potcovaru, Staffer

On September 15, the United States, United Kingdom, and Australia announced the creation of AUKUS, a new trilateral security partnership.  First on the agenda?  Providing Australia with a fleet of nuclear-powered, conventionally armed submarines in what observers see as a direct play to counter China’s influence in the region.  President Joe Biden, British Prime Minister Boris Johnson and Australian Prime Minister Scott Morrison did not name China itself in their joint news announcement, but invoked “security and stability” and the importance of a “free and open Indo-Pacific.”

France appeared caught off guard by the move, which came shortly after Australia’s cancellation of a 2016 contract to purchase French-made, conventionally powered submarines worth tens of billions of dollars. Since the announcement, the French foreign minister has decried the move as a “unilateral, brutal, unpredictable decision” and the government recalled its ambassadors from both the United States and Australia.

China has also responded negatively.  A foreign ministry spokesman said the move was "severely damaging regional peace and stability, intensifying an arms race, and damaging international nuclear non-proliferation efforts.”

At the announcement, the AUKUS parties said they would begin an eighteen-month exploratory period to determine how the complex project—which could require decades to execute—​will take shape. While PM Morrison said during the announcement that the submarines would be built in Adelaide, Australia, questions remain as to the type and degree of United States and United Kingdom involvement.  The United Kingdom is the only state with which the United States has transferred technology related to nuclear-powered submarines in the past. 

Non-Proliferation Compliance?

The sharing of sensitive nuclear technology and capabilities with a foreign state raises a number of legal questions.  Most obviously, how can Australia, a signatory of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), obtain a fleet of nuclear-powered military submarines while still complying with the NPT?  

As noted elsewhere, nuclear-powered submarines appear to be an exception to the NPT rules.  States seeking to use nuclear material for a permitted military application would need to remove that material from its International Atomic Energy Agency (IAEA)-monitored safeguards.  As described in paragraph 14 of INFCIRC/153, this requires an agreement between the state and the IAEA.  Mark Hibbs at Arms Control Wonk explained in 2017:

“Paragraph 14 concerns safeguards arrangements should a state wish to exercise the option to use nuclear material subject to safeguards as fuel for nuclear naval (i.e. military) submarines.  This option accommodates the provisions of the NPT, which proscribes the use of nuclear material for nuclear explosive activities, but not its use for military activities in general.”

No state has ever invoked this paragraph, which was inserted for Italy and the Netherlands during drafting due to their (ultimately unrealized) interest in nuclear-powered naval technology.  Brazil’s current attempt at constructing a nuclear-powered submarine is conducted under a separate four-party agreement.  Thus, paragraph 14 has been left dormant since its initial creation.

Potential Hurdles

The AUKUS partners will likely face at least two key hurdles. First, an agreement between the IAEA and a state invoking paragraph 14 may require approval from the IAEA Board of Governors.  On its face, the language of INFCIRC/153 discusses agency approval.  And in 1978, the then-Director General of the IAEA told Australia that an agreement following the invocation of paragraph 14 would have to be submitted to the IAEA Board of Governors.  

It seems this could cause a wrinkle in Australia’s plans to obtain nuclear-powered submarines.  That is, the IAEA could refuse to approve a paragraph 14 agreement, thus forcing Australia to choose between complying with or breaching its obligations under INFCIRC/153.  Given a lack of precedent, questions remain about how willing the IAEA will be to grant such an agreement.  Perhaps states opposed to the move will attempt to influence the decision or, if Australia breaches, will rely on INFCIRC/153 to critique the move as illegitimate.

The second pressing issue involves the transfer of enriched uranium fuel needed to power the future submarines.  Will the Australians enrich the uranium themselves with technology provided by an AUKUS partner or will they import it?  If the technology itself is imported, the United States or United Kingdom may need to justify a decision to supply enrichment technology in light of their membership in the Nuclear Suppliers Group (NSG).  

NSG guidelines in INFCIRC/254 encourage states to only permit transfers of enrichment technology to states when the purposes of that transfer are peaceful. It notes that states “should consult with potential recipients to ensure that enrichment and reprocessing facilities, equipment and technology are intended for peaceful purposes only; also taking into account at their national discretion, any relevant factors as may be applicable.”  AUKUS parties emphasized that the nuclear-powered submarines will support peace in the region.  But on its face, the transfer of such significant technology to a foreign military for use on military vessels raises obvious questions.  Can such a purely military investment be defined as peaceful activity within the understanding of the NSG policy?

Furthermore, despite reassurances from AUKUS parties on September 15th that all non-proliferation compliance measures will be met, it is easy to imagine that states opposed to the move like China (or even France) could attempt to argue that AUKUS states are in violation of legal requirements or guidelines.  At the least, they may invoke legal language to try to paint the decision as a breach of international obligations.  

And what about Australia’s initial lucrative contract with France?  State-to-state disputes can be arbitrated by the International Court of Justice, or even an ad hoc mediator, with the consent of both parties.  Yet political tensions between France and Australia raise questions about how either side might react to a legal “loss” and thus if the parties might attempt to avoid adjudication/arbitration altogether. At the same time, delaying a ruling could simply protract the disagreement over the contract’s status, exacting continued political and economic costs.

On top of all this, sources indicate that the United States will need to address a host of regulatory issues, depending on the specific technology that will eventually be transferred to Australia. This could require extensive analysis of current export restrictions and may necessitate changes to U.S. statutes.

Implications

As the proposed move plays out, it could have effects beyond the Anglo-alliance in the South Pacific.  The endowing of Australia with a nuclear-powered submarine fleet, blessed by a first-ever invocation of paragraph 14, and bolstered by IAEA approval, may signal to other states (like Iran) that proliferation of this capability will be accepted and legitimized in some cases.  As noted, paragraph 14 has sat idle for decades.  But international responses to its use may now set the tone for the expansion of nuclear-powered submarine capability in the coming decades, which will pose difficult questions about compliance monitoring, shifting international legal norms and evolving regional strategies.

 Alex Potcovaru is a second-year student at Columbia Law School and a Staff member of the Columbia Journal of Transnational Law.  He graduated from Georgetown University in 2018.  He previously worked with the Reiss Center on Law and Security at NYU School of Law, and his writing has appeared in Lawfare and Just Security.