Amendment to the Agreement of 6 October 1959 (1), in the form of an exchange of letters, between the European Atomic Energy Community (Euratom) and the Government of Canada for cooperation in the peaceful uses of atomic energy (78/217/Euratom)

(1)OJ No 60, 24.11.1959, p. 1165/59. COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 16 January 1978

Mr Chargé d'Affaires,

I have the honour to acknowledge receipt of your letter dated 16 January 1978, stating the following:

'Mr Commissioner,

As the Commission has been informed, the Canadian Government has decided to require more stringent safeguards in respect of sales abroad of Canadian material, equipment and information.

This decision implies an updating of the existing Agreement between the Government of Canada and the European Atomic Energy Community (Euratom) for cooperation in the Peaceful Uses of Atomic Energy of 6 October 1959 (hereinafter referred to as the Canada/Euratom Agreement of 1959) particularly in so far as it relates to safeguards.

The Canadian Government considers it necessary to come to an interim agreement through the present exchange of letters until the entire Canada/Euratom Agreement of 1959 has been updated, to provide for the requirement of the new Canadian safeguards policy by amending the relevant provisions of the Canada/Euratom Agreement of 1959.

Accordingly, I propose that the Canada/Euratom Agreement of 1959 be amended to include the following provisions relating to safeguards: (a) For the purposes of the Canada/Euratom Agreement of 1959, the phrase "machinery and plant" in paragraph (d) of Article XIV of the Canada/Euratom Agreement of 1959 shall be deemed to include all items listed in Annex A to this letter.

(b) Equipment which a Member State has designed to the Commission as equipment designed, constructed or operated on the basis of or by the use of information obtained from Canada and which is within the jurisdiction of that Member State at the time of designation, shall be considered as equipment subject to the Canada/Euratom Agreement of 1959, as amended.

Equipment which Canada has designated, as equipment designed, constructed or operated on the basis of or by the use of information obtained from that Member State shall be considered as equipment subject to the Canada/Euratom Agreement of 1959, as amended.

(c) Material which is subject to the terms of the Canada/Euratom Agreement of 1959 shall not be used for the manufacture of any nuclear weapon or for other military uses of nuclear energy or for the manufacture of any other nuclear explosive device. The foregoing undertaking shall be verified within Canada by the IAEA pursuant to an agreement between Canada and the IAEA and within the Community by the Community and by the IAEA pursuant to the Treaty establishing the European Atomic Energy Community and the agreements concluded between the Community, its Member States and the IAEA or if at any time such verification procedures are not in effect, there shall be agreement between the Contracting Parties for the application of a safeguards system which conforms with IAEA safeguards principles and procedures.

Mr P.D. Lee Chargé d'Affaires a.i. Mission of Canada to the European Communities Rue de Loxum, 6 (fifth floor) 1000 Brussels

(d) Equipment or material transferred between Canada and the Community after the coming into force of this Agreement, shall be subject to the Canada/Euratom Agreement of 1959 only if the supplying Contracting Party has so informed the other Contracting Party in writing prior to the transfer. In the case of transfer of equipment from the Community to Canada, notifications may also be given by a Member State.

(e) Material referred to in paragraph (c) shall be enriched beyond 20 % or reprocessed and plutonium or uranium enriched beyond 20 % shall be stored only according to conditions agreed upon in writing between the parties. (See Annex C - Interim Arrangement concerning enrichment, reprocessing and subsequent storage of nuclear material within the Community and Canada.)

(f) In no event shall a Contracting Party use the provisions of the present Agreement for the purpose of securing commercial advantages or for the purpose of interfering with the commercial relations of the other Contracting Party.

(g) The Community shall inform Member States of the levels of physical protection set out in Annex B to this letter which should be applied as minima to the material referred to in paragraph (c) above. Canada will apply such levels of physical protection as minima to material referred to in paragraph (c).

(h) Any dispute arising out of the interpretation or application of the present Agreement which is not settled by negotiation or as may otherwise be agreed by the Contracting Parties concerned shall, on the request of either Contracting Party, be submitted to an arbitral tribunal which shall be composed of three arbitrators. Each Contracting Party shall designate one arbitrator and the two arbitrators so designated shall elect a third, who shall be the chairman. If within 30 days of the request for arbitration either Contracting Party has not designated an arbitrator, either Contracting Party to the dispute may request the Secretary General of the OECD to appoint an arbitrator. The same procedure shall apply if, within 30 days of the designation or appointment of the second arbitrator, the third arbitrator has not been elected. A majority of the members of the arbitral tribunal shall constitute a quorum, and all decisions shall be made by majority vote of all members of the arbitral tribunal. The arbitral procedure shall be fixed by the tribunal. The decisions of the tribunal, including all rulings concerning its constitution, procedure, jurisdiction and the division of the expenses of arbitration between the Contracting Parties shall be binding on both Contracting Parties and shall be implemented by them, in accordance with their respective constitutional procedures. The remuneration of the arbitrators shall be determined on the same basis as that for ad hoc judges of the International Court of Justice.

(i) The provisions of paragraphs (a) to (h) above, inclusive, as well as Articles III, IX and XIV of the Canada/Euratom Agreement of 1959 (as those Articles are amended by the proposals in this letter) shall in all circumstances remain in force so long as any equipment or material referred to in this letter or in the Canada/Euratom Agreement of 1959 remains in existence or it is otherwise agreed.

If the foregoing is acceptable to the European Atomic Energy Community I have the honour to propose that this letter which is authentic in both English and French, together with Your Excellency's reply to that effect shall constitute an amendment to the Canada/Euratom Agreement of 1959 which shall enter into force on the date of Your Excellency's reply and which shall continue in force so long as any equipment, material or facilities referred to in this letter or in the Canada/Euratom Agreement of 1959 remain in existence or it is otherwise agreed.

Please accept, Mr Commissioner, the assurance of my highest consideration.