Legal Mechanisms of AUKUS Explained

On Sept. 15, the Biden administration unveiled a new strategic security pact between the United States, the United Kingdom and Australia. The agreement, dubbed AUKUS, sets out to deepen defense ties between the three countries by integrating military capabilities across naval, cyber, artificial intelligence, quantum computing and other undersea domains while also setting the stage for an enhanced U.S. force posture in Australia. Shortly after AUKUS was announced, U.S. Secretary of Defense Lloyd Austin further elaborated that the U.S. will increase rotational deployments of U.S. military aircraft to the country. 

At the heart of AUKUS is a commitment by the U.S. and the U.K. to provide Australia—a non-nuclear weapons state—with at least eight nuclear-propelled submarines that will operate using highly enriched uranium (HEU). This marks the first time that the U.S. will share this technology with a foreign country since a 1958 mutual defense agreement with the U.K. The U.S. has not otherwise shared such technology with another state since the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) went into force in 1970. The three countries have informed the International Atomic Energy Agency (IAEA) of their intentions and have begun an 18-month consultation process to ensure that the provision of nuclear expertise and technology will be in accordance with each nations’ respective NPT obligations. 

AUKUS has already sparked a hullabaloo, both with allies such as France, which was left out of the arrangement, and with adversaries such as China, which is an unnamed target of the arrangement. This post explains the naval nuclear propulsion portion of AUKUS, its operation and legal basis, and the controversy surrounding it.

Background on Naval Nuclear Propulsion Technology

The nuclear-powered submarines that the United States will supply to Australia will take approximately a decade to build and deploy. They will make the island country the first non-nuclear weapons state to possess naval nuclear propulsion technology. While many countries have attempted to develop nuclear propulsion capabilities over the years, few have been successful. For example, Brazil’s naval nuclear propulsion program is approximately 40 years old and has been marred by technical hurdles that have repeatedly delayed the program. Canada gave up on its own program in 1990, while South Korea has had fits and starts to a nuclear propulsion program since 1994. 

At present only six countries—all nuclear weapons states—have nuclear-powered submarine capabilities. This includes five NPT signatories (U.S., U.K., Russia, China and France) and India. The U.S. deployed its first nuclear-powered submarine, the USS Nautilus, in 1955 and shared the technology shortly thereafter with the U.K. as part of a mutual defense agreement still in force today. Over the intervening decades, U.S. nuclear propulsion capabilities have improved dramatically. Whereas the USS Nautilus had a nuclear core that endured for approximately 62,000 miles, today’s nuclear cores continue to operate for over 1 million miles. This in turn means that nuclear-powered submarines have the capacity to remain at sea for several months, limited only by food supplies and crew endurance. 

The nuclear reactor aboard the submarines operates by generating high amounts of power that propels the vessels at speeds as fast as or faster than ships and that does so relatively quietly, which makes them difficult to both detect and defend against. 

The appeal of such technology is self-evident, but the engineering has proved difficult to master. Naval nuclear propulsion requires a high output of energy in a very limited amount of space under relatively demanding conditions at sea. As a result, nuclear propulsion programs in the U.S., U.K., Russia and India operate using weapons-grade HEU so as to ensure sufficient energy output. The heat generated by the reactor’s nuclear fission in turn produces high-pressure steam that either directly or indirectly powers the vessel’s propulsion system.

The United States’ naval nuclear technology contains more than 90 percent enriched uranium. The U.K. uses both U.S. reactor technology and HEU in its vessels as well. By contrast, French nuclear-propelled submarines use low-enriched uranium (LEU), which poses a less direct threat to nuclear weapons proliferation given the additional hurdles necessary to enrich the material to sufficient quantities for a nuclear weapon. With these distinctions in mind, internal assessments of the Australian defense department in 2016 found that nuclear-propelled submarines were the preferred method by which to satisfy the country’s strategic needs. 

Legal Authorities for Nuclear Technology Sharing 

Before delving into the legal authorities specifically related to the sharing of nuclear technology with a foreign partner, it may be helpful to note that the close military ties at the heart of AUKUS predate both the Biden administration and recent tensions between the U.S. and China. In fact, AUKUS builds on defense trade cooperation treaties (DCTCs) dating back to 2007. These Bush-era agreements with both the U.K. and Australia were intended to improve the efficiency of eligible two-way transfers between the countries by preapproving the import and export of controlled military supplies. While nuclear propulsion technologies were exempted under DTCT agreements, the treaties envisioned a similar convergence of military and geostrategic needs that continue to be relevant under AUKUS today.

At this stage, neither the text of the AUKUS security pact nor its particular mechanics have yet been worked out. Still, the Atomic Energy Act of 1954, as amended (AEA), which regulates the export of nuclear expertise, materials and technology from the U.S., will shape Washington’s commitments under the agreement. (Lawfare previously explored international nuclear cooperation under the AEA.) In addition, Australia may have to update its existing IAEA safeguards to ensure that its actions are seen as consistent with the NPT. 

The applicable provisions of AEA include 42 U.S.C. §§ 2153, 2121(c) and 2164. Together these three sections permit the U.S. government to share restricted nuclear technology and expertise with a foreign country so long as that country maintains IAEA safeguards and ensures the physical security of materials, and the president determines that such cooperation promotes and does not pose an unreasonable risk to U.S. national security interests. 

Section 2153 is meant to operate as a general framework for the provision of civilian nuclear technology to foreign partners. In this case, § 2121(c) and § 2164 operate as exceptions to § 2153 requirements that cooperating foreign countries ensure that nuclear technology, materials or expertise provided by the U.S. be committed only to nonmilitary purposes. Section 2121(c) permits the Nuclear Regulatory Commission to sell, lease or loan nuclear materials to other nations for military applications in limited circumstances authorized by the president. Section 2164 authorizes the president to allow the commission as well as the departments of Energy and Defense to share restricted nuclear information—to include military reactor designs—with a foreign country so long as the president determines that such cooperation promotes U.S. security and does not pose an unreasonable risk to the common defense. 

It may be too early to tell which provisions will be most relevant until the specific details of AUKUS are worked out during the 18-month coordination period. Unknown factors at this stage include how the U.S. and U.K. plan to delineate responsibility for the supply of nuclear materials to Australia; the mechanisms for the transfer, storage, and training associated with said materials; as well as the accompanying IAEA safeguards that will be required to ensure the safety and security of the materials. For example, will Australia enrich its own uranium using U.S. reactor technology, or will it simply be responsible for storing and securing any reactor technology and accompanying HEU that it receives from its partners? 

As the aforementioned sections suggest, the AEA contemplates that any U.S. nuclear cooperation with a foreign country should be under appropriate nuclear safeguards by the IAEA and that steps are taken to mitigate against threats to the nuclear non-proliferation regime. For his part, President Biden was explicit in his remarks that AUKUS would not provide Australia with nuclear weapons capabilities but, rather, with nuclear-powered submarines armed only with conventional weapons. 

Australia and IAEA Safeguards

Australia is not a stranger to the IAEA. It has served as the chair of the IAEA Board of Governors on four occasions. The country holds one-third of the earth’s uranium resources and is the world’s third largest uranium exporter. The U.S. is the largest market for Australian uranium, accounting for over half of Australia’s exports. 

Australia first signed a comprehensive safeguards agreement with the IAEA in 1974 and subsequently joined the additional protocols in 1998. The safeguards agreement and additional protocols together provide the IAEA with both the authorities necessary and the freedom of action to ensure its verification mandate. Specifically, the IAEA is able to request necessary information from the government and conduct monitoring and verification of Australia’s civilian nuclear program by conducting short-notice inspections and complementary access visits and by collecting environmental samples where necessary. 

Of course, AUKUS and the introduction of military-grade nuclear reactors and HEU pose an inherently more complex non-proliferation risk that will present new challenges for both Australia and the IAEA. Australia will have to submit to new procedures to ensure its continued compliance with the NPT while the IAEA itself will have to wade into untested waters given that it may have limited ability to monitor nuclear-propulsion activities. 

Under one provision of the IAEA Information Circular 153—which serves as the basis for all safeguards agreements currently in place with non-nuclear weapons states—a state may remove nuclear materials from under IAEA safeguards if doing so for nonproscribed military nuclear activities such as naval nuclear propulsion. In short, the paragraph entitled “Non-Application of Safeguards to Nuclear Material to be used in Non-peaceful Activities” exempts HEU for naval nuclear propulsion from IAEA safeguards. 

This in turn has created a “loophole” whereby countries can remove weapons-grade uranium from the IAEA monitoring and verifications framework so long as they are doing so to power a military vessel. In turn, this creates a gap in coverage for the organization. While a state wishing to invoke that provision is required to make an arrangement with the IAEA to ensure that the nuclear material will be removed for only a temporary amount of time, this does not change the fact that there is no IAEA access during the interim period. 

This problem has yet to emerge within the context of non-nuclear weapons states, but some observers have already highlighted the risks that this potential loophole can be exploited by countries like Iran, which may attempt to use its aspirational naval nuclear propulsion program to shield HEU production from IAEA monitors. 

Anticipating such verification shortfalls, the Federation for American Scientists recommended in 2015 that a country like Australia should volunteer to implement IAEA safeguards for a naval nuclear propulsion program so as to set a productive precedent for IAEA monitoring of HEU used in naval propulsion programs. The AUKUS-IAEA consultations are likely to consider such issues, especially amid critiques from China and others that the pact violates the NPT and creates nuclear proliferation risks. 

Reaction and Fallout From AUKUS

The AUKUS announcement has engendered mixed reactions from U.S. allies and unsettled the Biden administration’s efforts to present a united front against China. Notably, France—whose own $66 billion agreement with Australia to supply it with 12 conventional diesel-electric submarines by 2034 was displaced by AUKUS—recalled its ambassadors to both Washington and Canberra in protest. French Foreign Minister Jean-Yves Le Drian called AUKUS “a stab in the back” and suggested that Australia had opted to forfeit its sovereignty to the U.S. For its part, Australia has pushed back and noted that France was aware of Australia’s dissatisfaction with the existing agreement to purchase the French submarines. 

European Union leaders have supported France’s outrage and signaled their dissatisfaction with U.S. actions. European Commission President Ursala von der Leyen called U.S. treatment of France and European allies “unacceptable” and demanded better coordination from Washington. Others have called for a “pause and reset” of the “broken” transatlantic relationship.

While France and the European Union expressed outrage, some U.S. allies have had more measured reactions. Canada and New Zealand—which are both a part of the “Five Eyes” intelligence-sharing partnership with the U.S., U.K. and Australia—welcomed the agreement while distancing themselves from future participation in the pact. Canadian Prime Minister Justin Trudeau brushed aside questions of whether Canada was invited to join AUKUS by noting that Canada is “not currently in the market for nuclear submarines.” New Zealand Prime Minister Jacinda Adern welcomed the engagement in the Indo-Pacific but warned that her country would continue to bar nuclear-powered vessels—including Australia’s—from entering its waters. 

India and Japan—both of which are members of the Quadrilateral Security Dialogue along with the U.S. and Australia—have each heralded the agreement and praised its utility in protecting Indo-Pacific stability. The four countries are due to meet in Washington, D.C., on Sept. 24 as a part of a summit to tackle shared priorities between them.

For their part, U.S. adversaries have condemned AUKUS. China, which many observers see as the main impetus for the agreement, denounced the pact as escalatory and warned that it will result in a regional arms race. North Korea echoed China and warned that Australia’s actions could trigger a nuclear arms race, while Iran’s former foreign minister, Javad Zarif, criticized the three countries’ alleged hypocrisy for penning an agreement that proliferated HEU. 

The range of reactions to the announcement of AUKUS pose a near-term challenge to the Biden administration’s stated priorities of bolstering U.S. alliances and leveraging multilateral institutions to confront China, Russia, North Korea and Iran. Perhaps recognizing this, the administration is actively attempting to mend ties with France and to assuage broader European concerns about U.S. unilateralism. Biden and French President Emmanuel Macron agreed to meet next month in Europe during the G-20 summit in Rome.

Conclusion

While nuclear-powered submarines are at least a decade away for the Australian military, the AUKUS pact will probably pose both opportunities and challenges as participating countries calibrate their next steps. The agreement builds on existing U.S. commitments to Australia and has been received as a signal of Washington’s willingness to take more assertive actions in the Indo-Pacific. At the same time, AUKUS risks encouraging other non-nuclear weapons states to pursue nuclear propulsion capabilities, which can undermine the global nuclear non-proliferation regime by encouraging the enrichment of HEU.

Critics like China have already begun to warn of the risks that the agreement poses for the nuclear non-proliferation regime. Iran may see this sort of activity by a non-nuclear weapons state as justification for its own nuclear submarine ambitions and may exploit this loophole to keep HEU from IAEA monitors or to drive a hard bargain during potential renewed Joint Comprehensive Plan of Action talks. Therefore, as AUKUS begins to take shape over the next 18 months, the mechanics of U.S. technology sharing and the accompanying IAEA safeguards regime will likely play an important role in assuaging international proliferation concerns associated with the agreement.