C-1/78

I — Background prevent the loss, theft, misuse or damage of nuclear material within From 31 October to 11 November 1977 their territory, under their there was held in Vienna, on the jurisdiction or under their control initiative of the International Agency, a anywhere (Article 3 (1)); preliminary meeting to discuss a Draft (b) not to import or export or permit the Convention on the Physical Protection import or export of nuclear material of Nuclear Materials, Facilities and unless such material will at all times Transports for peaceful purposes. during international transfer be Having regard to the co-operation subject to the precautions described agreement concluded on 1 December in detail in the convention (Article 4 1975 between the European Atomic (1)); Energy Community and the Inter­ (c) to identify and make known to each national Atomic Energy Agency (Official other their national agencies or au­ Journal 1975, L 329, p. 28) and in thorities having responsibility for particular to Article II (2) thereof the establishing and maintaining physical Commission of the European protection of nuclear materials, Communities was represented by nuclear facilities and nuclear observers at the Vienna meeting. transports and for co-ordinating In view of the grave dangers arising out recovery and response operations; of the potential theft and misuse of these agencies or authorities are to nuclear materials (plutonium, uranium co-operate on matters related to the 233, uranium enriched in the isotopes international transfer of nuclear 233 or 235 and any material containing materials and on other matters of one or more of the foregoing) and the mutual concern (Article 5); need for effective measures to provide (d) consistent with their domestic law, to for the physical protection of nuclear take such steps as are necessary to material at an international level the make punishable offences under their draft convention submitted to the criminal law certain infringements meeting lays down a series of measures such as theft, intentional misuse, to be undertaken by the States Parties to damage or destruction or nuclear the Convention. In particular the States material, intentionally causing must undertake as follows: physical damage to, destruction of or (a) to take appropriate measures seizing a nuclear facility or a nuclear consistent with their domestic law to transport (Article 6);

materials could not be agreed to by the following points: Member States alone without impeding (a) From a legal point of view the fundamental provisions of the EAEC Member States are not in a position Treaty. In view of those restrictions it to enter into the obligations set out would be necessary for the Community in Article 4 of the convention. as such to be a party to the Convention Indeed when nuclear materials are in addition to the Member States. transferred within the Community Consequently the Commission invited and when such materials are the Member States to take steps during imported from non-member the preliminary meeting in Vienna to countries those undertakings might ensure the participation of the impede the application of Community. fundamental principles of the EAEC The Commission's letter formed the Treaty.

subject of an exchange of views on 3 (b) On the other hand the Community November 1977 with the Council's does have the powers necessary to Working Party on Atomic Questions, enter into these obligations and it has which asked the Legal Department of the legal means to implement them. the Council for an opinion on the need (c) The participation of the Community for the Community to be a party to the in the Convention is therefore not convention. only possible but necessary.

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In a draft Council decision containing convention falls within the powers of the negotiating directives enclosed with its Community the only satisfactory solution letter the Commission proposed that the would be for the Member States to parti­ Council should decide that: cipate in the convention in addition to the Community in accordance with the (a) the Commission should enter into provisions of Article 102 of the EAEC the necessary negotiations in order Treaty. to ensure that the Community should participate in the convention;

In that document it repeated the points 4. If the signing of the convention by the set out in its letter to the Council of Community is necessary, is the need 7 April 1978 and in conclusion expressed for that signature based on Chapter the view that a Member State could not VI of the EAEC Treaty and/or on subscribe to the clauses contained in the principle of the free movement of nuclear materials? Article 4 (1) of the draft convention without impeding the application of the In the latter case does the principle of EAEC Treaty. In view of the fact that, as the free movement of nuclear regards a part of its provisions, the draft materials follow from the EAEC

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Treaty and/or from the Treaty accordance with the first subparagraph establishing the European Economic of Article 105 (4) of the Rules of Community? Procedure.

5. What would be the practical consequences of the signing of the III — Analysis of the arguments convention in question by the submitted to the Court Community with regard to:

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The system of the draft convention might oblige intended to achieve these aims is laid Member States to take measures which down in Chapter VI and hinges on the obstruct essential principles of the creation of a monopoly, which is Treaty. entrusted to the Supply Agency, which Article 2 (g) of the EAEC Treaty constitutes a genuine European public provides for the creation of a common service; to enable it to carry out its tasks market in specialized materials and the Supply Agency has been given a right equipment; Chapter IX, and in particular of option (Articles 52 and 57) on nuclear Article 93, requires the abolition of all materials produced within the customs duties or charges having Community and the exclusive right to equivalent effect and of all quantitative conclude contracts relating to the supply restrictions in trade between Member of such materials (Articles 52 and 64).

In States in the convention would not those circumstances the Community enable those States to enter into the would no longer be in a position to obligations resulting from Article 4. Even assume the responsibilities assigned to it then they would still have to undertake by the Treaty.

The proper and independent working of As it provides for derogations Article 195 the establishments of the Joint Nuclear must be strictly interpreted. This is parti Research Centre, set up under Article 8 of cularly necessary in the field of nuclear the Treaty, would be affected by the energy where public policy and the implementation of Article 4 of the draft protection of public health are, in one convention: as regards their supplies of way or another, always involved. special fissile materials such estab

agreements. In spite of those rules supply public health, lay down within a Member and outlets for these undertakings would State certain conditions with regard, in be subject to the same uncertainties as particular, to physical protection, for the Joint Research Centre. affecting the use or the transport of nuclear materials. However, Article 195 (b) With regard to imports from cannot give a Member State the power countries outside the Community Article 4 of the draft convention can also not be to enter into international undertakings in this regard. signed by the Member States.

affected. These problems would remain (d) The Commission is aware of the completely unresolved even if all the importance of the aims of the convention Member States participated in the and is convinced of the need to achieve convention. them within the Community also and it certainly does not intend to prevent the (c) Article 195 of the EAEC Treaty Member States from becoming parties cannot justify the undertakings by the thereto in the matters which concern Member States under Article 4 of the them. However, only the participation of draft convention. the Community acting, in conjunction

with the Member States, in the exercise policy, in particular to the security of of the powers, whether exclusive or materials and their physical protection. If concomitant, which it derives from the it were not able by means of the action Treaty can ensure the indispensable of the Supply Agency to ensure that concordance between the objectives of those requirements are respected the the draft convention and the rules of the Community would not be in a position EAEC Treaty. to fulfil the task assigned to it by Article 2 (d) of the Treaty to ensure that all Certainly the Community would be a party to the convention only within the users in the Community receive a regular and equitable supply of materials. limits of its powers and in so far as it is

Thus in particular under the last paragraph of Article 52 and under Articles 53 and 61 (f) The provisions of Chapter VII, in particular subparagraphs (a) and (b) of of the Treaty it has the necessary powers Article 77, also play their part in to undertake, on an international level, ensuring that the undertakings entered that no transfers of special fissile into by the Community in the terms of materials contrary to the convention shall henceforth be made. the convention are complied with.

exclusive right to conclude supply can also undertake not to permit exports contracts concern only the economic and outside the Community which are commercial aspects whilst the so-called prohibited by the Convention: Article 59 "policy" aspects are reserved to the of the Treaty makes exports from the appraisal of the Member States: Article Community subject to authorization by 52 of the Treaty makes the action of the the Commission, which must ensure that Supply Agency subject to the fulfilment the operation in question does not of the conditions imposed by external detrimentally affect the general interests suppliers; for reasons relating in of the Community; an export transaction particular to the strategic nature of the which is not in conformity with the materials in question such suppliers undertakings relating to physical impose conditions relating to matters of protection signed by all the Member

States must inevitably detrimentally free movement would not be at issue and affect those interests. the processing operations do not fall under the provisions relating to supply; (h) The arguments that the supply as regards operations between Member scheme is not applicable to certain States (Article 75 (a)) as any intervention transactions cannot be upheld. by States must be excluded by virtue of The use of special fissile materials for the the principle of freedom of movement producer's own requirements (Article 62 action by the Community under Article (2) (b)) does not entail any international 203 of the EAEC Treaty, where necess transfers and therefore does not fall ary, would be the only conceivable within the scope of Article 4 of the draft possibility. convention; it is moreover subject to a Operations which fall outside the Supply factual appraisal by the Supply Agency Agency's monopoly by virtue of Articles of the requirements of his own relied on 74 and 75 would, in any event, remain by the producer. subject to safeguards. Whilst transfers to "connected" under From all the above factors it is evident takings (Article 62 (2) (c)) are not that the obligations set out in Article 4 of subject to the Supply Agency's right of the draft convention come within the option they nevertheless do not fall purview of the Community which has the outside its exclusive right to conclude powers necessary to undertake them. supply contracts within the meaning of Article 52: the Supply Agency may B — Articles 3 and 5 of the draft refuse to conclude those contracts in convention application of the last paragraph of Article 52 and Article 61 if they are The participation of the Community in contrary to the convention. the convention alongside the Member States would also be justified by Article 3 As regards transfers of small quantities and by Article 5 of the draft convention. (Article 74), in so far as they fall within the scope of Article 4 of the draft (a) Article 3 (1) of the draft convention convention the Commission would be at provides that each contracting party shall liberty to prepare its own implementing take appropriate measures to prevent the rules in this respect taking account of loss, theft, misuse or damage of nuclear any requirements of the convention since

efficiently and safely and without the taken over in the internal Community loss of material to the detriment of the order on the basis, if necessary, of Community (penultimate paragraph of Article 203 of the Treaty. Article 75); as regards transfers from non- member countries to the Community (b) Article 3 (3) and Article 5 of the (Article 75 (c)) the Member States, who draft convention impose on the would also be parties to the Convention, contracting parties a general obligation might take the necessary measures which to co-operate and to supply each other would not be contrary to the Treaty as with information relating to the loss or

misuse of nuclear materials. Naturally 3. The participation of the Community the Community, which applies its own in the convention is justified on the safeguards and which is in a position to basis not only of Article 4 but also of trace such materials at any moment Articles 3 and 5. should primarily be associated in the In any event it is appropriate' to implementation of this system. follow the usual practice for mixed Moreover, as the materials in question agreements wherein the internal are the property of the Community any division of powers between the discussion relating to their loss or misuse Community and the Member States is necessarily concerns the Community. not defined as far as third parties are concerned. The latter should therefore, on the basis of the provisions of Chapters VII and 4. The participation of the Community VIII of the Treaty, be able to subscribe, in the convention is necessary in order in addition to the Member States, to the to ensure in particular that the obligation arising out of the provisions in provisions of the Treaty relating to question. freedom of movement and supply are complied with. Such participation is C — Furthermore from a general point based in essence on Chapter VI. of view it should be borne in mind that The principle of the free movement of the course taken by international nuclear materials derives from discussions on nuclear matters affects Chapter IX of the EAEC Treaty and more and more closely the determination in particular from Article 93 (see of the internal policies of the Community Article 92 and Annex IV with regard so that it is necessary for a combined and to the materials subject to that coherent course of action to be followed chapter). by the Member States and by the 5. The signature of the convention by Community. That is an additional reason the Community will have the of certain political importance in favour following practical consequences: of the Community's participation in the Convention. (a) The implementation of measures of physical protection (in the sub­ D — The following answers should be stantive sense) will in any event be a matter for the Member States as given to the questions put to the Court by the Government of the Kingdom of the Community does not have the Belgium: necessary machinery for this and its participation in the convention, 1. Belgium could not, either on its own within the limits defined above, by or with certain other Member States, no means requires it to adopt without the participation of the such measures; Community, become a party to the (b) In the present circumstances the convention without impeding the Supply Agency, in the exercise of application of the EAEC Treaty in its monopoly, would refuse to particular Article 93 (free movement enter into contracts relating to the of materials), Articles 52, 57, 64 and transfer of nuclear materials 65 (supply), Articles 7 and 8 (Joint which do not satisfy the Research Centre) and Articles 45 and conditions set out in Article 4 of 63 (joint undertakings). the convention. Consequently any 2. The participation of the Community transfer carried out in in the convention is not only possible contravention of this refusal but necessary. would be illegal and would have

States still have the necessary power to State and a non-member country. This assume and carry out that obligation. type of arrangement would not affect the The participation of the Community rules covering the nuclear common would only be necessary, always market because it would apply to all supposing it to be at all possible, if the transfers, regardless of the place of answer to that question is in the origin or destination. negative. These matters should be The participation of the Community in examined in the light of the relevant the convention would be necessary only provisions of the Treaty, that is to say if the Community alone were able to those relating to the nuclear common implement such an arrangement. market and supply arrangements; on the other hand the provisions relating to (b) It should be noted that the nuclear public health protection and the materials covered by the draft provisions relating to safeguards are not convention are all special fissile materials relevant; the latter do not concern within the meaning of Article 197 of the physical protection and are not affected EAEC Treaty. Consequently the by the draft convention. provisions of Chapter VIII (exclusive The safeguards provided for in the property of the Community) and the EAEC Treaty merely constitute a check rules of Chapter VI including the special on conformity: they concern a check rules relating to such materials would be that the actual use of nuclear materials is applicable. in accordance with the intended use as The common supply policy, one of the declared by the user. The aim of such a objectives of the Community provided check on the proper use of materials is to for in Article 2 (d) of the EAEC Treaty, ensure that users of fissile materials do is managed by the Supply Agency not divert them from their declared use established by Article 52 et seq. of the

However, the supply arrangements do The Member States therefore have not apply to every transfer or use of sufficient powers to subscribe to Article 4 special fissile materials: under Article 62 of the convention and to see that it is (2) materials produced in the implemented. Community are, for specified uses, to be left in the possession of the producer. (d) The following conclusions may be Further, under Article 74 limited drawn: the Community may not assume quantities of nuclear materials may be the obligation to forbid imports and exempted from the supply provisions exports, in the strict-sense of the term, of and, under Article 75, these provisions fissile materials between Member States; do not apply to transfers and operations Article 4 of the convention may be in connexion with work under contract. implemented by making all transfers In these circumstances whilst the parti­ subject to conditions of physical cipation of the Community is possible it protection; to this end the Member would not be an adequate guarantee of States may adopt national rules which the complete implementation of the would oblige the Supply Agency to proposed obligations. This would be so refuse to conclude supply contracts and even if, in order to comply with the would oblige the Commission to refuse convention, the Community were to authorize exports to non-member prepared to amend or annul regulations countries if those conditions are not made pursuant to Article 74. fulfilled; the Community may, by issuing Commission directives to the Supply (c) The powers conferred on the Agency, refuse the conclusion of supply Supply Agency under the supervision of contracts and, by refusing to authorize the Commission must be exercised in exports to non-member countries, accordance with the rules of the Treaty prevent the transfer of fissile materials and, in particular, Article 195 under to such countries unless adequate which the institutions and the Supply conditions of physical protection are Agency must, in the performance of their fulfilled, subject nevertheless to the duties, comply with the conditions of transfers covered by Articles 74 and 75 access to fissile materials laid down by of the Treaty.

2 The EAEC Treaty envisages different situations regarding the negotiation and conclusion of agreements or contracts by the Community. Article 101, at the beginning of Chapter X of the Treaty, relating to external relations, provides in the first paragraph that: "The Community may, within the limits of its powers and jurisdiction, enter into obligations by concluding agreements or contracts with a third State, an international organization or a national of a third State". Article 102 determines the procedure applicable to the conclusion of agreements or contracts with third States, international organizations or individuals to which, in addition to the Community, inter alia "one or more Member States" are parties. Taken as a whole these provisions define the powers and jurisdiction of the Community in the field of external relations.

3 In order to ensure that the provisions of the Treaty are not frustrated by agreements or contracts concluded by the Member States with third parties

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the EAEC Treaty provided in Article 103 for a Community supervisory procedure allowing for the preliminary examination of the compatibility of such agreements with the requirements of the Treaty. That article, which is the basis of the present case, is worded as follows:

"Member States shall communicate to the Commission draft agreements or contracts with a third State, an international organization or a national of a third State to the extent that such agreements or contracts concern matters within the purview of this Treaty.

If a draft agreement or contract contains clauses which impede the application of this Treaty, the Commission shall, within one month of receipt of such communication, make its comments known to the State concerned.

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5 In order to delineate exactly the scope of the problem referred to the Court the Belgian Government's application must be compared with the actual provisions of Article 103. The third paragraph of that article provides that the Court, in answer to an application by a Member State, shall adjudicate "on the compatibility of the proposed clauses with the provisions of this Treaty". It appears from that provision that the Court's examination must take account of all the relevant rules of the Treaty whether they concern questions of substance, of jurisdiction or of procedure.

It is in the first and fifth questions put by the Belgian Government that the problem is formulated in this manner. These questions ask, on the one hand, whether the participation of one or more Member States in the convention negotiated within the International Agency is compatible with the provisions of the Treaty relating to the division of powers in this regard between the Community and the Member States if no appropriate place is provided for the Community amongst the parties to the convention and, on the other, whether the Community has the necessary powers to ensure the implementation of the provisions to which it may possibly subscribe. The more specific questions raised with regard to the supply arrangements and the functioning of the nuclear common market must necessarily be answered within this framework.

6 The exchanges of views which the draft convention occasioned first within the competent organs of the Council, subsequently between the Commission and the Belgian Government and finally within the context of these proceedings have revealed that, apart from certain general provisions of the EAEC Treaty such as Article 2 which defines in general terms the tasks of the Community and Article 195 relating to national rules laid down for reasons of public policy or public health, no fewer than four individual chapters of the Treaty are concerned, namely: the chapters relating to supplies and the nuclear common market which are closely interconnected, the chapter relating to safeguards and the chapter relating to property ownership. All these aspects must be taken into account by the Court in accordance with the requirements of Article 103.

Article 2 serves to limit the field of application of the convention by excluding from it installations, materials or transport used for military purposes.

9 Articles 3 to 11 of the draft convention concern the obligations entered into by the parties.

Article 3 obliges each party to take all appropriate measures in order to prevent the loss, theft, misuse or damage of nuclear material within its territory, under its jurisdiction or under its control anywhere. The article also makes reference to a document of the International Agency entitled "The Physical Protection of Nuclear Material" (INFCIRC/225 (corrected)) which contains a number of additional indications with regard to the scope of the draft convention and on the harmonization of the provisions of the convention with the protective measures adopted in a national context.

Article 4 defines the precautions to be taken on the import, export, storage, transport and transit of nuclear materials. The article divides such materials into different categories and lays down the minimum measures of physical protection applicable to each of the categories. The measures constitute a very detailed statement of material, technical and personal provisions.

Article 5 defines the responsibility of the national agencies responsible for the protection and possible recovery of nuclear materials; in addition it makes arrangements for co-operation and mutual assistance between the various national agencies.

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11 It should be noted that as regards its whole structure and the style of drafting the draft convention is conceived in such a way as to be concluded and implemented by the "States" which, in the terms of Article 14 are identical to the States Parties to the Statute of the International Agency. In its present form the draft thus makes no provision for the participation of other subjects of international law which have powers and responsibilities within the field covered by the Convention. The Court has however been informed that the Belgian Government has already taken the initiative in submitting to the International Agency a draft amendment designed to make such participation possible.

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Second part. Provisions of the draft convention concerning matters within the purview of the EAEC Treaty

12 It is undeniable that the draft convention "concerns" in various ways matters within the purview of the EAEC Treaty according to the expression used in the first paragraph of Article 103.

On the other hand a comparison should be made between the draft convention and the objects of the EAEC as defined by Article 2 of the Treaty. That article assigns to the Community various tasks which it should be noted include, in particular, that of establishing uniform safety standards to protect the health of workers and of the general public (subparagraph (b)), making certain, by appropriate supervision, that nuclear materials are not diverted to purposes other than those for which they are intended (subparagraph (e)), the exercise of the right of ownership conferred upon the Community with respect to fissile materials coming under the Treaty (subpa­ ragraph (f)), and finally the establishment with other countries and inter­ national organizations of such relations as will foster progress in the peaceful uses of nuclear energy (subparagraph (h)). Reference to these objects is sufficient to enable it to be stated with certainty that the draft Convention on the Physical Protection of Nuclear Materials, Facilities and Transports concerns from various aspects matters within the purview of the EAEC Treaty.

It is further necessary to examine whether the provisions of the draft may impede the proper application of the EAEC Treaty if the Community as such is not a party to the convention on the same lines as the States. That question must be analysed with regard to the different chapters of the Treaty which relate to the problem raised.

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1. The supply arrangements and the nuclear common market

Thus Article 52 of the Treaty provides that the supply of ores, source materials and special fissile materials shall be ensured "by means of a common supply policy". For this purpose an agency is established possessing "a right of option on ores, source materials and special fissile materials produced in the territories of Member States and an exclusive right to conclude contracts relating to the supply of ores, source materials and special fissile materials coming from inside the Community or from outside". As regards ores, source materials or special fissile materials coming from outside the Community the Supply Agency has an exclusive right, under Article 64, to enter into agreements or contracts relating to the supply of such products "acting where appropriate within the framework of agreements concluded between the Community and a third State or an international organization". It follows from Article 60 in conjunction with Article 65 that the Supply Agency must be used as the intermediary between users of ores, source materials and special fissile materials and suppliers who are outside the Community. Even where the supply of products falling within the jurisdiction of the Supply Agency is provided "inter alia" by agreements or contracts between a Member State, a person or an undertaking on the one hand and a third State, an international organization or a national of a third State on the other, the prior consent of the Commission is necessary — in the terms of Article 73 — for the conclusion or the renewal of the agreement or contract. These provisions, amongst others, show the care taken in the Treaty to define in a precise and binding manner the exclusive right exercised by the Community in the field of nuclear supply in both internal and external relations.

16 It appears from the file on the case that in the course of the preliminary exchanges between the Commission and the Council the question was raised in this context, on the one hand, of the general reservation made by Article 195 of the Treaty — in the terms of which the institutions of the Community are, in applying the Treaty, to comply "with the conditions of access to ores, source materials and special fissile materials laid down in national rules and regulations made for reasons of public policy or public health" — and, on the other, of three specific exceptions which have the effect of removing certain specific categories of nuclear materials from the ambit of the provisions relating to the supply system. This is the case in fact for materials left in the possession of the producer under Article 62 (2), quantities used for research in accordance with Article 74 and finally materials involved in operations in connexion with contract work within the meaning of Article 75.

17 In the opinion of the Court neither the general reservation of Article 195 nor the specific provisions above are such as to invalidate the above considerations.

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With regard to Article 195 it may be pointed out that that provision is not intended to settle the question of powers in relations between the Community and the Member States. The purpose of the article is to require the institutions of the Community as well as the Supply Agency and joint undertakings to comply with the requirements laid down by the Member States in their national territory for reasons of public policy or public health with regard to the conditions of access to fissile materials. Article 195 as such therefore does not have the effect of limiting the Community's right and obligation to take measures to guarantee the security of the materials and installations for which it is itself responsible, or the Community's ability to enter into international commitments to the same end.

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2. Safeguards

19 The exchanges of views to which these proceedings have given rise have revealed an undeniable lack of certainty as to the scope of the "safeguards" laid down by the Treaty. On a restrictive interpretation, the security provisions laid down by the Treaty are nothing more than a check on "conformity" or "destination" that is to say a check with a view to ensuring that the nuclear materials are not diverted, by the person in possession of them, to a purpose other than that which he himself declared. Consequently this concept would bear no relation to the measures of physical security envisaged in the draft convention inasmuch as the latter serve to avoid external action, in other words, the intervention of unauthorized third parties. The question may be asked whether that interpretation takes full account of the wording and the aims of the Treaty.

20 From a historical point of view it must be admitted that the dangers which the draft convention seeks to counter were without a doubt less real to the negotiators and to the general public at the time when the EAEC Treaty was drawn up and implemented; it is also true that the arrangements for supervision made by the Community under the rules of the treaty relating to safeguards are not capable of coping fully with the new responsibilities defined by the convention. Nevertheless these considerations do not justify the very restrictive interpretation of safeguards which is expressed in the theory of the supervision of "conformity" or "destination".

22 Even if it is admitted that safeguards as specifically laid down by Chapter VII of the Treaty do not go any further than a check on the intended use of nuclear materials, nevertheless there already exists an area of conflict between the provisions of the Treaty and certain rules in the convention, in particular Article 3 relating to preventive measures. Indeed the Community must be able to exercise, in accordance with the rules which it has itself determined — and which are set out in particular in Commission Regulation (Euratom) No 3227/76 of 19 October 1976 concerning the application of the provisions on Euratom safeguards (Official Journal L 363) — central supervision of the use to which nuclear materials for which it is responsible are put; furthermore in the terms of Article 77 (b) it must be in a position to give to third parties all the guarantees resulting from the obligations which it has assumed in agreements concluded with other States or international organizations. The exercise of these powers would be hindered and its responsibility would be set at naught if the Member States undertook, without the participation of the Community, to take, in line with the objectives of the convention, an indeterminate and extensive body of preventive measures which may also include measures of supervision of users of fissile materials which are subject to the authority of the Community.

23 The result of the foregoing is that the exclusion of the Community from the draft convention would have the effect not only of hindering, in certain respects, the functioning of the safeguards as laid down by Chapter VII of the Treaty and the implementing measures based thereon, but it would also compromise the subsequent development of that system to its full scope implied by the very concept of "safeguards". From this aspect the power of the Community to participate in the proposed convention would consequently also appear to be undeniable.

Special fissile materials shall be the property of the Community.

The Community's right of ownership shall extend to all special fissile materials which are produced or imported by a Member State, a person or an undertaking and are subject to the safeguards provided for in Chapter VII.

Article 87

Member States, persons or undertakings shall have the unlimited right of use and consumption of special fissile materials which have properly come into their possession, subject to the obligations imposed on them by this Treaty, in particular those relating to safeguards, the right of option conferred on the Agency and health and safety".

26 For the purposes of these proceedings it is not necessary to determine the dividing line between the powers reserved to the Community, as owner of the special fissile materials, by Article 86 and the "right of use and consumption" guaranteed to the Member States and to other persons or undertakings under Article 87. In this context it is sufficient to note the following factors.

27 The system of property ownership by the Treaty signifies that, whatever the use to which nuclear materials are put, the Community remains the exclusive holder of the rights which form the essential content of the right of property. Thus, in the final analysis, the Community retains the right to dispose of special fissile materials; that concept is the basis of the supply arrangements as described above. In contrast to the right of use and consumption which, for the purposes of economic exploitation, is divided between many different holders, the right of ownership of fissile materials was concentrated by the Treaty in the hands of a common public authority, namely the Community; therefore, it is the Community, and the Community alone, which is in a position to ensure that in the management of nuclear materials the general

30 It is nevertheless necessary in this context to draw attention to one limitation resulting from Article 91 of the EAEC Treaty. Under that article, "the system of ownership applicable to all objects, materials and assets which are not vested in the Community under this Chapter shall be determined by the law of each Member State". The draft convention concerns the physical protection not only of fissile materials but also of nuclear facilities which have to be defended against sabotage as is explained at greater length in the document referred to in Article 3 of the draft convention. It appears therefore that from the point of view of the right of ownership, the convention relates both to objects falling under Community ownership — special fissile materials and any joint undertakings set up under Articles 45 to 51 of the EAEC Treaty — and to other materials and installations falling within the systems of ownership defined by the Member States.

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Third part. Concluding remarks on the division of jurisdiction and powers between the Comunity and the Member States

31 In the light of an analysis of the draft convention and a comparison of its provisions with those of the EAEC Treaty the fact must be recognized that the measures laid down in order to ensure the physical protection of nuclear materials, facilities and transports concerns in pan the jurisdiction of the Member States and in part that of the Community.

32 To these considerations, concerning the functions carried out by the Community with regard to the various objectives of the EAEC Treaty, there must be added an observation which is more specifically legal in nature and which appears no less decisive. The system of physical protection organized by the draft convention could only function in an effective manner, within the ambit of Community law, on condition that the Community itself is obliged to comply with it in its activities. To the extent to which jurisdiction and powers have been conferred on the Community under the EAEC Treaty the Member States, whether acting individually or collectively, are no longer able to impose on the Community obligations which impose conditions on the exercise of prerogatives which thenceforth belong to the Community and which therefore no longer fall within the field of national sovereignty. Therefore to the extent to which the Community is to be bound to comply with the convention it is necessary that it should assume such obligations itself; that is the sense of Article 101, which states that it is "the Community" which may enter into obligations by concluding agreements or contracts, and of Article 184 which confers legal personality upon it.

33 Thus the exclusion of the Community from participation in the convention would detrimentally affect the powers conferred upon it by the Treaty with

RULING PURSUANT TO ARTICLE 103 OF THE EAEC TREATY

regard to supply and the nuclear common market, the responsibilities borne by it with regard to security and the comprehensive nature of its right of ownership. Moreover such a course of action would call in question its capacity for independent action as it is also the Community which must be able to participate, as such, through its own institutions, in the drawing up and implementation of the measures provided in the draft convention in so far as it is to affect the aforesaid systems. The Member States are not to intervene in the exercise of those prerogatives; in accordance with the division of powers set out in Article 101 of the Treaty that right is conferred upon the common institutions alone.

34 It follows from all the foregoing that the draft convention put forward by the International Agency can be implemented as regards the Community only by means of a close association between the institutions of the Community and the Member States both in the process of negotiation and conclusion and in the fulfilment of the obligations entered into. This situation was foreseen by the EAEC Treaty. Where it appears that the subject-matter of an agreement or contract falls in part within the power and jurisdiction of the Community and in part within that of the Member States there are strong grounds for using the procedure envisaged by Article 102 of the Treaty whereby such obligations may be entered into by the Community in association with the Member States. For the Community's part agreements or contracts of this kind are to be concluded in accordance with the ordinary procedure laid down by the second paragraph of Article 101: as regards the Community they are to be negotiated by the Commission in accordance with the directives of the Council and concluded by the Commission with the approval of the Council. However, according to the specific requirements of Article 102 they are not to enter into force until the Commission has been notified by all the Member States concerned that those agreements or contracts have become applicable in accordance with the provisions of their respective national laws.

RULING 1/78 OF 14. 11. 1978

36 It is still necessary to give an answer to the question raised by the Belgian Government with regard to the implementation of the convention. That question should be resolved on the basis of the same principles as govern the division of powers with regard to the negotiation and conclusion of the convention. Once the convention has entered into force, its application will entail close co-operation between the institutions of the Community and the Member States. The tasks to be carried out by the Community will relate in essence to the supply arrangements and the management of the nuclear common market, the implementation of security provisions which cover the whole of the Community and finally the management of the right of property ownership. The relevant provisions of the Treaty, together with the provisions of the convention itself, which, once it has been concluded by the Community, will form an integral part of Community law, will provide an appropriate legal basis for the necessary implementing measures. More parti­ cularly it may be stated in this respect that Article 124 of the EAEC Treaty enables all the necessary implementing powers to be conferred on the Commission. For the rest it will be for the Member States to adopt the appro­ priate implementing provisions, each in its own territory, especially in the field of the intervention of the public authorities, criminal prosecutions and extradition. Under the second paragraph of Article 115 of the Treaty the Council will arrange for the co-ordination of the actions of the Member States and of the Community.

1. The participation of the Member States in a convention relating to the physical protection of nuclear materials, facilities and transports such as the convention at present being negotiated within the Inter­ national Atomic Energy Agency is compatible with the provisions of the EAEC Treaty only subject to the condition that, in so far as its own powers and jurisdiction are concerned, the Community as such is a party to the convention on the same lines as the States.

2. The fulfilment of the obligations entered into under the convention is to be ensured, on the Community's part, in the context of the institutional system established by the EAEC Treaty in accordance with the distribution of powers between the Community and its Member States.

Luxembourg, 14 November 1978.

Kutscher Mertens de Wilmars Mackenzie Stuart Donner Pescatore

Sørensen O'Keeffe Bosco Touffait