Does Noncompliance with a CSA Per Se Constitute Breach of the NPT?

A colleague asked if I would write something on the relationship if any between a finding by the IAEA of a state’s noncompliance with its comprehensive safeguards agreement (CSA) on one hand, and a breach of Article III of the NPT by that state on the other. In brief, does noncompliance with a CSA per se constitute a breach of NPT Article III?  Well, as it happens I did cover this topic at some length in my 2011 book. So I will just excerpt here from that book, Interpreting the Nuclear Nonproliferation Treaty, pgs. 87-94 (footnotes removed):

I would like to pay particular analytical attention at this point to the treaty interpretations given by NWS during the target period in order to justify the conditioning of nuclear supply, and recognition of the Article IV(1) right to peaceful use, upon NNWS compliance with an IAEA Comprehensive Safeguards Agreement.  As discussed in Chapter 3, there are several points of treaty interpretation included within the logical progression of interpretation maintained by NWS officials.  I identified these steps of interpretive progression as occurring within the following transitive sequence:

 

1. Noncompliance with an IAEA safeguards agreement constitutes a breach of NPT Article III,
2. A breach of NPT Article III results in the invalidity of the rights and obligations in Article IV,
3. Thus, noncompliance with an IAEA safeguards agreement results in the invalidity of the rights and obligations in Article IV.

 

As I explained in Chapter 3, this conditional normative linkage between NPT Articles III and IV, and the transitive conclusion that noncompliance with a safeguards agreement constitutes breach of the NPT, was used by NWS officials during the target era in order to justify the non-recognition of Iran’s right to peaceful nuclear technologies under NPT Article IV(1), as well as to justify a cessation of nuclear assistance to Iran by supplier states, pursuant to the obligation in Article IV(2). 

            The interpretation of a conditional linkage between Article III and Article IV, which forms an integral part of this transitive sequence, is an argument that I have already addressed above.  I concluded above that NNWS compliance or non-compliance with Articles I, II & III has no per se conditional effect upon the residual right of NNWS to engage in the peaceful use of nuclear energy materials and technologies recognized in Article IV(1).  This conclusion, taking away one of the two interpretive pillars of this transitive sequence, on its own renders the interpretive sequence incorrect.  

However, I will assume arguendo for the moment that the NWS interpretation on conditionality between Article III and Article IV is correct.  I will do so to show that, even if it was correct, the other interpretive pillar of this transitive sequence – that noncompliance with an IAEA safeguards agreement constitutes a breach of NPT Article III – is also incorrect. 

Returning to the discussion in Chapter 3 of the identity, role and authorities of the IAEA, it will be recalled that the IAEA is its own self-enclosed treaty-based international organization.  Its existence predates that of the NPT by more than a decade. It has its own constitutional treaty – the IAEA Statute – and its own separate membership as an international organization.  Its statute contains detailed rules and procedures regarding its functioning and authority.  The IAEA’s only legal connection to the NPT is the obligation in Article III.4 of the NPT for all NNWS parties to “conclude agreements with the International Atomic Energy Agency to meet the requirements of this Article.”

Some have argued that the operative legal obligation for NNWS in Article III is contained in Article III.1.  They point to the language in Article III.1 stating that each NNWS “undertakes to accept safeguards as set forth in an agreement to be negotiated and concluded with the International Atomic Energy Agency. . . ,” and to the phrases “Procedures for the safeguards required by this Article shall be followed with respect to source or special fissionable material. . .” and “The safeguards required by this Article shall be applied on all source or special fissionable material . . .”  They see in these terms an obligation in Article III.1 not only to enter into a safeguards agreement with the IAEA, but also an obligation to comply with the terms of that safeguards agreement.

However, a closer reading of the whole of Article III renders this interpretation unpersuasive. Article III does contain an obligation for NNWS to enter into a safeguards agreement with the IAEA.  That obligation is discussed in Article III.1, but is stated with even more clarity and specificity in Article III.4 which states: “Non-nuclear-weapon States Party to the Treaty shall conclude agreements with the International Atomic Energy Agency to meet the requirements of this Article . . .”

Additionally, reading into Article III.1’s provisions an independent obligation to comply with the terms of the safeguards agreement to be negotiated with the IAEA produces a redundancy from a normative system perspective.  One of the fundamental system rules of international law is contained in the customary international law rule of pacta sunt servanda (“treaties are to be observed”), which holds that parties to a treaty are under an obligation to perform their treaty undertakings in good faith.  Pacta sunt servanda is an omnipresent rule of customary international law, binding all states and all treaties made.

Therefore, to interpret Article III.1 of the NPT as comprising an operative legal obligation would be to make its provisions redundant with the obligation clearly spelled out in article III.4.  Furthermore, to interpret Article III.1’s terms as containing an obligation to comply with the terms of another treaty (a safeguards agreement) would render the terms of Article III.1 redundant and superfluous in light of the rule of pacta sunt servanda.  An interpretation of a treaty which renders some of its terms redundant or superfluous internally, or redundant with regard to other system rules of international law, is to be avoided.

The terms of Article III.1 are better interpreted in their context within Article III as describing, along with Article III.2 and Article III.3, the sort of safeguards agreement which NNWS are to enter into with the IAEA.  Under this interpretation, Article III makes sense holistically, and redundancy is avoided.  Paragraphs 1-3 of Article III lay out in detail the type of safeguards agreement which paragraph 4 requires NNWS to enter into with the IAEA. Indeed this is precisely what the terms of Article III.4 provide: “Non-nuclear-weapon States Party to the Treaty shall conclude agreements with the International Atomic Energy Agency to meet the requirements of this Article.”

Interpreted correctly, then, it is clear that the operative obligation in Article III.4 for NNWS to enter into a safeguards agreement with the IAEA, of a type described in Article III(1-3), is the extent of the legal relationship between the NPT on the one hand, and the IAEA and its safeguards agreements with states on the other.

            If a state enters into a safeguards agreement with the IAEA, it accepts the IAEA’s role in monitoring its compliance with its safeguards agreement, as detailed in Article XII of the IAEA Statute.  As Article XII makes clear, the IAEA has the authority to determine that a state party to a safeguards agreement is in noncompliance with that agreement.  Noncompliance with a safeguards agreement is reported in the first instance by the IAEA’s inspectors, whose job it is to verify the state’s disclosures and accounting of the nuclear materials and activities occurring within its borders.  If the IAEA inspectors report noncompliance with the terms of a safeguards agreement, Article XII(c) of the IAEA Statute details the IAEA’s responsibilities and procedural options.   The report on noncompliance is to be transmitted to the Director General, who will also transmit it to the IAEA Board of Governors.  At this point, the Board “shall call upon the recipient State or States to remedy forthwith any non-compliance which it finds to have occurred.”  The Board shall also report the non-compliance to all IAEA members and to the U.N. Security Council and General Assembly.

If the state fails to take “fully corrective action within a reasonable time,” the Board may take one or both of the following measures: 1) it may curtail or suspend all assistance being provided to the state by the IAEA and demand a return of assistance materials; 2) it may also act under Article XIX of the Statute and suspend the state from IAEA membership and privileges.

            An interesting legal question concerns the juridical meaning of a determination of safeguards agreement noncompliance by the IAEA.  Is the determination of noncompliance by the IAEA equivalent to or constitutive of a finding of material breach by the state party to the agreement, pursuant to the definition of material breach contained in VCLT Article 60?  Or is it merely a preliminary finding of noncompliance that does not, per se, constitute a determination of material breach? This is essentially a question of the role and authority of the IAEA.  And this in turn becomes a fundamental question of the international legal personality of the IAEA as an international organization.  And the question is whether the IAEA’s international legal personality includes the authority to make a determination of material breach of safeguards agreements to which it is a party, which is an essentially judicial and not a political role.

            Determining the international legal personality of an international organization is essentially a determination, made through a review of the organization’s constituting instruments, of the intent of the states that created the organization.  With what attributes of legal personality did the state creators of the organization intend to endow it?  The practice of the organization subsequent to its founding, and the acceptance or rejection of this practice by their member states as well as non-member states, can also contribute to the contours of the organization’s personality attributes. 

            In the case of the IAEA, a review of its constituting instrument, the IAEA Statute, yields compelling evidence that the IAEA was not intended by its creators to exercise a judicial role.  Rather, it was to perform a technical role of verifying the disclosures and accounting of nuclear materials and activities occurring within the boundaries of states that entered into safeguards agreements with the organization.  A finding of noncompliance with an IAEA safeguards agreement can be based upon quite technical disclosure or accounting lapses.  Indeed, pursuant to paragraph 19 of INFCIRC/153 (the agency’s standard comprehensive safeguards agreement), the IAEA Board of Governors may refer states to the U.N. Security Council for enforcement action upon the simple finding that Agency inspectors are “not able to verify that there has been no diversion of nuclear material required to be safeguarded under the Agreement to nuclear weapons or other nuclear explosive devices.” And the IAEA’s inspectors are highly capable and qualified in their training to make such technical determinations.  These determinations are important in that they can be probative in alerting the IAEA Board of Governors, and the U.N. Security Council to diversions of declared fissile materials and technologies to military uses. 

            However, the standards for determining technical noncompliance detailed in the IAEA Statue do not satisfactorily correlate to the standard for determining material breach, contained in VCLT Article 60, nor do they purport to.  Material breach is defined in the VCLT as “(a) a repudiation of the treaty not sanctioned by the present Convention; or (b) the violation of a provision essential to the accomplishment of the object or purpose of the treaty.”

            Quite the opposite, the IAEA Statute in Article XVII is explicit in its direction to the organization on steps to be taken in the event of “any question or dispute concerning the interpretation or application of this Statute which is not settled by negotiation . . .” The organization is directed to refer all such legal questions to a proper judicial forum – the International Court of Justice.  Article XVII further mandates the IAEA governing bodies to request an advisory opinion from the ICJ “on any legal question arising within the scope of the Agency’s activities.”  These provisions, manifesting the intent of the creators of the IAEA, are incongruous with an interpretation that the IAEA itself possesses a judicial role and authority, including the authority to determine a material breach of IAEA safeguards agreements.

            Furthermore, one must remember that IAEA safeguards agreements are bilateral treaties between the IAEA, in its exercise of legal personality explicitly granted to it by the IAEA Statute, and a state.  The proposition that the IAEA itself can determine in authoritative fashion that the other party to a bilateral treaty, to which it itself is the other member, is in breach of its obligations under that treaty, has no precedent or analogue in international law.

            The better interpretation of the IAEA’s international legal personality, and its mandate with regard to determining compliance with safeguards agreements, is that an IAEA determination that a state is in noncompliance with its safeguards agreement constitutes a preliminary technical determination of noncompliance short of an allegation or finding of material breach.  As Article XII of the IAEA Statute stipulates, such a finding triggers reporting requirements for the IAEA, but it also marks the beginning of a diplomatic process through which the IAEA is to work with the state to bring its actions – which again may consist of no more than reporting or accounting errors or omissions – into full compliance with the obligations of its safeguards agreement.  It is only if the noncompliant state fails to take corrective action within a reasonable time that the IAEA may proceed to suspend its assistance from the organization, or ultimately to suspend its IAEA membership and privileges, pursuant to the process detailed in Article XIX.

            Rather than interpreting the first finding of noncompliance as a treaty breach, it would be more correct to interpret only such a suspension pursuant to Article XIX as constituting an allegation (not a finding) by the IAEA that the other party to a bilateral treaty to which it is also a party, is in material breach of its obligations under that treaty.  Such an interpretation would be consonant, and in fact in perfect harmony, with the presumptive rules on termination or suspension of a treaty as a consequence of breach, contained in VCLT Article 60.  Article 60 provides that only a “material breach of a bilateral treaty by one of the parties entitles the other to invoke the breach as a ground for terminating the treaty or suspending its operation in whole or in part.”  The first finding, or subsequent findings of safeguards agreement noncompliance by the IAEA short of a finding triggering the procedures for suspension in Article XIX, should not therefore be interpreted as constituting an allegation of a material breach of the safeguards agreement.  Only a determination of noncompliance which results in the IAEA’s suspension of the membership of the noncompliant state under Article XIX, mirroring the remedy provided for in VCLT Article 60(1), should be interpreted as such an allegation of a material breach.

            Under this interpretation, a determination by the IAEA that a state is in noncompliance with its safeguards agreement is not per se equivalent to or constitutive of a determination of material breach of the safeguards agreement.  The IAEA simply does not have the legal personality under its statute to exercise such a judicial function.  A determination of safeguards agreement noncompliance by the IAEA is better interpreted as comprising a preliminary technical finding of treaty noncompliance, short of material breach, which results in explicitly detailed rights and responsibilities of the IAEA under Article XII of its Statute. 

            Returning, therefore, to NPT Article III.  I have demonstrated through this analysis that an IAEA determination of safeguards noncompliance does not per se constitute a determination of a material breach of the safeguards agreement.  However, even if it did, this would not result in or constitute a breach of NPT Article III.  This is because, as I have explained, the operative obligation in Article III is contained in Article III.4 and consists only in an obligation for NNWS to enter into a safeguards agreement with the IAEA, of a type described in Article III(1-3).  

            I have thus demonstrated that the second interpretive pillar of the transitive sequence identified above – that noncompliance with an IAEA safeguards agreement constitutes a breach of NPT Article III – is incorrect, as is the first interpretive pillar of the transitive sequence – the interpretation of a conditional linkage between Article III and Article IV.  The rhetorical blurring and conflation by NWS officials during the target era of the concepts of noncompliance with an IAEA safeguards agreement, and violation of Article III of the NPT, and the resulting claim that NNWS in noncompliance with their safeguards agreement were not entitled to their Article IV(1) right to nuclear peaceful use,  was all therefore simply incorrect treaty interpretation.

            This conclusion does beg the following questions: How then can a breach of NPT Article III be established? What entity is authorized to make this determination? What are the legal implications or consequences of such a determination?  Under the interpretation of Article III maintained herein, a breach of NPT Article III can be established if an NNWS party either fails to conclude a safeguards agreement with the IAEA, or is determined by a competent judicial authority to have materially breached a safeguards agreement, pursuant to the definition of material breach in VCLT Article 60.  The other logical means of breach would be termination of or withdrawal from a safeguards agreement with the IAEA.  However, the standard INFCIRC/153 safeguards agreement does not provide for termination/withdrawal in its terms.  Therefore any renunciation of a safeguards agreement by an NNWS party would fall under the definition of material breach contained in VCLT Article 60.

            As for who has the authority to determine a breach of Article III, the NPT is no different in this context than any other treaty. There is no specialized judicial body within the NPT normative system, inclusive of the IAEA, that has authority to determine a breach of NPT Article III. Therefore only an international judicial body with appropriate jurisdiction can perform this essentially judicial role.  The NPT does not contain a provision explicitly submitting parties to the jurisdiction of the International Court of Justice for legal questions arising under the treaty, as many treaties do. Therefore, jurisdiction for the ICJ to hear a dispute arising under the NPT must be obtained through other means, detailed in the ICJ’s Statute.

            In the event that a properly seized international judicial body were to determine that an NNWS party to the NPT had in fact breached NPT Article III, there would of course be legal implications for the breaching party as well as for the other parties to this multilateral treaty.  The rights of the other parties of the NPT in the event of a material breach (if indeed a breach of NPT Article III were determined by the court to constitute a material breach of the NPT) by one party are laid out in detail in VCLT Article 60.   As for the breaching party itself, it would be liable under any judgment for damages imposed by the court.  However, in terms of the NPT itself and the continuing applicability of the rest of its provisions to the breaching NNWS, there would be no per se legal implication flowing from the breach of Article III.  There would be no inherent conditionality with Article IV, as concluded herein. As a de facto matter, however, a state found to be in breach of Article III – if that breach were determined by the court to be a material breach of the treaty – would no doubt find many if not all of the other NPT parties exercising their rights under VCLT Article 60 to suspend the operation of the treaty as between themselves and the breaching state.  This would have the practical effect of nullifying the terms of the NPT with respect to the breaching state.