Legal and Commercial prospects of International Law on nuclear development in the 21st century and the right of Iran to Nuclear technology

Master's Thesis, 2007

78 Pages, Grade: Masters' (LLM)




1.1 Overview
1.2 Why is nuclear development so vital tob e recognised and regulated by International Law
1.3 Aims and Objectives

2.1 A brief history of the development of the nuclear technology
2.2 International Atomic Energy Agency (IAEA)
2.3 Creation of Nuclear Non-Proliferation Treaty (NPT)
2.4 Treaty establishing the European Atomic Energy Community (“EURATOM”)

3.1 International transport law regarding the International Nuclear trade Regulations
3.2 Nuclear trade and the competition law
3.3 Other International Instruments and Civil Law Contracts

4.1 Nuclear energy affects on the developing countries’ economy
4.2 Nuclear Trade and the right to development
4.3 Contribution of the WTO in Nuclear trade and development (Article XXI of GATT)

5.1 Summary
5.2 Case review
5.3 Iran’s right to nuclear technology under Article IV of Non-Proliferation Treaty (NPT)
5.4 The right of Iran to nuclear technology under the Universal Declaration of Human Rights
5.5 Politics overriding Iran’s right to nuclear technology
5.6 Security Council Sanctions against Iran
5.7 Case Resolution




The 21st Century is considered to be the age of nuclear energy and development, and the right to nuclear power is one of the most controversial topics in the World at the moment. Dual use of this technology has caused complexity and confusion amongst the nations. The nuclear law came to existence after the access of some states to the full aspects of this technology. Obviously the latter rules have stopped the rest of the world gaining access to the dual usage of nuclear while the previous nuclear states insist in keeping a right to maintain their superior technology.

This paper will argue this issue from the legal, commercial and human rights perspective in more depth and wishes to seek any possible resolutions or recommendations to solve this international dispute amongst the nations.

One of the other contributions of this thesis is to assess the inadequacy of some of the NPT1 articles2 and the main role of the IAEA3 to encourage the members to use the technology for peaceful purposes and the prohibition of its diversion into military ones. These flaws include the failure of the suppliers to supply adequate support to some of the non-nuclear states, mostly in developing countries, the lack of a proper timetable to eliminate nuclear weapons and the states selective interpretation of the NPT for nuclear trade and developments.


1.1 Overview

Reviewing the history of the World’s first fundamental energy source and its effects on the International Trade, we realise that discovering oil a century ago was a revolution in the human life in so many aspects and also an upheaval in the International Trade world. When oil first started being tradable amongst countries, we surprisingly apprehend that this commodity has had its own process to be internationally standardised through time. Eventually oil was the most vital source of energy, which led the nations to establish several gigantic International institutions and played a very important role in the world’s economy and International trade law in the 20th Century.

Although oil is still the main source of energy, mankind will very soon be witnessing a total revolution and furthermore substitution of the energy source.

The world has already taken the first steps to substitute the old fashioned fuel with the modern, cheap, more environmental friendly4 and a more efficient source that is merely nuclear energy.5

On the other hand, because of this commodity’s character specification, its international market has been unilaterally dominated and monopolised by a few states6. This seems to be a huge responsibility for the International Law system to solve this global problem by producing more clear and effecting laws and legislation.

In other words the right of trade and development of this particular commodity has been granted to a few countries7 (will be covered in the latter chapters) due to the present complex International law.

1.2 Why is nuclear development so vital to be recognised and regulated by International Law?

The world is still experiencing the first decade of the 21st Century and has already started facing the international oil market fluctuations8 because of three very noticeable reasons.

- The 21st century political crises and the war over the oil9 in the Middle East which will result in a vast increase on the oil prices and a need for a more efficient energy source substitution.

By 1950s the attention turned to the peaceful purposes of nuclear fission, notably for power generation. Today, the world produces as much electricity from nuclear energy as it did from all sources combined in 1960. There are now 440 “peaceful” reactors in 31 countries as well as 283 research reactors in 56 countries, many still operating on highly enriched uranium. The US is planning to build 50 more reactors by 2020; China plans 30; and 27 more are already under construction worldwide. . Civil nuclear power can now boast over 12,400 reactors, years of experience and supplies 16% of global needs.

- “Peak Oil”10 which means the unconstrained extraction of oil which will eventually hamper us from access to this natural source of energy.
- The supply and demand market which is increasingly growing regarding the huge number of civilian and commercial nuclear power plants11 currently under construction around the world that will need to be supplied with the vast amounts of this commodity on daily basis.

1.3 Aims and Objectives

The aims and objectives of this paper are concentrated on the possible ways and methods of introducing a universal and more fair legal rights12 of usage, development and trade of the nuclear materials and technology and arguing the legal loop holes which might be allowing some states break some of the principles and obligations of the present nuclear law13.

It can also be argued that there are some boundaries and limitations in order to achieve a flawless and fair legislation due to the incomplete and primitive legislations and the foundation of the present International Law.

The role and power of some relevant organisations and International Legislators such as IAEA14, NSG15, EURATOM16, NTC17, UN18, WTO19 and also the International conventions and agreements on the nuclear trade and development20 are the basic instruments to be used in this paper. Apparently the states’ ministries or departments of defence, foreign trade, energy, foreign affairs, environment, science and health play a very important role in nuclear trade which would be one of the most important boundaries through out achieving a more fair and universal nuclear law.


2.1 A brief history of the development of the nuclear technology

It was December 1942 which the 21 first man made reactor known as “Chicago Pile”22 was created by Fermi and Szilard in the United States. This project led to more serious projects called “Manhattan Project”23 which built large reactors in Hanford Site in Washington. Unfortunately this project proceeded to breed plutonium24 for the use of the first nuclear weapons to be used in the Second World War25 against the human race.

Electricity was first generated by a nuclear reactor on 20 December 1951 at the EBR-1 experimental station26 in Idaho. In December 1953 the phrase “Atoms for peace”27 was first used by President Dwight Eisenhower28 and emphasised the useful harnessing of Atom and promised a strong governmental support on the international use of nuclear power.

The first official civilian nuclear power plant29 was opened in 1957 in Pennsylvania and that was when the estates started realising the economical uses and benefits of the nuclear energy for the first time.

Officially it was in 1955 the United Nations “First Geneva Conference”30 that gave a legal soul and recognition to this mankind creation for the first time followed by the world’s largest gathering of scientists and engineers, met to explore this new technology.

The 1973 oil crisis31 led some countries such as France and Japan to invest more and more on Nuclear power plants to generate cheaper electricity. Atom lost its attraction for energy purposes during 1970s and 1980 due to the falling of the global fossil fuel prices32 and the power plants under construction became less attractive to some estates.

By the end of the 20th century Atom had played very important roles in the human lives, positive and negative, and had been fully recognised by International law and civilian nuclear power plants were being contracted and their fuel as enriched uranium33 and technology were being transported34

from country to country and contracted under the laws and regulations made by the related International organisations such as IAEA and EURATOM. Due to a very strategic and vital usage of the technology WTO s conventions and legislation stayed silent regarding the nuclear trade and handed its rights and legislating power to a new established organisation called IAEA.

That was the end of the 20th century which the states started to pay attention to a more in depth evaluation and structure of the nuclear law and regulations for safe guard regimes and the fear of possible nuclear accident35, radiation, nuclear proliferation36, nuclear waste37, transport38, storage39 and nuclear war rose eventually.

EURATOM was launched in 195740 alongside with the European Economic Community which now is called European Union41. Surprisingly, the same year “1957” the world witnessed the launch of the International Atomic Energy Agency (IAEA)42.

2.2 International Atomic Energy Agency (IAEA)

Despite the importance of the WTO as the main International Organisation on the world trade, the nuclear trade regulating system has been granted to an independent International Organisation called IAEA. Although so many International Organisations were created on nuclear trade and development, the role of IAEA, as the main regulator and inspector of the nuclear trade in the world, can not be abandoned in this paper. IAEA handbook of nuclear law is considered to be the bible of the nuclear trade and regulation.

The International Atomic Energy Agency was established by a United Nations General Assembly Resolution on 4 December 195443, with the aim to "accelerate and enlarge the contribution of atomic energy to peace, health and prosperity throughout the world.

Article III of the IAEA's Statute44 authorises the Agency to meet the needs of research on, and development and practical application of, atomic energy for peaceful purposes, including the production of electric power, with due consideration for the needs of the under-developed areas of the world."45

2.3 Creation of Nuclear Non-Proliferation Treaty (NPT)

At the cities of Washington, London and Moscow on the first of July 1968 agreed on this treaty with 11 articles considering the devastation that would be visited upon all mankind by a nuclear war and the consequent need to make every effort to prevent the danger of such a war and to take measures to safeguard the security of peoples, Believing that the proliferation46 of nuclear weapons would seriously enhance the danger of nuclear war47, In conformity with resolutions of the United Nations General Assembly.48

Furthermore, the NPT came to existence when the USA and Soviet Union negotiations on prevention of the spread of the nuclear-weapons that they themselves wanted to keep and have kept till now49. Offering and conducting meetings for other states to join the NPT, surprisingly, neither of them showed any interest to become a member party to the NPT unless they were pressured to join in 199250 and they joined as nuclear-weapon states which subjected them to the voluntary arrangements with the IAEA. States with nuclear program projects in hand like India, Germany, Brazil, Sweden, Canada and Italy started fearing that by joining the USA and Soviet Union as well-established nuclear states, they might be kept disadvantaged in economic and security terms later on.

They insisted on and won two important trade-offs: a commitment that those with weapons would end their arms race and pursue nuclear disarmament, which became Article VI51 ; and a promise that nuclear technology would remain available for peaceful purposes, contained in Article IV.

Although the nuclear disarmament was considered an integral part of the NPT by contracting non-nuclear-weapon states parties, but was only a less important and a minor issue for the nuclear-weapon states. Under pressure, the United States and Soviet Union weakened the Article VI obligation by rolling together in one sentence ending the arms race, nuclear disarmament treaty on general and complete disarmament. But unfortunately the nuclear weapon states have maintained their nuclear weapons till now as will describe in more depth in the latter chapters of this paper.

2.3.1 The Non-Proliferation Treaty - A barrier to an International Supply Regime

At first glance, it seems to be strange that the 1968 Treaty on the Non- Proliferation of Nuclear Weapons (NPT) could be among the instruments which could be a problem on the way to an international regime that likewise aims at preventing proliferation. Of course, the NPT does not prohibit the establishment of any additional non-proliferation regimes. But any additional non-proliferation measure of the access to the supply of materials and facilities restrict the scope of Article IV NPT which grants States the inalienable right to develop research, production and use of energy for peaceful purposes. This includes the right to freely decide on how a State secures its nuclear supply. If there is an active international supply regime, if legally or only politically binding, the State has no longer complete the disarmament, and on a Treaty on general and complete disarmament under strict and effective international control.

diplomacy of how to organise its supply. Some States may wish to maintain their freedom in this field and, therefore, will stay away from the international supply framework.

2.3.2 The Development of Export Controls and Their Role in Nuclear Non-Proliferation

The Nuclear Suppliers Group held the 2nd NSG52 International Seminar on the Role of Export Controls in Nuclear Non-Proliferation from 8 to 9 April 1999 at the United Nations in New York.

The Seminar, like the 1st Seminar, which was held in 1997, was organised in pursuance of the Principles and Objectives of the 1995 NPT Review and Extension Conference. It was thus an important instrument for furthering transparency about the role of export controls in nuclear non-proliferation and in the promotion of nuclear trade.53

The independent national right to decide on exports should be weighed against the international obligation to ensure the inalienable right of access by the concerned NPT members. Also, the Treaty agreeing with export weapons-related material should not be considered against the Treaty undertaking to provide for the fullest exchange. Furthermore, this should be examined against the provision that nothing in the NPT should be interpreted in a manner that would adversely affect the right to access.

In addition, commitments under international law would overtake those of national law. By agree with the NPT, supplier States have accepted undertakings that, on the one hand, limit their sovereign right by defining what they cannot export and, on the other, by stipulating what they cannot avoid exporting.

Any State or group of States who decide to offer or deny access to nuclear material may be liable for violation of Article IV of the NPT. The judgement or decision may be made by the individual State. But that decision can entail liability. It should also be said that conditions to qualify for access are not uninformed and left to individual decisions by State Parties. They are set by the Treaty. Those conditions, for the moment, are acceding to the NPT and accepting the full scope safeguards. Unless and until these conditions are modified by amending the NPT or additional protocols, they remain the sole conditions of eligibility.

The only exception one might draw is when a member withdraws from the NPT or is proven, doubtlessly, to be in obvious violation of the NPT. In this very exceptional case, one could argue, that the State concerned has deprived itself of its own inalienable right until it stops its violations and decides again to comply. But evidence and proof that is clear and convincing is the minimum condition.

Even then, and in the absence of any other Treaty body that assumes this role, the IAEA should examine the evidence and establish that violation has in fact occurred.

Hence, it can be seen that the formula for non-proliferation lies in export controls plus global treaty arrangements whereby nations agree to allow the international community the right of on-site inspection of both military and commercial facilities.

Furthermore, the states who are not members of our non-proliferation regimes, like Israel, should be advised to start adopting the controls.54 Whether multilateral membership is required or not, there is a place for every state in the world community of countries dedicated to nuclear nonproliferation, and the states should be encouraged to assist non-member nations in whatever way they can to develop the regulatory structure necessary to support the non-proliferation goals.

2.4 Treaty establishing the European Atomic Energy Community (“EURATOM”)

EURATOM can be said to be one of the first treaties of the European Union after its creation. Its draft goes back to the early 1950s some time before the Nuclear non-Proliferation Treaty. These include radiation protection of the work force and the public,55 the supply of nuclear fissile materials for the developing nuclear power sector56 the safeguarding of the nuclear fissile materials to prevent it from being used for unauthorised military purposes57 and general aspects such as research and dissemination of information58.

Under the treaty the European Commission acquired the status of a supranational regulatory authority in the areas of radiation protection, supply of nuclear fissile materials and nuclear safeguards. Some of the recent nuclear concerns such as nuclear power plants operational safety and radio active waste storages and disposal facilities were not included in the EURATOM treaty as these may not have been the areas of concern at the time which later on the IAEA produced new regulations regarding these issues. EURATOM is legally separated from the European Community (EC) and has its own Framework Research Programme, however managed by the common Community institutions59.

The European Union has not only contributed to the development of the poor states60 but also conducted an immaculate contribution for to the development of the International law via its EU policies61.

Management of nuclear sources, nuclear fuel contribution and research activities are legislated by EURATOM within the member states.

In Europe current energy demand is covered by 41% oil, 22% gas, 16% coal (hard coal, lignite and peat), 15% nuclear and 6% renewables.62

The Euratom Supply Agency (ESA) is responsible for the regular and equitable supply of nuclear fuels for Community users.63

The EURATOM has also taken positive steps regarding the fair distribution of the nuclear fuel amongst its member states by creating the Supply Agency's mission which ensures a regular and equitable supply of nuclear fuels for Community users. It has legal personality and financial autonomy. It can be said that this matter could be used as an immaculate example for the IAEA policies to consider in its nuclear fuel distribution scheme among its member states.

Two fundamental objectives of the EURATOM are to ensure the establishment of the basic installations necessary for the development of nuclear energy in the Community, and to ensure that all users in the Community receive a regular and equitable supply of ores and nuclear fuels.

The EURATOM Treaty gives the Supply Agency the right of option to acquire ores, source materials and special fissile materials produced in the Community and an exclusive right to conclude contracts for the supply of


1 Non-proliferation treaty

2 Articles III, IV and VI of the NPT

3 International Atomic Energy Agency

4 There is a debate amongst the scientists on whether the nuclear energy is environmentally friendly or not but at least the nuclear industry has reinvented itself as an environmentally friendly option, producing electricity without the air pollution and greenhouse gas emissions of coal, oil or gas.

5 Nuclear technology was first developed in the 1940s, and during the Second World War research initially focussed on producing bombs by splitting the atoms of either uranium or plutonium.

6 Will be explained in more depth in this paper

7 Although President George W. Bush has seen his proposals stymied so far at the NSG, the president succeeded in getting the more select Group of Eight to agree to a one-year moratorium on new deals involving enrichment and reprocessing technologies.

8 The price of crude oil has set a fresh record at $109.72, its fifth day in a row of historic highs. 11 March 2008.

9 There is substantial evidence that America's interest in Iraq is motivated by oil, not just national security. Is the U.S. government being open and honest about their reasons for declaring war on Iraq?


11 On 30 September 2007 439 nuclear power plant units with an installed electric net capacity of about 372 GW were in operation world-wide. plant-world-wide.htm

12 Laws, like the spiders’ net, catch the small flies and let the large ones go free. Hondore’ de Balzac Lawless world.Philippe Sands QC Penguin books.2005


14 International Atomic Energy Agency -

15 Nuclear Suppliers Group-

16 European Atomic Energy Community

17 Nuclear Theory Centre

18 United Nations

19 World Trade Organisation


21 Also: - International Convention for the Suppression of Acts of Nuclear Terrorism 2005(NTC) - Detainees and Extradition in NTC and its contribution to the development of International law - The Nuclear Test Ban Treaty 1963 and the Comprehensive Nuclear Test-Ban Treaty 1996.



24 “Plutonium was the second Tran uranium element of the actinide series to be discovered. The isotope 238Pu was produced in 1940 by Seaborg, McMillan, Kennedy, and Wahl by deuteron bombardment of uranium in the 60-inch cyclotron at Berkeley, California”.




28 President of the United States of America at the time




32 Article on The Economics of Stabilisation Part III: 7 Projecting the Growth of Greenhouse-Gas Emissions Gas_Emissions.pdf+1970s+and+1980+due+to+the+falling+of+the+global+fossil+fuel+prices&hl=en&ct =clnk&cd=5

33 Enriching uranium increases the amount of "middle-weight" and “light-weight” uranium atoms. Not all uranium atoms are the same. When uranium is mined, it consists of heavy-weight atoms (about 99.3% of the mass), middle-weight atoms (0.7%), and light-weight atoms (< 0.01%). These are the different isotopes of uranium, which means that while they all contain 92 protons in the atom’s centre (which is what makes it uranium). The heavy-weight atoms contain 146 neutrons, the middle-weight contains 143 neutrons, and the light-weight has just 142 neutrons. To refer to these isotopes, scientists add the number of protons and neutrons and put the total after the name: uranium-234 or U-234, uranium-235 or U-235, and uranium-238 or U-238.

34 Uranium Hexafluoride Transport - Current Issue (last updated 14 May 2007) http://www.wise-

35 Ie:The Chernobyl accident in 1986 was the result of a flawed reactor design that was operated with inadequately trained personnel and without proper regard for safety.

36 “Radiation: Radiation is any energy that is emitted from some source and travels through space. This includes things such as light, sound, and heat. The radiation typically referred to when discussing nuclear weapons or nuclear energy is ionizing radiation, which comes from unstable atoms. To become stable, unstable atoms emit radiation in the form of particles, such as alpha and beta radiation, or in the form of electromagnetic waves, such as gamma radiation and X-rays. Source”:


38 “ Each day thousands of shipments of radioactive materials are transported around the world. These consignments which are carried by road, rail, sea and inland waterways can range from smoke detectors, cobalt sources for medical uses, to nuclear fuel cycle materials for electricity generation”.







45 Nuclear Energy and the Non Proliferation Treaty: An Authorized Albatross? Comments on Article IV of the Treaty on the Non-Proliferation of Nuclear Weapons .Prepared for the second session of the Preparatory Committee for the 2000 Review Conference on the Parties to the Treaty on the NonProliferation of Nuclear Weapons .April 1998.






51 Article VI: Each of the Parties to the Treaty undertakes to pursue negotiations in good faith on effective measures relating to cessation of the nuclear arms race at an early date and to nuclear

52 The Nuclear Suppliers Group (NSG) is a group of nuclear supplier countries which seeks to contribute to the non-proliferation of nuclear weapons through the implementation of two sets of Guidelines for nuclear exports and nuclear related exports.

53 The participants were government representatives, experts from the appropriate international organisations and academic and industry specialists from all nuclear supplier countries, actual and potential.

54 Since its inception in 1974, twenty-nine nations have formally joined the six original members of the NSG. Twenty of those countries have joined since the NSG's formal establishment in 1992. Others are still developing the legal and regulatory basis necessary to establish non-proliferation controls.

55 Chapter III

56 Chapter VI

57 Chapter VII



60 European countries should jointly give 0.56% of their gross national income in 2010, rising to 0.7% in 2015. To deliver on this commitment, EU countries must make substantial amounts of ‘fresh money’ available. - keep improving the effectiveness of aid and its impact on the ground. - design EU policy to favour development, focusing particularly on bio fuels, research and the 'brain drain' problem - where qualified people leave developing countries to work abroad. - finance aid for trade - the €2bn to be spent by EU countries on trade until 2010 should target projects that help development.


62 Background paper for a speech made to a group of senior representatives from nuclear utilities in the context of a “European Strategic Exchange”, Brussels, 23rd May 2002


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Legal and Commercial prospects of International Law on nuclear development in the 21st century and the right of Iran to Nuclear technology
LLM International Commercial Law
Masters' (LLM)
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Legal, Commercial, International, Iran, Nuclear
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LLM Hamidreza Ostad Mohammadi (Author), 2007, Legal and Commercial prospects of International Law on nuclear development in the 21st century and the right of Iran to Nuclear technology, Munich, GRIN Verlag,


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