Australia, the United Kingdom, and the United States have taken steps to advance the two pillars of the AUKUS security partnership.Footnote 1 In August 2024, the three states signed an agreement governing the transfer of information, material, and equipment related to naval nuclear propulsion.Footnote 2 The pact is one of a series of recent actions that lay the groundwork for Australia's acquisition of conventionally armed, nuclear-powered submarines (the goal of Pillar I).Footnote 3 Also in August, the three states announced that they had each adopted comparable export control rules on defense-related trade and reciprocal licensing exemptions.Footnote 4 The new regulations seek to facilitate transnational collaborations in areas of “advanced capabilities” in order “to ensure that [AUKUS] forces are equipped with cutting edge interoperable military capabilities and [are] prepared to face down aggression in whatever form it may take” (the goal of Pillar II).Footnote 5 Marking the third anniversary of AUKUS in September, the three countries’ leaders, mindful of China's increasing assertiveness in the region, reaffirmed their goal of security and stability in the Indo-Pacific.Footnote 6
AUKUS's first pillar aims to provide Australia with conventionally armed, nuclear-powered submarine capability.Footnote 7 Following an initial eighteen-month feasibility study, the three partners, in March 2023, announced a “phased approach” to meet this objective. In the coming decade, the United States will sell Australia at least three Virginia-class submarines, the newest class of U.S. nuclear-powered attack submarines. Over a longer period, Australia, using technology from all three countries, will build a newly designed class of nuclear-powered submarines—the SSN-AUKUS—for its navy.Footnote 8
Though not prohibited by the Treaty on the Non-Proliferation of Nuclear Weapons (NPT),Footnote 9 to which the three states are parties, the transfer of naval nuclear propulsion plants (NNPPs),Footnote 10 nuclear material, and related equipment from nuclear-weapon states (the United States and the United Kingdom) to a non-nuclear-weapon state (Australia) has been described as “unprecedented” and raises serious proliferation concerns.Footnote 11 Australia is permitted to use nuclear material in non-peaceful activities (like submarines) provided it does not utilize such material to produce nuclear weapons or other nuclear explosive devices or divert the material to such weapons. But the safeguards agreement under which the International Atomic Energy Agency (IAEA) verifies and monitors the peaceful use of nuclear material by Australia does not apply to non-peaceful activities.Footnote 12 In such circumstances, an “arrangement” must be concluded by Australia and the IAEA that provides the agency with information concerning the nuclear material while it is being used for non-peaceful activities.Footnote 13 Consultations between Australia and the IAEA regarding this arrangement are ongoing.Footnote 14 Aware of the precedent they are setting,Footnote 15 the three AUKUS partners have repeatedly “committed to set the highest nuclear non-proliferation standard” and agreed to “consult with the [IAEA] to develop a non-proliferation approach that sets the strongest precedent for the acquisition of a nuclear-powered submarine capability.”Footnote 16 China has said that “AUKUS nuclear-powered submarine cooperation contravenes the object and purpose of the [NPT],” and it has “call[ed] on the international community to take seriously the impact of AUKUS nuclear-powered submarine cooperation on the authority and effectiveness of the NPT, and its negative effect on the IAEA safeguards regime.”Footnote 17
The agreement signed in August by Australia, the United Kingdom, and the United States establishes the framework for (1) the exchange of information between the three parties and (2) the transfer of material (including nuclear material) and equipment (including NNPPs) by the United Kingdom and the United States to Australia, in the context of their mutual defense and security arrangements.Footnote 18 Its provisions include placing on Australia the responsibility for disposal of spent nuclear fuel and radioactive waste resulting from the operation of transferred NNPPs and the obligation to indemnify the United Kingdom and the United States against any liability or loss relating to nuclear risks connected with the transferred material or equipment.Footnote 19 The agreement also contains numerous conditions, including: that any information or material communicated or transferred will “not be used for any nuclear explosive device, or for research on or development of any nuclear explosive device”;Footnote 20 that Australia will only use the nuclear material transferred for naval nuclear propulsion, will not use material from any other source for naval nuclear propulsion, and will “not enrich uranium, produce nuclear fuel, or reprocess nuclear fuel for naval nuclear propulsion”;Footnote 21 that Australia will not enrich or reprocess any of the material transferred;Footnote 22 that the United Kingdom and the United States may require the return of any transferred material or equipment if Australia materially breaches its obligations under the NPT, the Australia-IAEA Safeguards Agreement, or the Article 14 arrangement;Footnote 23 that Australia will maintain an accounting system for all transferred material;Footnote 24 and that all Australian nuclear-powered submarines will be conventionally armed.Footnote 25 The agreement details as well the parties’ cooperation regarding the application of the Safeguards Agreement and the Article 14 arrangement.Footnote 26 It also establishes rules regarding the security and dissemination of the information, material, and equipment that is exchanged and transferred.Footnote 27
The United States negotiated the cooperation agreement pursuant to Section 123 of the Atomic Energy Act (AEA).Footnote 28 Subject to specified requirements,Footnote 29 including the negotiation of an agreement, the AEA permits the United States to transfer to another nation nuclear reactors (the key element of NNPPs), “major components” of reactors, and nuclear material for those reactors.Footnote 30 The act also permits, subject to particular constraints, the “communicat[ion] or exchange” with another nation of “[r]estricted [d]ata concerning research, development, or design, of military reactors.”Footnote 31 The AUKUS agreement's conditions and guarantees, noted above, were drafted to comply with these provisions. The statute also requires that agreements be submitted to Congress for review and possible rejection through the enactment of a joint resolution.Footnote 32 The president submitted the AUKUS agreement in August; no objections were raised within the statutory period.Footnote 33 Australia and the United Kingdom are concluding steps under their domestic laws for the agreement's entry into force.Footnote 34
AUKUS's second pillar calls for “accelerating and deepening the development and delivery of advanced military capabilities,” such as undersea capabilities, quantum technologies, artificial intelligence, advanced cyber, hypersonic and counter-hypersonic capabilities, electronic warfare, innovation, and information sharing, through cross-border defense-sector collaboration and integration.Footnote 35 To help achieve this aim, the three countries have reformed their export control rules to allow license-free defense trade. In December 2023, the National Defense Authorization Act for Fiscal Year 2024 amended the Arms Export Control Act to require the president to “immediately exempt from the licensing or other approval requirements of [] exports and transfers . . . of defense articles and defense services” between the United States and Australia and the United Kingdom following a determination that each (1) has implemented comparable export controls to those of the United States for U.S.-origin defense articles and services and (2) has granted a comparable exemption from export controls rules for the United States.Footnote 36 The act also required the adoption of rules to establish “an expedited decision-making process, . . . for applications to export to Australia, the United Kingdom, and Canada commercial, advanced-technology defense articles and defense services that are not covered by an exemption.”Footnote 37 Following the State Department's notification to Congress in August 2024Footnote 38 that comparable export control rules and reciprocal exemptions had been adopted by AustraliaFootnote 39 and the United Kingdom,Footnote 40 amendments to the Export Administration Regulations and the International Traffic in Arms Regulations, implementing the statute's licensing exemptions and establishing an expedited licensing process for those items not exempted, went into effect.Footnote 41 Discussions are underway with Japan, Canada, New Zealand, and the Republic of Korea regarding possible cooperation with AUKUS on specific Pillar II projects.Footnote 42