123 Agreement and internal laws

R. Ramachandran
The Hindu, 19 September

Since the 123 Agreement requires a Congressional consent and is founded on U.S. laws (the AEA and the Hyde Act), it is a treaty under the U.S. definition as well and will be bound by international law.

In the statement issued on the Indo-U.S. nuclear deal with regard to the powers of the nation’s Executive, three top legal experts have commented on the applicability of the internal laws of each party to the recently concluded 123 Agreement (The Hindu, September 13). The relevant part of the Agreement is Article 2.1, which says: “…Each Party shall implement this Agreement in accordance with its respective appl icable treaties, national laws, regulations and licence requirements…” (Emphasis added).

In the context of the ongoing debate on the implications of the Hyde Act on the Agreement, the statement assumes importance. Article 2.1 has been interpreted by them to mean that “the 123 agreement is subject to all the present internal laws of the U.S. government, right from the U.S. Atomic Energy Act 1954 to the Hyde Act 2006, all inclusive. Not only that, but it will be subject to amendments to these present laws and to any new law that may be enacted in the future.” (Emphasis added).

Given Article 2.1, the debate currently in evidence, whether the 123 Agreement takes precedence over the Hyde Act or not, is essentially over what the phrases “in accordance with” and “subject to” (highlighted above) actually imply. The fact is that the 123 Agreement will be implemented, as has been emphasised by Nicholas Burns, the U.S. Under Secretary for Political Affairs and a key member of the U.S. negotiating team, in a manner fully consistent with the Hyde Act. Also, for example, contrary to what the Indian negotiators believe, Section 131 of the AEA will come into play (in arriving at “subsequent arrangements and procedures” as per Article 6(iii)) for the in-principle consent for reprocessing of spent fuel granted in the Agreement to become an exercisable right. This too has been emphasised by Mr. Burns. That is, cooperation will be operationalised in terms of the provisions of the 123 Agreement, which in turn carry all the import of the AEA and the Hyde Act. Similarly, the Agreement will be implemented in a manner consistent with all other relevant U.S. (and Indian) laws in existence until the date of conclusion of the Agreement.

However, the latter part of the experts’ interpretation, that the Agreement will be subject to future laws and future amendments to present laws, would seem to be not quite correct. This is because of Article 16.4, as will be argued below. Article 16.4 states: “This Agreement will be implemented in good faith and in accordance with the principles of international law.” The international law being referred to here is The Vienna Convention on the Law of Treaties. Article 27 of the Convention (on Internal Laws and Observance of Treaties) says: “A party may not invoke the provisions of its internal law as justification for its failure to perform a treaty.” The Convention defines Treaty as “an international agreement concluded between States in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments and whatever its particular designation.” As per this definition, an agreement such as the 123 Agreement is a treaty and the provisions of the Convention will apply to it.

If the Agreement has to be implemented in accordance with Article 2.1 and Article 27 of the Vienna Convention in a self-consistent manner, our conclusion follows immediately. Article 2.1 ensures that the Agreement will be implemented consistent with all the present laws and the Vienna Convention ensures that a Party cannot invoke a future law or future amendments that violate the Agreement. The argument by some commentators that India should enact a suitable legislation to guard against the adverse provisions of the Hyde Act (The Hindu, August 20) is, therefore, not a valid one. (Of course, one could argue that India could do so before the 123 Agreement is actually signed and comes into force but that would violate Article 16.4, which calls for implementation of the Agreement “in good faith.”)

The Tarapur experience, where the U.S. invoked the Nuclear Non-Proliferation Act of 1978 to deny supplies pursuant to the Indo-U.S. Nuclear Cooperation Agreement of 1963 following Pokhran-I test of 1974, is often cited as an example of the U.S. invoking a later law to violate an international agreement. The point is that the 1963 agreement could not have had any reference to the Vienna Convention because it came into force only in 1980. However, there is a caveat to our conclusions, which will be addressed later.

Some commentators have also commented upon the absence of a provision in the Indian 123 Agreement like what is included in Article 2.1 of the Chinese 123 Agreement of 1985. Besides what is common to both (with regard to “respective applicable treaties and national laws”), the Chinese agreement includes the following clause: “…with respect to the observance of this agreement, the principle of international law that provides that a party may not invoke the provisions of its internal law as justification for its failure to perform a treaty.” The language of the italicised part is exactly that of Article 27 of the Vienna Convention. The need for an explicit inclusion of this may be explained by the fact that, unlike Article 16.4 of the Indian agreement, the Chinese agreement does not have any other reference to international law.

Indeed, this provision raised concern in the U.S. Congress that it might not be able to enact laws on issues relevant to the China-U.S. agreement after the agreement was implemented. Officials of the Reagan administration, however, maintained that the provision only reiterated a principle of international law that bound the U.S. whether or not it was explicitly stated. The U.S. administration’s stand would thus seem to guarantee against the applicability of future legislation to the Indo-U.S. nuclear agreement as well.

There could, however, be another reason for including a clause equivalent to Article 27 explicitly. This pertains to the caveat mentioned above, which is that the U.S. is yet to ratify the Vienna Convention though it signed it when it was opened for signature in 1969. One would wonder how the Indian agreement could make references to the Convention (for example, in defining “material violation” of the agreement in Article 14.3) that the U.S. has not ratified! However, according to experts in international law, most of the Convention’s provisions are considered to be binding even on countries that are not formally parties to the Convention, such as the U.S. Indeed, U.S. officials have often stated that they accept much of the Convention as reflecting binding customary international law.

In 1971, President Richard Nixon had transmitted the Convention to the Senate and in 1972 the Senate Foreign Relations Committee adopted a resolution of advice and consent for ratification but conditional on its interpretation of Article 46 of the Convention. Article 46 states: “A State may not invoke the fact that its consent to be bound by a treaty has been expressed in violation of a provision of its internal law regarding competence to conclude treaties as invalidating its consent unless that violation was manifest and concerned a rule of its internal law of fundamental importance.” The State Department, however, objected to the Senate’s interpretation and the stalemate remains unresolved till date.

Treaty and executive agreement

The executive-legislative divide stems essentially from the differing definitions of ‘treaty’ under the U.S. Constitution and the Convention. The former makes a distinction between the terms treaty and executive agreement. It defines treaty as an agreement (of whatever kind) that is made with the advice and consent of the Senate, or whose terms law has approved, as the case may be. International agreements not submitted to the Senate are called ‘executive agreements’. While a treaty is a binding international agreement, an executive agreement applies in domestic law only. Under the Convention, however, both types of agreements are considered binding. Since the 123 Agreement requires a Congressional consent and is founded on U.S. laws (the AEA and the Hyde Act), it is a treaty under the U.S. definition as well and will be bound by international law. The debate within the U.S. has thus to do with the extent of the powers of the executive to make legally binding agreements. We are witnessing the beginnings of something similar in India today.

The stated U.S. position thus implies that it would abide by the Convention except for its reservation with regard to Article 46. Also formally, Article 18 of the Convention says that, upon signing a treaty, a nation is “obliged to refrain from acts which would defeat the object and purpose” of the treaty “until it shall have made its intention clear not to become a party to the treaty.” The U.S. has not formally rejected the Convention. With regard to the U.S. commitment to abiding by it in the implementation of the Indian 123 Agreement, in particular Article 27, whether the administration’s position is acceptable on face value or not depends on one’s perspective based on the U.S.’ track record of honouring binding agreements post-Vienna Convention.