‘1.

I have the honour to refer to the 16 January 1978 exchange of letters between the Government of Canada and the European Atomic Energy Community (Euratom) (hereinafter referred to as the exchange of letters) amending the Agreement between the Government of Canada and the European Atomic Energy Community for cooperation in the peaceful uses of atomic energy of 6 October 1959 (hereinafter referred to as the Agreement) particularly in so far as it relates to safeguards (followed by an additional exchange of letters). I specifically refer to paragraph (e) of the exchange of letters which states that:

“Material referred to in paragraph (c) shall be enriched beyond 20 % or reprocessed and plutonium or uranium enriched beyond 20 % shall be stored only according to conditions agreed upon in writing between the parties (see Annex C: Interim Arrangement concerning enrichment, reprocessing and subsequent storage of nuclear material within the Community and Canada).”

Paragraph 5 of Annex C states that the parties would commence negotiations as soon as possible after 31 December 1979, or the termination of the INFCE study, whichever was earlier, with a view to replacing the Interim Arrangement by other arrangements that would take into account inter alia any results of the INFCE studies in relation to the operations in question.

2.

These negotiations have now been completed and I have the honour to propose that the guidelines set forth below should cover reprocessing and plutonium storage and use:

Mr Richard Tait,

Ambassador Extraordinary and Plenipotentiary,

Head of the Canadian Mission to the European Communities

3.

I note that Canada and the Community have agreed that the objectives of the above guidelines have been met.

In particular I note that Canada and the Community and its Member States, to the extent of their respective competences, have made an effective commitment to non-proliferation and have submitted all relevant material to IAEA safeguards, and to adequate physical protection measures in paragraphs (c) and (g) of the exchange of letters completed by the letters from Member States' foreign ministers to Canadian ambassadors on physical protection. I also note that the Community has provided Canada with the description of the current and planned nuclear energy programmes of the Community and of its Member States and that the notification and material reporting procedures have been settled.

4.

Finally I note that these arrangements take into account inter alia the results of INFCE's studies in relation to the operations in question as, envisaged in paragraph 5 of Annex C to the exchange of letters. I note that the parties, in particular acknowledge that the separation, storage transportation and use of plutonium require particular measures to reduce the risk of nuclear proliferation; are determined to continue to support the development of international safeguards and other non-proliferation measures relevant to reprocessing and plutonium including an effective and generally accepted international plutonium storage scheme; recognize the role of reprocessing in connection with the maximum use of available resources and the management of materials contained in spent fuel or other peaceful non-explosive uses, including research, in particular in the context of significant nuclear energy programmes; and desire the predictable and practical implementation of paragraph (e) of the exchange of letters taking into account both their determination to ensure the furtherance of the objective of non-proliferation and the long-term needs of the nuclear energy programmes of the parties.

5.

I have the honour to inform the Commission that pursuant to the above, in accordance with paragraph (e) of the exchange of letters, the Government of Canada agrees that material subject to the Agreement may be reprocessed and plutonium stored within the framework of the current and planned nuclear energy programmes as described and up-dated from time-to-time by the Community and its Member States.

6.

I have the honour to inform the Commission that the agreement given by the Government of Canada in paragraph 5 will remain in force as long as the following conditions are met:

7.

Paragraph (e) of the exchange of letters provides that material subject to the Agreement shall be enriched beyond 20 % and that uranium enriched beyond 20 % shall be stored only according to conditions agreed upon in writing between the parties. I have the honour to propose that the parties agree to consult within 40 days of the receipt of a request from either party to consider proposals for conditions to be agreed upon in writing according to which material subject to the Agreement may be enriched beyond 20 % or uranium enriched beyond 20 % may be stored.

8.

I have the honour to confirm that the documents containing the descriptions of current and planned nuclear energy programmes of the Community and its Member States shall remain confidential to the Contracting Parties.

9.

If the foregoing is acceptable to the European Atomic Energy Community, I have the honour to propose that this letter, which is authentic in both English and French, together with Your Excellency's reply to that effect shall constitute the agreement required by paragraph (e) of the exchange of letters and replace both Annex C thereto and the 23 December 1980 exchange of letters. This Agreement shall take effect as of the date of Your Excellency's reply to this letter.’