AUKUS surprised many in September 2021, both in its intent, but also its consequences. It announced to the world the intent for Australia to acquire a nuclear submarine capability, signifying a significant shift in strategy, while making a significant affirmation of traditional alliances. The AUKUS arrangement will influence from acquisition to disposal and will lead to significant additional cooperation between the US, UK, and Australia. Significantly, cooperation will extend well beyond nuclear submarine technology and extend to security and broader Defence capabilities, witness the recent hypersonic missile announcement as proof.
AUKUS cooperation means the sharing of information, resources, and importantly, technologies. Australia is no stranger to receiving technologies from the US or UK, as demonstrated in major Defence programs like the Joint Strike Fighter program (JSF) and the Future Frigate program (SEA5000), both resulting in the Australian acquisition of technologies controlled by their relevant country’s Export Control regulations.
In prior ADM articles, I have discussed the impacts of the US International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR) for Australian businesses. AUKUS increases the need for a heightened awareness of these regulations, to ensure that one is maintaining compliance with both regulations. The introduction of nuclear technology brings additional regulations to work within, setting further challenges for the ADF and Defence Industry.
While Australia has 20 years of experience working with the Collins Class of submarine technology, the introduction of a nuclear submarine capability will have a radical impact on how we manage the related technology.
Submarines are inherently full of controlled technologies. Examples include combat systems, external fittings, and armament such as torpedoes. Nuclear propulsion adds to the Export Control compliance requirements, meaning a company must be acting in a compliant manner through effective training, detailed recordkeeping, a thorough compliance program and an operational plan.
AUKUS is unique in the addition of nuclear propulsion technology, which will add additional compliance constraints on Australian Defence SMEs. Nuclear propulsion technology is stringently controlled. It will introduce a range of regulatory and compliance challenges for both the Australian Defence Force (ADF), and Australian Defence Industry. For example, US Nuclear propulsion is specifically controlled under various additional departments and agencies, exemplifying the added compliance challenges.
Category XX of the ITAR United States Munitions List (USML) relates to ‘Submersible Vessels and Related Articles’ and describes the items controlled under the USML linked to that subject. Mixed in between the various descriptions is the mention of “naval nuclear propulsion plants” and the annotation to look at a different area of the ITAR and external references. This is representative of the unique nature of the technology and the associated expectations on technology owners.
Nuclear propulsion plants bring with them a further set of regulatory impacts. The US regulate their nuclear technology through the Department of Energy, who in turn manage the National Nuclear Security Administration. The Naval Nuclear Propulsion Program specifically manages the US Navy’s considerable propulsion needs, noting the US Navy’s reliance on nuclear propulsion for their maritime platforms.
AUKUS adds to existing cooperation programs between the US and Australia. Two exemplars are the US-Australia Defence Trade Cooperation Treaty and the United States’ National Technology Industrial Base (NTIB). The Trade Cooperation Treaty is designed to facilitate freedom of movement of controlled Defence articles between approved community members of the two nations without the need for approvals. The NTIB is a congressionally mandated policy framework that is intended to foster a defence free-trade area among the defence-related research and development sectors of the United States, Canada, Australia, and the United Kingdom.
AUKUS related technology will increase our obligations towards technology management and protection. It will require the Australian Defence sector to stay informed and diligent. Australian Defence SMEs are an increasingly critical part of the Defence global supply chain and those SMEs with strong technology governance will do well in the emerging environment.