Areva - Reference Document 2016

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RISK FACTORS 4.3 Legal risks

The group is also subject to regulations pertaining to the protection of its employees, its subcontractors and the public from the hazards of ionizing radiation (radiation protection), in particular by the establishment of exposure limits. Other national and international provisions govern: p the protection and safeguarding of nuclear materials, of their facilities and of their transportation, such as the Convention on the Physical Protection of Nuclear Materials of October 28, 1979, the French Defense Code (articles L. 1333-1 et seq. and R. 1333-1 et seq. ), the Euratom Treaty of March 25, 1957 (Chapter VII) and the Euratom Regulation no. 302/2005 of February 8, 2005, the IAEA/ France/Euratom Safeguards Agreement (INFCIRC/290 of July 27, 1978), and many international agreements. Compliance with these requirements is regularly verified by inspectors from the IAEA, Euratomand the office of the Senior Defense and Security Official at the French Ministry of Environment, Energy and Oceans (MEEM); p the safety of facilities of vital importance, as provided in the French Defense Code (articles L. 1332-1 et seq. and R. 1332-1 et seq. ) and national safety directives under the supervision of the Senior Defense and Security Official at the MEEM and the prefectural authorities; p nuclear facilities contributing to deterrence, as provided in the French Defense Code (article R. 1411-1 et seq. ), under the supervision of the French deterrence authority; p the transportation of radioactivematerials by land per the Transport of Dangerous Goods Order of May 29, 2009 (“TDG Order” - see Glossary ); p the control of cross-border movements of radioactive waste, bearing in mind that the provisions of the Council Directive 2016/117/Euratom of November 20, 2006 on the supervision and control of shipments of radioactive waste and spent nuclear fuel have been transposed into the Environmental Code; see also Regulations governing radioactive waste, below. Similar regulations provide for rigorous regulation of facilities and of their operating conditions by the competent bodies in the foreign countries in which the group operates nuclear facilities (Belgium, Germany and the United States). Regulations governing dismantling The legal framework governing the dismantling operations carried out in France mainly derives from the codified provisions of the TSN Law, the TECV Law and the order of February 10, 2016 containing various nuclear-related provisions. In addition, the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management of September 5, 1997, adopted under the auspices of the IAEA, contains provisions related to the nuclear facility decommissioning process. As the holder of licenses and permits for operations and dismantling, the nuclear operator is the legal entity responsible for the operation and dismantling of the facilities. The operator remains responsible for the timing and methods selected to dismantle the facilities it operates, subject to the technical supervision of the French nuclear safety authority ASN, which validates each major stage of dismantling. The decision authorizing dismantling and specifying its procedures is made by decree following a public inquiry and a process requiring the opinion of several organizations. The decree prescribing dismantling amends the decree authorizing Regulations governing end-of-lifecycle operations

creation (DAC) and in particular sets the characteristics of the dismantling, its time limit for completion, and the types of operations for which the operator is responsible following the dismantling. Depending on the particular features of each facility, dismantling operations may take several decades, encompassing work execution phases and facility monitoring phases involving practically no operation. Dismantling involves a series of operations, from the shutdown of the nuclear facility to the decision of the competent authorities to decommission the facility, at which time it can generally be put to new industrial use. In France, the group currently has 20 INBs (of which 6 are officially in final shutdown/dismantling and 2 are waiting to be decommissioned), plus 1 INBS which was declassified by a decision of the Prime Minister on July 20, 2016. The level of dismantling selected depends in particular on the expected use of the site that hosts the regulated nuclear facility. In the United States, Germany and Belgium, where the group operates four nuclear facilities, dismantling regulations are based on principles that are largely similar to those of France. The non-regulatory aspects of dismantling are addressed in Section 4.4.1.8. Regulations governing radioactive waste In France, the waste generated by nuclear operations or by the dismantling of regulated nuclear facilities is governed in particular by articles L. 542-1 to L. 542-14 of the Environmental Code. At the international level, radioactive waste management falls under the purview of the IAEA’s Joint Convention on the Safety of Spent Fuel Management and on the Safety of RadioactiveWasteManagement of September 5, 1997. At the European level, Council Directive no. 2011/70/Euratom of July 19, 2011 establishing a Community framework for the responsible and safe management of spent fuel and radioactive waste has been transposed into the French Environmental Code by the order of February 10, 2016 containing various nuclear-related provisions. The producer or the holder of waste from nuclear operations or dismantling operations, as applicable, is obligated to process and dispose of such waste. Article L. 542-2-1 of the French Environmental Code authorizes the treatment of foreign used fuel and radioactive waste in French facilities under certain conditions, including in particular the signature of intergovernmental agreements indicating an estimated schedule for the receipt and treatment of these substances and, as applicable, the prospects for the later use of the radioactive materials separated during their treatment. Every year, the operator submits a report with an inventory of these substances to the Minister of Energy. Article L. 594-1 of the Environmental Code provides that operators of regulated nuclear facilities must set aside provisions to cover the cost of dismantling the facilities and of managing used fuel and radioactive waste, and allocate the necessary assets to cover those provisions exclusively. In this regard, the regulations specify that the operator must account for the assets separately and that they must be sufficiently secure and liquid to meet their intended purpose. Their realizable value must be at least equal to the amount of the provisions. This earmarked portfolio of assets is protected from all creditors, except the State when it enforces compliance with rules pertaining to nuclear operations. All of these items are verified by a number of different administrative authorities, including the French national commission which assesses the funding of dismantling expenses. Furthermore, financial penalties apply in the event of a failure to comply with all of the obligations related to dismantling expenses.

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2016 AREVA REFERENCE DOCUMENT