Areva - Reference Document 2016

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RISK FACTORS

4.4 Industrial and environmental risks

p the reduction of the discount rate or any other change in regulations related to the earmarked assets. Lastly, although the used fuel treatment contracts call for the waste and residues from these operations to be allocated to and ultimately retrieved by the original waste producer, as the temporary holder of the radioactive waste produced by its customers, the group could be considered liable if a customer defaults or files for bankruptcy.

1.2-billion-euro tier. Beyond that amount, the other Signatory States would intervene up to a limit of 1.5 billion euros. A mechanism to increase these limits would be provided by the Convention as new States ratify it. However, without waiting for the Protocol amending the Paris Convention signed on February 12, 2004 to take effect, the French law no. 2015-992 of August 17, 2015 on the Energy Transition for Green Growth (the “TECV law”) provides for the early application of the cap on the operator’s nuclear liability. Thus, since February 18, 2016, the operator’s liability is capped at 700 million euros per nuclear accident in a nuclear facility, at 70 million euros in a reduced-risk facility (article L. 597-28 of the French Environmental Code) and at 80 million euros per nuclear accident during transportation (article L. 597-32 of the Environmental Code). Aside from the above-mentioned increases of the cap on nuclear operator liability, the TECV law effected an alignment of our domestic lawwith the scope of the Paris Convention by mentioning the natural persons or physical entities, both public and private, which operate a nuclear facility falling within the purview of regulated nuclear facility (INB) or environmentally regulated facility (ICPE) regulations. Two of the group’s INBs (Socatri and Somanu) and three of its ICPEs (STMI in Bollène, Cemo in Chalon and Cedos in Sully) appear on the list of sites benefiting from reduced liability amounts, pursuant to decree no. 2016-333 of March 21, 2016 implementing article L. 597-28 of the Environmental Code related to liability in the nuclear energy field. Description of insurance acquired AREVA has acquired several insurance policies in France, Germany, Belgium and the United States to cover its regulated nuclear facilities in France and abroad, and its nuclear transportation operations. These insurance policies comply with the international conventions governing nuclear operator liability, including their liability limits. These insurance policies are reinsured by the nuclear insurance pools of various countries, including Assuratome in France, DKV in Germany, Syban in Belgium and ANI in the United States. In addition, AREVA is a member of the European Liability Insurance for the Nuclear Industry mutual insurance association (ELINI). Property and business interruption insurance for nuclear operations Due to the nature of the potential damage to the facilities, this type of insurance is available only through the pools mentioned above or through specialized mutual insurance companies capable of providing the necessary coverage. The limits of coverage for this type of insurance are based on the estimated replacement value or on an estimate of the maximum possible loss (MPL). Insurance coverage for some facilities can be up to 1 billion euros. Mining operations and AREVA’s US and Belgian sites are not covered by property and business interruption guarantees for the nuclear process, but rather are covered by specific programs set up locally in agreement with AREVA’s Risk and Insurance Department.

SPECIFIC COVERAGE RELATING TO THE ACTIVITIES OF NUCLEAR FACILITY OPERATOR

4.4.1.9.

International nuclear liability law is based on a series of principles that override general liability law. The operator of the nuclear facility causing the damage has prime responsibility. This is known as the principle of exclusive liability channeling to the operator. Its liability is objective (“no fault”), for which there are few exemptions. The operator of a nuclear facility is therefore required to compensate victims for the bodily harm and property damage they have suffered. The operator is required to maintain a financial guarantee, which is generally insurance, to cover its liability, the amount of which is capped. This system is defined by international agreements such as the Paris Convention on Third Party Liability in the Field of Nuclear Energy of July 29, 1960, as amended, and the Brussels Supplementary Convention of January 31, 1963, as amended, and the Vienna Convention of May 21, 1963, as amended. In addition, the Common Protocol of September 21, 1988, which entered into force in France on July 30, 2014, is intended to connect the two systems established by the Paris and Vienna conventions, thus reducing common law jurisdiction in order to provide better protection to potential victims of a nuclear accident. In the United States, while not founded on an international agreement, the Price Anderson Act establishes a system to channel claims submitted to nuclear operators. Every country in which the group operates nuclear facilities is subject to one of these legal constructions. For purposes of information, the maximum amount of the operator’s nuclear liability in France until February 17, 2016 was 91.5 million euros per nuclear accident in a nuclear facility and 22.9 million euros per accident during transportation. Moreover, in the event of an accident in a regulated nuclear facility in France, the French government would assume liability above 91.5 million euros, up to a limit of 228.6million euros. Thereafter, the Signatory States to the Brussels Supplementary Convention would assume liability for the amount above 228.6 million euros, up to a limit of 381.1 million euros. The protocols of amendment of the Paris Convention and the Brussels Supplementary Convention were signed on February 12, 2004 by representatives of the Signatory States. However, the amended conventions are not yet in effect. The main amendments will concern an increase in the three tiers of indemnity. The nuclear operator’s liability would increase to 700 million euros per nuclear accident in a facility (70 million euros in a reduced-risk facility). This amount would rise to 80 million euros per accident during transportation. The State in which the nuclear facility responsible for the damage is located would cover the 700-million-euro to

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2016 AREVA REFERENCE DOCUMENT