Explanatory Report on the Framework Agreement
EXPLANATORY REPORT ON THE FRAMEWORK AGREEMENT RELATING TO THE ACTIVITIES OF THE BOHUNICE INTERNATIONAL DECOMMISSIONING SUPPORT FUND IN SLOVAKIA
Dated 2 February 2012
In Resolution No. 801 of 1999 the government of the Slovak Republic undertook the obligation to shut down Units 1 and 2 of the V1 Nuclear Power Plant in Jaslovské Bohunice (Bohunice NPP-V1).
In the above mentioned document of 1999, the government of the Slovak Republic set 2006 as a realistic date for the shutdown of Unit 1 and 2008 as a realistic date for the shutdown of Unit 2 of Bohunice NPP-V1.
In 2001 the government of the Slovak Republic adopted a resolution approving the final wording of the Framework Agreement between the Slovak Republic and the European Bank for Reconstruction and Development (the EBRD) relating to the activities of the Bohunice International Decommissioning Support Fund in Slovakia (the BIDSF). The Framework Agreement was signed on 16th November 2001.
After 10 years of the implementation of the Framework Agreement, the EBRD and the Slovak Republic have agreed on the wording of this Explanatory Report on the Framework Agreement (the Explanatory Report).
The Explanatory Report on the Framework Agreement forms an integral part of the Framework Agreement and is legally binding for the parties. The Explanatory Report explains how certain provisions should be understood and provides justification and basis for the interpretation of its provisions.
The Explanatory Report is published in two authentic versions, in English and Slovak. In case of any dispute between language versions, English version of the Explanatory Report shall prevail.
2. The Explanatory Report on the eighth recital of the Preamble:
The Preamble to the Framework Agreement states the grounds on which the Framework Agreement was concluded between the EBRD and the Slovak Republic.
The parties declare that in formulating the eighth recital of the Preamble they did not intend to restrict the provision of assistance to the Slovak Republic to grant financing or co-financing projects in the pre-decommissioning phase only.
The parties agree that assistance from the Fund to the Slovak Republic in the form of grants shall also include financing or co-financing of projects in the decommissioning phase, in accordance with the purpose of the Fund as expressed in Section 1.02 of the Rules of the Fund.
3. The Explanatory Report on Section 4(b)(iv) entitled Project Implementation Support Undertakings:
Section 4 of the Framework Agreement regulates the obligations of the Slovak Republic relating to the provision of various kinds of support in the implementation of Projects financed from Grants.
The parties have agreed that Nuclear Regulatory Authority of the Slovak Republic (UJD) and other authorities in charge of the licensing and certification of the Projects shall be independent, act within the terms and limits and according to the procedures laid down by the law of the Slovak Republic and not subject to any instructions, directives or orders of third parties.
The parties have agreed that the intention of the provision of the Framework Agreement in question is not that the Slovak Republic should undertake to give UJD or any other state authority or institution in charge of the licensing and certification of Projects binding instructions, directives or guidelines on how to proceed in the regulatory process.
The parties have agreed that the main intention of Section 4(b)(iv) of the Framework Agreement is to ensure that the Slovak Republic provides the necessary legislative and material conditions for the performance of the activities of UJD and other state bodies and institutions in charge of the process for the granting of licences and certification to Projects such that the regulatory processes scheduled in the Projects can be correctly and successfully implemented.
4. The Explanatory Report on Section 6 entitled Taxation:
Section 6 of the Framework Agreement regulates taxation and the payment of customs in connection with the implementation of Projects financed from Grants.
The parties have agreed that the main purpose of Section 6 of the Framework Agreement is expressed in point a) and relates to the prohibition to use grant funding to pay taxes, customs and import duties. The purpose of the subsequent points (b) to (g) of Section 6 of the Framework Agreement is to specify in more detail the main purpose expressed in point (a).
The parties have agreed that the intention of Section 6 (a) to (g) of the Framework Agreement do not amount to an automatic declaration of a general exemption from all taxes and customs for suppliers supplying goods and services to the Recipient.
The parties have agreed that they understand this section of the Framework Agreement to state that the suppliers of goods and services are exempt from applicable taxes and customs only where exemption is expressly granted by the legislation in force in the territory of the Slovak Republic.
5. The Explanatory Report on Section 7.2 Indemnity in Favour of Suppliers:
Section 7.2 of the Framework Agreement regulates the undertaking of the Slovak Republic to provide third parties, upon request, with a written statement of indemnification if they suffer losses in connection with the implementation of Projects financed from Grants.
The parties agree that this provision is relevant for countries that are not parties to the 1963 Vienna convention on civil liability for nuclear damage (the Vienna Convention).
The parties are aware that the duties established by the Vienna Convention have been incorporated into the law of the Slovak Republic, as a party to the Vienna Convention, through Sections 29 and 30 of Act No. 541/2004 Coll. on the peaceful use of nuclear energy and on the amendment of certain acts, as amended (the Atomic Act).
In accordance with the Vienna Convention and the Atomic Act, liability for nuclear damage is the sole and objective responsibility of the operator of the nuclear installation, which in this case is the Recipient and not the Slovak Republic. The parties are aware that the Recipient is insured against liability for nuclear damage up to the limit laid down by the Vienna Convention and the Atomic Act. If the Recipient did not submit evidence thereof to UJD, the Recipient is not entitled to operate a nuclear installation.
The parties have agreed that in view of the above, the wording of Section 7.2 of the Framework Agreement (including Schedule 1) looses reasonable significance; its non-application will not have adverse impact on the fulfilment of the obligations of the parties to the Framework Agreement and therefore the parties shall not enforce it.